Document:

<PAGE>

                                                                   Exhibit 10.12

                                  OFFICE LEASE

                                     between
             MSK FINANCIAL SERVICES, INC., A CALIFORNIA CORPORATION
                          (DBA ACCREDITED HOME LENDERS)

--------------------------------------------------------------------------------
                                     Tenant

                                       and

                         MBL Life Assurance Corporation

                              Date: AUGUST 29, 1995

<PAGE>

--------------------------------------------------------------------------------

Article 1    Basic Lease Information
    1.1      Basic Lease Information
    1.2      Definitions
    1.3      Exhibits
Article 2    Agreement
Article 3    Term, Delivery, and Acceptance of Premises
    3.1      Delivery of Possession
    3.2      Early Entry
Article 4    Monthly Rent
Article 5    Operating Expenses
    5.1      General
    5.2      Estimated Payments
    5.3      Annual Settlement
    5.4      Final Proration
    5.5      Other Taxes
    5.6      Additional Rent
Article 6    Insurance
    6.1      Landlord's Insurance
    6.2      Tenant's Insurance
    6.3      Forms of Policies
    6.4      Waiver of Subrogation
    6.5      Adequacy of Coverage
Article 7    Use
Article 8    Requirements of Law; Fire Insurance
    8.1      General
    8.2      Hazardous Materials
    8.3      Certain Insurance Risks
Article 9    Assignment and Subletting
    9.1      General
    9.2      Submission of Information
    9.3      Payments to Landlord
    9.4      Prohibited Transfers
    9.5      Landlord's Options
    9.6      Permitted Transfer
Article 10   Rules and Regulations
Article 11   Common Areas
Article 12   Landlord's Services
   12.1      Landlord's Repair and Maintenance
   12.2      Landlord's Other Services
   12.3      Tenant's Costs
   12.4      Limitation on Liability
Article 13   Tenant's Care of the Premises
Article 14   Alterations
   14.1      General
   14.2      Free-Standing Partitions
   14.3      Removal
Article 15   Mechanics' Liens
Article 16   End of Term
Article 17   Eminent Domain
Article 18   Damage and Destruction
Article 19   Subordination
   19.1      General
   19.2      Attornment
   19.3      Non-Disturbance
Article 20   Entry by Landlord
Article 21   Indemnification, Waiver, and Release
   21.1      Indemnification
   21.2      Waiver and Release
Article 22   Security Deposit
Article 23   Quiet Enjoyment
Article 24   Effect of Sale
Article 25   Default
   25.1      Events of Default
   25.2      Landlord's Remedies
   25.3      Certain Damages
   25.4      Continuing Liability After Termination
   25.5      Cumulative Remedies
   25.6      Waiver of Redemption
Article 26   Parking
Article 27   Miscellaneous
   27.1      No Offer
   27.2      Joint and Several Liability
   27.3      No Construction Against Drafting Party
   27.4      Time of the Essence
   27.5      No Recordation
   27.6      No Waiver
   27.7      Limitation on Recourse
   27.8      Estoppel Certificates
   27.9      Attorneys' Fees
   27.10     No Merger
   27.11     Holding Over
   27.12     Notices
   27.13     Severability
   27.14     Written Amendment Required
   27.15     Entire Agreement
   27.16     Captions
   27.17     Notice of Landlord's Default
   27.18     Authority
   27.19     Brokers
   27.20     Governing Law
   27.21     Late Payments
   27.22     No Easements for Air or Light
   27.23     Tax Credits
   27.24     Relocation of the Premises
   27.25     Financial Reports
   27.26     Landlord's Fees
   27.27     Binding Effect
   27.28     Terms
   27.29     Definition of Landlord
   27.30     Rights Cumulative
   27.31     Change of Building Name
   27.32     Force Majeure
   27.33     Third Party Beneficiary
   27.34     No Joint Venture
   27.35     Remedies
   27.36     WAIVER OF JURY TRIAL
Addenda and Exhibits

<PAGE>

THIS OFFICE LEASE ("Lease") is entered into by Landlord and Tenant as described
in the following basic lease Information on the date that is set forth for
reference only In the following basic lease information. Landlord and Tenant
agree:

ARTICLE 1 BASIC LEASE INFORMATION

1.1  Basic Lease Information. In addition to the terms that are defined
     elsewhere in this Lease, these terms are used in this Lease:

     (a)  LEASE DATE: August 29, 1995

     (b)  LANDLORD: MBL Life Assurance Corporation

     (c)  LANDLORD'S ADDRESS:
                    1600 Promenade Center, Suite 1100
                    Richardson. TX 75080

          with a copy at the same time to: MBL Life Assurance Corporation Real
          Estate Investment Division, 520 Broad Street, Newark, NJ 07102-3184

     (d)  TENANT: MSK Financial Services, Inc., a California corporation
                  (dba Accredited Home Lenders)

     (e)  TENANT'S ADDRESS: The Premises as defined in this Lease with a copy at
          the same time to:
                    10968 Via Frontera
                    San Diego, CA 92127

     (f)  BUILDING ADDRESS: 15030 Avenue of Science
                            Suite 100
                            San Diego, CA 92128

     (g)  PREMISES: The premises shown on Exhibit A to this Lease, known as
          Suite 100.

     (h)  RENTABLE AREA OF THE PREMISES: 9,998 square feet.

     (i)  RENTABLE AREA OF THE BUILDING: 115,862 square feet.

     (j)  TERM: Sixty (60) months, beginning on the Commencement Date and
          expiring on the Expiration Date.

     (k)  COMMENCEMENT DATE: November 15, 1995 or as extended pursuant to the
          Workletter.

     (l)  EXPIRATION DATE: November 14, 2000 or as extended pursuant to the
          Workletter.

     (m)  SECURITY DEPOSIT: $11,497

     (n)  MONTHLY RENT:

          *    Rent shall be fully abated for the first two months of the term.

          Amount Per Month:   Commencing On:      Ending On:
          -----------------   --------------      ----------

          $11,497.70          November 15, 1995*  November 14, 1996
          $11,957.60          November 15, 1996   November 14, 1997
          $12,435.91          November 15, 1997   November 14, 1998
          $12,933.35          November 15, 1998   November 14, 1999
          $13,450.68          November 15, 1999   November 14, 2000

     (o)  OPERATING EXPENSE BASE: $1996 Base Year per square foot of Rentable
          Area of the Building per annum.

     (p)  TENANT'S SHARE: nine (9%) percent (determined by dividing the Rentable
          Area of the Premises by the Rentable Area of the Building, multiplying
          the resulting quotient by 100, and rounding to the 3rd

                                     Page 1

<PAGE>

     (q)  PARKING SPACES: 40 spaces according to Article 26.

     (r)  PARKING CHARGE: $-0- per parking space per month, subject to
          adjustments specified in Article 26.

     (s)  BROKER: Grubb & Ellis
                  Ramsey Commercial

     (t)  BUSINESS HOURS: 7:00 a.m. to 6:00 p.m. on Monday through Friday and
          8:00 a.m. to 1:00 p.m. on Saturday.

1.2  Definitions.

     (a)  ADDITIONAL RENT: Any amounts that this Lease requires Tenant to pay in
          addition to Monthly Rent.

     (b)  BUILDING: The building located on the Land and of which the Premises
          are a part.

     (c)  LAND: The land on which the Project is located and which is described
          on Exhibit B.

     (d)  PRIME RATE: The rate of interest from time to time announced by The
          Wall Street Journal as the "prime rate." If The Wall Street Journal or
          any reasonable successor to it ceases to announce the prime rate, the
          Prime Rate will be a comparable interest rate designated by Landlord
          to replace the Prime Rate.

     (e)  PROJECT: The development consisting of the Land and all improvements
          built on the Land, including without limitation the Building, parking
          lot, parking structure, if any, walkways, driveways, fences, and
          landscaping.

     (f)  RENT: The Monthly Rent and Additional Rent.

     (g)  WORKLETTER: The workletter attached to this Lease as Exhibit C (if
          any).

     If any other provision of this Lease contradicts any definition of this
     Article 1, the other provision will prevail.

1.3  Exhibits. The following exhibits and addenda are attached to this Lease and
     are made part of this Lease:

     EXHIBIT A - The Premises
     EXHIBIT B - Legal Description of the Land
     EXHIBIT C - Workletter
     EXHIBIT D - Rules and Regulations
     EXHIBIT E - Commencement Date and Estoppel Certificate
     EXHIBIT F - Option to Extend.

     ADDENDUM:
     RIDER TO LEASE

           *****[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]*****

                                     Page 2

<PAGE>

In consideration for the Rent, and other covenants and agreements made by
Tenant, Landlord leases the Premises to Tenant, and Tenant leases the Premises
from Landlord, according to this Lease. The duration of this Lease will be the
Term. The Term will commence on the Commencement Date and will expire on the
Expiration Date unless terminated earlier pursuant to the terms of this Lease.

ARTICLE 3 TERM, DELIVERY, AND ACCEPTANCE OF PREMISES

3.1  Delivery of Possession. Landlord will be deemed to have delivered
     possession of the Premises to Tenant on the Commencement Date, as it may be
     adjusted pursuant to the Workletter. Landlord will construct or install in
     the Premises the Improvements as defined in the Workletter to be
     constructed or installed by Landlord according to the Workletter. If no
     Workletter is attached to this Lease, it will be deemed that Landlord
     delivered to Tenant possession of the Premises AS IS in its present
     condition on the Commencement Date. Tenant acknowledges that neither
     Landlord nor its agents or employees have made any representations or
     warranties as to the suitability or fitness of the Premises for the conduct
     of Tenant's business or for any other purpose, nor has Landlord or its
     agents or employees agreed to undertake any alterations or construct any
     Tenant improvements to the Premises except as expressly provided in this
     Lease and the Workletter. SEE RIDER ATTACHED.
                               ------------------

3.2  Early Entry. If Tenant is permitted entry to the Premises prior to the
     Commencement Date for the purpose of installing fixtures or any other
     purpose permitted by Landlord, the early entry will be at Tenant's sole
     risk and subject to all the terms and provisions of this Lease as though
     the Commencement Date had occurred, except for the payment of Rent, which
     will commence on the Commencement Date. Tenant, its agents, or employees
     will not interfere with or delay Landlord's completion of construction of
     the improvements. Tenant hereby agrees to indemnify Landlord against any
     injury, and loss or damage which may occur to any person as a result of
     Tenant's early entry or to any of the Tenant's work or installations made
     in such Premises, Building or Project, or to any personal property placed
     therein, the same being at Tenant's sole risk, and, prior to any early
     entry by Tenant, provide Landlord with proof of insurance coverages
     described in this Lease. Landlord has the right to impose additional
     conditions on Tenant's early entry that Landlord, in its reasonable
     discretion, deems appropriate and Landlord will further have the right to
     require that Tenant execute an early entry agreement containing those
     conditions prior to Tenant's early entry.

ARTICLE 4 MONTHLY RENT

Throughout the Term of this Lease, Tenant will pay Monthly Rent to Landlord as
rent for the Premises. Monthly Rent will be paid in advance on or before the
first day of each calendar month of the Term. If the Term commences on a day
other than the first day of a calendar month or ends on a day other than the
last day of a calendar month, then Monthly Rent will be appropriately prorated
by Landlord based on the actual number of calendar days in such month. If the
Term commences on a day other than the first day of a calendar month, then the
prorated Monthly Rent for such month will be paid on or before the first day of
the Term. Monthly Rent will be paid to Landlord, without written notice or
demand, and without deduction or offset, in lawful money of the United States of
America at Landlord's address, or to such other address as Landlord may from
time to time designate in writing.

ARTICLE 5 OPERATING EXPENSES

5.1  General.

     (a)  In addition to Monthly Rent, beginning on the Commencement Date Tenant
          will pay Tenant's Share of the amount by which the operating expenses
          paid, payable, or incurred by Landlord in each calendar year or
          partial calendar year during the Term exceeds the product of the
          Operating Expense Base times the Rentable Area of the Building. If
          operating expenses are calculated for a partial calendar year, the
          Operating Expense Base will be appropriately prorated. The operating
          expense base year will be 1996 and Tenant will be responsible for
          increases in taxes, insurance, and utilities; however, Tenant will not
          be responsible for all other operating expense increases that exceed
          five percent (5%) of the previous year's operating costs.

     (b)  As used in this Lease, the term "operating expenses" means:

          (1)  All reasonable costs that would, under generally accepted
               accounting principles, be regarded as costs of ownership,
               management, operation, repair and maintenance of the Project,
               including without limitation real and personal property taxes and
               assessments (and any tax levied in whole or in part in lieu of or
               in addition to real property taxes); wages, salaries,
               compensation and benefits of employees; consulting, accounting,
               legal, tax appeal, engineering and other professional fees and
               expenses; janitorial, maintenance, guard, and other services;
               management fees and costs (charged by Landlord, any affiliate of
               Landlord, or any other entity managing the Project and determined
               at a rate consistent with prevailing market rates for comparable
               services and projects); reasonable reserves for operating
               expenses; that part of office rent or rental value of space in
               the Project used or furnished by Landlord to enhance, manage,

                                     Page 3

<PAGE>

               _________________________________________________________________
               and repairs; service and maintenance contracts; insurance
               obtained with respect to the Project; depreciation on personal
               property and equipment, except as set forth in (c) below or which
               is or should be capitalized on the books of Landlord; and any
               other costs, charges, and expenses that under generally accepted
               accounting principles would be regarded as management,
               maintenance, and operating expenses; and

          (2)  The cost (amortized over such period as Landlord will reasonably
               determine) together with interest at the greater of the Prime
               Rate prevailing plus 2% or Landlord's borrowing rate for such
               capital improvements plus 2% on the unamortized balance of the
               cost of any capital Improvements and the installation thereof
               that are made to the Project by Landlord (i) for the purpose of
               safety, saving energy or reducing operating expenses, or (ii) by
               requirement of any governmental law or regulation that was not
               applicable to the Project at the time it was constructed and not
               as a result of special requirements for any tenant's use of the
               Building.

     (c)  The operating expenses will not include:

          (1)  depreciation on the Project (including without limitation
               depreciation on personal property, equipment, window coverings on
               exterior windows provided by Landlord and carpeting in public
               corridors and common areas);

          (2)  costs of alterations of space or other improvements made for
               tenants of the Project;

          (3)  finders' fees and real estate brokers' commissions;

          (4)  mortgage principal, or interest;

          (5)  capital items other than those referred to in clause (b)(2)
               above;

          (6)  costs of replacements to personal property and equipment for
               which depreciation costs are included as an operating expense;

          (7)  costs of excess or additional services provided to any tenant in
               the Buildings that are directly billed to such tenants;

          (8)  the cost of repairs due to casualty or condemnation that are
               reimbursed by third parties;

          (9)  any cost due to Landlord's breach of this Lease;

          (10) any income, estate, inheritance, or other transfer tax and any
               excess profit, franchise, or similar taxes on Landlord's
               business;

          (11) all costs, including legal fees, relating to activities for the
               solicitation and execution of leases of space in the Building;
               and

          (12) any legal fees incurred by Landlord in enforcing its rights under
               other leases for premises in the Building.

     (d)  Tenant acknowledges that Landlord has not made any representation or
          given Tenant any assurances that the Operating Expense Base will equal
          or approximate the actual operating expenses per square foot of
          Rentable Area of the Premises for any calendar year during the Term;
          provided that the Operating Expense Base will equal actual operating
          expenses for calendar year 1996.

5.2  Estimated Payments, At Landlord's request, during each calendar year or
     partial calendar year in the Term, in addition to Monthly Rent, Tenant will
     pay to Landlord on the first day of each month an amount equal to 1/12 of
     the product of Tenant's Share multiplied by the "estimated operating
     expenses" (defined below) for such calendar year. Subject to the limitation
     set forth in Section 5.1(a) "Estimated operating expenses" for any calendar
     year means Landlord's reasonable estimate of operating expenses for such
     calendar year, less the product of the Operating Expense Base, multiplied
     by the Rentable Area of the Building and will be subject to revision
     according to the further provisions of this Section 5.2 and Section 5.3.
     During any partial calendar year during the Term, estimated operating
     expenses will be estimated on a full-year basis. During each December
     during the Term, or as soon after each December as practicable, Landlord
     will give Tenant written notice of estimated operating expenses for the
     ensuing calendar year. On or before the first day of each month during the
     ensuing calendar year (or each month of the Term, if a partial calendar
     year), Tenant will pay to Landlord 1/12 of the product of Tenant's Share
     multiplied by the estimated operating expenses for such calendar year;
     however, if such

                                     Page 4

<PAGE>

     ___________________________________________________________________________
     Tenant will commence making monthly payments based upon the revised
     estimated operating expenses. In the month Tenant first makes a payment
     based upon the revised estimated operating expenses, Tenant will pay to
     Landlord for each month which has elapsed since December the difference
     between the amount payable based upon the revised estimated operating
     expenses and the amount payable based upon the prior year's estimated
     operating expenses. If at any time or times it reasonably appears to
     Landlord that the actual operating expenses for any calendar year will vary
     from the estimated operating expenses for such calendar year, Landlord may,
     by written notice to Tenant, revise the estimated operating expenses for
     such calendar year, and subsequent payments by Tenant in such calendar year
     will be based upon such revised estimated operating expenses.

5.3  Annual Settlement. Within 120 days after the end of each calendar year or
     as soon after such 120-day period as practicable, Landlord will deliver to
     Tenant a statement of amounts payable under Section 5.1 for such calendar
     year prepared by Landlord. Such statement will be final and binding upon
     Landlord and Tenant unless Tenant objects to it in writing to Landlord
     within 30 days after it is given to Tenant. If such statement shows an
     amount owing by Tenant that is less than the estimated payments, if any,
     previously made by Tenant for such calendar year, the excess will be held
     by Landlord and credited against the next payment of Rent; however, if the
     Term has ended and Tenant was not in default at its end, Landlord will
     refund the excess to Tenant. If such statement shows an amount owing by
     Tenant that is more than the estimated payments, if any, previously made by
     Tenant for such calendar year, Tenant will pay the deficiency without
     deduction or setoff to Landlord within 30 days after the delivery of such
     statement subject to the limitation set forth in Section 5.1(a).

     Tenant shall have the right at its own expense and at a reasonable time
     (after written notice to Landlord) within 30 days after receipt of the
     statement to review Landlord's record of operating expenses relevant to
     this Article. In the event Tenant does not review Landlord's records and
     deliver the results thereof to Landlord within said 30 day period, the
     terms and amounts set forth in the statement shall be deemed conclusive and
     final and Tenant shall have no further right to adjustment. In the event
     Tenant's examination reveals an error has been made or that ineligible
     charges were included, and Landlord disagrees with the results thereof,
     Landlord shall have 30 days to obtain an audit from an accountant of its
     choice. In the event Landlord's accountant and Tenant's accountant are
     unable to reconcile their results, both accountants shall mutually agree on
     a third accountant, whose determination shall be conclusive.

5.4  Final Proration. If this Lease ends on a day other than the last day of a
     calendar year, the amount of increase (if any) in the operating expenses
     payable by Tenant applicable to the calendar year in which this Lease ends
     will be calculated on the basis of the number of days of the Term falling
     within such calendar year, and Tenant's obligation to pay any increase or
     Landlord's obligation to refund any overage will survive the expiration or
     other termination of this Lease.

5.5  Other Taxes.

     (a)  Tenant will reimburse Landlord upon demand for any and all taxes
          payable by Landlord (other than as net forth in sub-paragraph (b)
          below), whether or not now customary or within the contemplation of
          Landlord and Tenant:

          (1)  upon or measured by Tenant's rent without limitation, any gross
               revenue tax, sales tax, use tax, excise tax, or value added tax
               levied by the federal government or any other governmental body
               with respect to the receipt of rent; and

          (2)  upon this transaction or any document to which Tenant is a party
               creating or transferring an interest or an estate in the
               Premises.

     (b)  Tenant will not be obligated to pay any inheritance tax, gift tax,
          transfer tax, franchise tax, income tax (based on net income), profit
          tax, or capital levy imposed upon Landlord.

     (c)  Tenant will pay promptly when due all personal property taxes on
          Tenant's personal property in the Premises and any other taxes payable
          by Tenant that if not paid might give rise to a lien on the Premises
          or Tenant's interest in the Premises.

5.6  Additional Rent. Amounts payable by Tenant according to this Article other
     than under Section 5.5(c), will be payable as Rent, without deduction or
     offset. If Tenant fails to pay any amounts due according to this Article 5,
     Landlord will have all the rights and remedies available to it on account
     of Tenant's failure to pay Rent.

ARTICLE 6 INSURANCE

6.1  Landlord's Insurance. At all times during the Term, Landlord will carry and
     maintain:

     (a)  Fire and extended coverage insurance covering the Project, its
          equipment, common area furnishings, and

                                     Page 5

<PAGE>

     (b)  Bodily injury and property damage liability insurance; and

     (c)  Such other insurance as Landlord reasonably determines from time to
          time.

          The insurance coverages and amounts in this Section 6.1 will be
          reasonably determined by Landlord.

6.2  Tenant's Insurance. At all times during the Term, Tenant will carry and
     maintain, at Tenant's expense, the following insurance, in the amounts
     specified below, with insurance companies and on forms reasonably
     satisfactory to Landlord:

     (a)  Bodily injury and property damage liability insurance, with a combined
          single occurrence limit of not less than $1,000,000 per occurrence.
          All such insurance will be equivalent to coverage offered by a
          commercial comprehensive general liability form, including without
          limitation personal injury, products and completed operations, broad
          form property damage, and contractual liability coverage for the
          performance by Tenant of the indemnity agreements set forth in Article
          21 of this Lease;

     (b)  Insurance covering all of Tenant's furniture and fixtures, machinery,
          equipment, stock, and any other personal property owned and used in
          Tenant's business and found in, on, or about the Project, and any
          leasehold improvements to the Premises in excess of the Tenant Finish
          Allowance, if any, provided pursuant to the Workletter in an amount
          not less than the full replacement cost. Property forms will provide
          coverage on a broad form basis insuring against "all risks of direct
          physical loss." All policy proceeds will be used for the repair or
          replacement of the property damaged or destroyed; however, if this
          Lease ceases under the provisions of Article 18, Tenant will be
          entitled to any proceeds resulting from damage to Tenant's furniture
          and fixtures, machinery, equipment, stock, and any other personal
          property;

     (c)  Worker's compensation insurance insuring against and satisfying
          Tenant's obligations and liabilities under the worker's compensation
          laws of the state in which the Premises are located, including
          employer's liability insurance in the limits required by the laws of
          the state in which the Project is located; and

     (d)  Owned, hired, or nonowned comprehensive automobile liability at a
          limit of liability not less than $1,000,000 combined bodily injury and
          property damage per occurrence.

          If Tenant fails to obtain or maintain any insurance required
          hereunder, Landlord shall have the option, without assuming any
          obligation in connection therewith, to effect such insurance at the
          sole cost of the Tenant and all outlays by Landlord shall be
          reimbursed by Tenant to Landlord as Additional Rent.

6.3  Forms of Policies. Certificates of insurance, together with copies of the
     endorsements, when applicable, naming Landlord and any others specified by
     Landlord as additional insureds, will be delivered to Landlord prior to
     Tenant's occupancy of the Premises and from time to time at least 10 days
     prior to the expiration of the term of each such policy. All commercial
     general liability or comparable policies maintained by Tenant will name
     Landlord and such other persons or firms as Landlord specifies from time to
     time as additional insureds, entitling them to recover under such policies
     for any loss sustained by them, their agents, and employees, including
     those losses sustained as a result of the negligent acts or omissions of
     Tenant. All such policies maintained by Tenant will provide that they may
     not be terminated nor may coverage be reduced except after 30 days' prior
     written notice to Landlord. All commercial general liability, automobile,
     and property policies maintained by Tenant will be written as primary
     policies, not contributing with and not supplemental to the coverage that
     Landlord may carry.

6.4  Waiver of Subrogation. Landlord and Tenant each waive any and all rights to
     recover against the other or against any other Tenant or occupant of the
     Project, or against the officers, directors, shareholders, partners, joint
     venturers, employees, agents, customers, invitees, or business visitors of
     such other party or of such other Tenant or occupant of the Project, for
     any loss or damage to such waiving party arising from any cause covered by
     any property insurance required to be carried by such party pursuant to
     this Article 6 or any other property insurance actually carried by such
     party to the extent of the limits of such policy. Landlord and Tenant
     from time to time will cause their respective insurers to issue appropriate
     waiver of subrogation rights endorsements to all property insurance
     policies carried in connection with the Project or the Premises or the
     contents of the Project or the Premises. Tenant agrees to cause all other
     occupants of the Premises claiming by, under, or through Tenant to execute
     and deliver to Landlord such a waiver of claims and to obtain such waiver
     of subrogation rights endorsements.

6.5  Adequacy of Coverage. Landlord, its agents and employees make no
     representation that the limits of liability specified to be carried by
     Tenant pursuant to this Article 6 are adequate to protect Tenant. If Tenant
     believes that any of such insurance coverage is inadequate, Tenant shall
     obtain such additional insurance coverage as Tenant deems adequate, at
     Tenant's sole expense.

                                     Page 6

<PAGE>

Tenant covenants that the Premises will be used only for general business office
purposes and purposes incidental to that use, and for no other purpose. Tenant
will use the Premises in a careful, safe, and proper manner. Tenant will not use
or permit the Premises to be used or occupied for any purpose or in any manner
prohibited by any applicable laws. Tenant will not commit waste or suffer or
permit waste to be committed in, on, or about the Premises. Tenant will conduct
its business and control its employees, agents, and invitees in such a manner as
not to create any nuisance or interfere with, annoy, or disturb any other Tenant
or occupant of the Project or Landlord in its operation of the Project. Tenant
agrees to take possession of and occupy the entire Premises no later than 60
days after the Commencement Date, and Tenant further agrees to continue to
occupy the Premises throughout the remainder of the Term of this Lease until 90
days prior to the Expiration Date.

ARTICLE 8 REQUIREMENTS OF LAW; FIRE INSURANCE

8.1  General. At its sole cost and expense, Tenant will promptly comply with all
     laws, statutes, ordinances, codes, and governmental rules, regulations, or
     requirements of federal, state, county, and local governmental authorities
     now in force or in force at any given time after the Lease Date, with the
     requirements of any board of fire underwriters or other similar body
     constituted now or after the Lease Date, with any direction or occupancy
     certificate issued pursuant to any law by any public officer or officers,
     as well as with the provisions of all recorded documents affecting the
     Premises, insofar as they relate to the condition, use, or occupancy of the
     Premises, excluding requirements of structural changes to the Building,
     unless required by the unique nature of Tenant's use or occupancy of the
     Premises.

8.2  Hazardous Materials.

     (a)  For purposes of this Lease, "hazardous materials" means any
          explosives, radioactive materials, hazardous wastes, or hazardous
          substances, including without limitation asbestos containing
          materials, PCB's, CFC's, or substances defined as "hazardous
          substances" in the Comprehensive Environmental Response, Compensation
          and Liability Act of 1980, as amended, 42 U.S.C. (S)(S) 9601-9657; the
          Hazardous Materials Transportation Act of 1975, 49 U.S.C. (S)(S)
          1801-1812; the Resource Conservation and Recovery Act of 1976, 42
          U.S.C. (S)(S) 6901-6987; or any other federal, state, or local
          statute, law, ordinance, code, rule, regulation, order, or decree
          regulating, relating to, or imposing liability or standards of conduct
          concerning hazardous materials, waste, or substances now or at any
          time hereafter in effect (collectively, "hazardous materials laws").

     (b)  Tenant will not cause or permit the storage, use, generation, release,
          or disposition of any hazardous materials in, on, or about the
          Premises or the Project by Tenant, its agents, employees, or
          contractors. Tenant will not permit the Premises to be used or
          operated in a manner that may cause the Premises or the Project to be
          contaminated by any hazardous materials in violation of any hazardous
          materials laws. Tenant will immediately advise Landlord in writing of
          (1) any and all enforcement, cleanup, remedial, removal, or other
          governmental or regulatory actions instituted, completed, or
          threatened pursuant to any hazardous materials laws relating to any
          hazardous materials affecting the Premises; and (2) all claims made or
          threatened by any third party against Tenant, Landlord, the Premises
          or the Project relating to damage, contribution, cost recovery,
          compensation, loss, or injury resulting from any hazardous materials
          on or about the Premises. Without Landlord's prior written consent,
          Tenant will not take any remedial action or enter into any agreements
          or settlements in response to the presence of any hazardous materials
          in, on, or about the Premises.

     (c)  Tenant will be solely responsible for and will defend, indemnify and
          hold Landlord, its agents, and employees harmless from and against all
          claims, costs, expenses, damages, and liabilities, including
          attorneys' fees and costs, arising out of or in connection with
          Tenant's breach of its obligations in this Article 8. Tenant will be
          solely responsible for and will defend, indemnify, and hold Landlord,
          its agents, and employees harmless from and against any and all
          claims, costs, and liabilities, including attorneys' fees and costs,
          arising out of or in connection with the removal, cleanup, and
          restoration work and materials necessary to return the Premises and
          any other property of whatever nature located on the Project to their
          condition existing prior to the appearance of Tenant's hazardous
          materials on the Premises. Tenant's obligations under this Article 8
          will survive the expiration or other termination of this Lease.

8.3  Certain Insurance Risks. Tenant will not do or permit to be done any act or
     thing upon the Premises or the Project which would (a) jeopardize or be in
     conflict with fire insurance policies covering the Project and fixtures and
     property in the Project; (b) increase the rate of fire insurance applicable
     to the Project to an amount higher than it otherwise would be for general
     office use of the Project; or (c) subject Landlord to any liability or
     responsibility for injury to any person or persons or to property by reason
     of any business or operation being carried on upon the Premises. If the
     conduct of the Tenant, or any acts or omissions of the Tenant shall cause
     or result in any increase in premiums for insurance carried by the
     Landlord, whether or not Landlord allows such act or omission to continue,
     Tenant shall pay any increase in premium as Additional Rent.

