Document:

Exhibit 10.22

                             BASIC LEASE INFORMATION

Lease Date:                        For identification purposes only, the date of
                                   this Lease is April 9, 1999

Landlord:                          PRUNEYARD ASSOCIATES, LLC
                                   a California limited liability company

Tenant:                            AmeriCom USA, Inc.
                                   a Delaware corporation
                                  (dba "AdCast, Inc.")

Project:                           The Pruneyard Office Towers

Building Address:                  Pruneyard Office Tower I
                                   1901 South Bascom Avenue
                                   Campbell, CA 95008

Rentable Area of
Building:                          Approximately 116,743 square feet

Premises:                          Floor:           Eighth (8th)
                                   Suite Number:    880
                                   Rentable Area:   Approximately 1,431 rentable
                                                    square feet

Term:                              36 full  calendar  months  (plus any  partial
                                   month at the beginning of the Term);  subject
                                   to Tenant's  Extension Option, as provided in
                                   Section 36 in the Additional Provisions Rider
                                   (Exhibit D)

Scheduled
Commencement Date:                 May 1, 1999

Expiration Date:                   The last day of the 36th full calendar  month
                                   in the Term;  subject to  Tenant's  Extension
                                   Option,  as  provided  in  Section  36 in the
                                   Additional Provisions Rider (Exhibit D)

Base Rent:                         Months 01 - 12:   $4,221.45 per month
                                   Months 13 - 24:   $4,293.00 per month
                                   Months 25 - 36:   $4,364.55 per month

Base Year:                         The calendar year 1999

Tenant's Share:                    1.226%

Security Deposit:                  $4,221.45

<PAGE>

Landlord's Address
for Payment of Rent:               Pruncyard Associates, LLC
                                   File #72847
                                   P.O. Box 61000
                                   San Francisco, CA 94161-2847

Business Hours:                    7:00 a.m. - 6:00 p.m. Monday - Friday,
                                   except Holidays
                                   9:00 a.m. - 3:00 p.m. Saturday, except
                                   Holidays

Landlord's Address
for Notices:                       Pruneyard Associates, LLC
                                   Wilson Cornerstone Properties
                                   1999 South Bascom Avenue, Suite 200
                                   Campbell, CA 95008
                                   Attention: Property Manager

                                   with a copy to:

                                   Wilson Cornerstone Properties
                                   2929 Campus Drive, Suite 450
                                   San Mateo, CA 94403
                                   Attention: General Counsel

Tenant's Address
for Notices:                       1901 South Bascom Avenue, Suite 880
                                   Campbell, CA 95008

Broker(s):                         Colliers Parrish International

Guarantor(s):                      (None)

Property Manager:                  Cornerstone  Properties  Limited  Partnership
                                   (dba  "Wilson-Cornerstone  Properties Limited
                                   Partnership")

Additional Provisions:             36.      Extension Option

Exhibits:
--------
Exhibit A:        The Premises
Exhibit B:        Construction Rider
Exhibit C:        Building Rules
Exhibit D:        Additional Provisions
Exhibit E:        Asbestos Notification

         The Basic Lease  Information  set forth above is part of the Lease.  In
the event of any conflict  between any provision in the Basic Lease  Information
and the Lease, the Lease shall control.

                                      -2-

<PAGE>

         THIS  LEASE is made as of the Lease  Date set forth in the Basic  Lease
Information,  by  and  between  the  Landlord  identified  in  the  Basic  Lease
information  ("Landlord"),   and  the  Tenant  identified  in  the  Basic  Lease
Information ("Tenant"). Landlord and Tenant hereby agree as follows:

1.       PREMISES.  Landlord  hereby leases to Tenant,  and Tenant hereby leases
from Landlord,  upon the terms and subject to the conditions of this Lease,  the
office space  identified  in the Basic Lease  Information  as the Premises  (the
"Premises"), in the Building located at the address specified in the Basic Lease
Information (the "Building").  The approximate configuration and location of the
Premises is shown on Exhibit A. Landlord and Tenant agree that the rentable area
of the  Premises for all  purposes  under this Lease shall be the Rentable  Area
specified  in the Basic  Lease  Information.  The  Building,  together  with the
parking  facilities  serving the  Building  (the  "Parking  Facility"),  and the
parcel(s) of land on which the  Building  and the Parking  Facility are situated
(collectively,  the "Property"),  is part of the Project identified in the Basic
Lease Information (the "Project").