                                     Page 7

<PAGE>

9.1  General, Tenant,_____________________________, distributees, executors,
     administrators, legal representatives, successors, and assigns, covenants
     and agrees that it will not assign, mortgage, or encumber this Lease, or
     sublease, nor or otherwise permit the Premises or any part of the Premises
     to be used or occupied by others, without the prior written consent of
     Landlord in each instance, which consent will not be unreasonably withheld.
     Landlord may condition its consent upon execution by the subtenant or
     assinee, as the case may be, of an instrument confirming the restrictions
     on further subleasing or assignment contained herein and joining in the
     waivers and indemnities made by Tenant hereunder. Any assignment or
     sublease in violation of this Article 9 will be void. If this Lease is
     assigned, or if the Premises or any part of the Premises are subleased or
     occupied by anyone other than Tenant, Landlord may, after any default by
     Tenant, collect rent from the assignee, subtenant, or occupant, and apply
     the net amount collected to Rent. No assignment, sublease, occupancy, or
     collection will be deemed (a) a waiver of the provisions of this
     Section 9.l; (b) the acceptance of the assignee, subtenant, or occupant as
     Tenant; or (c) a release of Tenant from the further performance by Tenant
     of covenants on the part of Tenant contained in this Lease. The consent by
     Landlord to an assignment or sublease will not be construed to relieve
     Tenant from obtaining Landlord's prior written consent in writing to any
     further assignment or sublease. No permitted subtenant may assign or
     encumber its sublease or further sublease all or any portion of its
     subleased space, or otherwise permit the subleased space or any part of its
     subleased space to be used or occupied by others, without Landlord's prior
     written consent in each instance. Any assignee approved by Landlord must
     assume all of the obligations and duties of Tenant under this Lease
     pursuant to an assumption agreement satisfactory to Landlord to which
     Landlord is the beneficiary.

9.2  Submission of Information. If Tenant requests Landlord's consent to a
     specific assignment or subletting, Tenant will submit in writing to
     Landlord (a) the name and address of the proposed assignee or subtenant;
     (b) the business terms of the proposed assignment or sublease; (c)
     reasonably satisfactory information as to the nature and character of the
     business of the proposed assignee or subtenant, and as to the nature of its
     proposed use of the space; (d) banking, financial, or other credit
     information reasonably sufficient to enable Landlord to determine the
     financial responsibility and character of the proposed assignee or
     subtenant; (e) the proposed form of assignment (including lease assumption
     provisions) or sublease for Landlord's reasonable approval; and (f) any
     other information reasonably required by Landlord.

9.3  Payments to Landlord. If Landlord consents to a proposed assignment or
     sublease, then Landlord will have the right to require Tenant to pay to
     Landlord a sum equal to (a) 50% of any rent or other consideration paid to
     Tenant by any proposed transferee that (after deducting the costs of
     Tenant, if any, in effecting the assignment or sublease, including
     reasonable alterations costs, commissions and legal fees) is in excess of
     the Rent allocable to the transferred space then being paid by Tenant to
     Landlord pursuant to this Lease; (b) 50 % of any other profit or gain
     (after deducting any necessary expenses incurred) realized by Tenant from
     any such sublease or assignment; and (c) Landlord's reasonable attorneys'
     fees and costs incurred in connection with negotiation, review, and
     processing of the transfer to the extent it is in excess of amounts payable
     to Landlord under Clauses (a) and (b) above. All such sums owed to Landlord
     under 9.3(c), above, will be payable to Landlord at the time the next
     payment of Monthly Rent is due.

9.4  Prohibited Transfers. The transfer of a majority of the issued and
     outstanding capital stock of any corporate Tenant or subtenant of this
     Lease, or a majority of the total interest in any partnership Tenant or
     subtenant, however accomplished, and whether in a single transaction or in
     a series of related or unrelated transactions, will be deemed an assignment
     of this lease or of such sublease requiring Landlord's consent in each
     instance. For purposes of this Article 9, the transfer of outstanding
     capital stock of any corporate Tenant will not include any sale of such
     stock by persons other than those deemed "insiders" within the meaning of
     the Securities Exchange Act of 1934, as amended, effected through the
     "over-the-counter market" or through any recognized stock exchange.

9.5  Landlord's Options. In the event of a prohibited transfer of this Lease or
     of all or any part of the Premises by Tenant, Landlord in addition to any
     rights contained herein, shall have the following options at its
     discretion:

     (a)  to give Tenant written notice of Landlord's intention to terminate
          this Lease as to all or any portion of the Premises on the date such
          notice is given or on any later date specified therein, whereupon, on
          the date specified in such notice, Tenant's right to possession of the
          Premises or such portion of the Premises shall cease and this Lease
          shall thereupon be terminated, except as to any incompleted
          obligations of Tenant; or

     (b)  to re-enter and take possession of the Premises or the part thereof
          subject to such transfer, and to enforce all rights of Tenant, in
          accordance with such sublet or assignment of the Premises, or any part
          thereof, as if Landlord was the sublessor or assignor, and to do
          whatever Tenant is permitted to do pursuant to the terms of such
          sublease or assignment.

9.6  Permitted Transfer. Landlord consents to an assignment of this Lease or
     sublease of all or part of the Premises to a wholly-owned subsidiary of
     Tenant or the parent of Tenant or to any corporation into or with which
     Tenant may be merged or consolidated; provided that (a) Tenant promptly
     provides Landlord with a fully executed copy of such assignment or
     sublease; (b) Tenant is not released from liability under this Lease

                                     Page 8

<PAGE>

ARTICLE 10 RULES AND REGULATIONS

Tenant and its employees, agents, licensees, and visitors will at all times
observe faithfully, and comply strictly with, the rules and regulations set
forth in Exhibit D. Landlord may from time to time reasonably amend, delete, or
modify existing rules and regulations, or adopt reasonable new rules and
regulations for the use, safety, cleanliness, and care of the Premises, the
Building, and the Project, and the comfort, quiet, and convenience of occupants
of the Project. Modifications or additions to the rules and regulations will be
effective upon 30 days' prior written notice to Tenant from Landlord. In the
event of any breach of any rules or regulations or any amendments or additions
to such rules and regulations, Landlord will have all remedies that this Lease
provides for default by Tenant, and will in addition have any remedies available
at law or in equity, including the right to enjoin any breach of such rules and
regulations. Landlord will not be liable to Tenant for violation of such rules
and regulations by any other tenant, its employees, agents, visitors, or
licensees or any other person provided that Landlord will endeavor to enforce
the rules and regulations equally throughout the Project, subject to such
special rules as may be agreed to for a given tenant's special circumstances. In
the event of any conflict between the provisions of this Lease and the rules and
regulations, the provisions of this Lease will govern.

ARTICLE 11 COMMON AREAS

As used in this Lease, the term "common areas" means, without limitation, the
hallways, entryways, stairs, elevators, driveways, roadways, parking areas,
walkways, terraces, docks, loading areas, restrooms, trash facilities, and all
other areas and facilities in the Project that are provided and designated from
time to time by Landlord for the general nonexclusive use and convenience of
Tenant with Landlord and other tenants of the Project and their respective
employees, invitees, licensees, or other visitors. Landlord grants Tenant, its
employees, invitees, licensees, and other visitors a nonexclusive license for
the Term to use the common areas in common with others entitled to use the
common areas, subject to the terms and conditions of this Lease. Without advance
written notice to Tenant, except with respect to matters covered by subsection
(a) below, and without any liability to Tenant in any respect, Landlord will
have the right to:

     (a)  Close off any of the common areas to whatever extent required in the
          opinion of Landlord and its counsel to prevent a dedication of any of
          the common areas or the accrual of any rights by any person or the
          public to the common areas;

     (b)  Temporarily close any of the common areas for maintenance, alteration,
          or improvement purposes; and

     (c)  Change the size, use, shape, or nature of any such common areas,
          including erecting additional buildings on the common areas, expanding
          the existing Building or other buildings to cover a portion of the
          common areas, converting common areas to a portion of the Building or
          other buildings, or converting any portion of the Building (excluding
          the Premises) or other buildings to common areas. Upon erection of any
          additional buildings or change in common areas, the portion of the
          Project upon which buildings or structures have been erected will no
          longer be deemed to be a part of the common areas.

ARTICLE 12 LANDLORD'S SERVICES

12.1 Landlord's Repair and Maintenance. Subject to the condemnation and casualty
     provisions contained in this Lease and except as otherwise expressly
     provided herein, Landlord will maintain and repair the common areas of the
     Project, including lobbies, stairs, elevators, corridors, and restrooms,
     the windows in the Building, the mechanical, plumbing and electrical
     equipment serving the Building, and the structure of the Building in
     reasonably good order and condition.

12.2 Landlord's Other Services.

     (a)  Landlord will furnish the Premises with services, including without
          limitation (1) electricity for lighting and the operation of
          low-wattage office machines (such as desktop micro-computers, desktop
          calculators, and typewriters) during Business Hours, and to 7:30 p.m.,
          Monday through Friday, although Landlord will not be obligated to
          furnish more power to the Premises than is proportionally allocated to
          the Premises under the Building design; (2) heat and air conditioning
          reasonably required for the comfortable occupation of the Premises
          during Business Hours; (3) access and elevator service; (4) lighting
          replacement during Business Hours (for building standard lights, but
          not for any special Tenant lights, which will be replaced at Tenant's
          sole cost and expense); (5) restroom supplies; (6) window washing with
          reasonable frequency, as determined by Landlord; and (7) daily
          cleaning service on weekdays. Landlord may provide, but will not be
          obligated to provide, any such services (except access and elevator
          service) on holidays or weekends.

                                     Page 9

<PAGE>

     ___________________________________________________________________________
     Tenant gives Landlord reasonable prior written notice of its desire to do
     so; (2) the excess services are reasonably available to Landlord and to the
     Premises; and (3) Tenant pays as Additional Rent (at the time the next
     payment of Monthly Rent is due) the cost of such excess service at a rate
     of $21 per hour from time to time charged by Landlord; subject to the
     procedures reasonably established by Landlord from time to time for
     providing such additional or excess services.

12.3 Tenant's Costs. Whenever equipment (other than customary office equipment)
     or lighting (other than building standard lights) is used in the Premises
     by Tenant and such equipment or lighting affects the temperature otherwise
     normally maintained by the design of the Building's air conditioning
     system, Landlord will have the right, after prior written notice to Tenant,
     to install supplementary air conditioning facilities in the Premises or
     otherwise modify the ventilating and air conditioning system serving the
     Premises; and the cost of such facilities, modifications, and additional
     service will be paid by Tenant as Additional Rent. If Landlord reasonably
     believes that Tenant is using more power than Landlord furnishes pursuant
     to Section 12.2, Landlord may install separate meters of Tenant's power
     usage, and Tenant will pay for the cost of such excess power as Additional
     Rent, together with the cost of installing any risers, meters, or other
     facilities that may be necessary to furnish or measure such excess power to
     the Premises.

12.4 Limitation on Liability. Landlord will not be in default under this Lease
     or be liable to Tenant or any other person for direct or consequential
     damage, or otherwise, for any failure to supply any heat, air conditioning,
     elevator, cleaning, lighting, or security; for surges or interruptions of
     electricity; or for interruptions to other services Landlord has agreed to
     supply. Landlord will use reasonable efforts to diligently remedy any
     interruption in the furnishing of such services. Landlord reserves the
     right temporarily to discontinue such services at such times as may be
     necessary by reason of accident; repairs, alterations or improvements;
     strikes; lockouts; riots; acts of God; governmental preemption in
     connection with a national or local emergency; any rule, order, or
     regulation of any governmental agency; conditions of supply and demand that
     make any product unavailable; Landlord's compliance with any mandatory
     governmental energy conservation or environmental protection program, or
     any voluntary energy conservation program at the request of or with consent
     or acquiescence of Tenant; or any other happening beyond the control of
     Landlord. Landlord will not be liable to Tenant or any other person or
     entity for direct or consequential damages resulting from the admission to
     or exclusion from the Building or Project of any person. In the event of
     invasion, mob, riot, public excitement, strikes, lockouts, or other
     circumstances rendering such action advisable in Landlord's sole opinion,
     Landlord will have the right to prevent access to the Building or Project
     during the continuance of the same by such means as Landlord, in its sole
     discretion, may deem appropriate, including without limitation locking
     doors and closing parking areas and other common areas. Landlord will not
     be liable for damages to person or property or for injury to, or
     interruption of, business for any discontinuance permitted under this
     Article 12, nor will such discontinuance in any way be construed as an
     eviction of Tenant or cause an abatement of Rent or operate to release
     Tenant from any of Tenant's obligations under this Lease. Landlord agrees
     that Tenant shall be entitled to ratably abated rent in the event of any
     material impairment in Tenant's use of the Property beyond the reasonable
     control of the Landlord which persists for more than five (5) business
     days. Said abatement shall begin on the sixth (6th) day of the material
     impairment.

ARTICLE 13 TENANT'S CARE OF THE PREMISES

Tenant will maintain the Premises (including Tenant's equipment, personal
property, and trade fixtures located in the Premises) in their condition at the
time they were delivered to Tenant, reasonable wear and tear excluded. Tenant
will immediately advise Landlord of any damage to the Premises or the Project.
All damage or injury to the Premises, the Project, or the fixtures,
appurtenances, and equipment in the Premises or the Project that is caused by
Tenant, its agents, employees, or invitees may be repaired, restored, or
replaced by Landlord, at the expense of Tenant. provided such expenses shall not
exceed the amount reasonably necessary to repair damage. Such expense will be
collectible as Additional Rent and will be paid by Tenant within 10 days after
delivery of a statement for such expense. Nothing in this section shall limit
Tenant's right to replace or repair Tenant's property.

ARTICLE 14 ALTERATIONS

(The provisions of this Article 14 shall not apply to Improvements covered by
the Workletter.)

14.1 General.

     (a)  To the extent the cost of such work exceeds $1,000.00, Tenant will not
          make or allow to be made any alterations, additions, or improvements
          to or of the Premises or any part of the Premises, or attach any
          fixtures or equipment to the Premises, without first obtaining
          Landlords written consent. which consent shall not be unreasonably
          withheld. In no event shall the work of Tenant affect or impair the
          structure; the elevators, or utility systems of the Building.
          Landlord's approval of the plans, specifications, and working drawings
          for Tenant's alterations shall create no responsibility or liability
          on the part of the Landlord for their completeness, design
          sufficiency, or compliance with all laws, ordinances, rules,
          requirements, and regulations of governmental agencies or authorities,
          or the use and occupancy permit for the Building. All such
          alterations, additions, and improvements consented to by Landlord, and
          capital improvements that are required to be made to the Project as a
          result of the nature of Tenant's use of the Premises:

          (1)  Will be performed by contractors reasonably approved by Landlord
               and subject to conditions specified by Landlord (which may
               include requiring the posting of performance and payment bonds);

          (2)  At Landlord's option, SEE ORDER ATTACHED
                                     ------------------

                                    Page 10

<PAGE>

          (3)  Will be done in a good and workmanlike manner and shall be
               completed promptly;

          (4)  Shall not cause a loss or diminution of electric power or other
               utilities or services to other tenants of the Building;

          (5)  Will be performed according to plans, specifications, and working
               drawings approved by Landlord; and

          (6)  Will be in accordance with all applicable federal, state, county
               and local laws, rules, regulations, ordinances and codes.

          At all times between the start and completion of the work, in addition
          to the other policies of insurance required by this Lease, Tenant
          shall maintain a policy of "All Risk" Builder's Risk Insurance
          covering the full replacement value of all work done and fixtures and
          equipment installed or to be installed at the Premises pursuant to
          this Article 14. Tenant herewith agrees to be responsible for all
          damages to persons or property, including loss of life, as a result of
          occurrences connected with activities undertaken by Tenant, its
          agents, contractors, and employees pursuant hereto, and hereby
          indemnifies Landlord and shall defend and hold Landlord harmless from
          and against any and all loss, cost or expense in connection with its
          responsibilities hereunder.

     (b)  Subject to Tenant's rights in Article 16, all alterations, additions,
          fixtures, and improvements, whether temporary or permanent in
          character, made in or upon the Premises either by Tenant or Landlord,
          will immediately become Landlord's property and at the end of the Term
          will remain on the Premises without compensation to Tenant, unless
          Landlord At the time landlord consents to the alteration, addition,
          fixture or improvement advises Tenant in writing that such
          alterations, additions, fixtures, or improvements must be removed at
          the expiration or other termination of this Lease.

14.2 Free-Standing Partitions. Tenant will have the right to install
     free-standing work station partitions, without Landlord's prior written
     consent, so long as no building or other governmental permit is required
     for their installation or relocation; however, if a permit is required,
     Landlord will not unreasonably withhold its consent to such relocation or
     installation. The free-standing work station partitions for which Tenant
     pays will be part of Tenant's trade fixtures for all purposes under this
     Lease. All other partitions installed in the Premises are and will be
     Landlord's property for all purposes under this Lease.

14.3 Removal. If Landlord has required Tenant to remove any or all alterations,
     additions, fixtures, and improvements that are made in or upon the
     Premises pursuant to this Article 14 prior to the Expiration Date, Tenant
     will remove such alterations, additions, fixtures, and improvements at
     Tenant's sole cost and will restore the Premises to the condition in which
     they were before such alterations, additions, fixtures, improvements, and
     additions were made.

ARTICLE 15 MECHANICS' LIENS

Tenant will pay or cause to be paid all costs and charges for work (a) done by
Tenant or caused to be done by Tenant, in or to the Premises, and (b) for all
materials furnished for or in connection with such work. Tenant will indemnify
Landlord against and defend and hold Landlord, the Premises, and the Project
free, clear, and harmless of and from all mechanics' liens and claims of liens,
and all other liabilities, liens, claims, and demands on account of such work by
or on behalf of Tenant, other than work performed by Landlord pursuant to the
Workletter. If any such lien, at any time, is filed against the Premises or any
part of the Project, Tenant will cause such lien to be discharged of record
within 10 days after the filing of such lien, except that if Tenant desires to
contest such lien, it will furnish Landlord, within such l0-day period, security
reasonably satisfactory to Landlord of at least 150% of the amount of the claim,
plus estimated costs and interest, or comply with such statutory procedures as
may be available to release the lien. If a final judgment establishing the
validity or existence of a lien for any amount is entered, Tenant will pay and
satisfy the same at once. If Tenant fails to pay any charge for which a
mechanics' lien has been filed, and has not given Landlord security as described
above, or has not complied with such statutory procedures as may be available
to release the lien, Landlord may, at its option, pay such charge and related
costs and interest, and the amount so paid, together with reasonable attorneys'
fees incurred In connection with such lien, will be immediately due from Tenant
to Landlord as Additional Rent. Nothing contained in this Lease will be deemed
the consent or agreement of Landlord to subject Landlord's interest in the
Project to liability under any mechanics' or other lien law. If Tenant receives
written notice that a lien has been or is about to be filed against the Premises
or the Project, or that any action affecting title to the Project has been
commenced on account of work done by or for or materials furnished to or for
Tenant, it will immediately give Landlord written notice of such notice. At
least 15 days prior to the commencement of any work (including but not limited
to any maintenance, repairs, alterations, additions, improvements, or
installations) in or to the Premises, by or for Tenant, Tenant will give
Landlord written notice of the proposed work and the names and addresses of the
persons supplying labor and materials for the proposed work. Landlord will have
the right to post notices of nonresponsibility or similar written notices on the
Premises in order to protect the Premises against any such liens.

                                    Page 11

<PAGE>

At the end of ___ Lease, Tenant will promptly quit and surrender the Premises
broom-clean, In good order and repair, ordinary wear and tear excepted and
deliver all keys to the Premises and the Building to Landlord. If Tenant is not
then in default, Tenant may remove from the Premises any trade fixtures,
equipment, and movable furniture placed in the Premises by Tenant, whether or
not such trade fixtures or equipment are fastened to the Building; Tenant will
not remove any trade fixtures or equipment without Landlord's prior written
consent if such fixtures or equipment are used in the operation of the Building,
or if the removal of such fixtures or equipment will result in impairing the
structural strength of the Building. Whether or not Tenant is in default, Tenant
will remove such alterations, additions, improvements, trade fixtures,
equipment, and furniture as Landlord has requested in accordance with Article
14. Tenant will fully repair any damage occasioned by the removal of any trade
fixtures, equipment, furniture, alterations, additions, and improvements. All
trade fixtures, equipment, furniture, inventory, effects, alterations,
additions, and improvements on the Premises after the end of the Term will be
deemed conclusively to have been abandoned and may be appropriated, sold,
stored, destroyed, or otherwise disposed of by Landlord without notice to Tenant
or any other person and without obligation to account for them. Tenant will pay
Landlord for all expenses incurred in connection with the removal of such
property, including but not limited to the cost of storage, and the cost of
repairing any damage to the Building or Premises caused by the removal of such
property. Tenant's obligation to observe and perform this covenant will survive
the expiration or other termination of this Lease.

ARTICLE 17 EMINENT DOMAIN

If all of the Premises are taken by exercise of the power of eminent domain (or
conveyed by Landlord in lieu of such exercise) this Lease will terminate on a
date (the "termination date") which is the earlier of the date upon which the
condemning authority takes possession of the Premises or the date on which title
to the Premises is vested in the condemning authority. If more than 10% of the
Rentable Area of the Premises is so taken, Tenant will have the right to cancel
this Lease by written notice to Landlord given within 20 days after the
termination date. If less than 10% of the Rentable Area of the Premises is so
taken, or if the Tenant does not cancel this Lease according to the preceding
sentence, the Monthly Rent will be abated in the proportion of the Rentable Area
of the Premises so taken to the Rentable Area of the Premises immediately before
such taking, and Tenant's Share will be appropriately recalculated. If 25% or
more of the Building or the Project is so taken, Landlord may cancel this Lease
by written notice to Tenant given within 30 days after the termination date. In
the event of any such taking, the entire award will be paid to Landlord, and
Tenant will have no right or claim to any part of such award; however, Tenant
will have the right to assert a claim against the condemning authority in a
separate action, so long as Landlord's award is not reduced as a consequence of
such claim, for Tenant's moving expenses and trade fixtures owned by Tenant.

ARTICLE 18 DAMAGE AND DESTRUCTION

     (a)  If the Premises or the Building is damaged by fire or other insured
          casualty, Landlord will give Tenant written notice of the time which
          will be needed to repair such damage, as determined by Landlord in its
          reasonable discretion, and the election (if any) which Landlord has
          made according to this Article 18. Such notice will be given before
          the 60th day (the "notice date") after the fire or other insured
          casualty.

     (b)  If the Premises or the Building is damaged by fire or other insured
          casualty to an extent which may be repaired within 180 days after the
          notice date, as reasonably determined by Landlord, Landlord will
          promptly begin to repair the damage after the notice date and will
          diligently pursue the completion of such repair. In that event this
          Lease will continue in full force and effect except that Monthly Rent
          will be abated on a pro rata basis from the date of the damage until
          the date of the completion of such repairs (the "repair period") based
          on the proportion of the Rentable Area of the Premises Tenant is
          unable to use during the repair period.

     (c)  If the Premises or the Building is damaged by fire or other insured
          casualty to an extent that may not be repaired within 180 days after
          the notice date, as reasonably determined by Landlord, then (1)
          Landlord may cancel this Lease as of the date of such damage by
          written notice given to Tenant on or before the notice date or (2)
          Tenant may cancel this Lease as of the date of such damage by written
          notice given to Landlord within 10 days after Landlord's delivery of a
          written notice that the repairs cannot be made within such 180 day
          period. If neither Landlord nor Tenant so elects to cancel this Lease,
          Landlord will diligently proceed to repair the Building and Premises
          and Monthly Rent will be abated on a pro rata basis during the repair
          period based on the proportion of the Rentable Area of the Premises
          Tenant is unable to use during the repair period.

     (d)  Notwithstanding the provisions of subparagraphs (a), (b), and (c)
          above, if the Premises or the Building or the Project are damaged by
          uninsured casualty, or if the proceeds of insurance are insufficient
          to pay for the repair of any damage to the Premises or the Building or
          the Project, Landlord will have the option to repair such damage or
          cancel this Lease as of the date of such casualty by written notice to
          Tenant on or before the notice date, provided that if Landlord elects
          to repair such damage, the provisions of subparagraphs (a), (b) and
          (c) above shall apply.

                                    Page 12

<PAGE>

          as otherwise provided for in this Article 18. Tenant will have no
          rights to terminate this Lease on account of any damage to the
          Premises, the Building, or the Project, except as set forth in this
          Lease.

     (f)  For purposes of this Article 18 and subject to subsections (a) thru
          (e) hereof, Landlord shall repair or restore any portion of the
          alterations, additions or improvements in the Premises or the
          decorations thereto to the extent that such alterations, additions,
          improvements and decorations were provided by Landlord at the
          beginning of the Term. Except as otherwise provided in this Lease,
          Landlord shall have no further obligations pursuant to this Lease to
          repair or restore any alterations, additions or improvements in the
          Premises or the decorations thereto. If Tenant desires any other or
          additional repairs or restoration and if Landlord consents thereto,
          which consent shall not be unreasonably withheld, the same shall be
          done at Tenant's sole cost and expenses. Tenant acknowledges that
          Landlord shall be entitled to the full proceeds of any insurance
          coverage, whether carried by Landlord or Tenant, for damage to
          alterations, additions, improvements or decorations, but only to the
          extent Landlord applies such proceeds to repair, restoration, or
          replacement, whether undertaken by Landlord or Tenant.

ARTICLE 19 SUBORDINATION

                               SEE RIDER ATTACHED
                               ------------------

19.1 NON-DISTURBANCE SEE RIDER ATTACHED
                     ------------------

ARTICLE 20 ENTRY BY LANDLORD

Landlord, its agents, employees, and contractors may enter the Premises at any
time in response to an emergency and at any other reasonable time including
during non-business hours, upon prior notice, to:

     (a)  Inspect the Premises;

     (b)  Exhibit the Premises to prospective purchasers, lenders, or within 90
          days of Lease expiration to prospective tenants;

     (c)  Determine whether Tenant is complying with all its obligations in this
          Lease;

                                    Page 13

<PAGE>

     (e)  Post written notices of nonresponsibility or similar notices; or

     (f)  Make repairs required of Landlord under the terms of this Lease or
          make repairs to any adjoining space or utility services or make
          repairs, alterations, or improvements to any other portion of the
          Building.

Tenant, by this Article 20, waives any claim against Landlord, its agents,
employees, or contractors for damages for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy or quiet enjoyment of
the Premises, or any other loss occasioned by any entry in accordance with this
Article 20. Landlord will at all times have and retain a key with which to
unlock all of the doors in, on, or about the Premises (excluding Tenant's
vaults, safes, and similar areas designated in writing by Tenant in advance).
Landlord will have the right to use any and all means Landlord may deem proper
to open doors in and to the Premises in an emergency in order to obtain entry to
the Premises, provided that Landlord will promptly repair any damages caused by
any forced entry. Any entry to the Premises by Landlord in accordance with this
Article 20 will not be construed or deemed to be a forcible or unlawful entry
into or a detainer of the Premises or an eviction, actual or constructive, of
Tenant from the Premises or any portion of the Premises, nor will any such entry
entitle Tenant to damages or an abatement of Monthly Rent, Additional Rent, or
other charges that this Lease requires Tenant to pay. Landlord shall not
unreasonably interfere with Tenant's possession and quiet enjoyment of the
Premises in connection with the entry by Landlord in Article 20.

ARTICLE 21 INDEMNIFICATION, WAIVER, AND RELEASE

21.1 Indemnification. To the extent not prohibited by law, Landlord, its
     employees and agents shall not be liable for damage to person, property or
     business or resulting from the loss of use thereof sustained by Tenant or
     other persons due to the Building or any part thereof becoming out of
     repair or due to an accident or due to any act or neglect of any tenant,
     occupant or other person. Tenant further agrees that a11 personal property
     upon the Premises, loading dock, holding areas, and freight elevators shall
     be at the sole risk of Tenant.

Tenant will neither hold nor attempt to hold Landlord, its employees, or agents
liable for, and Tenant will indemnify and defend and hold harmless Landlord, its
employees, and agents from and against, any and all demands, claims, causes of
action, fines, penalties, damages (including consequential damages),
liabilities, judgments, and expenses (including without limitation reasonable
attorneys' fees) incurred in connection with or arising from:

     (a)  the use or occupancy or manner of use or occupancy of the Premises or
          any common areas by Tenant or any person claiming under Tenant;

     (b)  any activity, work, or thing done or permitted by Tenant in or about
          the Premises, the Building, or the Project;

     (c)  any breach by Tenant or its employees, agents, contractors, or
          invitees of this Lease; and

     (d)  any injury or damage to the person, property, or business of Tenant,
          its employees, agents, contractors, or invitees entering upon the
          Premises under the express or implied invitation of Tenant.

     If any action or proceeding is brought against Landlord, its employees, or
     agents by reason of any such claim for which Tenant has indemnified
     Landlord, Tenant, upon written notice from Landlord, will defend the same
     at Tenant's expense, with counsel reasonably satisfactory to Landlord.

21.2 Waiver and Release. Tenant, as a material part of the consideration to
     Landlord for this Lease, by this Section 21.2 waives and releases all
     claims against Landlord, its employees, and agents with respect to all
     matters for which Landlord has disclaimed liability pursuant to the
     provisions of this Lease.

ARTICLE 22 SECURITY DEPOSIT

Tenant has deposited the security deposit with Landlord as security for the
full, faithful, and timely performance of every provision of this Lease to be
performed by Tenant. If Tenant defaults with respect to any provision of this
Lease, including but not limited to the provisions relating to the payment of
Rent, Landlord may use, apply, or retain all or any part of the security deposit
for the payment of any Rent, or any other sum in default, or for the payment of
any other amount Landlord may spend or become obligated to spend by reason of
Tenant's default, or to compensate Landlord for any other loss or damage
Landlord may suffer by reason of Tenant's default. If any portion of the
security deposit is so used, applied, or retained, Tenant will within 5 days
after written demand deposit cash with Landlord in an amount sufficient to
restore the security deposit to its original amount. Landlord will not be
required to keep the security deposit separate from its general funds, and
Tenant will not be entitled to interest on the security deposit. The security
deposit will not be deemed a limitation on Landlord's damages or a payment of
liquidated damages or a payment of the Monthly Rent due for the last month of
the Term. If Tenant fully, faithfully, and timely performs every provision of
this Lease to be performed by it, the security deposit or any balance of the
security deposit will be returned to Tenant within 60 days after the

                                    Page 14

<PAGE>

________________________________________________________________________________
after such time Landlord will have no further liability to Tenant with respect
to the security deposit.

ARTICLE 23 QUIET ENJOYMENT

Landlord covenants and agrees with Tenant that so long as Tenant pays the Rent
and observes and performs all the terms, covenants, and conditions of this Lease
on Tenant's part to be observed and performed, Tenant may peaceably and quietly
enjoy the Premises subject, nevertheless, to the terms and conditions of this
Lease, and Tenant's possession will not be disturbed by anyone claiming by,
through, or under Landlord.

ARTICLE 24 EFFECT OF SALE

A sale, conveyance, or assignment of the Building or the Project will operate to
release Landlord from liability from and after the effective date of such sale,
conveyance, or assignment upon all of the covenants, terms, and conditions of
this Lease, express or implied, except those liabilities that arose prior to
such effective date, and, after the effective date of such sale, conveyance, or
assignment, Tenant will look solely to Landlord's successor in interest in and
to this Lease. This Lease will not be affected by any such sale, conveyance, or
assignment, and Tenant will attorn to Landlord's successor in interest to this
Lease from and after such effective date.

ARTICLE 25 DEFAULT

25.1 Events of Default. The following events are referred to, collectively, as
     "events of default" or, individually, as an "event of default":

     (a)  Tenant fails to pay any Rent or other monetary obligation when due,
          and such failure continues for 5 days after written notice
          from Landlord; however, Tenant will not be entitled to more than 2
          written notices for monetary defaults during any 12-month period, and
          if after 2 written notices any Rent is not paid when due, an event of
          default will be considered to have occurred without further notice;
          provided further that Landlord or its agent shall provide monthly
          statements of rent due not less than five (5) business  days
          prior to the day such rent is due;

     (b)  Tenant vacates or abandons the Premises;

     (c)  This Lease or the Premises or any part of the Premises is taken upon
          execution or by other process of law directed against Tenant, or is
          taken upon or subject to any attachment by any creditor of Tenant or
          claimant against Tenant, and said attachment is not discharged or
          disposed of within 15 days after its levy;

     (d)  Tenant or any guarantor of Tenant's obligations under this Lease
          ("Guarantor") files a petition in bankruptcy or insolvency or for
          reorganization or arrangement under the bankruptcy laws of the United
          States or under any insolvency act of any state, or admits the
          material allegations of any such petition by answer or otherwise, or
          admits in writing its inability to meet its debts as they mature, or
          is dissolved or makes an assignment for the benefit of creditors;

     (e)  Involuntary proceedings under any such bankruptcy law or insolvency
          act or for the dissolution of Tenant or any Guarantor are instituted
          against Tenant or any Guarantor, or a receiver or trustee is appointed
          for all or substantially all of the property of Tenant or any
          Guarantor, and such proceeding is not dismissed or such receivership
          or trusteeship vacated within 60 days after such institution or
          appointment;

     (f)  Tenant fails to take possession of the Premises within 60 days
          following the Commencement Date of the Term;

     (g)  Tenant violates the terms of Article 9 "Assignment and Subletting";

     (h)  Tenant breaches any of the agreements, terms, covenants, or conditions
          of this Lease and such breach involves a hazardous condition and is
          not cured immediately upon written notice to Tenant;

     (i)  Tenant materially breaches any of the other agreements, terms,
          covenants, or conditions that this Lease requires Tenant to perform,
          and such breach continues for a period of 30 days after written notice
          from Landlord to Tenant or, if such breach cannot be cured reasonably
          within such 30-day period, if Tenant fails to diligently commence to
          cure such breach within 30 days after written notice from Landlord and
          to complete such cure within a reasonable time thereafter; or

     (j)  Any guaranty of the Lease obligations becomes unenforceable in whole
          or in part for any reason.

25.2 Landlord's Remedies. If any one or more events of default set forth in
     Section 25.1 occurs then Landlord has the right, at its election:

     (a)  To give Tenant written notice of Landlord's intention to terminate
          this Lease on the earliest date permitted by law or on any later date
          specified in such notice, in which case Tenant's right to possession
          of the Premises will cease and this Lease will be terminated, except
          as to Tenant's liability, as if the expiration

                                    Page 15

<PAGE>

     (b)  _____________________________ notice, and without terminating this
          Lease, to reenter and take possession of the Premises or any part of
          the Premises, repossess the same, expel Tenant and those claiming
          through or under Tenant, and remove the effects of both or either,
          using such force for such purposes as may be necessary, without being
          liable for prosecution, without being deemed guilty of any manner of
          trespass, and without prejudice to any remedies for arrears of Monthly
          Rent or other amounts payable under this Lease or as a result of any
          preceding breach of covenants or conditions; or

     (c)  Without further demand or notice to cure any event of default and to
          charge Tenant for the cost of effecting such cure, including without
          limitation reasonable attorneys' fees and interest on the amount so
          advanced at the rate set forth in Section 27.21, provided that
          Landlord will have no obligation to cure any such event of default of
          Tenant.

     Should Landlord elect to reenter as provided in subsection (b), or should
     Landlord take possession pursuant to legal proceedings or pursuant to any
     notice provided by law, Landlord may, from time to time, without
     terminating this Lease, relet the Premises or any part of the Premises in
     Landlord's or Tenant's name, but for the account of Tenant, for such term
     or terms (which may be greater or less than the period which would
     otherwise have constituted the balance of the Term) and on such conditions
     and upon such other terms (which may include concessions of free rent and
     alteration and repair of the Premises) as Landlord, in its reasonable
     discretion, may determine, and Landlord may collect and receive the rents
     from such reletting. Landlord will in no way be responsible or liable for
     any failure to relet the Premises, or any part of the Premises, or for any
     failure to collect any rent due upon such reletting. No such reentry or
     taking possession of the Premises by Landlord will be construed as an
     election on Landlord's part to terminate this Lease unless a written notice
     of such intention is given to Tenant. No written notice from Landlord under
     this Section or under a forcible or unlawful entry and detainer statute or
     similar law will constitute an election by Landlord to terminate this Lease
     unless such notice specifically so states. Landlord reserves the right
     following any such reentry or reletting to exercise its right to terminate
     this Lease by giving Tenant such written notice, in which event this Lease
     will terminate as specified in such notice.

25.3 Certain Damages. In the event that Landlord does not elect to terminate
     this Lease as permitted in Section 25.2(a), but on the contrary elects to
     take possession as provided in Section 25.2(b), Tenant will pay to Landlord
     Monthly Rent and other sums as provided in this Lease that would be payable
     under this Lease if such repossession had not occurred, less the net
     proceeds, if any, of any reletting of the Premises after deducting all of
     Landlord's reasonable expenses in connection with such reletting, including
     without limitation all repossession costs, brokerage commissions,
     attorneys' fees, expenses of employees, alteration and repair costs, and
     expenses of preparation for such reletting. Tenant will pay such Rent and
     other sums to Landlord monthly on the day on which the Monthly Rent would
     have been payable under this Lease if possession had not been retaken, and
     Landlord will be entitled to receive such Rent and other sums from Tenant
     on each such day.

25.4 Continuing Liability After Termination. If this Lease is terminated on
     account of the occurrence of an event of default, Tenant will remain liable
     to Landlord for damages in an amount equal to the Rent and other amounts
     that would have been owing by Tenant for the balance of the Term, had this
     Lease not been terminated, less the net proceeds, if any, of any reletting
     of the Premises by Landlord subsequent to such termination, after deducting
     all of Landlord's reasonable expenses in connection with such reletting,
     including without limitation the expenses enumerated in Section 25.3.
     Landlord will be entitled to collect such damages from Tenant monthly on
     the day on which Monthly Rent and other amounts would have been payable
     under this Lease if this Lease had not been terminated, and Landlord will
     be entitled to receive such Monthly Rent and other amounts from Tenant on
     each such day. Alternatively, at the option of Landlord, in the event this
     Lease is so terminated, Landlord will be entitled to recover against Tenant
     as damages for loss of the bargain and not as a penalty:

     (a)  The worth at the time of award of the unpaid Rent that had been earned
          at the time of termination;

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

     (c)  The worth at the time of award of the amount by which the unpaid Rent
          for the balance of the Term of this Lease (had the same not been so
          terminated by Landlord) after the time of award exceeds the amount of
          such rental loss that Tenant proves could be reasonably avoided;

     (d)  Any other amount necessary to compensate Landlord for all the
          detriment proximately caused by Tenant's failure to perform its
          obligations under this Lease or which in the ordinary course of things
          would be likely to result therefrom.

     The "worth at the time of award" of the amounts referred to in clauses (a)
     and (b) above is computed by

                                    Page 16

<PAGE>

     amount referred to in clause (c) above is computed by discounting such
     amount at the discount rate of the Federal Reserve Bank of New York, New
     York, at the time of award plus 1%.

25.5 Cumulative Remedies. Any suit or suits for the recovery of the amounts and
     damages set forth in Sections 25.3 and 25.4 may be brought by Landlord,
     from time to time, at Landlord's election, and nothing in this Lease will
     be deemed to require Landlord to await the date upon which this Lease or
     the Term would have expired had there occurred no event of default. Each
     right and remedy provided for in this Lease is cumulative and is in
     addition to every other right or remedy provided for in this Lease or now
     or after the Lease Date existing at law or in equity or by statute or
     otherwise, and the exercise or beginning of the exercise by Landlord of any
     one or more of the rights or remedies provided for in this Lease or now or
     after the Lease Date existing at law or in equity or by statute or
     otherwise will not preclude the simultaneous or later exercise by Landlord
     of any or all other rights or remedies provided for in this Lease or now or
     after the Lease Date existing at law or in equity or by statute or
     otherwise. All costs incurred by Landlord in collecting any amounts and
     damages owing by Tenant pursuant to the provisions of this Lease or to
     enforce any provision of this Lease, including reasonable attorneys' fees
     from the date any such matter is turned over to an attorney, whether or not
     one or more actions are commenced by Landlord, will also be recoverable by
     Landlord from Tenant.

25.6 Waiver of Redemption. Tenant waives any right of redemption arising as a
     result of Landlord's exercise of its remedies under this Article 25.

ARTICLE 26 PARKING

Tenant will be entitled to use the parking spaces during the Term subject to the
rules and regulations set forth in Exhibit D, and any amendments or additions to
them. The parking charges set forth in Section 1.1(r), if any, will be due and
payable in advance at the same time and place as Monthly Rent. Tenant's parking
spaces will be unassigned, nonreserved, and nondesignated.

Neither Landlord nor any operator of the parking areas within the Project, as
the same are designated and modified by Landlord, in its sole discretion, from
time to time (the "parking areas") will be liable for loss of or damage to any
vehicle or any contents of such vehicle or accessories to any such vehicle, or
any property left in any of the parking areas, resulting from fire, theft,
vandalism, accident, conduct of other users of the parking areas and other
persons, or any other casualty or cause. Further, Tenant understands and agrees
that: (a) Landlord will not be obligated to provide any traffic control,
security protection or operator for the parking areas; (b) Tenant uses the
parking areas at its own risk; and (c) Landlord will not be liable for personal
injury or death, or theft, loss of, or damage to property. Tenant waives and
releases Landlord from any and all liability arising out of the use of the
parking areas by Tenant, its employees, agents, invitees, and visitors, whether
brought by any of such persons or any other person.

Tenant's right to use the parking areas will be in common with other tenants of
the Project and with other parties permitted by Landlord to use the parking
areas. Landlord reserves the right to assign and reassign, from time to time,
particular parking spaces for use by persons selected by Landlord, provided that
Tenant's rights under the Lease are preserved. Landlord will not be liable to
Tenant for any unavailability of Tenant's designated spaces, if any, nor will
any unavailability entitle Tenant to any refund, deduction, or allowance
provided that Landlord takes reasonable steps to mitigate any parking
problem. Tenant will not park in any numbered space or any space designated as:
RESERVED, HANDICAPPED, VISITORS ONLY, or LIMITED TIME PARKING (or similar
designation).

If the parking areas are damaged or destroyed, or if the use of the parking
areas is limited or prohibited by any governmental authority, or the use or
operation of the parking areas is limited or prevented by strikes or other labor
difficulties or other causes beyond Landlord's control, Tenant's inability to
use the parking spaces will not subject Landlord or any operator of the parking
areas to any liability to Tenant and will not relieve Tenant of any of its
obligations under the Lease and the Lease will remain in full force and effect;
provided that Landlord takes reasonable steps to mitigate any parking problem.

Tenant has no right to assign or sublicense any of its rights in the parking
spaces, except as part of a permitted assignment or sublease of the Lease.

ARTICLE 27 MISCELLANEOUS

27.1 No Offer. Submission of the Lease to Tenant is for examination and shall
     not bind Landlord in any manner. No lease or obligations of Landlord shall
     arise until this instrument is signed by both Landlord and Tenant and
     delivery is made to each; provided, however, the execution and delivery by
     Tenant of this Lease to Landlord or Landlord's agent shall constitute an
     irrevocable offer by Tenant to lease the Premises on the terms and
     conditions herein contained, which offer may not be withdrawn or revoked
     for 10 days after such execution and delivery.

                                    Page 17

<PAGE>

     late charge represents a fair and reasonable estimate of the costs Landlord
     will incur by reason of late payment, including repeated late payments, by
     Tenant Acceptance of such late charge by Landlord does not constitute a
     waiver of Tenant's default with respect to such overdue amount, nor prevent
     Landlord from exercising any of the other rights and remedies granted by
     this Lease, at law, or in equity.

     INITIALS                    /s/ Illegible
               ---------------   ---------------
               Landlord          Tenant

     Landlord and Tenant have executed this Rider this 2nd day of Nov 1995

<TABLE>
<S>                                           <C>
Tenant: MSK Financial Services Inc.           Landlord: MBL Life Assurance Corporation
        ----------------------------
        a California Corporation
        (dba Accredited edit Home Lenders)
</TABLE>

By: /s/ James A. Konrath                      By: /s/ Norman J Short
    ---------------------------------             ------------------------------

Name: James A. Konrath                        Name:  Norman J Short
      -------------------------------                ---------------------------

Title: President                              Title: V.P.
       ------------------------------                ---------------------------

Attest/Witness                                Attest/Witness

By:  /s/ Ray W. McKewon                       By:  /s/ Kevin Gibbons
     --------------------------------              -----------------------------
     Ray W. McKewon                                KEVIN GIBBONS

Its: Secretary                                Its: SENIOR ASSET MANAGER
     --------------------------------              -----------------------------

                                       3

<PAGE>

     ___________________________________________________________________________
     according to this Lease. The act of, written notice to, written notice
     from, refund to, or signature of any signatory to this Lease (including
     without limitation modifications of this Lease made by fewer than all such
     signatories) will bind every other signatory as though every other
     signatory had so acted, or received or given the written notice or refund,
     or signed.

27.3 No Construction Against Drafting Party. Landlord and Tenant acknowledge
     that each of them and their counsel have had an opportunity to review this
     Lease and that this Lease will not be construed against Landlord merely
     because Landlord has prepared it.

27.4 Time of the Essence. Time is of the essence of each and every provision of
     this Lease.

27.5 No Recordation. Tenant's recordation of this Lease or any memorandum or
     short form of it will be void and an event of default under this Lease.
     Tenant shall, at the request of Landlord, execute a short-form lease and
     have it properly acknowledged for the purpose of recording. The cost of
     recording such short-form lease shall be borne by Landlord.

27.6 No Waiver. No waiver a party of any agreement, condition or provision
     contained in this Lease will be valid or binding unless expressed in
     writing and signed by such party. The waiver by a party of any agreement,
     condition, or provision contained in this Lease will not be deemed to be a
     waiver of any subsequent breach of the same or any other agreement,
     condition, or provision contained in this Lease, nor will any custom or
     practice that may grow up between the parties in the administration of the
     terms of this Lease be construed to waive or to lessen the right of a party
     to insist upon the performance by the other party in strict accordance with
     the terms of this Lease. The subsequent acceptance of Rent by Landlord will
     not be deemed to be a waiver of any preceding breach by Tenant of any
     agreement, condition, or provision of this Lease, other than the failure of
     Tenant to pay the particular Rent so accepted, regardless of Landlord's
     knowledge of such preceding breach at the time of acceptance of such Rent.

27.7 Limitation on Recourse. Tenant specifically agrees to look solely to
     Landlord's interest in the Project for the recovery of any judgments from
     Landlord. It is agreed that Landlord (and its agents, shareholders,
     venturers, and partners, and their shareholders, venturers, and partners
     and all of their officers, directors, and employees) will not be personally
     liable for any such judgments.

27.8 Estoppel Certificates. At any time and from time to time but within 5 days
     after prior written request by Landlord, Tenant will execute, acknowledge,
     and deliver to Landlord or such other person as Landlord shall direct,
     promptly upon request, a certificate certifying (a) that this Lease is
     unmodified and in full force and effect or, if there have been
     modifications, that this Lease is in full force and effect, as modified,
     and stating the date and nature of each modification; (b) the date, if any,
     to which Rent and other sums payable under this Lease have been paid; (c)
     that no written notice of any default has been delivered to Landlord which
     default has not been cured, except as to defaults specified in said
     certificate; (d) that the Tenant has no knowledge of and that there is no
     event of default under this Lease or an event which, with notice or the
     passage of time, or both, would result in an event of default under this
     Lease, except for defaults specified in said certificate; and (e) such
     other matters as may be reasonably requested by Landlord. Any such
     certificate may be relied upon by any prospective purchaser or existing or
     prospective mortgagee or beneficiary under any deed of trust of the
     Building or any part of the Project. Tenant's failure to deliver such a
     certificate within such time will be conclusive evidence of the matters set
     forth in it, and such failure shall be an event of default. Landlord will
     sign a similar certificate, as described above for Tenant's lender if
     requested to do so.

27.9 Attorneys' Fees. If Landlord and Tenant litigate any provision of this
     Lease or the subject matter of this Lease, the unsuccessful litigant will
     pay to the successful litigant all costs and expenses, including reasonable
     attorneys' fees and court costs, incurred by the successful litigant at
     trial and on any appeal. If, without fault, either Landlord or Tenant is
     made a party to any litigation instituted by or against the other, the
     other will indemnify the faultless one against all loss, liability, and
     expense, including reasonable attorneys' fees and court costs, incurred by
     it in connection with such litigation.

27.10 No Merger. The voluntary or other surrender of this Lease by Tenant or the
     cancellation of this Lease by mutual agreement of Tenant and Landlord or
     the termination of this Lease on account of Tenant's default will not work
     a merger, and will, at Landlord's option, (a) terminate all or any
     subleases and subtenancies or (b) operate as an assignment to Landlord of
     all or any subleases or subtenancies. Landlord's option under this Section
     27.10 will be exercised by written notice to Tenant and all known
     sublessees or subtenants in the Premises or any part of the Premises.

27.11 Holding Over. Tenant will have no right to remain in possession of all or
     any part of the Premises after the expiration of the Term and Landlord may,
     at its option, re-enter and take possession of the Premises, reserving its
     rights to collect damages sustained by reason of Tenant's unlawful
     retention of possession of the Premises or any part thereof. If Tenant
     remains in possession of all or any part of the Premises after the
     expiration of the Term, with the express written consent of Landlord: (a)
     such tenancy will be deemed

                                    Page 18

<PAGE>

     earlier of 30 days' prior written notice or the earliest date permitted by
     law. In such event, Monthly Rent will be increased to an amount equal to
     150% of the Monthly Rent payable during the last month of the Term, and any
     other sums due under this Lease will be payable in the amount and at the
     times specified in this Lease. During such month-to-month tenancy, Tenant
     will observe every other term, condition, and covenant contained in this
     Lease.

27.12 Notices. Any notice, request, demand, consent, approval, or other
     communication required or permitted under this Lease must be in writing and
     will be deemed to have been given when personally delivered, sent by
     facsimile with delivery confirmed by telephone, deposited with any
     nationally recognized overnight carrier that routinely issues receipts, or
     deposited in any depository regularly maintained by the United States
     Postal Service, postage prepaid, certified mail, return receipt requested,
     addressed to the party for whom it is intended at its address(es) set forth
     in Section 1.1. Either Landlord or Tenant may add additional addresses or
     change its address for purposes of receipt of any such communication by
     giving 10 days' prior written notice of such change to the other party in
     the manner prescribed in this Section 27.12.

27.13 Severability. If any provision of this Lease proves to be illegal,
     invalid, or unenforceable, the remainder of this Lease will not be affected
     by such finding, and in lieu of each provision of this Lease that is
     illegal, invalid, or unenforceable a provision shall be deemed added as a
     part of this Lease as similar in terms to such illegal, invalid, or
     unenforceable provision as may be possible and be legal, valid, and
     enforceable.

27.14 Written Amendment Required. No amendment, alteration, modification of, or
     addition to the Lease will be valid or binding unless expressed in writing
     and signed by Landlord and Tenant. Tenant agrees to make any modifications
     of the terms and provisions of this Lease required or requested by any
     lending institution providing financing for the Building, or Project, as
     the case may be, provided that no such modifications will materially
     adversely affect Tenant's rights and obligations under this Lease.

27.15 Entire Agreement. This Lease, the exhibits and addenda, if any, contain
     the entire agreement between Landlord and Tenant. No promises or
     representations, except as contained in this Lease, have been made to
     Tenant respecting the condition or the manner of operating the Premises,
     the Building, or the Project.

27.16 Captions. The captions of the various articles and sections of this Lease
     are for convenience only and do not necessarily define, limit, describe, or
     construe the contents of such articles or sections.

27.17 Notice of Landlord's Default. In the event of any alleged default in the
     obligation of Landlord under this Lease, Tenant will deliver to Landlord
     written notice listing the reasons for Landlord's default and Landlord will
     have 30 days following receipt of such notice to cure such alleged default
     or, in the event the alleged default cannot reasonably be cured within a
     30-clay period, to commence action and proceed diligently to cure such
     alleged default. A copy of such notice to Landlord will be sent to any
     holder of a mortgage or other encumbrance on the Building or Project of
     which Tenant has been notified in writing, and any such holder will also
     have an like period to cure such alleged default.

27.18 Authority. Tenant and the party executing this Lease on behalf of Tenant
     represent to Landlord that such party is authorized to do so by requisite
     action of the board of directors or partners, as the case may be, and agree
     upon request to deliver to Landlord a resolution or similar document to
     that effect.

27.19 Brokers. Tenant represents and warrants that it has not consulted or
     negotiated with any broker, finder or agent with regard to the Premises
     except the broker named in Section 1.1, if any. Tenant agrees to hold
     Landlord harmless and indemnify Landlord against all costs, expenses,
     attorney's fees, or other liability for commissions or other compensation
     or charges claimed by any broker, finder or agent claiming the same by,
     through or under Tenant and such indemnity shall survive the expiration or
     earlier termination of this Lease.

27.20 Governing Law. This Lease will be governed by and construed pursuant to
     the laws of the state in which the Project is located.

27.21 Late Payments. Any Rent or other monetary obligation due Landlord that is
     not paid when due will accrue interest at a rate of the Prime Rate plus 5%
     per annum (but in no event in an amount in excess of the maximum rate
     allowed by applicable law) from the date on which it was due until the date
     on which it is paid in full with accrued interest. In addition to the
     foregoing, Tenant shall pay to Landlord a late charge of 5% of the amount
     due.

27.22 No Easements for Air or Light. Any diminution or shutting off of light,
     air, or view by any structure that may be erected on lands adjacent to the
     Building will in no way affect this Lease or impose any liability on
     Landlord.

27.23 Tax Credits. Landlord is entitled to claim all tax credits and
     depreciation attributable to leasehold

                                    Page 19

<PAGE>

     ______________________________________________respective costs for which
     Landlord or Tenant has paid. Landlord will be entitled to all credits and
     depreciation for those items for which Landlord has paid by means of any
     Tenant finish allowance or otherwise. Tenant will be entitled to any tax
     credits and depreciation for all items for which Tenant has paid with funds
     not provided by Landlord.

27.24 Relocation of the Premises.

27.25 Financial Reports. Within 15 days after Landlord's request, but no more
     than once a year, Tenant will furnish Tenant's most recent audited
     financial statements (including any notes to them) to Landlord, or, if no
     such audited statements have been prepared, such other financial statements
     (and notes to them) as may have been prepared by an independent certified
     public accountant or, failing those, Tenant's internally prepared financial
     statements. Tenant will discuss its financial statements with Landlord and
     will give Landlord reasonable access to Tenant's books and records in order
     to enable Landlord to verify the financial statements. Landlord will not
     disclose any aspect of Tenant's financial statements that Tenant designates
     to Landlord as confidential except (a) to Landlords lenders or prospective
     purchasers of the Project, who must also agree to preserve the
     confidentiality of the information (b) in litigation between Landlord and
     Tenant, and (c) if required by court order or subpoena.

27.26 Landlord's Fees. Whenever Tenant requests Landlord to give any consent
     required or permitted under this Lease, Tenant will reimburse Landlord for
     all of Landlord's reasonable costs incurred in reviewing the proposed
     consent, including without limitation reasonable attorneys', engineers' or
     architects' fees, within 10 days after Landlord's delivery to Tenant of a
     statement of such costs. Tenant will be obligated to make such
     reimbursement without regard to whether Landlord consents to any such
     proposed action.

27.27 Binding Effect. The covenants, conditions, and agreements contained in
     this Lease will bind and inure to the benefit of Landlord and Tenant and
     their respective heirs, distributees, executors, administrators,
     successors, and, except as otherwise provided in this Lease, their assigns.

27.28 Terms. The necessary grammatical changes required to make the provisions
     hereof apply either to corporations, partnerships, or individuals, men or
     women, as the case may be, shall in all cases be assumed as though in each
     case fully expressed.

27.29 Definition of Landlord. All indemnities, covenants and agreements of
     Tenant contained herein which inure to the benefit of Landlord shall be
     construed to also inure to the benefit of Landlord's beneficiaries and
     their partners,

27.30 Rights Cumulative. All rights and remedies of Landlord under this Lease
     shall be cumulative and none shall exclude any other rights and remedies
     allowed by law.

27.31 Change of Building Name. Landlord reserves the right at any time and
     without liability to any tenant to change the name by which the Building or
     Project is designated.

27.32 Force Majeure. When a period of time is herein prescribed for any action
     to be taken by Landlord, Landlord shall not be liable or responsible for,
     and there shall be excluded from the computation for any such period of
     time, any delays due to strikes, riots, acts of God, shortages of labor or
     materials, war, regulations or restrictions or any other causes of any kind
     whatsoever which are beyond the control of Landlord.

27.33 Third Party Beneficiary. It is specifically understood and agreed that no
     person shall be a third party beneficiary hereunder, and that none of the
     provisions of this Lease shall be for the benefit of or be enforceable by
     anyone other than the parties hereto, and that only the parties hereto and
     their permitted assignees shall have rights hereunder.

27.34 No Joint Venture. Landlord and Tenant are not and shall not be deemed to
     be for any purpose, partners or joint venturers with each other.

27.35 Remedies. If Tenant believes that Landlord has unreasonably withheld its
     consent in any instance in connection with this Lease, Tenant's sole remedy
     will be to seek a declaratory judgment that Landlord has unreasonably
     withheld its consent or an order of specific performance or mandatory
     injunction in

                                    Page 20

<PAGE>

________________________________________________________________________________
consent to a proposed assignment or sublease as provided in Section 9.1.

     27.36 WAIVER OF JURY TRIAL. LANDLORD AND TENANT BY THIS SECTION 27.36 WAIVE
          TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY
          EITHER OF THE PARTIES TO THIS LEASE AGAINST THE OTHER ON ANY MATTERS
          WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE
          RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE
          PREMISES, OR ANY OTHER CLAIMS (EXCEPT CLAIMS FOR PERSONAL INJURY OR
          PROPERTY DAMAGE), AND ANY EMERGENCY STATUTORY OR ANY OTHER STATUTORY
          REMEDY.

     Landlord and Tenant have executed this Lease as of the day and year first
above written.

<TABLE>
<S>                                             <C>
Tenant:    MSK Financial Services, Inc.         Landlord:   MBL Life Assurance Corporation
           a California Corporation

           (dba Accredited Home Lenders)

By:        /s/ James A. Konrath                 By:    /s/ Illegible
           ----------------------------------          ----------------------------------------
Name:      JAMES A. KONRATH                     Name:  Illegible
Title:     PRESIDENT                            Title: V.P.

Attest/Witness:                                 Attest/Witness:

By:        /s/ Ray W. Mckewon                   By:    /s/ Illegible
           ----------------------------------          ----------------------------------------
Name:      RAY W. McKEWON                       Name:  Illegible
Its:       SECRETARY                            Its:   SENIOR ASSET MANAGER
</TABLE>

     [affix corporate seal]

           *****[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]*****

                                    Page 21

<PAGE>

                                                                       [GRAPHIC]

CARMEL POINT
15030 AVENUE OF SCIENCE

                                    [GRAPHIC]

                                                                     [Illegible]

PRILIMINARY PLAN [Illegible]
----------------------------
[Illegible]

<PAGE>

________________________________________________________________________________

     Lot 29 of Rancho Carmel Unit No. 2, in the City of San Diego, County of San
     Diego, State of California, according to Map therof No. 10382, filed in the
     Office of the County Recorder of San Diego County, April 29, 1982.

<PAGE>
________________________________________________________________________________

This Workletter is dated August 29, 1995, between MBL Life Assurance Corporation
("Landlord") and MSK Financial Services, Inc., (dba Accredited Home Lenders
("Tenant").

RECITALS

This Workletter is attached to and forms a part of that certain office lease
dated August 29, 1995 ("Lease"), pursuant to which Landlord has leased to
Tenant office space in the Building.

Tenant requests and Landlord agrees to make certain initial improvements to the
Premises, prior to occupancy, upon the terms and conditions contained in this
Workletter.

1.   Definitions. In this Workletter, some defined terms are used. They are:

     (a)  Tenant's Representative:   Pete Frank

     (b)  Landlord's Representative: Tim Meissner

     (c)  Tenant Finish Allowance: Not to exceed $15.00 per square foot
          (non-cash), which equals $150,000.00 and is to be applied by Landlord
          to the cost of the improvements.

     (d)  Programming Information: Information provided by Tenant, including the
          nature of the Tenant's business, manner of operation, number and types
          of rooms, special equipment and functional requirements, anticipated
          growth, interactions among groups, and any other programming
          requirements the Tenant may have.

     (e)  Programming Information Submission Date: September 25, 1995, the date
          Tenant will submit to Landlord the Programming Information necessary
          for the preparation of the space plan.

     (f)  Final Space Plan: A drawing of the Premises clearly showing the layout
          and relationship of all departments and offices, depicting partitions,
          door locations, types of electrical/data/telephone outlets, and
          delineation of furniture and equipment as approved by Tenant.

     (g)  Estimated Construction Cost: A preliminary estimate of the costs of
          the improvements that are depicted on the Final Space Plan, including
          all architectural, engineering, contractor, and any other costs as can
          be determined from the Final Space Plan.

     (h)  Working Drawings: Construction documents detailing the improvements,
          complete in form and content and containing sufficient information and
          detail to allow for competitive bidding or negotiated pricing by
          contractor(s) selected and engaged by Landlord, and approved by
          Tenant.

     (i)  Construction Schedule: A schedule depicting the relative time frames
          for various activities related to the construction of the improvements
          to the Premises.

     (j)  Tenant Cost Proposals: A final estimate of costs of the improvements
          that are depicted on the Working Drawings, including all
          architectural, engineering, contractor, and any other costs, and
          clearly indicating the dollar amount, if any, that is to be paid by
          Tenant pursuant to paragraph 7.