2.       TERM; POSSESSION. The term of this Lease (the "Term") shall commence on
the Commencement  Date as described below and, unless sooner  terminated,  shall
expire on the  Expiration  Date set forth in the Basic  Lease  Information  (the
"Expiration Date"). The "Commencement Date" shall be the earlier of (a) the date
on which  Landlord  tenders  possession  of the Premises to Tenant,  with all of
Landlord's  construction  obligations,  if  any,  "Substantially  Completed"  as
provided in the  Construction  Rider  attached  as Exhibit B (the  "Construction
Rider") or, in the event of any "Tenant  Delay," as defined in the  Construction
Rider,  the date on which  Landlord  could  have done so had there  been no such
Tenant  Delay;  or (b) the date  upon  which  Tenant,  with  Landlord's  written
permission,  actually  occupies  and  conducts  business  in any  portion of the
Premises.  The parties  anticipate that the  Commencement  Date will occur on or
about the Scheduled  Commencement  Date set forth in the Basic Lease Information
(the "Scheduled Commencement Date"); provided,  however, that Landlord shall not
be liable for any claims,  damages or  liabilities if the Premises are not ready
for occupancy by the Scheduled Commencement Date. When the Commencement Date has
been  established,  Landlord  and Tenant  shall at the  request of either  party
confirm the Commencement Date and Expiration Date in writing.

3.       RENT.

     3.1  Base Rent. Tenant agrees to pay to Landlord the Base Rent set forth in
          the Basic Lease  Information,  without prior notice or demand,  on the
          first day of each and every  calendar  month  during the Term,  except
          that Base Rent for the first full calendar month in which Base Rent is
          payable shall be paid upon  Tenant's  execution of this Lease and Base
          Rent for any partial  month at the beginning of the Term shall be paid
          on the  Commencement  Date.  Base  Rent for any  partial  month at the
          beginning  or end of the Term  shall be  prorated  based on the actual
          number of days in the month.

         If the Basic Lease Information  provides for any change in Base Rent by
reference to years or months (without  specifying  particular dates), the change
will  take  effect  on the  applicable  annual  or  monthly  anniversary  of the
Commencement  Date  (which  won't  necessarily  be the first  day of a  calendar
month).

                                      -3-
<PAGE>

3.2      Additional Rent: Increases in Operating Costs and Taxes.

          (a)  Definitions.

          (1)  "Base  Operating  Costs" means  Operating  Costs for the calendar
year  specified  as the Base  Year in the  Basic  Lease  Information  (excluding
therefrom, however, any Operating Costs of a nature that would not ordinarily be
incurred on an annual, recurring basis).

          (2)  "Base Taxes" means Taxes for the calendar  year  specified as the
Base Year in the Basic Lease Information.