     (k)  Maximum Approved Cost: The amount established in accordance with
          paragraph 6(c) that Tenant has agreed to pay for the Improvements to
          the Premises.

     (l)  Improvements: The work is inclusive of the following:

          (1)  The development of space plans and working drawings, including
               supporting engineering studies (i.e., structural design or
               analysis, lighting or acoustical evaluations, or others as
               determined by Landlord's architect);

          (2)  All construction work necessary to augment the Base Building,
               creating the details and partitioning shown on the Final Space
               Plan. The work will create finished ceilings, walls, and floor
               surfaces, as well as complete HVAC, lighting, electrical, and
               fire protection systems.

          The Improvements will NOT include personal property items, such as
          decorator items or services, artwork, plants, furniture, equipment, or
          other fixtures not permanently affixed to the Premises.

     (m)  Cost of the Improvements: The cost includes but is not limited to the
          following:

                                    Page C-1

<PAGE>

          ______________________________________________________________________

          (2)  All contractor and construction manager costs and fees;

          (3)  All permits and taxes;

          (4)  A coordination and administration fee to Landlord, pursuant to
               paragraph 4(b).

     (n)  Change Order: Any change, modification, or addition to the Final Space
          Plan or Working Drawings after Tenant has approved the same.

     (o)  Base Building: Those elements of the core and shell construction that
          are completed in preparation for the Improvements to the Premises.
          This includes Building structure, envelope, and systems as indicated
          on Schedule 1, "Base Building Definition," attached hereto. This
          defines the existing conditions to which Improvements are added.

     (p)  Building Standard: Component elements utilized in the design and
          construction of the Improvements that have been pre-selected by the
          Landlord to ensure uniformity of quality, function, and appearance
          throughout the Building. These elements include but are not limited to
          ceiling systems, doors, hardware, walls, floor coverings, finishes,
          window coverings, light fixtures, and HVAC components.

     (q)  Other capitalized terms not defined herein shall have the same meaning
          as defined in the Lease.

2.   Representatives. Landlord appoints Landlord's Representative to act for
     Landlord in all matters associated with this Workletter. Tenant appoints
     Tenant's Representative to act for Tenant in all matters associated with
     this Workletter. All inquiries, requests, instructions, authorizations, and
     other communications with respect to the matters covered by this Workletter
     will be made to Landlord's Representative or Tenant's Representative, as
     the case may be. Tenant will not make any inquiries of or requests to, and
     will not give any instructions or authorizations to, any employee or agent
     of Landlord, including, without limitation, Landlord's architect,
     engineers, and contractors or any of their agents or employees, with regard
     to matters associated with this Workletter. Either party may change its
     representative under this Workletter at any time by providing 3 days' prior
     written notice to the other party.

3.   Project Design and Construction. All work will be performed by designers
     and contractors selected and engaged by Landlord.

4.   Cost Responsibilities.

     (a)  Landlord: Landlord will pay up to the amount of the Tenant Finish
          Allowance for the cost of the Improvements.

     (b)  Tenant: Tenant will pay for:

          (1)  Tenant-initiated changes to the Final Space Plan or Working
               Drawings after Tenant's approval; but only to the extent any such
               change results in total approved costs in excess of the
               Tenant Finish Allowance

          (2)  Tenant-initiated Change Orders, modifications, or additions to
               the Improvements after Tenant's approval of the Working Drawings;
               but only to the extent any such change results in total approved
               costs in excess of the Tenant Finish Allowance;

          (3)  All costs in excess of the Tenant Finish Allowance that are not
               included in (1) or (2) immediately above; but only to the extent
               the Tenant Cost Proposal exceeds the Tenant Finish Allowance;

          (4)  The cost of the Landlord's overhead for coordination and
               administration at a rate of 5% of the total cost to the
               Landlord of clauses (1), (2), and (3) above.

5.   Landlord's Approval. Landlord, in its reasonable discretion, may withhold
     its approval of any space plan, Working Drawings, or Change Order that:

     (a)  Exceeds or adversely affects the structural integrity of the Building,
          or any part of the heating, ventilating, air conditioning, plumbing,
          mechanical, electrical, communication, or other systems of the
          Building;

     (b)  Is not approved by the holder of any mortgage or deed of trust
          encumbering the Building at the time the work is proposed;

     (c)  Would not be approved by a prudent owner of property similar to the
          Building;

                                    Page C-2

<PAGE>

     (e)  Landlord reasonably believes will increase the cost of operation or
          maintenance of any of the systems of the Building; beyond that
          required for customary office use;

     (f)  Landlord reasonably believes will reduce the market value of the
          Premises or the Building at the end of the Term;

     (g)  Does not conform to applicable building code or is not approved by any
          governmental, quasigovernmental, or utility authority with
          jurisdiction over the Premises; on

6.   Schedule of Improvement Activities.

     (a)  On or before the Programming Information Submission Date, Tenant will
          cooperate with and submit to Landlord the Programming Information
          necessary for Landlord's architect to prepare the proposed space plan.

     (b)  Landlord's architect will expeditiously prepare a space plan and
          forward it to Tenant. Tenant will give Landlord written notice whether
          or not Tenant approves the proposed space plan within 5 business days
          after its receipt. If Tenant's notice objects to the proposed space
          plan, the notice will set forth how the proposed space plan is
          inconsistent with the Programming Information and how the proposed
          space plan must be changed in order to overcome Tenant's objections.
          Landlord will resubmit a revised space plan to Tenant and it will be
          treated as though it was the first proposed space plan prepared
          pursuant to this paragraph.

     (c)  After Tenant approval of the Final Space Plan, and construction
          drawings, Landlord will promptly cause to be prepared, a Tenant will
          establish the Maximum Approved Cost by either: SEE RIDER ATTACHED
                                                         ------------------

          (1)  Agreeing in writing to pay the amount if any, by which the
               Estimated Construction Cost exceeds the Tenant Finish Allowance;
               or

          (2)  Agreeing to have the Final Space Plan revised by Landlord's
               architect in order to assure that the Estimated Construction
               Cost is acceptable to Tenant, and either:

               (A)  No more than the Tenant Finish Allowance; or

               (B)  Exceeds the Tenant Finish Allowance by an amount which
                    Tenant agrees to pay pursuant to clause (1) immediately
                    above.

          Tenant shall give immediate attention to establishing the Maximum
          Approved Cost by responding to Landlord within 2 business days. Upon
          Tenant's timely fulfillment of its obligations in either clause (1) or
          clause (2) immediately above, the Maximum Approved Cost will be
          established.

     (d)  Upon establishment of the Maximum Approved Cost, Landlord will cause
          to be prepared and delivered to Tenant the Working Drawings, the
          Construction Schedule, and the Tenant Cost Proposal for the
          Improvements in accordance with the Final Space Plan. If the Tenant
          Cost Proposal is less than the Maximum Approved Cost, Landlord will
          take steps necessary to commence construction of the Improvements to
          the Premises.

          If the Tenant Cost Proposal is more than the Maximum Approved Cost,
          Landlord will so notify Tenant in writing and Tenant will either (1)
          agree in writing to pay the amount by which the Tenant Cost Proposal
          exceeds the Tenant Finish Allowance or (2) request Landlord to revise
          the Working Drawings in order to assure that the Tenant Cost Proposal
          is no more than the Maximum Approved Cost.

          Tenant shall give immediate attention to the cost proposal approval
          process and to respond to Landlord within 3 business days.

     (e)  Following approval of the Working Drawings and the Tenant Cost
          Proposal, Landlord will cause application to be made to the
          appropriate governmental authorities for necessary approvals and
          building permits. Upon receipt of the necessary approvals and permits,
          Landlord will begin construction of the Improvements.

7.   Payment by Tenant. The amount payable by Tenant will be billed
     periodically, as the work proceeds, and

                                    Page C-3

<PAGE>

     ______________________________ improvements during construction only by
     written instructions to Landlord's Representative on a form approved by
     Landlord. All such changes will be subject to Landlord's prior written
     approval in accordance with paragraph 5. Prior to commencing any change,
     Landlord will prepare and deliver to Tenant, for Tenant's approval, a
     Change Order setting forth the total cost of such change, which will
     include associated architectural, engineering, construction contractor's
     costs and fees, Construction Schedule changes, and the cost of Landlord's
     overhead pursuant to paragraph 4(b). If Tenant fails to approve such change
     order within 5 business days after delivery by Landlord, Tenant will be
     deemed to have withdrawn the proposed change and Landlord will not proceed
     to perform the change. Upon Landlord's receipt of Tenant's approval,
     Landlord will proceed with the change.

9.   Early Entry. Landlord, in its sole discretion, may permit Tenant and
     Tenant's employees and agents to enter the Premises prior to the
     Commencement Date so that Tenant may do such other work as may be required
     to make the Premises ready for Tenant's use and occupancy. If Landlord
     permits such entry prior to the Commencement Date, it will be upon the
     condition that Tenant and its employees, agents, contractors and suppliers
     shall work in harmony with Landlord and its employees, agent, contractors
     and suppliers and will not interfere with the performance of the work by
     Landlord or with the work of any other tenants or occupants in the
     Building. If at any time such entry shall cause or threaten to cause such
     disharmony or interference. Landlord shall have the right to withdraw such
     license upon 24 hours written notice to Tenant. Tenant agrees that any such
     entry or occupation of the Premises shall be governed by all of the terms,
     covenants, conditions and provisions of the Lease, except the covenant for
     the payment of Rent, and further agrees that Landlord shall not be liable
     in any way for injury, loss or damage which may occur to any of the
     Tenant's work or installations made in such Premises, Building or Project,
     or to any personal property placed therein, the same being at Tenant's sole
     risk.

10.  Completion and Commencement Date. Tenant's obligation for payment of Rent
     pursuant to the Lease will commence on the Commencement Date; however, the
     Commencement Date and the date for the payment of Rent may be delayed on a
     day-by-day basis for each day the substantial completion of the
     Improvements is delayed by Landlord or its contractors or agents. The
     payment of Rent will not be delayed by a delay of substantial completion
     due to Tenant. The following are some examples of delays which will not
     affect the Commencement Date and the date Rent is to commence under the
     Lease:

     (a)  Late submissions of Programming Information;

     (b)  Change Orders requested by Tenant;

     (c)  Delays in obtaining construction materials requested by Tenant;
          provided that Landlord immediately notifies Tenant of such delay and
          Tenant does not elect to substitute other materials;

     (d)  Tenant's failure to approve timely any item requiring Tenant's
          approval; and

     (e)  Delays by Tenant according to paragraph 6.

     In the event that substantial completion of the Improvements is delayed by
     Landlord, its contractors, or agents, the Commencement Date will be the
     date of substantial completion of the improvements, subject only to the
     completion of Landlord's punch-list items (that is, those items that do not
     materially interfere with Tenant's use and enjoyment of the Premises).
     Landlord and Tenant will confirm the Commencement Date in accordance with
     Section 3.1 of the Lease.

11. Condition of the Premises.

     (a)  Prior to the Commencement Date, Tenant will conduct a walk-through
          inspection of the Premises with Landlord and prepare a punch-list of
          items needing additional work by Landlord. Other than the items
          specified in the punch-list and "latent defects" (as defined below),
          by taking possession of the Premises Tenant will be deemed to have
          accepted the Premises in their condition on the date of delivery of
          possession and to have acknowledged that Landlord has installed the
          Improvements as required by this Workletter and that there are no
          items needing additional work or repair. The punch-list will not
          include any damage to the Premises caused by Tenant's move-in or early
          access, if permitted. Damage caused by Tenant will be repaired or
          corrected by Landlord at Tenant's expense. Tenant acknowledges that
          neither Landlord nor its agents or employees have made any
          representations or warranties as to the suitability or fitness of the
          Premises for the conduct of Tenant's business or for any other
          purpose, nor has Landlord or its agents or employees agreed to
          undertake any alterations or construct any Tenant improvements to the
          Premises except as expressly provided in this Lease and this
          Workletter. If Tenant fails to submit a punch-list to Landlord prior
          to the Commencement Date, it will be deemed that there are no items
          needing additional work or repair. Landlord's contractor will complete
          all reasonable punch-list items within 30 days after the walk-through
          inspection or as soon as practicable after such walk-through.

     (b)  A "latent defect" is a defect in the condition of the Premises caused
          by Landlord's failure to construct the

                                    Page C-4

<PAGE>

          ____________________________________________________________ then
          Landlord, at its expense, will repair such latent defect as soon as
          practicable. Except as set forth in this paragraph 11, Landlord will
          have no obligation or liability to Tenant for latent defects.

12.  No Liability. Subject to paragraph 11 regarding latent defects, Preparation
     of the Final Space Plan and Working Drawings by or on behalf of Landlord
     shall create no responsibility or liability on the part of the Landlord for
     their completeness, design sufficiency, or compliance with all laws,
     ordinances, rules, regulations of governmental agencies or authorities, or
     the use and occupancy permit for the Building. SEE RIDER ATTACHED
                                                    ------------------
13.  Adjustments Upon Completion. As soon as practicable, upon completion of
     the Improvements in accordance with this Workletter, Landlord will notify
     Tenant of the Rentable Area of the Premises, the Rentable Area of the
     Building, Monthly Rent, and Tenant's Share, if such information was not
     previously determinable by Landlord. Tenant, within 10 days of Landlord's
     written request, will execute a certificate confirming such information.

           *****[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]*****

                                    Page C-5

<PAGE>

RULES AND REGULATIONS

     1. Landlord may from time to time adopt appropriate systems and procedures
for the security or safety of the Building, any persons occupying, using, or
entering the Building, or any equipment, finishings, or contents of the
Building, and Tenant will comply with Landlord's reasonable requirements
relative to such systems and procedures.

     2. The sidewalks, halls, passages, exits, entrances, elevators, and
stairways of the Building will not be obstructed by any tenants or used by any
of them for any purpose other than for ingress to and egress from their
respective Premises. The halls, passages, exits, entrances, elevators,
escalators, and stairways are not for the general public, and Landlord will in
all cases retain the right to control and prevent access to such halls,
passages, exits, entrances, elevators, and stairways of all persons whose
presence in the judgment of Landlord would be prejudicial to the safety,
character, reputation, and interests of the Building and its tenants, provided
that nothing contained in these rules and regulations will be construed to
prevent such access to persons with whom any tenant normally deals in the
ordinary course of its business, unless such persons are engaged in illegal
activities. No tenant and no employee or invitee of any tenant will go upon the
roof of the Building except such roof or portion of such roof as may be
contiguous to the Premises of a particular tenant and may be designated in
writing by Landlord as a roof deck or roof garden area. No tenant will be
permitted to place or install any object (including without limitation radio and
television antennas, loudspeakers, sound amplifiers, microwave dishes, solar
devices, or similar devices) on the exterior of the Building or on the roof of
the Building,

     3. No sign, placard, picture, name, advertisement, or written notice
visible from the exterior of Tenant's Premises will be inscribed, painted,
affixed, or otherwise displayed by Tenant on any part of the Building or the
Premises without the prior written consent of Landlord. Landlord will adopt and
furnish to Tenant general guidelines relating to signs inside the Building on
the office floors. Tenant agrees to conform to such guidelines. All approved
signs or lettering on doors will be printed, painted, affixed, or inscribed at
the expense of the Tenant by a person approved by Landlord. Other than draperies
expressly permitted by Landlord and building standard window treatments,
material visible from outside the Building will not be permitted. In the event
of the violation of this rule by Tenant, Landlord may remove the violating items
without any liability, and may charge the expense incurred by such removal to
the tenant or tenants violating this rule.

     4. No cooking will be done or permitted by any tenant on the Premises,
except in areas of the Premises which are specially constructed for cooking and
except that use by the tenant of microwave ovens and Underwriters' Laboratory
approved equipment for brewing coffee, tea, hot chocolate, and similar beverages
will be permitted, provided that such use is in accordance with all applicable
federal, state, and city laws, codes, ordinances, rules, and regulations.

     5. No tenant will employ any person or persons other than the cleaning
service of Landlord for the purpose of cleaning the Premises, unless otherwise
agreed to by Landlord in writing. Except with the written consent of Landlord,
no person or persons other than those approved by Landlord will be permitted to
enter the Building for the purpose of cleaning it. No tenant will cause any
unnecessary labor by reason of such tenant's carelessness or indifference in the
preservation of good order and cleanliness. Should Tenant's actions result in
any increased expense for any required cleaning, Landlord reserves the right to
assess Tenant for such expenses.

     6. The toilet rooms, toilets, urinals, wash bowls and other plumbing
fixtures will not be used for any purposes other than those for which they were
constructed, and no sweepings, rubbish, rags, or other foreign substances will
be thrown in such plumbing fixtures. All damages resulting from any misuse of
the fixtures will be borne by the tenant who, or whose servants, employees,
agents, visitors, or licensees, caused the same.

     7. No tenant, or tenant's invitees or licensees, will in any way deface any
part of the Premises or the Building of which they form a part. In those
portions of the Premises where carpet has been provided directly or indirectly
by Landlord, Tenant will at its own expense install and maintain pads to protect
the carpet under all furniture having casters other than carpet casters.

     8. No tenant will alter, change, replace, or rekey any lock or install a
new lock or a knocker on any door of the Premises. Landlord, its agents, or
employees will retain a pass (master) key to all door locks on the Premises. Any
new door locks required by Tenant or any change in keying of existing locks will
be installed or changed by Landlord following tenant's written request to
Landlord and will be at Tenant's expense. All new locks and rekeyed locks will
remain operable by Landlord's pass (master) key. Landlord will furnish each
tenant, free of charge, with two (2) keys to each suite entry door lock on the
Premises. Landlord will have the right to collect a reasonable charge for
additional keys and cards requested by any tenant. Each tenant, upon termination
of its tenancy, will deliver to Landlord all keys and access cards for the
Premises and Building that have been furnished to such tenant.

     9. The elevator designated for freight by Landlord will be available for
use by all tenants in the Building during the hours and pursuant to such
procedures as Landlord may determine from time to time. The persons

                                    Page D-1

<PAGE>

business is the performing of relocation services, and must be bonded and fully
insured. A certificate or other verification of such insurance must be received
and approved by Landlord prior to the start of any moving operations. Insurance
must be sufficient, in Landlord's sole opinion, to cover all personal liability,
theft or damage to the Project, including but not limited to floor coverings,
doors, walls, elevators, stairs, foliage, and landscaping. Special care must be
taken to prevent damage to foliage and landscaping during adverse weather. All
moving operations will be conducted at such times and in such a manner as
Landlord will direct, and all moving will take place during non-Business Hours
unless Landlord agrees in writing otherwise. Tenant will be responsible for the
provision of building security during all moving operations, and will be liable
for all losses and damages sustained by any party as a result of the failure to
supply adequate security. Landlord will have the right to prescribe the weight,
size, and position of all equipment, materials, furniture, or other property
brought into the Building. Heavy objects will, if considered necessary by
Landlord, stand on wood strips of such thickness as is necessary to properly
distribute the weight. Landlord will not be responsible for loss of or damage to
any such property from any cause, and all damage done to the Building by moving
or maintaining such property will be repaired at the expense of Tenant. Landlord
reserves the right to inspect all such property to be brought into the Building
and to exclude from the Building all such property which violates any of these
rules and regulations or the Lease of which these rules and regulations are a
part. Supplies, goods, materials, packages, furniture, and all other items of
every kind delivered to or taken from the Premises will be delivered or removed
through the entrance and route designated by Landlord, and Landlord will not be
responsible for the loss or damage of any such property.

     10. No tenant will use or keep in the Premises or the Building any
kerosene, gasoline, or inflammable or combustible or explosive fluid or material
or chemical substance other than limited quantities of such materials or
substances reasonably necessary for the operation or maintenance of office
equipment or limited quantities of cleaning fluids and solvents required in
tenant's normal operations in the Premises, which shall be stored in accordance
with applicable law. Without Landlord's prior written approval, no tenant will
use any method of heating or air conditioning other than that supplied by
Landlord. No tenant will use or keep or permit to be used or kept any foul or
noxious gas or substance in the Premises.

     11. Tenants shall not, prior to or during the Term, either directly or
indirectly, employ or permit the employment of any contractor, mover, mechanic
or laborer, or permit any materials in the Premises, if the use of such
contractor, mover, mechanic or laborer or such materials would, in Landlord's
opinion, create any difficulty, strike or jurisdictional dispute with other
contractors, movers, mechanics or laborers engaged by Landlord, tenants, or
others, or would in any way disturb the construction, maintenance, cleaning,
repair, management, security or operation of the Building, Project or any part
thereof. Any tenant, upon demand by Landlord, shall cause all contractors,
movers, mechanics, laborers or materials causing such interference, difficulty
or conflict to leave or be removed from the Project immediately.

     12. Landlord will have the right to prohibit any advertising by Tenant
mentioning the Building that, in Landlord's reasonable opinion, tends to impair
the reputation of the Building or its desirability as a building for offices,
and upon written notice from Landlord, tenant will refrain from or discontinue
such advertising.

     13. Tenant will not bring any animals (except "Seeing Eye" dogs) or birds
into the Building, and will not permit bicycles or other vehicles inside or on
the sidewalks outside the Building except in areas designated from time to time
by Landlord for such purposes.

     14. All persons entering or leaving the Building between the hours of 6
p.m. and 7 a.m. Monday through Friday, and at all hours on Saturdays, Sundays,
and holidays will comply with such off-hour regulations as Landlord may
establish and modify from time to time. Landlord reserves the right to limit
reasonably or restrict access to the Building during such time periods.

     15. Each tenant will store all its trash and garbage within its Premises.
No material will be placed in the trash boxes or receptacles if such material is
of such nature that it may not be disposed of in the ordinary and customary
manner of removing and disposing of trash and garbage without being in violation
of any law or ordinance governing such disposal. All garbage and refuse disposal
will be made only through entryways and elevators provided for such purposes and
at such times as Landlord designates. Removal of any furniture or furnishings,
large equipment, packing crates, packing materials, and boxes will be the
responsibility of each tenant and such items may not be disposed of in the
Building trash receptacles nor will they be removed by the Building's janitorial
service, except at Landlord's sole option and at the tenant's expense. No
furniture, appliances, equipment, or flammable products of any type may be
disposed of in the Building trash receptacles.

     16. Canvassing, peddling, soliciting, and distributing handbills or any
other written materials in the Building are prohibited, and each tenant will
cooperate to prevent the same.

     17. The requirements of the tenants will be attended to only upon
application by written, personal, or telephone notice at the office of the
Building. Employees of Landlord or Landlord's agent will not perform any work or
do anything outside of their regular duties unless under special instructions
from Landlord.

                                    Page D-2

<PAGE>

RIDER TO LEASE - CALIFORNIA

This RIDER TO LEASE between MBL Life Assurance Corporation, as Landlord, and MSK
Financial Services Inc., A California Corporation (DBA Accredited Home Lenders)
as Tenant, is dated August 29, 1995. Landlord and Tenant hereby agree as
follows:

1.   The following subsection (g) shall be added to ARTICLE 18, - DAMAGE AND
     DESTRUCTION:

     (g)  Tenant waives any rights it may have under Sections 1941 and 1942 of
          the California Civil Code regarding repair and termination after
          destruction of part or all of the Premises.

2.   ARTICLE 19, - SUBORDINATION, NONDISTURBANCE AND ATTORNMENT

     19.1 Subordination. This Lease and all of Tenant's rights granted under
     this Lease shall, at Landlord's option, be subordinate to any ground lease,
     mortgage, deed of trust, or any other hypothecation or security now or
     hereafter placed upon the Property and to any and all advances made on the
     security thereof and to all renewals, modifications, consolidations,
     replacements and extensions thereof; provided, however, that if any
     mortgagee, trustee or ground lessor shall elect to have this Lease prior to
     the lien of its mortgage, deed of trust or ground lease, and shall give
     written notice thereof to Tenant, this Lease shall be deemed prior to such
     mortgage, deed of trust or ground lease, whether this Lease is dated prior
     or subsequent to the date of such mortgage, deed of trust or ground lease
     or the date of recording thereof.

     19.2 Nondisturbance. Notwithstanding the subordination of this Lease to any
     ground lease, mortgage, deed of trust, or any other hypothecation or
     security, Tenant's right to quiet possession of the Premises shall not be
     disturbed if Tenant is not in default under this Lease and for so long as
     Tenant continues to perform all of Tenant's obligations under this Lease.

     19.3 Attornment. If the interest of Landlord under this Lease is
     transferred by reason of foreclosure, trustee's sale, deed in lieu of
     foreclosure or other proceeding to enforce the security interest of any
     mortgagee, trustee or ground lessor, Tenant shall attorn to the transferee
     who acquires the interest of Landlord as the result of such foreclosure,
     trustee's sale, deed in lieu of foreclosure or other proceeding
     ("Transferee") as the Landlord under this Lease. Such attornment shall be
     self operative and effective upon the Transferee's succession to the
     interest of the Landlord under this Lease without execution of other
     instruments. Such Transferee will not be bound by:

          (a) Any payment of Rent for more than one month in advance, except
          prepayments in the nature of security for the performance by Tenant of
          its obligations under this Lease that are actually received by such
          successor in interest;

          (b) Any amendment or modification of this Lease made without the
          written consent of such successor in interest (if such consent was
          required under the terms of such superior lien);

          (c) Any claim against Landlord arising prior to the date on which such
          Transferee succeeded to Landlord's interest, or

          (d) Any claim or offset of Rent against the Landlord.

     19.4 Execution of Documents. Tenant agrees to execute any documents
     required to effectuate an attornment, a subordination, or to make this
     Lease prior to the lien of any mortgage, deed of trust or ground lease, as
     the case may be. Tenant's failure to execute such documents within ten (10)
     days after written demand shall constitute a material default by Tenant
     hereunder without further notice to Tenant or, at Landlord's option,
     Landlord shall execute such documents on behalf of Tenant as Tenant's
     attorney-in-fact. Tenant does hereby make, constitute and irrevocably
     appoint Landlord as Tenant's attorney-in-fact and in Tenant's name, place
     and stead, to execute such documents in accordance with this paragraph.

3.   The following shall be added at the end of ARTICLE 21.2, - WAIVER AND
     RELEASE:

          Tenant waives the provision of Civil Code Section 1542, which section
          provides as follows: "Civil Code Section 1542. General Release -
          Claims Extinguished. A general release does not extend to claims which
          the creditor does not know or suspect to exist in his favor at the
          time of executing the release, which if known by him must have
          materially affected his settlement with the debtor."

                                       1

<PAGE>

4.   ARTICLES 25.2, 25.3, AND 25.4 are hereby deleted in their entirety and the
     following is inserted in their place.

     ARTICLE 25.2. - REMEDIES BY LANDLORD

     If any one or more events of default set forth in Article 25.1 occurs, then
     Landlord may at any time thereafter, with or without notice and demand and
     without limiting Landlord in the exercise of any right or remedy at law or
     in equity which Landlord may have by reason of such default or breach:

     a.   Landlord has the remedy described in California Civil Code Section
          1951.4 (Landlord may continue this Lease in effect after Tenant's
          breach and abandonment and recover rent as it becomes due, if the
          Tenant has right to sublet or assign, subject only to reasonable
          limitations).

     b.   Terminate Tenant's right to possession by any lawful means, in which
          case this Lease shall terminate and Tenant shall immediately surrender
          possession of the Premises to Landlord. In such event, Landlord shall
          be entitled to recover from Tenant all damages incurred by Landlord by
          reason of Tenant's default including, but not limited to (i) the worth
          at the time of award of any unpaid Rent which had been earned at the
          time of termination, plus, (ii) the worth at the time of award of the
          amount by which the unpaid Rent which exceeds the amount of such
          rental loss that Tenant proves could have been reasonably avoided,
          plus, (iii) 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 that Tenant proves could be
          reasonably avoided, plus, (iv) any other amount necessary to
          compensate Landlord for all the detriment proximately caused by
          Tenant's failure to perform its obligations under this Lease or which
          in the ordinary course of things would be likely to result therefrom,
          including if applicable the costs of repairs, alterations,
          redecorating, lease commissions, and Landlord's other expenses
          incurred in reletting the Premises to a new tenant, plus, (v) 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
          state law. On any such reentry, Landlord has the right to make any
          reasonable repairs, alterations, or modifications to the Premises
          which Landlord in its sole discretion deems reasonable and necessary.
          As used in subparagraphs (i) and (ii), the "worth at the time of
          award" is computed by allowing interest at the rate specified in the
          fourth sentence of Section 27.21 from the date of default. As used in
          subparagraph (iii), the "worth at the time of award" is computed by
          discounting such amount at the discount rate of the Federal Reserve
          Bank of New York, New York at the time of the award plus one percent
          (1%). The term "rent," as used in this article means all rent to be
          paid pursuant to this Lease and all other monetary sums required to be
          paid by Tenant pursuant to the terms of this Lease.

     c.   Landlord and/or its designated agent may, as Attorney In Fact for
          Tenant, enter the Premises and remove therefrom all persons and
          property. (Landlord is irrevocably appointed Attorney In Fact for
          Tenant, with power of substitution, for such purposes and all others
          set forth in this paragraph.) Such property may be stored in a public
          warehouse or elsewhere at the cost of and for the account of the
          Tenant, and may be sold by Landlord by public or private sale, without
          notice to or demand on Tenant, if said property is stored for thirty
          (30) days or more and Tenant has not paid the entire cost of storage.

     ARTICLES 25.5 and 25.6 shall be renumbered 25.3 and 25.4 respectively.

5.   ARTICLE 27.21 is deleted in its entirety and the following is inserted in
     its place:

     ARTICLE 27.21 - LATE PAYMENTS

     Tenant acknowledges that late payment to Landlord of Rent and any and all
     other sums due hereunder will cause Landlord to incur costs not
     contemplated by this Lease. The exact amount of such sums is extremely
     difficult to ascertain. Such costs include, but are not limited to,
     processing and accounting charges, and late charges which may be imposed on
     Landlord by the terms of any mortgage or trust deed covering the Premises,
     if any. Consequently, and Rent or monetary obligation due Landlord that is
     not paid when due will accrue interest at a rate of Prime Rate plus five
     percent (5%) per annum (but in no event in an amount in excess of the
     maximum rated allowed by law) from the date on which it was due until the
     date on which it is paid in full with accrued interest. In addition to the
     foregoing, Tenant shall pay to Landlord a late charge of five percent (5%)
     of the amount due. The parties hereto agree that such

                                        2

<PAGE>

          (d) All provisions of the Lease regarding obligations at the end of
the term of the Lease shall be applicable if the Lease is terminated by exercise
of the Termination Option.

     3. Credit for Unused Tenant Finish Allowance: Any portion of the Tenant
        -----------------------------------------
Finish Allowance not utilized pursuant to the Workletter, but in no event more
than $5 per square foot of Rentable Area in the Premises, shall be applied to
reduce the Rent payable by Tenant over the sixty (60) month Term of the Lease,
any such credit to be applied equally to each monthly payment of Rent due during
such Term.

     4. Liability and Indemnification: Notwithstanding anything to the contrary
        -----------------------------
set forth in the Lease, nothing shall relieve Landlord from liability for, and
Tenant shall have no indemnification or other liability for, any and all
demands, claims, causes of action, fines, penalties, damages, liabilities,
judgments, and expenses (including without limitation reasonable attorneys'
fees) incurred in connection with or arising from the gross negligence, willful
misconduct, or violation of law, regulation or ordinance, by Landlord, its
employees or agents.

     5. Signage: Landlord shall construct and maintain the existing "tombstone"
        -------
sign next to the entry of the Premises and the addition of Tenant's name to the
monument sign at the entrance to the Project. Costs of both signs are to be
included in the improvements covered by the Tenant Finish Allowance. Landlord
shall have control over the location, size, materials, appearance, construction,
and configuration of the monument sign.

<PAGE>

     ADDENDUM TO LEASE DATED AUGUST 29, 1995 ("LEASE") BY AND BETWEEN MBL LIFE
ASSURANCE CORPORATION ("LANDLORD") AND MSK FINANCIAL SERVICES, INC. (DBA
ACCREDITED HOME LENDERS) ("TENANT") REGARDING PREMISES KNOWN AS SUITE 100, 15030
AVENUE OF SCIENCE, SAN DIEGO, CALIFORNIA ("PREMISES").

     1. Expansion Option: Tenant shall have the right ("Expansion Option") to
        ----------------
expand the Premises to include the area designated as "Expansion Space" on
Exhibit A on the ground floor, which will increase the Premises by 4,559 square
feet for a total of 14,557 square feet upon the following terms and conditions:

          (a) Tenant's written notice of exercise of the Expansion Option must
be received by Landlord on or before the last day of the ninth (9th) month from
the commencement date of the Lease and shall be effective commencing with the
first day of the 13th month from the commencement date of the Lease, subject to
postponement for delay in completing Improvements in accordance with the terms
of the Workletter.

          (b) The terms of this Lease shall apply to the Expansion Space, except
as follows:

               (1) The Rent then in effect will be applied on a rentable square
foot basis to the Expansion Space.

               (2) Tenant's share of the Operating Expenses will be increased to
reflect the addition of the Expansion Space to the Premises.

               (3) Tenant shall be entitled to the same Tenant Improvement
Allowance (on a square foot basis) as it was entitled to for the original
Premises and the Rent shall be increased by the difference between the amount
necessary to amortize such Tenant Improvement Allowance over 48 months versus 60
months. For example, if the cost of the Tenant Improvements for the Expansion
Space was $75,000, Rent would be increased by $312.50 per month or $.06 per
square foot (i.e., 5,000 sq. ft. x $15 psf = $75,000/48 mos $1,562.50 per month
less $1,250.00 (60 mos amortization)).

               (4) Tenant shall not be entitled to free rent regarding the
Expansion Space.

          (c) If notice of exercise of the Expansion Option is not received
within the time provided, the Expansion Option shall expire without notice or
action on the part of any party and Tenant shall have no further interest or
rights in the Expansion Space and shall, upon request, execute documentation
confirming such expiration. Time is expressly of the essence with regard to
exercise of the Expansion Option.

     2. Option to Terminate: Tenant shall have the right ("Termination Option")
        -------------------
to terminate this Lease at the end of the 36th month of the commencement of the
term, upon the following terms and conditions:

          (a) As of the date of termination there must not be an uncured Default
caused or allowed by Tenant;

          (b) Written notice of Tenant's exercise of the Termination Option must
be received by Landlord no later than the end of the 32nd month of the
commencement of the term.

          (c) Written notice of Tenant's exercise of the Termination Option must
be accompanied by payment of a termination fee in the sum of (1) two (2) months
Rent at the rate then in effect; and (2) the remaining unamortized costs of
Tenant Improvements paid by the Landlord (including any Tenant Improvements in
connection with the Expansion Space if the Expansion Option has been exercised)
and unamortized leasing commissions paid by Landlord.

<PAGE>

This Commencement Date and Estoppel Certificate is entered into by Landlord and
Tenant pursuant to Section 3.1 of the Lease.

     1.   DEFINITIONS. In this certificate the following terms have the meanings
          given to them:

          (a)  Landlord: MBL Life Assurance Corporation

          (b)  Tenant: MSK Financial Services, Inc., a California Corporation
               (dba Accredited Home Lenders)

          (c)  Lease: Office lease dated August 29, 1995 between Landlord and
               Tenant.

          (d)  Premises: Suite 100.

          (e)  Building Address: 15030 Avenue of Science
                                 San Diego CA 92128

     2.   Landlord and Tenant confirm that the Commencement Date of the Lease is
                                    and the Expiration Date is
          -------------------------                           ------------------
          and that Sections 1.1 (k) and (l) are accordingly amended.

     3.   The Rentable Area of the Premises is 9,998 square feet.

     4.   The Rentable Area of the Building is 115,862 square feet.

     5.   Tenant's Share is nine (9%) percent.

     6.   Tenant has accepted possession of the Premises as provided in the
          Lease.

     7.   The Improvements required to be furnished by the Landlord in
          accordance with the Workletter (if any) have been furnished to the
          satisfaction of Tenant (subject to any corrective work or punch-list
          items submitted previously to Landlord).

     8.   All terms and conditions to be performed by Landlord under the Lease
          have been satisfied and on this date there are no existing defenses or
          offsets which Tenant has against the full enforcement of the Lease by
          Landlord.

     9.   The Lease is in full force and effect and has not been modified,
          altered, or amended, except as follows:
                                                 -------------------------------

          ----------------------------------------------------------------------

          ----------------------------------------------------------------------

     10.  There are no setoffs or credits against Rent, and no Security Deposit
          or prepaid Rent has been paid except as provided by the Lease.

Landlord and Tenant have executed this Commencement Date and Estoppel
Certificate as of the dates set forth below.

Tenant:                                Landlord: MBL Life Assurance Corporation
       -----------------------------

       -----------------------------

By:                                    By:
       -----------------------------         -----------------------------------

Name:                                  Name:
       -----------------------------         -----------------------------------

Title:                                 Title:
       -----------------------------         -----------------------------------

Date:                                  Date:
       -----------------------------         -----------------------------------

<PAGE>

_______________________

Tenant may extend this Lease for a period of sixty (60) months (the "Extension
Term") beginning the day after the Lease Expiration Date, upon the same terms
and conditions of the Lease, except that:

     1.   the Term is modified to include the Extension Term;
     2.   the Monthly Rent and Additional Rent for the Extension Term shall be
          the market rate (determined exclusive of any and all allowances,
          credits and other tenant concessions offered by Landlord to tenants
          leasing new or additional space in the Building) charged by the
          Landlord for comparable space at the time of Landlord's receipt of
          Tenant's Notice to Extend Term (defined below), but not less than the
          amount of Monthly Rent and Additional Rent at the time of Tenant's
          Notice to Extend Term; and
     3.   the Option to Extend shall be deleted and shall not be available to
          Tenant at the end of the Extension Term.

To exercise this option to Extend, Tenant must:

     1.   never have allowed an event of default to occur and remain uncured of
          the Lease; and
     2.   give Notice to Landlord that Tenant is exercising its Option to Extend
          at least 180 days, but not more than 240 days before the Lease
          Expiration Date ("Tenant's Notice to Extend Term").
     3.   provide such financial reports and statements evidencing to the
          Landlord's reasonable satisfaction the Tenant's ability to meet its
          obligations during the Extension Term.
     4.   execute the extension agreement memorializing the terms of the
          extension as set forth herein to be provided by Landlord and return it
          to Landlord within 10 days of receipt:

Failure of Tenant to observe or comply with the terms of this Option to Extend
shall render the option null and void. Landlord shall not be required to extend
the Term of this Lease if, in its reasonable judgement, Tenant's financial
condition may impair its ability to meet its obligations during the Extended
Term. This option is personal to the Tenant named herein and shall be void upon
any transfer as per Article 9 of this Lease.

<PAGE>

                                 RIDER TO LEASE

3.1  Delivery of Possession: If for any reason, Landlord cannot deliver
     possession of the Premises to Tenant on or before May 1, 1996 ("Outside
     Date"), Landlord shall not be liable to Tenant for any damages resulting
     from that failure, nor shall that failure cause a termination of this Lease
     or Tenant's obligations under this Lease, except as otherwise permitted
     under this Section, nor shall that failure extend the term of this Lease.
     If Landlord has not delivered possession of the Premises to Tenant on or
     before the Outside Date, Tenant may cancel this Lease, by written notice to
     Landlord within ten (10) days after the Outside Date; in which case, the
     parties shall be discharged from all obligations under this Lease;
     provided, however, that if the written notice of Tenant is not received by
     Landlord within such ten (10) day period, Tenant shall have no further
     right to terminate this Lease by reason of Landlord's failure to timely
     deliver possession. The Outside Date shall be extended one (1) day for each
     day of delay in design or construction of the Improvements caused by (i)
     any act or inaction of Tenant or any employee, contractor, or agent of
     Tenant (including Tenant change orders) and/or, (ii) strikes, lockouts,
     labor troubles, inability to procure materials, failure of power,
     restrictive governmental laws or regulations, riots, insurrection, war or
     other reason beyond the reasonable control of Landlord. Landlord shall use
     diligent efforts to ensure completion of improvements at the earliest date
     possible.

14.1 General

     (2)  At Landlord's option, will be made by Tenant, subject to Landlord's
          reasonable approval or Landlord for Tenant's account, subject to
          Tenant's right to cancel desired alterations, additions or
          improvements if the estimated cost of such work of which Landlord
          shall notify Tenant prior to commencing such work, is unacceptable to
          Tenant.

6.   Schedule of Improvement Activities

     (c) and delivered to Tenant three competitive bids as to the cost of the
Improvements as set forth in the final space plan and construction drawings.
Tenant will notify Landlord in writing of the bid selected by Tenant, provided
that if Landlord disapproves of such bid and Landlord and Tenant cannot agree on
another bid, the lowest bid shall be selected (the "Estimated Construction
Cost").

WORKLETTER, Page C-5, Paragraph 12 - No Liability

     If Tenant has been damaged by reason of defective design or workmanship and
     desires to pursue recourse against Landlord's architects, engineers, or
     contractors, Landlord may, in its sole discretion, assign such rights to
     Tenant as may be necessary in order to pursue such recourse; provided,
     however, such assignment shall be on a non-exclusive basis and Landlord
     shall reserve such rights to itself.

<PAGE>

Space on any exterior signage will be provided in Landlord's sole discretion. No
tenant will have any right to the use of any exterior sign.

     19. Tenant will see that the doors of the Premises are closed and locked
and that all water faucets, water apparatus, and utilities are shut off before
Tenant or Tenant's employees leave the Premises, so as to prevent waste or
damage, and for any failure to comply or carelessness in this regard Tenant will
make good all injuries sustained by other tenants or occupants of the Building
or Landlord. On multiple-tenancy floors, all tenants will keep the doors to the
Building corridors closed at all times except for ingress and egress.

     20. Tenant will not conduct itself in any manner that is inconsistent with
the character of the Building as a first quality building or that will impair
the comfort and convenience of other tenants in the Building.

     21. Tenant (including tenant's employees, agents, invitees, and visitors)
will use the parking spaces solely for the purpose of parking passenger model
cars, small vans, and small trucks and will comply in all respects with any
rules and regulations that may be promulgated by Landlord from time to time with
respect to the parking areas. The parking areas will not be used by Tenant, its
agents, or employees, for overnight parking of vehicles, except with Landlord's
prior consent. Tenant will ensure that any vehicle parked in any of the parking
spaces will be kept in proper repair and will not leak oil, grease, gasoline, or
any other fluids. If any of the parking spaces are at any time used (a) for any
purpose other than parking as provided above; (b) in any way or manner
reasonably objectionable to Landlord; or (c) by Tenant after default by Tenant
under the Lease, Landlord, in addition to any other rights otherwise available
to Landlord, may consider such default an event of default under the Lease.

     22. No act or thing done or omitted to be done by Landlord or Landlord's
agent during the term of the Lease in connection with the enforcement of these
rules and regulations will constitute an eviction by Landlord of any tenant nor
will it be deemed an acceptance of surrender of the Premises by any tenant, and
no agreement to accept such termination or surrender will be valid unless in a
writing signed by Landlord. The delivery of keys to any employee or agent of
Landlord will not operate as a termination of the Lease or a surrender of the
Premises unless such delivery of keys is done in connection with a written
instrument executed by Landlord approving the termination or surrender.

     23. In these rules and regulations, the term "tenant" includes the
employees, agents, invitees, and licensees of Tenant and others permitted by
Tenant to use or occupy the Premises.

     24. Landlord may waive any one or more of these rules and regulations for
the benefit of any particular tenant or tenants, but no such waiver by Landlord
will be construed as a waiver of such rules and regulations in favor of any
other tenant or tenants, nor prevent Landlord from enforcing any such rules and
regulations against any or all of the tenants of the Building after such waiver.

     25. These rules and regulations are in addition to, and will not be
construed to modify or amend, in whole or in part, the terms, covenants,
agreements, and conditions of the Lease.

                                    Page D-3

<PAGE>

__________

This Workletter is dated August 29, 1995, between MBL Life Assurance Corporation
("Landlord") and MSK Financial Services, Inc., (dba Accredited Home Lender)
("Tenant").

RECITALS

This Workletter is attached to and forms a part of that certain office lease
dated August 29, 1995 ("Lease"), pursuant to which Landlord has leased to Tenant
office space in the Building.

Tenant requests and Landlord agrees to make certain initial improvements to the
Premises, prior to occupancy, upon the terms and conditions contained in this
Workletter.

1.   Definitions. In this Workletter, some defined terms are used. They are:

     (a)  Tenant's Representative: Pete Frank

     (b)  Landlord's Representative: Tim Meissner

     (c)  Tenant Finish Allowance: Not to exceed $ 15.00 per square foot
          (non-cash), which equals $ 150,000.00 and is to be applied by Landlord
          to the cost of the improvements.

     (d)  Programming Information: Information provided by Tenant, including the
          nature of the Tenant's business, manner of operation, number and types
          of rooms, special equipment and functional requirements, anticipated
          growth, interactions among groups, and any other programming
          requirements the Tenant may have.

     (e)  Programming Information Submission Date: September 25, 1995, the date
          Tenant will submit to Landlord the Programming Information necessary
          for the preparation of the space plan.

     (f)  Final Space Plan: A drawing of the Premises clearly showing the layout
          and relationship of all departments and offices, depicting partitions,
          door locations, types of electrical/data/telephone outlets, and
          delineation of furniture and equipment as approved by Tenant.

     (g)  Estimated Construction Cost: A preliminary estimate of the costs of
          the improvements that are depicted on the Final Space Plan, including
          all architectural, engineering, contractor, and any other costs as can
          be determined from the Final Space Plan.

     (h)  Working Drawings: Construction documents detailing the improvements,
          complete in form and content and containing sufficient information and
          detail to allow for competitive bidding or negotiated pricing by
          contractor(s) selected and engaged by Landlord. and approved by
          Tenant.

     (i)  Construction Schedule: A schedule depicting the relative time frames
          for various activities related to the construction of the improvements
          in the Premises.

     (j)  Tenant Cost Proposal: A final estimate of costs of the improvements
          that are depicted on the Working Drawings, including all
          architectural, engineering, contractor, and any other costs, and
          clearly indicating the dollar amount, if any, that is to be paid by
          Tenant pursuant to paragraph 7.

     (k)  Maximum Approved Cost: The amount established in accordance with
          paragraph 6(c) that Tenant has agreed to pay for the Improvements to
          the Premises.

     (l)  Improvements: The work is inclusive of the following:

          (1)  The development of space plans and working drawings, including
               supporting engineering studies (i.e., structural design or
               analysis, lighting or acoustical evaluations, or others as
               determined by Landlord's architect);

          (2)  All construction work necessary to augment the Base Building,
               creating the details and partitioning shown on the Final Space
               Plan. The work will create finished ceilings, walls, and floor
               surfaces, as well as complete HVAC, lighting, electrical, and
               fire protection systems.

          The Improvements will NOT include personal property items, such as
          decorator items or services, artwork, plants, furniture, equipment, or
          other fixtures not permanently affixed to the Premises.

     (m)  Cost of the Improvements: The cost includes but is not limited to the
          following:

                                    Page C-1

<PAGE>

          (2)  All contractor and construction manager costs and fees;

          (3)  All permits and taxes;

          (4)  A coordination and administration fee to Landlord, pursuant to
               paragraph 4(b).

     (n)  Change Order: Any change, modification, or addition to the Final Space
          Plan or Working Drawings after Tenant has approved the same.

     (o)  Base Building: Those elements of the core and shell construction that
          are completed in preparation for the Improvements to the Premises.
          This includes Building structure, envelope, and systems as indicated
          on Schedule 1, "Base Building Definition," attached hereto. This
          defines the existing conditions to which Improvements are added.

     (p)  Building Standard: Component elements utilized in the design and
          construction of the Improvements that have been pre-selected by the
          Landlord to ensure uniformity of quality, function, and appearance
          throughout the Building. These elements include but are not limited to
          ceiling systems, doors, hardware, walls, floor coverings, finishes,
          window coverings, light fixtures, and HVAC components.

     (q)  Other capitalized terms not defined herein shall have the same meaning
          as defined in the Lease.

2.   Representatives. Landlord appoints Landlord's Representative to act for
     Landlord in all matters associated with this Workletter. Tenant appoints
     Tenant's Representative to act for Tenant in all matters associated with
     this Workletter. All inquiries, requests, instructions, authorizations, and
     other communications with respect to the matters covered by this Workletter
     will be made to Landlord's Representative or Tenant's Representative, as
     the case may be. Tenant will not make any inquiries of or requests to, and
     will not give any instructions or authorizations to, any employee or agent
     of Landlord, including, without limitation, Landlord's architect,
     engineers, and contractors or any of their agents or employees, with regard
     to matters associated with this Workletter. Either party may change its
     representative under this Workletter at any time by providing 3 days' prior
     written notice to the other party.

3.   Project Design and Construction. All work will be performed by designers
     and contractors selected and engaged by Landlord.

4.   Cost Responsibilities.

     (a)  Landlord: Landlord will pay up to the amount of the Tenant Finish
          Allowance for the cost of the Improvements.

     (b)  Tenant: Tenant will pay for:

          (1)  Tenant-initiated changes to the Final Space Plan or Working
               Drawings after Tenant's approval; but only to the extent any such
               change results in total approved costs in excess of the Tenant
               Finish

          (2)  Tenant-initiated Change Orders, modifications, or additions to
               the Improvements after Tenant's approval of the Working Drawings;
               but only to the extent any such change regults in total approved
               costs in excess of the Tenant Finish Allowance;

          (3)  All costs in excess of the Tenant Finish Allowance that are not
               included in (1) or (2) immediately above; but only to the extent
               the Tenant Cost Proposal exceeds the Tenant Finish Allowance;

          (4)  The cost of the Landlord's overhead for coordination and
               administration at a rate of 5% of the total cost to the Landlord
               of clauses (1), (2), and (3) above.

5.   Landlord's Approval. Landlord, in its reasonable discretion, may withhold
     its approval of any space plan, Working Drawings, or Change Order that:

     (a)  Exceeds or adversely affects the structural integrity of the Building,
          or any part of the heating, ventilating, air conditioning, plumbing,
          mechanical, electrical, communication, or other systems of the
          Building;

     (b)  Is not approved by the holder of any mortgage or deed of trust
          encumbering the Building at the time the work is proposed;

     (c)  Would not be approved by a prudent owner of property similar to the
          Building;

                                    Page C-2

<PAGE>

     (e)  Landlord reasonably believes will increase the cost of operation or
          maintenance of any of the systems of the Building; beyond that
          required for customary office use;

     (f)  Landlord reasonably believes will reduce the market value of the
          Premises or the Building at the end of the Term;

     (g)  Does not conform to applicable building code or is not approved by any
          governmental, quasi-governmental or utility authority with
          jurisdiction over the Premises; or

6.   Schedule of Improvement Activities.

     (a)  On or before the Programming Information Submission Date, Tenant will
          cooperate with and submit to Landlord the Programming Information
          necessary for Landlord's architect to prepare the proposed space plan.

     (b)  Landlord's architect will expeditiously prepare a space plan and
          forward it to Tenant. Tenant will give Landlord written notice whether
          or not Tenant approves the proposed space plan within 5 business days
          after its receipt. If Tenant's notice objects to the proposed space
          plan, the notice will set forth how the proposed space plan is
          inconsistent with the Programming Information and how the proposed
          space plan must be changed in order to overcome Tenant's objections.
          Landlord will resubmit a revised space plan to Tenant and it will be
          treated as though it was the first proposed space plan prepared
          pursuant to this paragraph.

     (c)  After Tenant approval of the Final Space Plan and construction
          drawings, Landlord will promptly cause to be prepared,: Tenant will
          establish the Maximum Approved Cost by either SEE RIDER ATTACHED
                                                        ------------------

          (1)  Agreeing in writing to pay the amount if any, by which the
               Estimated Construction Cost exceeds the Tenant Finish Allowance;
               or

          (2)  Agreeing to have the Final Space Plan revised by Landlord's
               architect in order to assure that the Estimated Construction
               Cost is acceptable to Tenant, and either:

               (A)  No more than the Tenant Finish Allowance; or

               (B)  Exceeds the Tenant Finish Allowance by an amount which
                    Tenant agrees to pay pursuant to clause (1) immediately
                    above.

          Tenant shall give immediate attention to establishing the Maximum
          Approved Cost by responding to Landlord within 2 business days. Upon
          Tenant's timely fulfillment of its obligations in either clause (1) or
          clause (2) immediately above, the Maximum Approved Cost will be
          established.

     (d)  Upon establishment of the Maximum Approved Cost, Landlord will cause
          to be prepared and delivered to Tenant the Working Drawings, the
          Construction Schedule, and the Tenant Cost Proposal for the
          improvements in accordance with the Final Space Plan. If the Tenant
          Cost Proposal is less than the Maximum Approved Cost, Landlord will
          take steps necessary to commence construction of the Improvements to
          the Premises.

          If the Tenant Cost Proposal is more than the Maximum Approved Cost,
          Landlord will so notify Tenant in writing and Tenant will either (1)
          agree in writing to pay the amount by which the Tenant Cost Proposal
          exceeds the Tenant Finish Allowance or (2) request Landlord to revise
          the Working Drawings in order to assure that the Tenant Cost Proposal
          is no more than the Maximum Approved Cost.

          Tenant shall give immediate attention to the cost proposal approval
          process and to respond to Landlord within 3 business days.

     (e)  Following approval of the Working Drawings and the Tenant Cost
          Proposal, Landlord will cause application to be made to the
          appropriate governmental authorities for necessary approvals and
          building permits. Upon receipt of the necessary approvals and permits,
          Landlord will begin construction of the Improvements.

7.   Payment by Tenant. The amount payable by Tenant will be billed
     periodically, as the work proceeds, and

                                    Page C-3

<PAGE>

     ___________________________________________________________________________
     improvements during construction only be writer, instructions to Landlord's
     Representative on a form approved by Landlord. All such changes will be
     subject to Landlord's prior written approval in accordance with paragraph
     5. Prior to commencing any change, Landlord will prepare and deliver to
     Tenant, for Tenant's approval, a Change Order setting forth the total cost
     of such change, which will include associated architectural, engineering,
     construction contractor's costs and fees, Construction Schedule changes,
     and the cost of Landlord's overhead.Pursuant to paragraph 4(b)if Tenant
     fails to approve such change order within 5 business days after delivery by
     Landlord, Tenant will be deemed to have withdrawn the proposed change and
     Landlord will not proceed to perform the change. Upon Landlord's receipt of
     Tenant's approval, Landlord will proceed with the change.

9.   Early Entry. Landlord, in its sole discretion, may permit Tenant and
     Tenant's employees and agents to enter the Premises prior to the
     Commencement Date so that Tenant may do such other work as may be required
     to make the Premises ready for Tenant's use and occupancy. If Landlord
     permits such entry prior to the Commencement Date, it will be upon the
     condition that Tenant and its, employees, agents, contractors and suppliers
     shall work in harmony with Landlord and its employees, agents, contractors
     and suppliers and will not interfere with the performance of the work by
     Landlord or with the work of any other tenants or occupants in the
     Building. If at any time such entry shall cause or threaten to cause such
     disharmony or interference, Landlord shall have the right to withdraw such
     license upon 24 hours written notice to Tenant. Tenant agrees that any such
     entry or occupation of the Premises shall be governed by all of the terms,
     covenants, conditions and provisions of the Lease, except the covenant for
     the payment of Rent, and further agrees that Landlord shall not be liable
     in any way for injury, loss or damage which may occur to any of the
     Tenant's work or installations made in such Premises, Building or Project,
     or to any personal property placed therein, the same being at Tenant's sole
     risk.

10.  Completion and Commencement Date. Tenant's obligation for payment of Rent
     pursuant to the Lease will commence on the Commencement Date; however, the
     Commencement Date and the date for the payment of Rent may be delayed on a
     day-by-day basis for each day the substantial completion of the
     Improvements is delayed by Landlord or its contractors or agents. The
     payment of Rent will not be delayed by a delay of substantial completion
     due to Tenant. The following are some examples of delays which will not
     affect the Commencement Date and the date Rent is to commence under the
     Lease:

     (a)  Late submissions of Programming Information;

     (b)  Change Orders requested by Tenant;

     (c)  Delays in obtaining construction materials requested by Tenant;
          provided that Landlord immediately notifies Tenant of such delay and
          Tenant does not elect to substitute other materials

     (d)  Tenant's failure to approve timely any item requiring Tenant's
          approval; and

     (e)  Delays by Tenant according to paragraph 6.

     In the event that substantial completion of the Improvements is delayed by
     Landlord, its contractors, or agents, the Commencement Date will be the
     date of substantial completion of the improvements, subject only to the
     completion of Landlord's punch-list items (that is, those items that do not
     materially interfere with Tenant's use and enjoyment of the Premises).
     Landlord and Tenant will confirm the Commencement Date in accordance with
     Section 3.1 of the Lease.

11.  Condition of the Premises.

     (a)  Prior to the Commencement Date, Tenant will conduct a walk-through
          inspection of the Premises with Landlord and prepare a punch-list of
          items needing additional work by Landlord. Other than the items
          specified in the punch-list and "latent defects" (as defined below),
          by taking possession of the Premises Tenant will be deemed to have
          accepted the Premises in their condition on the date of delivery of
          possession and to have acknowledged that Landlord has installed the
          Improvements as required by this Workletter and that there are no
          items needing additional work or repair. The punch-list will not
          include any damage to the Premises caused by Tenant's move-in or early
          access, if permitted. Damage caused by Tenant will be repaired or
          corrected by Landlord at Tenant's expense. Tenant acknowledges that
          neither Landlord nor its agents or employees have made any
          representations or warranties as to the suitability or fitness of the
          Premises for the conduct of Tenant's business or for any other
          purpose, nor has Landlord or its agents or employees agreed to
          undertake any alterations or construct any Tenant improvements to the
          Premises except as expressly provided in this Lease and this
          Workletter. If Tenant fails to submit a punch-list to Landlord prior
          to the Commencement Date, it will be deemed that there are no items
          needing additional work or repair. Landlord's contractor will complete
          all reasonable punch-list items within 30 days after the walk-through
          inspection or as soon as practicable after such walk-through.

     (b)  A "latent defect" is a defect in the condition of the Premises caused
          by Landlord's failure to construct the

                                    Page C-4

<PAGE>

          ___________________________________________________________________
          then Landlord, at its expense, will repair such latent defect as
          soon as practicable. Except as set forth in this paragraph 11,
          Landlord will have no obligation or liability to Tenant for latent
          defects.

12.  No Liability. Subject to paragraph 11 regarding latent defects, Preparation
     of the Final Space Plan and Working Drawings by or on behalf of Landlord
     shall create no responsibility or liability on the part of the Landlord for
     their completeness, design sufficiency, or compliance with all laws,
     ordinances, rules, regulations of governmental agencies or authorities, or
     the use and occupancy permit for the Building. SEE RIDER ATTACHED
                                                    ------------------

13.  Adjustments Upon Completion. As soon as practicable, upon completion of the
     Improvements in accordance with this Workletter, Landlord will notify
     Tenant of the Rentable Area of the Premises, the Rentable Area of the
     Building, Monthly Rent, and Tenant's Share, if such information was not
     previously determinable by Landlord. Tenant, within 10 days of Landlord's
     written request, will execute a certificate confirming such information.

           *****[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]*****

                                    Page C-5

<PAGE>

RULES AND REGULATIONS

     1. Landlord may from time to time adopt appropriate systems and procedures
for the security or safety of the Building, any persons occupying, using, or
entering the Building, or any equipment, finishings, or contents of the
Building, and Tenant will comply with Landlord's reasonable requirements
relative to such systems and procedures.

     2. The sidewalks, halls, passages, exits, entrances, elevators, and
stairways of the Building will not be obstructed by any tenants or used by any
of them for any purpose other than for ingress to and egress from their
respective Premises. The halls, passages, exits, entrances, elevators,
escalators, and stairways are not for the general public, and Landlord will in
all cases retain the right to control and prevent access to such halls,
passages, exits, entrances, elevators, and stairways of all persons whose
presence in the judgment of Landlord would be prejudicial to the safety,
character, reputation, and interests of the Building and its tenants, provided
that nothing contained in these rules and regulations will be construed to
prevent such access to persons with whom any tenant normally deals in the
ordinary course of its business, unless such persons are engaged in illegal
activities. No tenant and no employee or invitee of any tenant will go upon the
roof of the Building except such roof or portion of such roof as may be
contiguous to the Premises of a particular tenant and may be designated in
writing by Landlord as a roof deck or roof garden area. No tenant will be
permitted to place or install any object (including without limitation radio and
television antennas, loudspeakers, sound amplifiers, microwave dishes, solar
devices, or similar devices) on the exterior of the Building or on the roof of
the Building.