          (3)  "Operating  Costs"  means  all  costs  of  managing,   operating,
maintaining and repairing the Property, including all costs, expenditures,  fees
and  charges  for:  (A)  operation,  maintenance  and  repair  of  the  Property
(including  maintenance,  repair and replacement of glass,  the roof covering or
membrane,   and   landscaping);    (B)   utilities   and   services   (including
telecommunications  facilities  and  equipment,  recycling  programs  and  trash
removal),  and associated  supplies and materials;  (C) compensation  (including
employment  taxes  and  fringe  benefits)  for  persons  who  perform  duties in
connection  with  the  operation,  management,  maintenance  and  repair  of the
Building,  such compensation to be appropriately  allocated for persons who also
perform duties unrelated to the Building;  (D) property  (including coverage for
earthquake and flood if carried by Landlord), liability, rental income and other
insurance relating to the Property, and expenditures for deductible amounts paid
under such insurance; (E) licenses, permits and inspections;  (F) complying with
the  requirements  of any  law,  statute,  ordinance  or  governmental  rule  or
regulation  or  any  orders  pursuant   thereto   (collectively   "Laws");   (G)
amortization of capital improvements  required to comply with Laws, or which are
intended  to reduce  Operating  Costs or  improve  the  utility,  efficiency  or
capacity of any Building System, with interest on the unamortized balance at the
rate paid by Landlord on funds  borrowed to finance  such  capital  improvements
(or, if Landlord  finances such  improvements  out of  Landlord's  funds without
borrowing,  the rate that  Landlord  would have paid to borrow  such  funds,  as
reasonably  determined  by  Landlord),  over such useful life as Landlord  shall
reasonably  determine;  (H) an office in the Project for the  management  of the
Property,  including  expenses of furnishing  and equipping  such office and the
rental value of any space  occupied for such purposes;  (I) property  management
fees;  (J)  accounting,  legal  and  other  professional  services  incurred  in
connection  with the operation of the Property and the  calculation of Operating
Costs and Taxes;  (K) a reasonable  allowance for  depreciation on machinery and
equipment used to maintain the Property and on other personal  property owned by
Landlord in the Property  (including  window  coverings  and carpeting in common
areas); (L) contesting the validity or applicability of any Laws that may affect
the Property;  (M) the Building's share of any shared or common area maintenance
fees and expenses (including costs and expenses of operating,  managing,  owning
and maintaining the Parking Facility and the common areas of the Project and any
fitness  center or conference  center in the  Project);  and (N) any other cost,
expenditure,  fee or charge,  whether or not  hereinbefore  described,  which in
accordance  with  generally  accepted  property  management  practices  would be
considered  an expense of managing,  operating,  maintaining  and  repairing the
Property.  Operating Costs for any calendar year during which average  occupancy
of the  Building is less than one hundred  percent  (100%)  shall be  calculated

                                      -4-

<PAGE>

based upon the Operating Costs that would have been incurred if the Building had
an average  occupancy of one hundred  percent (100%) during the entire  calendar
year.

Operating Costs shall not include (i) capital  improvements (except as otherwise
provided above);  (ii) costs of special services rendered to individual  tenants
(including  Tenant)  for which a  special  charge is made;  (iii)  interest  and
principal payments on loans or indebtedness secured by the Building;  (iv) costs
of  improvements  for  Tenant or other  tenants  of the  Building;  (v) costs of
services or other benefits of a type which are not available to Tenant but which
are  available to other tenants or  occupants,  and costs for which  Landlord is
reimbursed  by other  tenants  of the  Building  other than  through  payment of
tenants'  shares of  increases  in  Operating  Costs  and  Taxes;  (vi)  leasing
commissions,  attorneys'  fees and other  expenses  incurred in connection  with
leasing space in the Building or enforcing such leases;  (vii)  depreciation  or
amortization,  other  than  as  specifically  enumerated  in the  definition  of
Operating  Costs above;  and (viii)  costs,  fines or penalties  incurred due to
Landlord's violation of any Law.

          (4) "Taxes"  means:  all real property  taxes and general,  special or
district assessments or other governmental impositions, of whatever kind, nature
or origin,  imposed  on or by reason of the  ownership  or use of the  Property;
governmental  charges,  fees or  assessments  for transit or traffic  mitigation
(including area-wide traffic improvement  assessments and transportation  system
management  fees),  housing,  police,  fire or  other  governmental  service  or
purported  benefits to the Property;  personal  property  taxes  assessed on the
personal  property of Landlord used in the  operation of the  Property,  service
payments  in lieu of taxes and taxes and  assessments  of every  kind and nature
whatsoever  levied or assessed in addition to, in lieu of or in substitution for
existing or additional  real or personal  property  taxes on the Property or the
personal  property  described  above;  any increases in the foregoing  caused by
changes in assessed valuation,  tax rate or other factors or circumstances;  and
the  reasonable  cost of contesting  by  appropriate  proceedings  the amount or
validity of any taxes,  assessments or charges  described  above.  To the extent
paid by Tenant or other  tenants as "Tenant's  Taxes" (as defined in Section 8 -
Tenant's Taxes), "Tenant's Taxes" shall be excluded from Taxes.

          (5) "Tenant's  Share" means the Rentable Area of the Premises  divided
by the total  Rentable  Area of the  Building,  as set forth in the Basic  Lease
Information.  If the  Rentable  Area of the  Building is changed or the Rentable
Area of the  Premises  is  changed  by  Tenant's  leasing  of  additional  space
hereunder or for any other reason, Tenant's Share shall be adjusted accordingly.