     3. No sign, placard, picture, name, advertisement, or written notice
visible from the exterior of Tenant's Premises will be inscribed, painted,
affixed, or otherwise displayed by Tenant on any part of the Building or the
Premises without the prior written consent of Landlord. Landlord will adopt and
furnish to Tenant general guidelines relating to signs inside the Building on
the office floors. Tenant agrees to conform to such guidelines. All approved
signs or lettering on doors will be printed, painted, affixed, or inscribed at
the expense of the Tenant by a person approved by Landlord. Other than draperies
expressly permitted by Landlord and building standard window treatments,
material visible from outside the Building will not be permitted. In the event
of the violation of this rule by Tenant, Landlord may remove the violating items
without any liability, and may charge the expense incurred by such removal to
the tenant or tenants violating this rule.

     4. No cooking will be done or permitted by any tenant on the Premises,
except in areas of the Premises which are specially constructed for cooking and
except that use by the tenant of microwave ovens and Underwriters' Laboratory
approved equipment for brewing coffee, tea, hot chocolate, and similar beverages
will be permitted, provided that such use is in accordance with all applicable
federal, state, and city laws, codes, ordinances, rules, and regulations.

     5. No tenant will employ any person or persons other than the cleaning
service of Landlord for the purpose of cleaning the Premises, unless otherwise
agreed to by Landlord in writing. Except with the written consent of Landlord,
no person or persons other than those approved by Landlord will be permitted to
enter the Building for the purpose of cleaning it. No tenant will cause any
unnecessary labor by reason of such tenant's carelessness or indifference in the
preservation of good order and cleanliness. Should Tenant's actions result in
any increased expense for any required cleaning, Landlord reserves the right to
assess Tenant for such expenses.

     6. The toilet rooms, toilets, urinals, wash bowls and other plumbing
fixtures will not be used for any purposes other than those for which they were
constructed, and no sweepings, rubbish, rags, or other foreign substances will
be thrown in such plumbing fixtures. All damages resulting from any misuse of
the fixtures will be borne by the tenant who, or whose servants, employees,
agents, visitors, or licensees, caused the same.

     7. No tenant, or tenant's invitees or licensees, will in any way deface any
part of the Premises or the Building of which they form a part. In those
portions of the Premises where carpet has been provided directly or indirectly
by Landlord, Tenant will at its own expense install and maintain pads to protect
the carpet under all furniture having casters other than carpet casters.

     8. No tenant will alter, change, replace, or rekey any lock or install a
new lock or a knocker on any door of the Premises. Landlord, its agents, or
employees will retain a pass (master) key to all door locks on the Premises. Any
new door locks required by Tenant or any change in keying of existing locks will
be installed or changed by Landlord following tenant's written request to
Landlord and will be at Tenant's expense. All new locks and rekeyed locks will
remain operable by Landlord's pass (master) key. Landlord will furnish each
tenant, free of charge, with two (2) keys to each suite entry door lock on the
Premises. Landlord will have the right to collect a reasonable charge for
additional keys and cards requested by any tenant. Each tenant, upon termination
of its tenancy, will deliver to Landlord all keys and access cards for the
Premises and Building that have been furnished to such tenant.

     9. The elevator designated for freight by Landlord will be available for
use by all tenants in the Building during the hours and pursuant to such
procedures as Landlord may determine from time to time. The persons

                                    Page D-1

<PAGE>

business is the performing of relocation services, and must be bonded and fully
insured. A certificate or other verification of such insurance must be received
and approved by Landlord prior to the start of any moving operations. Insurance
must be sufficient, in Landlord's sole opinion, to cover all personal liability,
theft or damage to the Project, including but not limited to floor coverings,
doors, walls, elevators, stairs, foliage, and landscaping. Special care must be
taken to prevent damage to foliage and landscaping during adverse weather. All
moving operations will be conducted at such times and in such a manner as
Landlord will direct, and all moving will take place during non-Business Hours
unless Landlord agrees in writing otherwise. Tenant will be responsible for the
provision of building security during all moving operations, and will be liable
for all losses and damages sustained by any party as a result of the failure to
supply adequate security. Landlord will have the right to prescribe the weight,
size, and position of all equipment, materials, furniture, or other property
brought into the Building. Heavy objects will, if considered necessary by
Landlord, stand on wood strips of such thickness as is necessary to properly
distribute the weight. Landlord will not be responsible for loss of or damage to
any such property from any cause, and all damage done to the Building by moving
or maintaining such property will be repaired at the expense of Tenant. Landlord
reserves the right to inspect all such property to be brought into the Building
and to exclude from the Building all such property which violates any of these
rules and regulations or the Lease of which these rules and regulations are a
part. Supplies, goods, materials, packages, furniture, and all other items of
every kind delivered to or taken from the Premises will be delivered or removed
through the entrance and route designated by Landlord, and Landlord will not be
responsible for the loss or damage of any such property.

     10. No tenant will use or keep in the Premises or the Building any
kerosene, gasoline, or inflammable or combustible or explosive fluid or material
or chemical substance other than limited quantities of such materials or
substances reasonably necessary for the operation or maintenance of office
equipment or limited quantities of cleaning fluids and solvents required in
tenant's normal operations in the Premises, which shall be stored in accordance
with applicable law. Without Landlord's prior written approval, no tenant will
use any method of heating or air conditioning other than that supplied by
Landlord. No tenant will use or keep or permit to be used or kept any foul or
noxious gas or substance in the Premises.

     11. Tenants shall not, prior to or during the Term, either directly or
indirectly, employ or permit the employment of any contractor, mover, mechanic
or laborer, or permit any materials in the Premises, if the use of such
contractor, mover, mechanic or laborer or such materials would, in Landlord's
opinion, create any difficulty, strike or jurisdictional dispute with other
contractors, movers, mechanics or laborers engaged by Landlord, tenants, or
others, or would in any way disturb the construction, maintenance, cleaning,
repair, management, security or operation of the Building, Project or any part
thereof. Any tenant, upon demand by Landlord, shall cause all contractors,
movers, mechanics, laborers or materials causing such interference, difficulty
or conflict to leave or be removed from the Project immediately.

     12. Landlord will have the right to prohibit any advertising by Tenant
mentioning the Building that, in Landlord's reasonable opinion, tends to impair
the reputation of the Building or its desirability as a building for offices,
and upon written notice from Landlord, tenant will refrain from or discontinue
such advertising.

     13. Tenant will not bring any animals (except "Seeing Eye" dogs) or birds
into the Building, and will not permit bicycles or other vehicles inside or on
the sidewalks outside the Building except in areas designated from time to time
by Landlord for such purposes.

     14. All persons entering or leaving the Building between the hours of 6
p.m. and 7 a.m. Monday through Friday, and at all hours on Saturdays, Sundays,
and holidays will comply with such off-hour regulations as Landlord may
establish and modify from time to time. Landlord reserves the right to limit
reasonably or restrict access to the Building during such time periods.

     15. Each tenant will store all its trash and garbage within its Premises.
No material will be placed in the trash boxes or receptacles if such material is
of such nature that it may not be disposed of in the ordinary and customary
manner of removing and disposing of trash and garbage without being in violation
of any law or ordinance governing such disposal. All garbage and refuse disposal
will be made only through entryways and elevators provided for such purposes and
at such times as Landlord designates. Removal of any furniture or furnishings,
large equipment, packing crates, packing materials, and boxes will be the
responsibility of each tenant and such items may not be disposed of in the
Building trash receptacles nor will they be removed by the Building's janitorial
service, except at Landlord's sole option and at the tenant's expense. No
furniture, appliances, equipment, or flammable products of any type may be
disposed of in the Building trash receptacles.

     16. Canvassing, peddling, soliciting, and distributing handbills or any
other written materials in the Building are prohibited, and each tenant will
cooperate to prevent the same.

     17. The requirements of the tenants will be attended to only upon
application by written, personal, or telephone notice at the office of the
Building. Employees of Landlord or Landlord's agent will not perform any work or
do anything outside of their regular duties unless under special instructions
from Landlord.

                                    Page D-2

<PAGE>

     DEFINITIONS. In this certificate the following terms have the meanings
     given to them:

     (a)  Landlord: MBL Life Assurance Corporation

     (b)  Tenant: MSK Financial Services, Inc., a California Corporation (dba
          Accredited Home Lenders)

     (c)  Lease: Office lease dated August 29, 1995 between Landlord and Tenant.

     (d)  Premises: Suite 100.

     (e)  Building Address: 15030 Avenue of Science San
                            Diego CA 92128

2.   Landlord and Tenant confirm that the Commencement Date of the Lease is
     December 15, 1995 and the Expiration Date is December 14, 2000 and that
     Sections 1.1(k) and (1) are accordingly amended.

3.   The Rentable Area of the Premises is 9,998 square feet.

4.   The Rentable Area of the Building is 115,862 square feet.

5.   Tenant's Share is nine (9%) percent.

6.   Tenant has accepted possession of the Premises as provided in the Lease.

7.   The Improvements required to be furnished by the Landlord in accordance
     with the Workletter (if any) have been furnished to the satisfaction of
     Tenant (subject to any corrective work or punch-list items submitted
     previously to Landlord).

8.   All terms and conditions to be performed by Landlord under the Lease have
     been satisfied and on this date there are no existing defenses or offsets
     which Tenant has against the full enforcement of the Lease by Landlord.

9.   The Lease is in full force and effect and has not been modified, altered,
     or amended, except as follows: Not Applicable.

10.  There are no setoffs or credits against Rent, and no Security Deposit or
     prepaid Rent has been paid except as provided by the Lease.

Landlord and Tenant have executed this Commencement Date and Estoppel
Certificate as of the dates set forth below.

<TABLE>
<S>                                                     <C>
Tenant:   ACCREDITED HOME LENDERS, INC                  Landlord: MBL Life Assurance Corporation
          formerly known as MSK Financial
          Services, Inc.(dba Accredited Home Lenders)

By:   /s/ James A. Konrath                              By:
      --------------------------------                         -------------------------------
Name:   James A. Konrath                                Name:
                                                               -------------------------------
Title:  President                                       Title:
                                                               -------------------------------
Date:   December 15, 1995                               Date:
                                                               -------------------------------
</TABLE>

<PAGE>

3. Commencement Date. The "Commencement Date" for the Expansion Space shall be
   -----------------
the date of substantial completion of the Improvements. Landlord shall construct
certain improvements to the Expansion Space, which shall be completed in
accordance with the provisions of the Workletter attached to the Lease, except
that Tenant's Representative is Pete Frank; the Tenant Finish Allowance shall
not exceed $15 per square foot of Rentable Area (which equals $75,780); the
Programming Information Submission Date is August 25, 1996; and all references
to the Premises and the Improvements will be deemed to refer to the Expansion
Space and the improvements that are to be done to the Expansion Space pursuant
hereto.

4. Clarification. In Section 1.1(n), regarding Tenant's Monthly Rent, each
   -------------
reference to the word "November" is replaced with the word "December" (since the
Commencement Date for the Lease was December 15, 1995).

5. Miscellaneous. The provisions of this agreement supersede any contrary
   -------------
provisions in the Lease. Except as amended hereby, the Lease remains unchanged
and in full force and effect.

6. Reduction in Monthly Rent: No Default.
   ------------------------------------

     6.1 After the tenant finish work for the Expansion Space has been finally
completed, Tenant's Monthly Rent for the Premises for the remainder of the
primary term of the Lease shall be reduced by the "Monthly Reduction Amount."
The Monthly Reduction Amount is derived as follows.

          6.1.1 First, determine the total "Cost of the Improvements" (as
defined in Exhibit C) for the Expansion Space.

          6.1.2 Second, subtract the amount in 6.1.1 from $75,780. The resulting
amount is called the "Savings for the Expansion Space." If the resulting amount
is negative, the Savings for the Expansion Space will be $0 (zero). However,
notwithstanding the foregoing, the Savings for the Expansion Space shall never
exceed $5 per square foot of Rentable Area in the Expansion Space ($25,260).

          6.1.3 Third, add (a) the Savings for the Expansion Space and (b)
$3,358 (which is the agreed value of the savings realized from the initial
tenant finish work done in the Premises).

          6.1.4 Fourth, divide the amount determined in Section 6.1.3 by the
number of scheduled monthly rent payments remaining in the primary term of the
Lease after the tenant finish work for the Expansion Space has been finally
completed. The resulting number is the Monthly Reduction Amount.

As an example only, if you assumed that the Savings for the Expansion Space was
$642, and that there were 48 scheduled monthly rent payments remaining in the
primary term of the Lease after the tenant finish work for the Expansion Space
has been finally completed, then the Monthly Reduction Amount for the entire
space would be $83.33, and the Monthly Rent for the entire Premises would be
reduced by that amount for each of the following 48 monthly rent payments (since
$3,358 + $642 = $4,000, and $4,000/48 = $83.33).

The foregoing reduction in Monthly Rent implements, and will satisfy Landlord's
obligations under, Section 3 of the Addendum to Lease.

     6.2 Tenant represents and warrants that, to the best of Tenant's knowledge,
after due inquiry and investigation, there is no default by Landlord under the
Lease and there is no event which with the passage of time or the giving of
notice or both could ripen into a default or an event of default by Landlord
under the Lease. Except for the reduction in Monthly Rent as set forth in
Section 6.1 and Landlord's obligation to reimburse Tenant the sum of $5,220
(which amount relates to a computer room HVAC unit installed as part of the
original tenant finish work in the Premises, and which amount will be reimbursed
to Tenant upon submission by Tenant of paid invoices for the unit), Tenant has
no counterclaim or right to offset, deduction or credit under the Lease or
otherwise against the rent or other amounts due or to become due under the
Lease.

7. Brokerage Commission. Tenant represents and warrants that Tenant has not
   --------------------
dealt with any broker, agent or other person in connection with this agreement
who might be entitled to a commission, except for Ramsey Commercial. Landlord
shall pay any broker's commission owing to such broker in accordance with the
provisions of a separate written agreement. Tenant shall indemnify Landlord
against any liability, loss,

<PAGE>

ACCREDITED HOME LENDERS
CARMEL POINT BUSINESS PARK
15030 AVENUE OF SCIENCE
FIRST FLOOR

PROJECT _:     ______
DATE:          __________
AREA:          __________

                                    [GRAPHIC]

FINAL PRELIMINARY FLOOR PLAN
--------------------------------------------------------------------------------
SCALE: [Illegible]

[Illegible]

NOTES:

A.   THIS PLAN IS FOR SPACE PLAN REFERENCE ONLY. LUND DESIGN GROUP SHALL DEVELOP
     CONSTRUCTION DOCUMENTS IN ORDER TO ESTABLISH AN ACCURATE SCOPE OF WORK.
     LUND DESIGN GROUP IS NOT RESPONSIBLE FOR ANY PRELIMINARY BIDS DEVELOPED
     FROM THIS PRELIMINARY PLAN.
B.   TENANTS OWN SYSTEMS FURNITURE CONSULTANT SHALL BE RESPONSIBLE TO FIELD
     VERIFY CLEARANCE REQUIRED FOR TENANTS OWN SYSTEMS FURNITURE.
C.   NEW LAMINATED PLASTIC BASE, CABINET WITH DOORS AND LOCKS. THIS IS SUBJECT
     TO PRICING AN LANDLORD'S SUBSEQUENT APPROVAL.
D.   NEW LAMINATED PLASTIC UPPER OPEN SHELVING. THIS IS SUBJECT TO PRICING AND
     SUBSEQUENT LANDLORD'S APPROVAL.
E.   NEW UPPER SHELVING WITH VERTICAL DIVIDERS.
F.   ELECTRICAL REQUIREMENTS: (3) ELECTRICAL DUPLEX OUTLETS PER OFFICE. (3)POWER
     POLES AND(__). BOXES FOR PANEL SYSTEMS, (16) ELECTRICAL DUPLEX OUTLETS AND
     (2) DEDICATED ELECTRICAL DUPLE OUTLETS FOR WORKROOM AND OPEN OFFICE.
G.   IN OPEN OFFICE, EXISTING LIGHT FIXTURES ARE TO BE RETROFITED WITH PARABOLIC
     LENS TO MATCH EXISTING.

<PAGE>

                                   EXHIBIT "E"
                   COMMENCEMENT DATE AND ESTOPPEL CERTIFICATE

This Commencement Date and Estoppel Certificate is entered into by Landlord and
Tenant pursuant to Section 3.1 of the Lease.

1.   DEFINITIONS. In this certificate the following terms have the meanings
     given to them:

     (a)  Landlord: MBL Life Assurance Corporation

     (b)  Tenant: Accredited Home Lenders, Inc. fka: MSK Financial Services Inc.

     (c)  Lease: First Amendment dated 8/27/96 between Landlord and Tenant.

     (d)  Premises: Suite 106

     (e)  Building Address:                    15030 Avenue of Science
                                               San Diego, California 92128

2.   Landlord and Tenant confirm that the Commencement Date of the Amendment is
     10/2/96 and the Expiration Date is 12/14/00 and that Sections 1.1 (k) and
     (l) are accordingly amended.

3.   The Rentable Area of the Expansion Premises is 5,052 square feet.

4.   The Rentable Area of the Building is 115.047 square feet.

5.   Tenant's Share is increased to 12.69 percent.

6.   Tenant has accepted possession of the Premises as provided in the Lease.

7.   The Improvements required to be furnished by the Landlord in accordance
     with the Workletter (if any) have been furnished to the satisfaction of
     Tenant (subject to any corrective work or punch-list items submitted
     previously to Landlord).

8.   All terms and conditions to be performed by Landlord under the Lease have
     been satisfied and on this date there are no existing defenses or offsets
     which Tenant has against the full enforcement of the Lease by Landlord.

9.   The Lease is in full force and effect and has not been modified, altered,
     or amended, except as follows:
     N/A

10.  There are no setoffs or credits against Rent, and no Security Deposit or
     prepaid Rent has been paid except as provided by the Lease.

Landlord and Tenant have executed this Commencement Date and Estoppel
Certificate as of the dates set forth below.

<TABLE>
<S>                                           <C>
TENANT: Accredited Home Lenders,              LANDLORD: MBL Life Assurance Corporation
        Inc., fka: MSK Financial
        Services, Inc.

BY:     /s/ Ray W. McKewon                    By:    /s/ Illegible
        -------------------------------              ---------------------------------

NAME:   Ray W. McKewon                        NAME:  Anthony N. Chirico

TITLE:  Executive Vice President              Title: Regional Asset Management Officer

DATE:   25 Oct 96                             DATE:  11/19/96
</TABLE>

<PAGE>

ACCREDITED HOME LENDERS                                                [GRAPHIC]
EXPANSION

CARMEL POINT BUSINESS PARK
15030 AVENUE OF SCIENCE
SUITE 106
SAN DIEGO, CA 92128

DATE: 07/24/96

                                    [GRAPHIC]

PARTITION PLAN
--------------------------------------------------------------------------------
NOT TO SCALE

<PAGE>

1.   DEFINITIONS. In this certificate the following terms have the meanings
     given to them:

     (a)  Landlord: MBL Life Assurance Corporation

     (b)  Tenant: MSK Financial Services, Inc., a California Corporation (dba
          Accredited Home Lenders)

     (c)  Lease: Office lease dated August 29, 1995 between Landlord and Tenant.

     (d)  Premises: Suite l00.

     (e)  Building Address:    15030 Avenue of Science
                               San Diego CA 92128

2.   Landlord and Tenant confirm that the Commencement Date of the Lease is
     December 15, 1995 and the Expiration Date is December 14, 2000 and that
     Sections 1.1(k) and (1) are accordingly amended.

3.   The Rentable Area of the Premises is 9,998 square feet.

4.   The Rentable Area of the Building is 115,862 square feet.

5.   Tenant's Share is nine (9%) percent.

6.   Tenant has accepted possession of the Premises as provided in the Lease.

7.   The Improvements required to be furnished by the Landlord in accordance
     with the Workletter (if any) have been furnished to the satisfaction of
     Tenant (subject to any corrective work or punch-list Items submitted
     previously to Landlord).

8.   All terms and conditions to be performed by Landlord under the Lease have
     been satisfied and on this date there are no existing defenses or offsets
     which Tenant has against the full enforcement of the Lease by Landlord.

9.   The Lease is in full force and effect and has not been modified, altered,
     or amended, except as follows:
     Not Applicable.

10.  There are no setoffs or credits against Rent, and no Security Deposit or
     prepaid Rent has been paid except as provided by the Lease.

Landlord and Tenant have executed this Commencement Date and Estoppel
Certificate as of the dates set forth below.

<TABLE>
<S>                                       <C>
Tenant:   ACCREDITED HOME LENDERS, INC    Landlord: MBL Life Assurance Corporation
          formerly known as MSK
          Financial Services, Inc.
          (dba Accredited Home Lenders)
</TABLE>

By: Illegible                           By:  Illegible
    --------------------------               -----------------------------

Name: James A. Konrath                  Name:  Anthony N. Chirico

Title: President                        Title: Regional Asset Management Officer

Date: December 15, 1995                 Date: 1/2/96

<PAGE>

                            First Amendment to Lease

This First Amendment to Lease is entered into as of this 27 day of August, 1996,
by and between MBL LIFE ASSURANCE CORPORATION, a New Jersey corporation
("Landlord"), and Accredited Home Lenders, Inc., formerly known as MSK Financial
Services, Inc. (dba Accredited Home Lenders) ("Tenant").

WHEREAS, Landlord and Tenant have previously entered into a certain Office Lease
and Addendum (the "Lease") dated August 29, 1995, pursuant to which Tenant
leased certain space at 15030 Avenue of Science, San Diego, California, located
on the first floor of Building B (the "Premises"); and

WHEREAS, Landlord and Tenant desire to modify certain provisions of the Lease
and to provide for the terms and conditions for such modifications as
hereinafter set forth;

NOW, THEREFORE, for and in consideration of Ten Dollars ($10) in hand paid, the
mutual premises contained herein and for other good and valuable consideration,
the receipt and legal sufficiency of which are hereby acknowledged, the parties
agree as follows:

1. Definitions. Defined or capitalized terms used herein and not otherwise
   -----------
defined herein shall have the same meanings as in the Lease. Defined terms set
forth in the Lease and not expressly modified herein shall continue to have the
meanings set forth in the Lease.

2.   Premises: Rent.
     --------------

     2.1 Beginning on the Commencement Date defined herein, the Premises shall
be increased by 5,052 square feet of Rentable Area as shown on Exhibit A- 1 (the
"Expansion Space"), for a total of 15,050 square feet of Rentable Area (as shown
on Exhibit A-2), and Tenant's Share under Article 1.1(p) of the Lease shall be
increased to 12.69%.

     2.2 The Monthly Rent for the Expansion Space shall be as follows:

 Monthly Rent                  Period
 ------------                  ------
 $5,809.80             the Commencement Date for the Expansion Space to 12/14/96
 $6,042.19             12/15/96 to 12/14/97
 $6,283.88             12/15/97 to 12/14/98
 $6,535.23             12/15/98 to 12/14/99
 $6,796.64             12/15/99 to 12/14/00

In addition, the Monthly Rent for the Expansion Space shall be further increased
during the primary term of the Lease by the "Amortization Amount," which is the
amount derived as follows.

          2.2.1 First, take the total amount of the tenant finish allowance for
the Expansion Space, which is $75,780 ($15 per square foot of Rentable Area in
the Expansion Space) ("Landlord's Allowance Payment").

          2.2.2  Second, divide Landlord's Allowance Payment by the number of
months between the Commencement Date for the Expansion Space and December 14,
2000. Partial months should be expressed to 1 decimal place.

          2.2.3 Third, divide Landlord's Allowance Payment by 60.

          2.2.4 Fourth, subtract the result in Section 2.2.3 from the result in
Section 2.2.2. The resulting number is the Amortization Amount.

As am example only, if you assumed that the number of months between the
Commencement Date for the Expansion Space and December 14, 2000 was 48, then the
Monthly Rent would be increased by $315.75 per month (since $75,780/48 =
$1,578.75, and $75,780/60 = $1,263.00, and $1,578.75 - $1,263.00 = $315.75).

          2.3 The first month's rent shall be prorated in accordance with
Article 4 of the Lease if the Commencement Date for the Expansion Space is other
than the first day of a calendar month. The Monthly Rent for the Expansion Space
shall be in addition to the Monthly Rent for the original premises provided for
under the Lease. Tenant is not entitled to any free rent with respect to the
Expansion Space.

<PAGE>

cost, damage or expense (including legal fees and costs) relating to any
commissions or brokerage fees claimed on account of the execution hereof due to
any action of Tenant.

IN WITNESS WHEREOF, Landlord and Tenant have caused their signatures and seals
to be hereunder affixed as of the date and year first above written.

LANDLORD                                      TENANT

MBL LIFE ASSURANCE                            ACCREDITED HOME LENDERS, INC., fka
CORPORATION,                                  MSK FINANCIAL SERVICES, INC.,
a New Jersey Corporation                      a California Corporation

By:/s/ Anthony N. Chirica                     By:/s/ Ray W. McKewon
   -------------------------------------         -------------------------------

Name: Anthony N. Chirica                      Name: Ray W. McKewon

Title: Regional Asset Management Officer      Title: Executive Vice President

Date: 8/27/96                                 Date: August 23, 1996

<PAGE>

                           Second Amendment to Lease

The Second Amendment to Lease is entered into as of this       day of November,
                                                         -----
1996, by and between MBL LIFE ASSURANCE CORPORATION, a New Jersey corporation
("Landlord"), and Accredited Home Lenders, Inc., formerly known as MSK Financial
Services, Inc. (dba Accredited Home Lenders) ("Tenant").

WHEREAS, Landlord and Tenant have previously entered into a certain Office Lease
and Addendum (the "Lease") dated August 29, 1995, pursuant to which Tenant
leased certain space at 15030 Avenue of Science, San Diego, California, located
on the first floor of Building B (the "Premises"); and Landlord and Tenant
subsequently amended the lease on August 27, 1996 to increase the premises
incorporating the expansion space on the ground floor the ("First Amendment");
and

WHEREAS, Landlord and Tenant desire to modify certain provisions of the Lease
and to provide for the terms and conditions for such modifications as
hereinafter set forth:

NOW, THEREFORE, for and in consideration of Ten Dollars ($10) in hand paid, the
mutual premises contained herein and for other good and valuable consideration,
the receipt and legal sufficiency of which are hereby acknowledged, the parties
agree as follows:

1.   Premises: Rent. In accordance with Section 6 of the First Amendment,
     --------------
     commencing October 2, 1996, the schedule of monthly rent for the entire
     ground floor premises of 15,050 square feet (Exhibit B attached) shall be
     adjusted as follows:

Monthly Rent                       Period
------------                       ------
$24,696.72                         10/2/96 to 11/14/96
$17,399.96                         11/15/96 to 12/14/96
$18,092.25                         12/15/96 to 12/14/97
$18,812,25                         12/15/97 to 12/14/98
$19,561.04                         12/15/98 to 12/14/99
$20,339.78                         12/15/99 to 12/14/00

2.   Miscellaneous. The provisions of this agreement supersede any contrary
     -------------
     provisions in the lease or amendment. Except as amended hereby the lease
     remains unchanged and in full force and effect.

IN WITNESS WHEREOF, Landlord and Tenant have caused their signatures and seals
to be hereunto affixed as of the date and year first above written.

LANDLORD                                     TENANT

MBL Life Assurance Corporation,              Accredited Home Lenders, Inc., fka
A New Jersey Corporation                     MSK Financial Services, Inc.
a New Jersey Corporation                     a California Corporation

By: /s/ Elizabeth Smith                      By: /s/ Illegible
    ---------------------------                  -------------------------------

Name: ELIZABETH SMITH                        Name: Illegible

Title: VICE PRESIDENT                        Title: President

Date:                                        Date: 12-14-96
     -----------------

<PAGE>

CARMEL POINT                                                           [GRAPHIC]
15030 AVENUE OF SCIENCE

                                   [GRAPHIC]

FIRST FLOOR
AS BUILT FLOOR PLAN
--------------------------------------------------------------------------------
NOT TO SCALE

<PAGE>

                           THIRD AMENDMENT TO LEASE

This Third Amendment to Lease ("Third Amendment") is entered into as of this
Illegible day of February 1997, by and between MBL LIFE ASSURANCE CORPORATION,
---------        --------
a New Jersey corporation ("Landlord"), and Accredited Home Lenders, Inc.,
formerly known as MSK Financial Services, Inc. ("Tenant").

WHEREAS, Landlord and Tenant have previously entered into a certain Office Lease
and Addendum (the "Lease") dated August 29, 1995, pursuant to which Tenant
leased certain space at 15030 Avenue of Science, San Diego, California, located
on the first floor of Building B (the "Premises"); and Landlord and Tenant
subsequently amended the Lease pursuant to the terms of a First Amendment to
Lease dated August 27, 1996 and pursuant to a Second Amendment to Lease dated
November   , 1996. The term "Lease" a used herein shall mean and refer to the
         --
Lease as amended by the First and Second Amendments; and

WHEREAS Landlord and Tenant desire to further modify certain provisions of the
Lease in accordance with this Third Amendment;

NOW, THEREFORE, for and in consideration of Ten Dollars ($10) in hand paid, the
mutual premises contained herein and for other good and valuable consideration,
the receipt and legal sufficiency of which are hereby acknowledged, the parties
agree as follows:

1. Definitions. Defined or capitalized terms used herein and not otherwise
   -----------
defined herein shall have the same meanings as in the Lease. Defined terms set
forth in the Lease and not expressly modified herein shall continue to have the
meanings set forth in the Lease.

2. Premises: Rent.
   --------------

     2.1 Beginning on the Commencement Date, as defined herein, the Premises
shall be increased by 7,685 square feet of Rentable Area a shown on Exhibit A-1,
Suite 201 (the "Additional Space"), for a total of 22,735 square feet of
Rentable Area (as shown on Exhibit A-2), and Tenant's Share under Article 1.1(p)
of the Lease shall be increased to 19.62%

     2.2 The Monthly rent for the Additional Space shall be a follows:

     Monthly Rent   Period
     ------------   ------

     $10,759.00    the Commencement Date for the Additional Space to 12/14/97

     $11,143.25    12/15/97 to 12/14/98

     $11,527.50    12/15/98 to 12/14/99

     $11,911.75    12/15/99 to 12/14/ll0

     2.3 The first month's Monthly Rent, relating to the Additional Space, shall
be prorated in accordance with Article 4 of the Lease if the Commencement Date
for the Additional Space is other than) fifteenth day of a calendar month. The
Monthly Rent for the Additional Space shall be in addition to the Monthly Rent
for the Premises as provided in the Lease.

3. Commencement Date. The Commencement Date relative to the Additional Space
   -----------------
("Additional Space Commencement Date") shall be April 15, 1997, or as extended
pursuant to the Workletter. The provisions of Section 3.1 of the Lease shall
apply with respect to any inability of Landlord to deliver the Additional Space
by the Additional Space Commencement Date. From and after the Additional Space
Commencement Date, all references to "Premises" in the Lease shall mean and
refer to the Premises including the Additional Space and all provisions of the
Lease shall apply to the Additional Space except as herein otherwise
specifically provided The Lease Termination Date will be remain 60 months from
the original Commencement Date, notwithstanding the later Additional Space
Commencement Date.

4. Tenant Finish. Landlord shall construct certain Improvements to the
   -------------
Additional Space, which shall be completed in accordance with the provisions of
the Workletter attached as Exhibit B and made a part of this Third Amendment;
the Tenant Finish Allowance shall not exceed $10 per square fool of Rentable
Area (which equals $76,850) and shall include expenses incurred for preliminary
space plans and construction management fees, permits and fees payable to the
City of San Diego, and all

<PAGE>

_______________________________________________________________________________

Date shall be January 31, 1997.

5. Security Deposit. The security deposit of $17,400.00 shall be increased by
   ----------------
$10,759.00 for a total security deposit of $28,159.00.

6. Commencement Date and Estoppel Certificate. Upon Substantial Completion of
   ------------------------------------------
the Tenant Finish in the Additional Space, Landlord and Tenant will execute a
Commencement Date and Estoppel Certificate in the form attached hereto as
Exhibit C, documenting the Additional Space Commencement Date, the amount of
Tenant Finish Allowance, and other matters set forth therein.

7. Miscellaneous. It is specifically acknowledged and agreed that:
   -------------

     7.1 The provisions of this Third Amendment shall supersede any contrary
provisions of  the Lease.

     7.2 Tenant shall not be entitled to any rent abatement or other incentive
with respect to the Additional Space which may have been provided in respect to
the Original Premises.

     7.3 The Option to Extend provided in Exhibit H of the Lease shall apply
to the Premises (including the Additional Space).

     7.4 The Operating Expense Base Year shall be 1996, irrespective of the
Additional Space Commencement Date.

     7.5 The Option to terminate the Lease prior to the end of the 36th month,
as provided in Paragraph 2 of the Addendum to the Lease (Exhibit H), is hereby
deleted in its entirety and Tenant shall have no further right to terminate the
Lease.

     7.6 Except as amended hereby, the Lease remains unchanged and in full force
and effect.

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

LANDLORD                                   TENANT

MBI, Life Assurance Corporation,           ACCREDITED HOME LENDERS, INC.,
a New Jersey Corporation                   a California corporation

By: /s/ Elizabeth Smith                    By: /s/ James A. Konrath
    ------------------------------------       --------------------------------

Name: ELIZABETH SMITH                      Name: James A. Konrath

Title: VICE PRESIDENT                      Title: President

Date:                                      Date: February 13, 1997
      ----------------------------------

                                       2

<PAGE>

CARMEL POINT
15030 AVENUE OF SCIENCE

                                     [GRAPHIC]

SECOND FLOOR
AS BUILT FLOOR PLAN
--------------------------------------------------------------------------------
NOT TO SCALE

<PAGE>

CARMEL POINT
15030 AVENUE OF SCIENCE

                                     [GRAPHIC]

FIRST FLOOR
AS BUILT-FLOOR PLAN
--------------------------------------------------------------------------------
NOT TO SCALE

CARMEL POINT
15030 AVENUE OF SCIENCE

                                     [GRAPHIC]

SECOND FLOOR
AS BUILT FLOOR PLAN
--------------------------------------------------------------------------------
NOT TO SCALE

<PAGE>

                                     [GRAPHIC]

                                                      PRELIMINARY FLOOR PLAN 'C'

<PAGE>

EXHIBIT B
---------

WORKLETTER

This Workletter is dated          , between MBL Life Assurance Corporation
                         ---------
("Landlord") and Accredited Home Lenders, Inc., formerly known as MSK ("Tenant")
Financial Services, Inc.

RECITALS

This Workletter is attached to and forms a part of that certain Third Amendment
to office lease dated Jan. 1997 ("Lease"), pursuant to which Landlord has leased
to Tenant office space in the Building.

Tenant requests and Landlord agrees to make certain initial improvements to the
Premises, prior to occupancy, upon the terms and conditions contained in this
Workletter.

1.   Definitions: In this Workletter, some defined terms are used. They are:
     -----------

     (a)  Tenant's Representative: Duane Drake
          -----------------------

     (b)  Landlord's Representative: Andrea Webb
          -------------------------

     (c)  Tenant Finish Allowance: Not to exceed $ 10.00 per square foot
          -----------------------
          (non-cash), which equals $ 76,850.00 (non-cash) and is to be applied
          by Landlord to the cost of the improvements.

     (d)  Programming Information: Information provided by Tenant, including the
          -----------------------
          nature of the Tenant's business, manner of operation, number and types
          of rooms, special equipment and functional requirements, anticipated
          growth, interactions among groups, and any other programming
          requirements the Tenant may have.

     (e)  Programming Information Submission Date: Feb. 1, 1997 the submit to
          ---------------------------------------
          Landlord the Programming Information necessary for the preparation of
          the space plan.

     (f)  Final Space Plan: A drawing of the Premises clearly showing the layout
          ----------------
          and relationship of all departments and offices, depicting partitions,
          door locations, types of electrical/data/telephone outlets, and
          delineation of furniture and equipment as approved by Tenant.

     (g)  Estimated Construction Cost: A preliminary estimate of the costs of
          ---------------------------
          the improvements that are depicted on the Final Space Plan, including
          all architectural, engineering, contractor, and any other costs as can
          be determined from the Final Space Plan.

     (h)  Working Drawings: Construction documents detailing the improvements,
          ----------------
          complete in form and content and containing sufficient information
          and detail to allow for competitive bidding or negotiated pricing by
          contractors) selected and engaged by Landlord.

     (i)  Construction Schedule: A schedule depicting the relative time frames
          ---------------------
          for various activities related to the construction of the improvements
          in the Premises.

     (j)  Tenant Cost Proposal: A final estimate of costs of the improvements
          --------------------
          that are depicted on the Working Drawings, including all
          architectural, engineering, contractor, and any other costs, and
          clearly indicating the dollar amount, if any, that is to be paid by
          Tenant pursuant to paragraph 7.

     (k)  Maximum Approved Cost: The sum of the Tenant Finish Allowance and any
          ---------------------s
          additional amount that Tenant has agreed to pay for the Improvements
          to the Premises.

     (l)  Improvements: The work is inclusive of the following:
          ------------

          (1) The development of space plans and working drawings, including
          supporting engineering studies (i.e. structural design or analysis,
          lighting or acoustical evaluations, or others as determined by
          Landlord's architect);

          (2) All construction work necessary to create the details and
          partitioning shown on the Final Space Plan. The work will create
          finished ceilings, walls and floor surfaces, as well as complete HVAC,
          lighting, electrical and fire protection systems.

          The improvements will NOT include personal property items such as
          decorator items or services, artwork, plants, furniture, equipment, or
          other fixtures not permanently affixed to the Premises.

     (m)  Cost of the Improvements: The cost includes, but is not limited to,
          ------------------------
          the following:

          (1)  All architectural and engineering fees and expenses:

                                    Page B-1

<PAGE>

          (2)  All contractor and construction manager costs and fees;

          (3)  All permits and taxes;

          (4)  A coordination and administration fee to Landlord, pursuant to
               paragraph 4(b).

     (n)  Change Order: Any change, modification, or addition to the Final Space
          ------------
          Plan or Working Drawings after Tenant has approved the same.

     (o)  Building Standard: Component elements utilized in the design and
          -----------------
          construction of the Improvements that have been pre-selected by the
          Landlord to ensure uniformity of quality, function, and appearance
          throughout the Building. These elements include but are not limited to
          ceiling systems, doors, hardware, walls, floor coverings, finishes,
          window coverings, light fixtures, and HVAC components.

     (p)  Other capitalized terms not defined herein shall have the same meaning
          as defined in the Lease

2.   Representatives. Landlord appoints Landlord's Representative to act for
     ---------------
     Landlord in all matters associated with this Workletter. Tenant appoints
     Tenant's Representative to act for Tenant in all matters associated with
     this Workletter. All inquiries, requests, instructions, authorizations, and
     other communications with respect to the matters covered by this Workletter
     will be made to Landlord's Representative or Tenant's Representative, as
     the case may be. Tenant will not make any inquiries of or requests to, and
     will not give any instructions or authorizations to, any employee or agent
     of Landlord, including, without limitation, Landlord's architect,
     engineers, and contractors or any of their agents or employees, with regard
     to matters associated with this Workletter. Either party may change its
     representative under this Workletter at any time by providing 3 days' prior
     written notice to the other party.

3.   Project Design and Construction. All work will be performed by designers
     -------------------------------
     and contractors selected and engaged by Landlord.

4.   Cost Responsibilities.
     ---------------------

     (a)  Landlord: Landlord will pay up to the amount of the Tenant Finish
          --------
          Allowance for the cost of the Improvements.

     (b)  Tenant: Tenant will pay for:
          ------

          (1)  Tenant-initiated changes to the Final Space Plan or Working
               Drawings after Tenant's approval: but only to the extent any such
               change results in total approved costs in excess of the Tenant
               Finish Allowance;

          (2)  Tenant-initiated Change Orders, modifications, or additions to
               the Improvements after Tenant's approval of the Working Drawings:
               but only to the extent any such change results in total approved
               costs in excess of the Tenant Finish Allowance;

          (3)  All costs in excess of the Tenant Finish Allowance that are not
               included in (1) or (2) immediately above: but only to the extent
               the Tenant Cost Proposal extends the Tenant Finish Allowance;

          (4)  The cost of the Landlord's overhead for coordination and
               administration at a rate of 15% of the total cost to the Landlord
               of clauses (1), (2), and (3) above.

     (c)  Tenant will not be entitled to any credit for any portion of the
          Tenant Finish Allowance which is not used.

5.   Landlord's Approval. Landlord in its sole discretion, may withhold its
     -------------------
     approval of any space plan, Working Drawings, or Change Order that:

     (a)  Exceeds or adversely affects the structural integrity of the Building,
          or any part of the heating, ventilating, air conditioning, plumbing,
          mechanical, electrical, communication, or other systems of the
          Building;

     (b)  Is not approved by the holder of any mortgage or deed of trust
          encumbering the Building at the time the work is proposed;

     (c)  Would not be approved by a prudent owner of property similar to the
          Building;

     (d)  Violates any agreement which affects the Building or binds the
          Landlord;

     (e)  Landlord reasonably believes will increase the cost of operation or
          maintenance of any of the systems of the Building;

                                    Page B-2

<PAGE>

     (f)  Landlord reasonably believes will reduce the market value of the
          Premises or the Building at the end of the Term;

     (g)  Does not conform to applicable building code or is not approved by any
          governmental, quasi-governmental, or utility authority with
          jurisdiction over the Premises; or

     (h)  Does not conform to the Building Standard.

6.   Schedule of Improvement Activities.
     ----------------------------------

     (a)  On or before the Programming Information Submission Date, Tenant will
          cooperate with and submit to Landlord the Programming Information
          necessary for Landlord's architect to prepare the proposed space plan.

     (b)  Landlord's architect will expeditiously prepare a space plan and
          forward it to Tenant. Tenant will give Landlord written notice whether
          or not Tenant approves the proposed space plan within 5 days after its
          receipt. If Tenant's notice objects to the proposed space plan, the
          notice will set forth how the proposed space plan is inconsistent with
          the Programming Information and how the proposed space plan must be
          changed in order to overcome Tenant's objections. Landlord will
          resubmit a revised space plan to Tenant and it will be treated as
          though it was the first proposed space plan prepared pursuant to this
          paragraph.

     (c)  After Tenant approval of the Final Space Plan, Landlord will promptly
          cause to be prepared, a preliminary estimate of the cost of the
          Improvements as set forth in the final space plan (the "Estimated
          Construction Cost"). If the Estimated Construction Cost is less than
          the Tenant Finish Allowance, the Estimated Construction Cost will be
          deemed approved without a required response from the Tenant. If the
          Estimated Construction Cost is more than the Tenant Finish Allowance,
          Landlord will so notify Tenant in writing and Tenant will establish
          the Maximum Approved Cost by either:

          (1)  Agreeing in writing (in a manner reasonably acceptable to
               Landlord) to pay the amount by which the Estimated Construction
               Cost exceeds the Tenant Finish Allowance; or

          (2)  Agreeing to have the Final Space Plan revised by Landlord's
               architect in order to assure that the Estimated Construction Cost
               is either:

               (A)  No more than the Tenant Finish Allowance; or

               (B)  Exceeds the Tenant Finish Allowance by an amount which
                    Tenant agrees to pay pursuant to clause (1) immediately
                    above.

               Tenant shall give immediate attention to establishing the Maximum
               Approved Cost by responding to Landlord within 2 business days.
               Upon Tenant's timely fulfillment of its obligations in either
               clause (1) or clause (2) immediately above, the Maximum Approved
               Cost will be established.

     (d)  Upon establishment of the Maximum Approved Cost, Landlord will cause
          to be prepared and delivered to Tenant the Working Drawings, the
          Construction Schedule, and the Tenant Cost Proposal for the
          Improvements in accordance with the Final Space Plan. If the Tenant
          Cost Proposal is less than the Maximum Approved Cost, Landlord will
          take steps necessary to commence construction of the Improvements to
          the Premises.

          If the Tenant Cost Proposal is more than the Maximum Approved Cost,
          Landlord will so notify Tenant in writing and Tenant will either (1)
          agree in writing to pay the amount by which the Tenant Cost Proposal
          exceeds the Maximum Approved Cost or (2) request Landlord to revise
          the Working Drawings in order to assure that the Tenant Cost Proposal
          is no more than the Maximum Approved Cost.

          Tenant shall give immediate attention to the cost proposal approval
          process and to respond to Landlord within 3 business days.

     (e)  Following approval of the Working Drawings and the Tenant Cost
          Proposal, Landlord will cause application to be made to the
          appropriate governmental authorities for necessary approvals and
          building permits. Upon receipt of the necessary approvals and permits,
          Landlord will begin construction of the Improvements.

7.   Payment by Tenant. The amount payable by Tenant will be billed
     -----------------
     periodically, as the work proceeds, and Tenant agrees to pay the same
     within 10 business days following delivery of each such invoice.

8.   Change Orders. Tenant may request changes to the Improvements during
     -------------
     construction only by written instructions to Landlord's Representative on a
     form approved by Landlord. All such changes will be

                                    Page B-3

<PAGE>

     subject to Landlord's prior written approval which landlord may withhold in
     its sole discretion. Prior to commencing any change, Landlord will prepare
     and deliver to Tenant, for Tenant's approval, a Change Order setting forth
     the total cost of such change, which will include associated architectural,
     engineering, construction contractor's costs and fees, Construction
     Schedule changes, and the cost of Landlord's overhead. If Tenant fails to
     approve such change order within 5 business days after delivery by
     Landlord, Tenant will be deemed to have withdrawn the proposed change and
     Landlord will not proceed to perform the change. Upon Landlord's receipt of
     Tenant's approval, Landlord will proceed with the change.

9.   Early Entry. Landlord, in its sole discretion, may permit Tenant and
     -----------
     Tenant's employees and agents to enter the Premises prior to the
     Commencement Date so that Tenant may do such other work as may be required
     to make the Premises ready for Tenant's use and occupancy. If Landlord
     permits such entry prior to the Commencement Date, it will be upon the
     condition that Tenant and its employees, agents, contractors and suppliers
     shall work in harmony with Landlord and its employees, agents, contractors
     and suppliers and will not interfere with the performance of the work by
     Landlord or with the work of any other tenants or occupants in the
     Building. If at any time such entry shall cause or threaten to cause such
     disharmony or interference, Landlord shall have the right to withdraw such
     license upon 24 hours written notice to Tenant. Tenant agrees that any such
     entry or occupation of the Premises shall be governed by all of the terms,
     covenants, conditions and provisions of the Lease, except the covenant for
     the payment of Rent, and further agrees that Landlord shall not be liable
     in any way for injury, loss or damage which may occur to any of the
     Tenant's work or installations made in such Premises, Building or Project,
     or to any personal property placed therein, the same being at Tenant's sole
     risk.

10.  Completion and Commencement Date. Tenant's obligation for payment of Rent
     --------------------------------
     pursuant to the Lease will commence on the Commencement Date; however, the
     Commencement Date and the date for the payment of Rent may be delayed on a
     day-by-day basis for each day the substantial completion of the
     Improvements is delayed by Landlord or its contractors or agents. The
     payment of Rent will not be delayed by a delay of substantial completion
     due to Tenant. The following are some examples of delays which will not
     affect the Commencement Date and the date Rent is to commence under the
     Lease:

     (a)  Late submissions of Programming Information;

     (b)  Change Orders requested by Tenant;

     (c)  Delays in obtaining non-Building Standard construction materials
          requested by Tenant;

     (d)  Tenant's failure to approve timely any item requiring Tenant's
          approval; and

     (e)  Delays by Tenant according to paragraph 6.

     In the event that substantial completion of the Improvements is delayed by
     Landlord, its contractors, or agents, the Commencement Date will be the
     date of substantial completion of the improvements, subject only to the
     completion of Landlord's punch-list items (that is, those items that do not
     materially interfere with Tenant's use and enjoyment of the Premises).
     Landlord and Tenant will confirm the Commencement Date in accordance with
     Section 3.1 of the Lease.

11.  Condition of the Premises.
     -------------------------

     (a)  Prior to the Commencement Date, Tenant will conduct a walk-through
          inspection of the Premises with Landlord and prepare a punch-list of
          items needing additional work by Landlord. Other than the items
          specified in the punch-list and "latent defects" (as defined below),
          by taking possession of the Premises Tenant will be deemed to have
          accepted the Premises in their condition on the date of delivery of
          possession and to have acknowledged that Landlord has installed the
          Improvements as required by this Workletter and that there are no
          items needing additional work or repair. The punch-list will not
          include any damage to the Premises caused by Tenant's move-in or early
          access, if permitted. Damage caused by Tenant will be repaired or
          corrected by Landlord at Tenant's expense. Tenant acknowledges that
          neither Landlord nor its agents or employees have made any
          representations or warranties as to the suitability or fitness of the
          Premises for the conduct of Tenant's business or for any other
          purpose, nor has Landlord or its agents or employees agreed to
          undertake any alterations or construct any Tenant improvements to the
          Premises except as expressly provided in this Lease and this
          Workletter. If Tenant fails to submit a punch-list to Landlord prior
          to the Commencement Date, it will be deemed that there are no items
          needing additional work or repair. Landlord's contractor will complete
          all reasonable punch-list items within 30 days after the walk-through
          inspection or as soon as practicable after such walk-through.

     (b)  A "latent defect" is a defect in the condition of the Premises caused
          by Landlord's failure to construct the improvements in a good and
          workmanlike manner and in accordance with the working drawings, which
          defect would not ordinarily be observed during a walk-through
          inspection. If Tenant notifies Landlord of a latent defect within one
          year following the Commencement Date, then Landlord, at its expense,
          will repair such expense, will repair such

                                    Page B-4

<PAGE>

          latent defect as soon as practicable. Except as set forth in this
          paragraph 11, Landlord will have no obligation or liability to Tenant
          for latent defects.

12.  No Liability. Subject to paragraph 11 regarding latent defects, Preparation
     ------------
     of the Final Space Plan and Working Drawings bar or on behalf of Landlord
     shall create no responsibility or liability on the part of the Landlord for
     their completeness, design sufficiency, or compliance with all laws,
     ordinances, rules, regulations of governmental agencies or authorities, or
     the use and occupancy permit for the Building.

          *****[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]*****

                                    Page B-5

<PAGE>

The Commencement Date and Estoppel Certificate is entered into by Landlord and
Tenant pursuant to Section 6 of the Third Amendment to Office Space dated
              , 1997.
-------------

1. DEFINITIONS. In this certificate the following terms have the meanings given
   -----------
to them:

     (a)  Landlord: MBL Life Assurance Corporation

     (b)  Tenant: Accredited Home Lenders, Inc., formerly known as MSK Financial
          Services, Inc.

     (c)  Lease: Third Amendment of Office Lease dated          , 1997
                                                       --------
     (d)  Premises: Suite 100 and 20l

     (e)  Building Address: 15030 Avenue of Science
                            San Diego CA 92128

2. Landlord and Tenant confirm that the Commencement Date for the Commencement
Date for the Expansion Space is              and that Section 1 of the Third
                                ------------
Amendment is accordingly amended

3. The Rentable Area of the Expansion Space is deemed to be           square
                                                            ---------
feet.

4. The Rentable Area of the Building is deemed to be             square feet.
                                                     -----------

5. Tenant's Share is            percent.
                     ----------

6. Tenant has accepted possession of the Expansion Space as provided in the
Third Amendment.

7. The Improvements required to be furnished by the Landlord in accordance with
the Workletter have been furnished to the satisfaction of Tenant (subject to any
corrective work or punch-list items submitted previously to Landlord).

8. All terms and conditions to be performed by Landlord under the Third
Amendment been satisfied and on this date there are no existing defenses or
offsets which Tenant has against the full enforcement of the Lease by Landlord.

9. The Lease is in full force and effect and has not been modified, altered, or
amended, except as follows:

     The Third Amendment to Office Lease dated             , 1997.
                                               -----------

10. There are no setoffs or credits against Rent, and no Security Deposit or
prepaid Rent has been paid except as provided by the Lease.

Landlord and Tenant have executed this Commencement Date and Estoppel
Certificate as of the dates set forth below.

Tenant:  Accredited Home Lenders, a     Landlord: MBL Life Assurance Corporation
         California corporation

By:                                     By:
      -------------------------------         --------------------------------

Name:                                   Name:
      -------------------------------         --------------------------------

Title:                                  Title:
      -------------------------------         --------------------------------

Date:                                   Date:
      -------------------------------         --------------------------------

<PAGE>

                            Fourth Amendment to Lease

     This FOURTH AMENDMENT TO LEASE, made as of the 19th day of October, 1999,
is by and between PROPERTY CALIFORNIA OB ONE CORPORATION, an Oregon corporation
("Landlord") and ACCREDITED HOME LENDERS, INC. ("Tenant").

                                    RECITALS

     A. Landlord's predecessor-in-interest, MBL Life Assurance Corporation
("MBL"), and Tenant, formerly known as MSK Financial Services, Inc., entered
into that certain lease agreement dated August 29, 1995 (the "Lease"), pursuant
to which Landlord leased unto Tenant and Tenant leased from Landlord
approximately 22,735 rentable square feet of space commonly known as Suites No.
100 and 201 (collectively, the "Original Premises") in the office building
located at 15030 Avenue of Science, San Diego, California ("Building"), as more
particularly described in the Lease.

     B. Landlord is the current owner of the Building and has succeeded to all
of MBL's right, title, and interest in and to the Lease.

     C. Tenant desires to further expand its premises and lease from Landlord an
additional 8,184 rentable square feet of space located on the first floor of the
Building which is commonly known as Suite 110 (the "Third Expansion Space"), as
depicted on Exhibit "B" attached hereto and incorporated herein by this
reference.

     D. The Term of the Lease is to expire on December 14, 2000, however, Tenant
desires to extend the Term of the Lease through December 31, 2005. Landlord
agrees to so extend the Term upon the terms and conditions outlined in this
Amendment.

                                    AGREEMENT

     Now, therefore, for and in consideration of the facts mentioned above, the
mutual promises set forth below and other good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, the parties hereto do
agree as follows:

     1. Capitalized Terms. All capitalized terms used herein and not otherwise
defined herein shall have the same meanings as ascribed to them in the Lease.
Defined terms set forth in the Lease and not expressly modified herein shall
continue to have the meanings set forth in the Lease.

     2. Effective Date. The amendments to the Lease set forth below shall be
deemed effective as of the date Landlord delivers possession of the Third
Expansion Space to Tenant

1 -   FOURTH AMENDMENT TO LEASE

<PAGE>

with the Initial Improvements (as defined in paragraph 10 below) substantially
completed therein (the "Effective Date").

     3. Premises. Section 1.1(g) of the Lease, as previously amended, shall be
deleted in its entirety and replaced with the following:

     "(g) PREMISES: The premises shown on Exhibit A to this Lease known as
          Suites 100, 110 and 201."

     Also, Exhibit "A" attached to the Lease shall be replaced with Exhibit "A"
attached hereto and incorporated herein by this reference.

     Furthermore, Section 1.1(h) of the Lease, as previously amended, shall be
deleted in its entirety and replaced with the following:

     "(h) RENTABLE AREA OF THE PREMISES: 30,919 rentable square feet."

     4. Term; Expiration Date. Section 1.1(j) of the Lease is hereby deleted in
its entirety and replaced with the following provision:

     "(j) TERM: Beginning on the Effective Date (as defined in the Fourth
          Amendment to Lease) and ending on the Expiration Date."

     Section 1.1(l) of the Lease is hereby deleted in its entirety and replaced
with the following provision:

     "(l) EXPIRATION DATE:  December 31, 2005."

     5. Security Deposit. The sum of Twenty-Eight Thousand One Hundred
Fifty-Nine and 00/100 Dollars ($28,159.00) (the "Existing Deposit") currently
held by Landlord as a security deposit pursuant to Article 22 of the Lease shall
continue to be held by Landlord throughout the Term of the Lease (as extended by
this Amendment) pursuant to the terms and conditions set forth in Article 22 of
the Lease. In addition, upon execution of this Amendment, Tenant shall pay
Landlord the sum of Fourteen Thousand Five Hundred Sixty-Seven and 52/100
Dollars ($14,567.52), which shall be added to the Existing Deposit and shall
result in a total security deposit of Forty-Two Thousand Seven Hundred
Twenty-Six and 52/100 Dollars ($42,726.52), which shall be held by Landlord
throughout the term of the Lease pursuant to the terms and conditions set forth
in Article 22 of the Lease.

     6. Monthly Rent. All provisions in the Lease regarding monthly rent for the
Premises shall be amended as follows. From the Effective Date through December
14, 2000, Tenant shall continue to pay those amounts owing under the Lease for
the Original Premises.

2 -   FOURTH AMENDMENT TO LEASE

<PAGE>

From December 15, 2000 through December 31, 2000, Tenant shall pay Landlord the
sum of Twenty-Two Thousand One Hundred Ninety-Two and no/100 Dollars
($22,192.00) for base rent for the Original Premises, which is based on One
Dollar and 78/100 Dollars ($1.78) per rentable square foot of the Original
Premises per month, as appropriately prorated.

     In addition to the sums set forth above for the Original Premises, from the
Effective Date through December 31, 2000, Tenant shall pay Landlord monthly rent
for the Third Expansion Space in the amount of Fourteen Thousand Two Hundred
Forty and 16/100 Dollars ($14,240.16), as appropriately prorated.

     From January 1, 2001, through December 31, 2005, Tenant shall pay Landlord
the following sums as monthly rent for the entire Premises:

  Time Period                 P.S.F./per month               Monthly Amount
  -----------                 ----------------               --------------
1/1/01-12/31/01                     $1.78                     $55,035.82
1/1/02-12/31/02                     $1.83                     $56,581.77
1/1/03-12/31/03                     $1.88                     $58,127.72
1/1/04-12/31/04                     $1.93                     $59,673.67
1/1/05-12/31/05                     $1.98                     $61,219.62

     7. Operating Expenses. Section 1.1(o), Section 1.1(p) and Article 5 of the
Lease shall be revised as follows. With respect to the Original Premises, Tenant
shall continue to pay Landlord from the Effective Date through December 14,
2000, Tenant's Share (equal to 19.62%) of Operating Expenses in excess of the
current Operating Expense Base of 1996. With respect to the Third Expansion
Space, Tenant shall pay Landlord from the Effective Date through the Expiration
Date Tenant's Share (equal to 7.06%) of Operating Expenses in excess of the
actual expenses incurred by Landlord in the calendar year ending December 31,
1999. With respect to the entire Premises, from December 15, 2000, through the
Expiration Date, Tenant shall pay Landlord Tenant's Share (equal to 26.68%) of
Operating Expenses in excess of the actual expenses incurred by Landlord in the
calendar year ending December 31, 1999.

     8. Parking. Section 1.1(q) of the Lease shall be deleted in its entirety
and replaced with the following:

     "(q) PARKING SPACES: One Hundred Ten (110) spaces according to Article 26."

     9. Insurance. The following new item (e) shall be added to Section 6.2 of
the Lease:

     "(e) Umbrella excess liability insurance, on an occurrence basis, that
          applies excess of required commercial general liability, business auto
          liability, and employers

3 -   FOURTH AMENDMENT TO LEASE

<PAGE>

          liability policies, which insures against bodily injury, property
          damage, personal injury, and advertising injury claims with limits of
          not less than (i) $2,000,000 per occurrence, and (ii) $2,000,000 for
          the annual aggregate. These limits shall be in addition to and not
          including those stated for underlying commercial general liability,
          business auto liability, and employers liability insurance. Such
          policy shall name Landlord, currently Property California OB One
          Corporation, Landlord's asset manager, currently LaSalle Investment
          Management, Inc., and property manager, currently Meissner-Jacquet
          Investment Management Services, including each of the foregoing
          entities' trustees, officers, directors, agents, and employees and any
          Landlord's mortgagees, all as additional insureds."

     Within ten (10) days after this Amendment is fully executed, Tenant shall
deliver to Landlord an updated certificate of insurance showing that Tenant
carries the additional insurance policy listed above.

     10. Delivery and Condition of Third Expansion Space. As soon as possible
after this Amendment is mutually executed by the parties hereto, Landlord shall
deliver the Third Expansion Space to Tenant in the condition required by the
Work Letter attached hereto as Exhibit "C". In addition to substantially
completing the Initial Improvements (as defined in the Work Letter), Landlord
shall, at its sole cost and expense, replace the ceiling panels within the Third
Expansion Space before the Effective Date. The costs of replacing such panels
shall not be included in the Allowance to be paid by Landlord in connection with
the Initial Improvements. Furthermore, in addition to the Initial Improvements,
Landlord shall replace the missing miniblinds on the windows in the Third
Expansion Space and patch the holes where plumbing hookups exist on the floor of
the Third Expansion Space (collectively, "Miscellaneous Work"). Landlord's
actual costs of completing the Miscellaneous Work shall be included in the
Allowance to be paid by Landlord in connection with the Initial Improvements. No
costs associated with the recent HVAC installations shall be included in the
Allowance. Tenant acknowledges and agrees that except as herein provided,
neither Landlord, its asset manager, property manager or any employee or agent
of said entities have made any representations or warranties with respect to the
condition of the Third Expansion Space. All references in the Lease to work
performed by Landlord as of the original commencement date of the lease or with
respect to prior expansion spaces are no longer applicable and therefore shall
be deleted in their entirety. Tenant agrees to hold Landlord harmless from any
interruption of business that may be suffered by Tenant and from any other
liability whatsoever resulting from the completion of the Initial Improvements.
Landlord will make every reasonable effort to complete the Initial Improvements
as soon as possible, but can make no guaranty as to a specific date of
completion, and said completion date shall not affect the payment of rent due
from Tenant under the Lease with respect to the Original Premises. Tenant
acknowledges that Landlord has forewarned Tenant of the inconvenience that
Tenant may experience by occupying the Original Premises during the completion
of the Initial Improvements within the Third Expansion Space including, but not
limited to, noise, dust and debris, and that Landlord is accommodating Tenant's
request to

4 -   FOURTH AMENDMENT TO LEASE

<PAGE>

complete the Initial Improvements during Tenant's occupancy of the Original
Premises. Landlord shall cause its contractors to use commercially reasonable
efforts to minimize any damage to persons or property within the Original
Premises and any disruption to Tenant's business in the Original Premises that
may be caused by the construction of the Initial Improvements within the Third
Expansion Space. Notwithstanding anything to the contrary in the Lease or in
this Amendment. Tenant shall not be responsible for any HVAC costs associated
with the roof top equipment or equipment that services suites other than the
Third Expansion Space.