     (b)  Additional Rent.

          (1) Tenant shall pay Landlord as  "Additional  Rent" for each calendar
year or portion  thereof  during the Term  Tenant's  Share of the sum of (x) the
amount (if any) by which  Operating  Costs for such period exceed Base Operating
Costs,  and (y) the amount (if any) by which Taxes for such  period  exceed Base
Taxes.

          (2)  Prior  to  the  end of the  Base  Year  and  each  calendar  year
thereafter,  Landlord  shall notify Tenant of  Landlord's  estimate of Operating
Costs,  Taxes and Tenant's  Additional  Rent for the  following  calendar  year.
Commencing on the first day of January of each  calendar year and  continuing on
the  first day of every  month  thereafter  in such  year,  Tenant  shall

                                      -5-
<PAGE>

pay to  Landlord  one-twelfth  (1/12th) of the  estimated  Additional  Rent.  If
Landlord  thereafter  estimates that Operating Costs or Taxes for such year will
vary from Landlord's prior estimate,  Landlord may, by notice to Tenant,  revise
the  estimate for such year (and  Additional  Rent shall  thereafter  be payable
based on the revised estimate).

          (3) As soon as reasonably  practicable  after the end of the Base Year
and each calendar year  thereafter,  Landlord  shall furnish  Tenant a statement
with respect to such year,  showing  Operating Costs,  Taxes and Additional Rent
for the year, and the total payments made by Tenant with respect thereto. Unless
Tenant raises any  objections to  Landlord's  statement  within ninety (90) days
after receipt of the same, such statement  shall  conclusively be deemed correct
and Tenant shall have no right  thereafter to dispute such statement or any item
therein or the  computation  of Additional  Rent based  thereon.  If Tenant does
object to such  statement,  then Landlord shall provide  Tenant with  reasonable
verification  of the  figures  shown  on the  statement  and the  parties  shall
negotiate  in good faith to resolve any  disputes.  Any  objection  of Tenant to
Landlord's  statement and  resolution of any dispute shall not postpone the time
for payment of any amounts due Tenant or Landlord based on Landlord's statement,
nor shall any failure of Landlord to deliver  Landlord's  statement  in a timely
manner  relieve  Tenant of Tenant's  obligation  to pay any amounts due Landlord
based on Landlord's statement.

          (4) If Tenant's Additional Rent as finally determined for any calendar
year exceeds the total payments made by Tenant on account thereof,  Tenant shall
pay  Landlord  the  deficiency  within  ten (10)  days of  Tenant's  receipt  of
Landlord's  statement.  If the total payments made by Tenant on account  thereof
exceed Tenant's  Additional Rent as finally  determined for such year,  Tenant's
excess payment shall be credited toward the rent next due from Tenant under this
Lease.  For any  partial  calendar  year at the  beginning  or end of the  Term,
Additional  Rent shall be prorated on the basis of a 365-day  year by  computing
Tenant's Share of the increases in Operating Costs and Taxes for the entire year
and then  prorating such amount for the number of days during such year included
in the Term.  Notwithstanding the termination of this Lease,  Landlord shall pay
to Tenant or Tenant shall pay to Landlord,  as the case may be,  within ten (10)
days after Tenant's  receipt of Landlord's final statement for the calendar year
in which this Lease terminates,  the difference between Tenant's Additional Rent
for  that  year,  as  finally  determined  by  Landlord,  and the  total  amount
previously paid by Tenant on account thereof.

If for any reason Base Taxes or Taxes for any year during the Term are  reduced,
refunded  or  otherwise  changed,  Tenant's  Additional  Rent shall be  adjusted
accordingly.  If Taxes  are  temporarily  reduced  as a  result  of space in the
Building being leased to a tenant that is entitled to an exemption from property
taxes or other taxes, then for purposes of determining  Additional Rent for each
year in which Taxes are reduced by any such exemption, Taxes for such year shall
be  calculated on the basis of the amount the Taxes for the year would have been
in the  absence of the  exemption.  The  obligations  of  Landlord to refund any
overpayment  of  Additional  Rent and of Tenant to pay any  Additional  Rent not
previously  paid  shall  survive  the  expiration  of the Term.  Notwithstanding
anything to the  contrary  in this Lease,  if there is at any time a decrease in
Taxes  below the amount of the Taxes for the Base  Year,  then for  purposes  of
calculating  Additional  Rent for the year in which such decrease occurs and all
subsequent periods,  Base Taxes shall be reduced to equal the Taxes for the year
in which the decrease occurs.