     11. Improvements to Original Premises. Tenant shall have the right to make
improvements within the Original Premises (the "Renewal Improvements"), provided
that Tenant complies with all of the terms and condition set forth in Article 14
of the Lease. In consideration of Tenant's extension of the Term of the Lease,
Landlord shall contribute up to the sum of Ninety Thousand Nine Hundred Forty
and no/100 Dollars ($90,940.00) toward any Renewal Improvements that Tenant
completes at any one time after January 1, 2000 (the "Renewal Allowance"), which
shall be paid as follows. Landlord shall pay Tenant all or the appropriate part
of the Renewal Allowance within thirty (30) days after Landlord's receipt of (i)
Tenant's written statement that the Renewal Improvements have been substantially
completed, (ii) satisfactory invoices of Tenant's actual costs incurred in
connection with the Renewal Improvements, and (iii) lien waivers from all
contractors and suppliers involved in the construction of the Renewal
Improvements. Should the cost of the Renewal Improvements exceed the Allowance,
Tenant shall be solely responsible for the payment of such overage. Should the
cost of the Renewal Improvements be less than the Allowance, Landlord shall have
no obligation to pay or credit to Tenant any portion of such shortfall. No costs
associated with the recent HVAC installations shall be included in the Renewal
Allowance.

     12. Renewal Option. Exhibit "H" to the Lease is hereby deleted in its
entirety and the following new Section 27.37 is added to the Lease in lieu
thereof:

     "26.37 Option to Renew. Tenant shall have one (1) option to renew the Term
of the Lease for an additional five (5) years, provided that Tenant gives
Landlord written notice of its intention to renew at least one hundred eighty
(180) days but not more than two hundred and ten (210) days prior to the
Expiration Date and Tenant is not in default under any terms of the Lease as of
the date of Tenant's notice nor at the time the renewal period is to commence.
Tenant's leasing of the Premises during the renewal term shall be upon all of
the same terms and conditions of this Lease, provided, however, monthly rent for
the renewal term shall be equal to the then-existing fair market rate as of the
date the renewal term is to commence, based upon what Landlord is then charging
for comparable space in the Building.

     13. No Further Modifications. Except as otherwise set forth in this
Amendment, the terms and conditions of the Lease remain unchanged and in full
force and effect.

5 -   FOURTH AMENDMENT TO LEASE

<PAGE>

     14. Entire Agreement. The Lease, as amended by this Amendment, constitutes
the entire and complete agreement of the parties with respect to the subject
matter hereof, and supersedes all prior or contemporaneous agreements,
statements, promises, understandings, arrangements, and commitments, all of
which, whether oral or written, are merged herein.

     15. Counterparts. This Amendment may be executed in counterparts, each of
which shall be deemed an original, and all of which when executed and delivered
shall together constitute one and the same instrument.

     16. Authority. Each party represents that the person executing this
Amendment for such party is acting on behalf of such party and is duly
authorized to execute this Amendment for such party.

     17. Brokers. Tenant represents that it has had no dealing with any real
estate brokers or agents in connection with this Amendment. Tenant shall
indemnify and hold Landlord harmless from any and all claims that may be made by
any broker or agent in connection with this Amendment.

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

LANDLORD:      PROPERTY CALIFORNIA OB ONE CORPORATION,
               an Oregon corporation

               By:  LaSalle Investment Management, Inc.
                    Its Authorized Agent

                    By:  /s/ Jeffrey E. West
                         -----------------------------------
                         Jeffrey E. West
                         Its Vice President

                    By:  /s/ William W. Barendrick, Jr.
                         -----------------------------------
                         William W. Barendrick, Jr.
                         Its Principal

TENANT:        ACCREDITED HOME LENDERS, INC.

                    By:  /s/ James A. Konrath
                         -----------------------------
                         James A. Konrath
                         Title: CEO

6 -   FOURTH AMENDMENT TO LEASE

<PAGE>

                                   EXHIBIT "A"

                                    PREMISES

               [See attached depiction of Suites 100, 110 and 201]

<PAGE>

CARMEL POINT BUSINESS PARK                                             [GRAPHIC]
15030 AVENUE OF SCIENCE
FIRST FLOOR
BUILDING 'B'

DATE: 06/25/99

                                    [GRAPHIC]

FIRST FLOOR - AS-BUILT PLAN
--------------------------------------------------------------------------------
NOT TO SCALE

                                                                           NORTH

<PAGE>

CARMEL POINT BUSINESS PARK                                             [GRAPHIC]
15030 AVENUE OF SCIENCE
SECOND FLOOR
BUILDING 'B'

DATE: 12/08/98

                                    [GRAPHIC]

SECOND FLOOR - AS-BUILT PLAN
--------------------------------------------------------------------------------
NOT TO SCALE
                                                                           NORTH

<PAGE>

                                   EXHIBIT "B"

                              THIRD EXPANSION SPACE

                      [See attached depiction of Suite 110]

<PAGE>

                                   EXHIBIT "B"

ACCREDITED HOME LENDERS

CARMEL POINT BUSINESS PARK
15030 AVENUE OF SCIENCE
SUITE 110
SAN DIEGO, CA 92128

PROJECT, 055432
DATE, 04/30/99

                                    [GRAPHIC]

<PAGE>

                                   EXHIBIT "C"

                                   WORK LETTER

     This WORK LETTER (the "Agreement") is hereby made a part of that certain
Fourth Amendment to Lease dated October            . 1999, made and entered into
                                        -----------
by and between Property California OB One Corporation ("Landlord"), and
Accredited Home Lenders, Inc. ("Tenant") (the "Amendment"). All terms used
herein which are defined in the Amendment shall have the same meanings herein as
are ascribed to such terms in the Amendment. Landlord and Tenant hereby agree as
follows with respect to the construction of initial improvements in the Third
Expansion Space.

     1. COMPLETION AND APPROVAL OF PLANS.
        --------------------------------

          1.1 Space Plan. All work required to be performed by Landlord or
              ----------
Landlord's contractor pursuant to this Agreement is hereinafter referred to as
the "Landlord's Work". Landlord shall cause to be constructed, at Landlord's
cost except as otherwise specified herein, improvements in the Third Expansion
Space (the "Initial Improvements") in accordance with that certain preliminary
plan (the "Space Plan") attached hereto as Exhibit "C-1" and made a part hereof.

          1.2 Final Plans. Upon the execution of the Amendment by both parties,
              -----------
Landlord shall cause to be prepared such plans, drawings, and specifications
(collectively, the "Plans") as may be necessary to obtain a building permit for
construction of the Initial Improvements. Upon completion thereof, the Plans
shall be submitted to Tenant for approval. Tenant shall notify Landlord, in
writing, within five (5) days following receipt by Tenant of the Plans if Tenant
disapproves of any portion thereof. Such disapproval shall be communicated with
sufficient specificity to enable Landlord to revise the Plans in a manner
acceptable to Tenant; however, Tenant shall not be permitted to disapprove the
Plans to the extent they conform to the Space Plan. Failure of Tenant to timely
notify Landlord of any such disapproval shall constitute approval by Tenant of
the Plans. If Tenant timely and properly objects to any portion of the Plans,
Landlord shall cause the same to be revised accordingly, and shall resubmit the
revised Plans to Tenant for approval. Tenant shall have two (2) days to
disapprove of the revised Plans, but shall not be permitted to raise any
objections to any portion of Plans previously approved by Tenant. The foregoing
process shall continue until the Plans are approved by Tenant.

          1.3 Required Changes. Tenant hereby consents to any changes to the
              ----------------
Plans which may be imposed as a condition of obtaining a permit for the
construction of the Initial Improvements by any municipal department having
jurisdiction over same.

          1.4 Requested Changes. Tenant may request changes to the final Plans
              -----------------
following approval thereof, but no such changes shall be made except upon
Landlord's prior written consent. All such requests for changes and consent
shall be subject to the procedures set forth in Paragraph 5 hereof.

<PAGE>

     2. COMMENCEMENT OF CONSTRUCTION AND COSTS. Landlord's Work shall commence
        --------------------------------------
as soon as reasonably practicable following the issuance of the building permits
for the Initial Improvements.

          2.1 Tenant's Cost; Allowance. Tenant shall bear all costs of
              ------------------------
constructing the Initial Improvements, except that Landlord shall provide a
construction allowance (the "Allowance") to be applied to such costs in an
amount not to exceed Ninety-Eight Thousand Two Hundred Eight and no/100
($98,208.00). The costs of such construction shall not include demolition of
existing tenant improvements but shall include, without limitation, preparation
of Plans and all working drawings, obtaining building permits, labor and
materials used in such construction, and all other costs of such construction
including a conditional use permit (if required) and occupancy permits. No
portion of the Allowance may be used for furniture, fixtures, or equipment, or
for any non-permanent or non-building standard improvement in the Third
Expansion Space. If the costs of completing the Initial Improvements shall
exceed the Allowance, Tenant shall reimburse Landlord for such excess costs
within thirty (30) days after received an invoice from Landlord of all costs
associated with the design and construction of the Initial Improvements. If the
costs of completing the Initial Improvements should be less than the Allowance,
Landlord shall have no obligation to pay or credit to Tenant any portion of such
shortfall.

     3. ACCEPTANCE OF THIRD EXPANSION SPACE. Landlord shall deliver the Third
        -----------------------------------
Expansion Space to Tenant, and Tenant shall accept the same, upon final
inspection and/or approval of the same by the municipality having jurisdiction
over the construction of the Initial Improvements. Except in the event of any
Tenant Delay (as hereinafter defined), delivery of the Third Expansion Space
shall be deemed to have occurred one (1) business day following Landlord's
written notice to Tenant that such inspection has been performed or such
approval has been obtained. Tenant shall have three (3) days following delivery
of the Third Expansion Space to inspect the same and to identify in writing any
portion of Landlord's Work still to be completed by Landlord (the "Punch List").
If Tenant has not delivered the Punch List to Landlord within such time, Tenant
shall be deemed to have accepted the Third Expansion Space and the Initial
Improvements as delivered by Landlord and Landlord shall have no further
responsibility for same.

     4. CONTRACTORS; MATERIALS. Except as otherwise herein provided or as may be
        ----------------------
otherwise approved by Landlord, all construction of the Initial Improvements,
including work to be performed at Tenant's expense, if any, shall be performed
by Landlord's contractors in a good and workmanlike manner. Notwithstanding the
foregoing, Tenant shall have the right to furnish Landlord with the name of its
own contractor that it desires that Landlord use to complete the Initial
Improvements. If Tenant's contractor's bid for the Initial Improvements is lower
than Landlord's contractor's bid, Landlord shall choose Tenant's contractor to
complete the Initial Improvements, provided that Tenant's contractor is properly
licensed, bonded and insured in accordance with Landlord's criteria for the
selection of a contractor performing services within the Building. Tenant
acknowledges that all improvements described in the Space Plan, including,
without limitation, all wall covering, woodwork (if any), fixtures, paint, floor
coverings, and other finishes are contemplated to be of building standard
quality, as determined ,by Landlord from time to time for general tenant
improvement work in the Project ("Building

<PAGE>

Standard"). Landlord shall not under any circumstances be required to provide or
pay for any furniture, trade fixtures, equipment or other personal property of
Tenant, or any other item ,which is not to be permanently affixed to the Third
Expansion Space and made a part thereof or which is not Building Standard.

     5. EXTRA WORK.
        ----------

          5.1 In General. Except as expressly approved in writing by Landlord
              ----------
pursuant to the provisions of this Paragraph 5, Landlord shall not be required
to perform any additional or nonstandard work over and above that which is
Building Standard, nor shall Landlord be required to revise the final Plans or
any portion of the Initial Improvements which have been constructed (all such
additional, nonstandard, or revised work is hereinafter collectively referred to
herein as "Extra Work"). Tenant may request Landlord, in writing, to perform any
Extra Work desired by the Tenant. Tenant acknowledges that any delays in the
completion of the Initial Improvements caused by the review of any request for,
as well as any approval and/or performance of Extra Work shall constitute a
Tenant Delay as described in Paragraph 9.2 below, regardless of whether or not
the Extra Work is actually performed.

          5.2 Procedure. Any request by Tenant for Extra Work which would
              ---------
require a change to the final Plans shall be accompanied by all necessary
additional and/or revised Plans for such Extra Work, which revised Plans shall
be prepared at Tenant's expense by Landlord's architect. Landlord shall respond
in writing to any request by Tenant for the performance of Extra Work. Any
approval of such request may, in Landlord's sole discretion, be conditioned upon
any or all of the following: (i) payment by Tenant, in advance, of all estimated
costs of such Extra Work, along with a reasonable work review fee; (ii) the
written acknowledgment by Tenant that any additional time required to perform
such Extra Work shall constitute a Tenant Delay, and (iii) any other conditions
which Landlord may find to be reasonable under the circumstances. If Tenant
shall fail to meet any such conditions precedent to the performance of Extra
Work within three (3) days following Landlord's notice to Tenant of same, the
proposed Extra Work shall be deemed disapproved by Tenant, and Landlord shall
not be obligated to perform any portion thereof.

     6. ENTRY MADE AT TENANT'S SOLE RISK. Upon the prior written consent of
        --------------------------------
Landlord, and at such times as are acceptable to Landlord in Landlord's sole
discretion, Tenant and its approved contractors shall have the right to enter
the Third Expansion Space during the construction of the Initial Improvements
without payment of rent, for the following purposes only: (a) to perform such
work or decoration as is to be performed by or under the direction or control of
Tenant; (b) to review the progress of the construction of the Initial
Improvements for the purpose of coordinating Tenant's move into the Third
Expansion Space; and (c) to install Tenant's furniture, fixtures, and equipment;
provided that such entry or performance of work shall not interfere in any
manner with the conduct of Landlord's Work. Any entry into the Third Expansion
Space by Tenant, its agents, contractors, and employees during the construction
of the Initial Improvements shall be at the sole risk of Tenant, and Tenant
hereby releases Landlord, its agents, contractors, and employees, from any and
all liability, cost, damage, expense, and claim for injury (including bodily
injury, death or property damage)

<PAGE>

(collectively, "Claims") incurred or suffered by Tenant in or about the Third
Expansion Space during the construction of the Initial Improvements, except to
the extent such Claims are caused by the negligence or intentional misconduct of
Landlord, its employees, agents or contractors, Tenant hereby indemnifies,
defends, and holds Landlord, its agents, contractors, and employees, harmless
from and against any and all claims, including attorneys' fees and costs, made
against Landlord by any party, or incurred by Landlord, as a result of any entry
into or inspection of the Third Expansion Space made by Tenant, its agents,
contractors, employees, or invitees, during the construction of the Initial
Improvements, except to the extent such claims are caused by the negligence or
intentional misconduct of Landlord, its employees, agents or contractors.

     7.   HIRING OF CONTRACTORS APPROVED BY LANDLORD.
          ------------------------------------------

          7.1 Approval Required. Tenant shall not permit any contractor to
              -----------------
perform work in the Third Expansion Space in connection with the Initial
Improvements (including such work as is described in Paragraph 6 above) or for
any other purpose without the express prior written consent of Landlord, which
consent may be withheld in Landlord's sole and absolute discretion. Landlord may
require Tenant to furnish a payment and performance bond for the performance of
any work to be performed by or for Tenant, which bond shall be posted prior to
the commencement of any such work. Any such contractors approved by Landlord for
the performance of any work in the Third Expansion Space prior to occupancy by
Tenant shall be subject to the supervision of Landlord's contractor. In order to
ensure the orderly and lien free completion of any such work in the Third
Expansion Space (other than Landlord's Work). Landlord may (i) require Tenant to
pay the estimated costs of such other work to Landlord in advance in which case
Landlord shall pay such contractors directly out of funds received for such
purpose from Tenant, or (ii) bill Tenant for such work as costs therefor are
incurred. Landlord shall be entitled to receive a reasonable work review fee for
all of such work, and such fee shall be increased in the event of any change
orders resulting in increases in the contract price for such work. The foregoing
requirements shall apply to all work performed in the Third Expansion Space for
the benefit of Tenant prior to delivery of the Third Expansion Space to Tenant,
including, but not limited to, installation of telephone equipment, electrical
devices and attachments, and all installations (other than Landlord's Work)
affecting floors, walls, woodwork, trim, windows, ceilings, equipment, or any
other physical portion of the Third Expansion Space. All materials and
workmanship used in the construction by Tenant or Tenant's contractors of any
improvements in the Third Expansion Space shall be of a quality that is at least
Building Standard. Notwithstanding any provision to the contrary in the Lease,
this Work Letter, or any other document comprising the Lease, Landlord shall
have no responsibility whatsoever for the correction of any defect in Landlord's
Work which has been covered by Tenant or any of Tenant's contractors.

          7.2 Contractor Requirements. Tenant's contractors, if any, shall
              -----------------------
comply with all rules and regulations which Landlord may generally impose from
time to time upon subcontractors in the building. Tenant shall require all
contractors and subcontractors performing construction or alterations to the
Third Expansion Space to, prior to commencing any such work, furnish Landlord
with original certificates of insurance evidencing that such contractors and
subcontractors carry: (i) workers compensation insurance in such amounts as

<PAGE>

may be required by law; (ii) liability insurance (including owned and non-owned
automobile liability) with limits of no less than $2,000.000; and (iii)
employers liability insurance with limits of at least $1,000.000. All liability
policies of any such contractor shall name Landlord and its managing agent as
additional insureds; be primary to and non-contributory with any liability
insurance carried by Landlord and its managing agent, and shall contain
contractual liability and cross liability endorsements in favor of Landlord, and
its managing agent. Any such contractor shall agree in writing, prior to the
commencement of any work, to indemnify, protect, defend, and hold Landlord and
its managing agent harmless from and against any claims, liability, damage,
actions, losses, and costs (including attorneys' fees) arising out of such
contractor's negligence, willful misconduct, or the performance of such
contractor's work.

          7.3 No Warranty. Landlord's supervision and/or approval of any
              -----------
contractor or any contractors work shall not under any circumstances constitute
a warranty or representation that such work was properly performed or designed
or create any liability for payment for such work by Landlord. Rather, Tenant
acknowledges that such supervision by Landlord is for the sole benefit of
Landlord and the property wherein the Third Expansion Space is located.

     8.   TENANT'S LIABILITIES. Landlord shall have no liability for any loss of
          --------------------
or damage to any of Tenant's or Tenant's contractors' fixtures or property
installed or left in the Third Expansion Space or elsewhere in the Project, and
Tenant shall be fully responsible for same. Tenant shall be responsible at its
own expense for the prompt removal of all rubbish and refuse left by Tenant's
contractors and in connection with the delivery of Tenant's personal property
into the Third Expansion Space. Tenant shall be liable for the repair of any
damage to the Initial Improvements occurring during any entry into the Third
Expansion Space by Tenant, its agents, contractors, employees, or invitees.

     9.   DELAY.
          -----

          9.1 Force Majeure Delays. The term "Force Majeure Delay" shall mean
              --------------------
any delay in the completion of the Initial Improvements which is attributable to
any: (1) delay or failure to perform attributable to any strike, lockout or
other labor or industrial disturbance, civil disturbance, judicial order, act of
a public enemy, war, riot, sabotage, blockade, embargo, inability to secure
customary materials, supplies or labor through ordinary sources by reason of
regulation or order of any governmental agency; (2) delay attributable to
inability to secure building permits and approvals; (3) delay in completing
working drawings or other necessary components of final Plans, and/or delay in
the construction of the Initial Improvements despite Landlord's diligent efforts
to complete same, because of changes in any laws or regulations subsequent to
the execution date hereof (including, without limitation, the Americans with
Disabilities Act of 1990) or changes in the interpretation of any such law by
the applicable building department; or (4) delay attributable to lightning,
earthquake, fire, storm, hurricane, tornado, flood, washout, explosion, or any
other cause beyond the reasonable control of Landlord. Notwithstanding any
provision of the Lease to the contrary, any prevention, delay, or stoppage due
to any Force Majeure Delay shall excuse Landlord's performance hereunder for a
period of time equal to any such prevention, delay or stoppage, and Tenant shall
have no right to terminate this Lease as a result thereof.

<PAGE>

          9.2 Tenant Delay. The term "Tenant Delay" shall mean, with respect to
              ------------
the completion of the Initial Improvements, delay which is attributable to any:
(1) delay in the giving of authorizations or approvals by Tenant; (2) delay
attributable to the negligent or willfully wrongful acts or failures to act of
Tenant, its agents or contractors; (3) delay attributable to the interference of
Tenant, its agents or contractors with the completion of Landlord's Work,
including delays resulting from entry into the Third Expansion Space by such
persons as contemplated in Paragraph 6 above; (4) any extension of time required
to complete the Initial Improvements because of changes to the Plans or the
Initial Improvements requested by Tenant, including any delays caused by
requests for Extra Work pursuant to Paragraph 5, above; or (5) any delay in
obtaining a certificate of occupancy for the Third Expansion Space as a result
of the failure of any contractor hired by Tenant to complete any portion of the
Initial Improvements prior to the completion of Landlord's Work. In the event of
any Tenant Delay, the date of delivery of the Third Expansion Space to Tenant by
Landlord shall be deemed, for the purpose of determining the commencement date
of Tenant's obligation to pay Base Rent and all other amounts due under the
Lease, to be one day earlier than the actual date of such delivery for each day
in which any Tenant Delay occurs.

<PAGE>

                                 EXHIBIT "C-I"

                                   SPACE PLAN

                                 [See attached.]

<PAGE>

ACCREDITED HOME LENDERS                                                [GRAPHIC]
CARMEL POINT BUSINESS PARK
15030 AVENUE OF SCIENCE
SUITE 110
SAN DIEGO, CA 92128

PROJECT: #3393.2
DATE: 09/30/99

NOTES:

A.   THIS PLAN MUST BE REVIEWED BY THE CITY OF SAN DIEGO FOR EXITING ANALYSIS.

B.   THIS PLAN IS FOR ADJACENCIES REFERENCE ONLY. LUND VANDRUFF SHALL DEVELOP
     CONSTRUCTION DOCUMENTS IN ORDER TO ESTABLISH ACCURATE SCOPE OF WORK. LUND
     VANDRUFF IS NOT RESPONSIBLE FOR ANY PRELIMINARY BIDS DEVELOPED FROM THIS
     PRELIMINARY PLAN.

C.   TENANT'S OWN SYSTEMS, FURNITURE CONSULTANT SHALL BE RESPONSIBLE TO FIELD
     VERIFY CLEARANCE REQUIRED FOR TENANT'S OWN SYSTEMS FURNITURE.

                                    [GRAPHIC]

CONSTRUCTION NOTES:

THE FOLLOWING IS SUBJECT TO PRICING AND SUBSEQUENT LANDLORD'S APPROVAL:

1.   AT KITCHEN, CONTRACTOR TO PROVIDE NEW PLASTIC LAMINATE BASE AND UPPER
     CABINETS. EXISTING DISHWASHER AND SINK TO REMAIN AND BE REWORKED AS
     REQUIRED.

2.   AT NEW OFFICE, CONTRACTOR TO RELOCATE EXISTING ELECTRICAL PANELS AND
     TELEPHONE BOARD.

3.   AT KITCHEN, CONTRACTOR TO PROVIDE NEW V.C.T AND RUBBER BASE.

4.   ENTIRE EXPANSION SUITE WITH EXCEPTION OF THE KITCHEN, IS TO RECEIVE NEW
     CARPET, RUBBER BASE AND PAINT THROUGHOUT.

5.   PRIOR TO ANY MECHANICAL AND ELECTRICAL WORK, CONTACTOR TO VERIFY ALL POINTS
     OF CONNECTION AND REWORK DUCTWORK AND ELECTRICAL PANELS AS REQUIRED. THERE
     SHALL BE NO OTHER CONNECTIONS TO ANY OTHER TENANT SPACES.

PRELIMINARY PLAN "A"
--------------------------------------------------------------------------------
SCALE N.T.S                                                                NORTH<PAGE>

                                                                   Exhibit 10.13

                       CARMEL MOUNTAIN DISTRIBUTION CENTER
                        MULTI-TENANT INDUSTRIAL NET LEASE

                       CALWEST INDUSTRIAL PROPERTIES, LLC
                     a California Limited Liability Company
                                    Landlord

                                       AND

                          ACCREDITED HOME LENDERS, INC.
                            A California Corporation
                                     Tenant

                                October 17, 2001

<PAGE>

                                TABLE OF CONTENTS

Article                                                                    Page

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       i

<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       ii

<PAGE>

                        MULTI-TENANT INDUSTRIAL NET LEASE
                                 REFERENCE PAGE

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

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

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

LEASE REFERENCE DATE:                October 17, 2001

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

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

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

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

USE                                  General office space

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

SCHEDULED TERMINATION DATE:          December 31, 2005

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

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

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

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

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

SECURITY DEPOSIT:                    $26,457

ASSIGNMENT/SUBLETTING FEE:           $500.00

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

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

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

By:     RREEF Management Company,
        a Delaware corporation

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

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

<PAGE>

                                      LEASE

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

1. USE AND RESTRICTIONS ON USE.

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

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

2. TERM.

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

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

                                       1

<PAGE>

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

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

3. RENT.

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

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

4. RENT ADJUSTMENTS.

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

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

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

                                       2

<PAGE>

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

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

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

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

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

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

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

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

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

5. SECURITY DEPOSIT.

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

                                       3

<PAGE>

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

6.   ALTERATIONS.

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

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

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

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

7.   REPAIR.

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

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

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

                                       4

<PAGE>

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

     7.4 Except as provided in Article 22, there shall be no abatement of rent
and no liability of Landlord by reason of any injury to or interference with
Tenant's business arising from the making of any repairs, alterations or
improvements in or to any portion of the Building or the Premises or to
fixtures, appurtenances and equipment in the Building, provided that no activity
of Landlord or its contractors shall unreasonably interfere with Tenant's use of
the Premises. Except to the extent, if any, prohibited by law, Tenant waives the
right to make repairs at Landlord's expense under any law, statute or ordinance
now or hereafter in effect.

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

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

8.   LIENS.

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

9.   ASSIGNMENT AND SUBLETTING.

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

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

                                       5

<PAGE>

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

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

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

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

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

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

                                       6

<PAGE>

10. INDEMNIFICATION.

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

11. INSURANCE.

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

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

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

12. WAIVER OF SUBROGATION.

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

13. SERVICES AND UTILITIES.

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

                                       7

<PAGE>

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

14. HOLDING OVER.

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

15. SUBORDINATION.

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

16. RULES AND REGULATIONS.

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

17. REENTRY BY LANDLORD.

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

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

     17.3 Tenant hereby waives any claim for damages for any injury or
inconvenience to or interference with Tenant's business, any loss of occupancy
or quiet enjoyment of the Premises, and any other loss occasioned by any action
of Landlord authorized by this Article 17. Tenant agrees to reimburse Landlord,
on demand, as additional rent, for any expenses which Landlord may reasonably
incur in thus effecting compliance with Tenant's obligations under this Lease.

                                       8

<PAGE>

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

18. DEFAULT.

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

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

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

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

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

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

19. REMEDIES.

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

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

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

                                       9

<PAGE>

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

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

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

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

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

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

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

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

                                       10

<PAGE>

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

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

20.  TENANTS BANKRUPTCY OR INSOLVENCY.

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

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

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

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

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

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

21.  QUIET ENJOYMENT.

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

                                       11

<PAGE>

22.  DAMAGE BY FIRE, ETC.

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

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

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

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

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

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

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

                                       12

<PAGE>

23.  EMINENT DOMAIN.

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

24.  SALE BY LANDLORD.

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

25.  ESTOPPEL CERTIFICATES.

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

26.  SURRENDER OF PREMISES.

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

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

                                       13

<PAGE>

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

27.  NOTICES.

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

28.  TAXES PAYABLE BY TENANT.

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

29.  RELOCATION OF TENANT.

30.  DEFINED TERMS AND HEADINGS.

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

                                       14

<PAGE>

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

31.  TENANT'S AUTHORITY.

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

32.  COMMISSIONS.

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

33.  TIME AND APPLICABLE LAW.

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

34.  SUCCESSORS AND ASSIGNS.

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

35.  ENTIRE AGREEMENT.

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

36.  EXAMINATION NOT OPTION.

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

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

37.  RECORDATION.

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

38.  FINANCIAL STATEMENTS.

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

                                       15

<PAGE>

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

39. RENT SCHEDULE

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

40. RENEWAL OPTION

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

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

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

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

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

41. PARKING

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

                                       16

<PAGE>

42. LIMITATION OF LANDLORD'S LIABILITY

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

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

By:    RREEF Management Company,
       a Delaware corporation

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

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

<PAGE>

                                    EXHIBIT A
                                    ---------

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

                                    PREMISES

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

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

                                   [GRAPHIC]

                                       18

<PAGE>

                                    EXHIBIT B
                                    ---------

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

                               INITIAL ALTERATIONS

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

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

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

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

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

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

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

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

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

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

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

                                   [GRAPHIC]

                                       19

<PAGE>

                                    EXHIBIT C
                                    ---------

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

                              RULES AND REGULATIONS

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

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

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

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

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

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

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

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

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

                                       20

<PAGE>

                                    EXHIBIT D
                                    ---------

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

                              CONDITION OF PREMISES

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

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

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

3.   Overhead doors must be serviced and repaired.

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

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

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

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

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

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

                                       21

<PAGE>

                            FIRST AMENDMENT TO LEASE

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

                              W I T N E S S E T H:

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

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

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

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

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

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

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

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

<PAGE>

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

LANDLORD:                                      TENANT:

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

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

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

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}]]