                                      -6-
<PAGE>

     3.3  Payment of Rent. All amounts  payable or  reimbursable by Tenant under
this Lease,  including late charges and interest  (collectively,  "Rent"), shall
constitute  rent and shall be  payable  and  recoverable  as rent in the  manner
provided in this Lease.  All sums  payable to Landlord on demand under the terms
of this Lease shall be payable  within ten (10) days after notice from  Landlord
of the  amounts  due.  All rent  shall be paid  without  offset,  recoupment  or
deduction  in lawful  money of the  United  States of  America  to  Landlord  at
Landlord's  Address  for  Payment  of  Rent  as set  forth  in the  Basic  Lease
Information, or to such other person or at such other place as Landlord may from
time to time designate.

4.       SECURITY DEPOSIT. On execution of this Lease, Tenant shall deposit with
Landlord  the amount  specified in the Basic Lease  Information  as the Security
Deposit,  if any (the "Security  Deposit"),  as security for the  performance of
Tenant's  obligations  under  this  Lease.  Landlord  may  (but  shall  have  no
obligation to) use the Security Deposit or any portion thereof to cure any Event
of Default  under this Lease or to compensate  Landlord for any damage  Landlord
incurs as a result of Tenant's  failure to perform  any of Tenant's  obligations
hereunder.  In such  event  Tenant  shall  pay to  Landlord  on demand an amount
sufficient to replenish the Security Deposit. If Tenant is not in default at the
expiration or  termination  of this Lease,  Landlord  shall return to Tenant the
Security Deposit or the balance thereof then held by Landlord and not applied as
provided  above.  Landlord may  commingle the Security  Deposit with  Landlord's
general and other funds.  Landlord  shall not be required to pay interest on the
Security Deposit to Tenant.

5.       USE AND COMPLIANCE WITH LAWS.

     5.1  Use.  The Premises  shall be used and  occupied  for general  business
office  purposes  and for no other use or purpose.  Tenant shall comply with all
present and future Laws  relating to Tenant's  use or  occupancy of the Premises
(and make any repairs,  alterations or  improvements  as required to comply with
all such Laws), and shall observe the "Building Rules" (as defined in Section 27
- Rules and  Regulations).  Tenant shall not do, bring, keep or sell anything in
or about the Premises that is prohibited  by, or that will cause a  cancellation
of or an increase in the existing premium for, any insurance policy covering the
Property  or any part  thereof.  Tenant  shall not  permit  the  Premises  to be
occupied or used in any manner  that will  constitute  waste or a  nuisance,  or
disturb the quiet enjoyment of or otherwise annoy other tenants in the Building.
Without  limiting the foregoing,  the Premises shall not be used for educational
activities,  practice of medicine or any of the healing arts,  providing  social
services,  for any governmental use (including embassy or consulate use), or for
personnel  agency,  customer  service office,  studios for radio,  television or
other media,  travel agency or  reservation  center  operations or uses.  Tenant
shall not, without the prior consent of Landlord, (i) bring into the Building or
the Premises  anything  that may cause  substantial  noise,  odor or  vibration,
overload  the floors in the  Premises  or the  Building  or any of the  heating,
ventilating  and  air-conditioning  ("HVAC"),  mechanical,  elevator,  plumbing,
electrical,  fire  protection,  life  safety,  security or other  systems in the
Building  ("Building  Systems"),  or jeopardize the structural  integrity of the
Building  or any part  thereof;  (ii)  connect  to the  utility  systems  of the
Building any apparatus,  machinery or other  equipment other than typical office
equipment;  or (iii)  connect  to any  electrical  circuit in the  Premises  any
equipment or other load with aggregate  electrical power  requirements in excess
of 80% of the rated capacity of the circuit.

                                      -7-
<PAGE>

     5.2  Hazardous Materials.

          (a)  Definitions.

               (1) " Hazardous Materials" shall mean any substance: (A) that now
or in the  future  is  regulated  or  governed  by,  requires  investigation  or
remediation  under,  or is defined as a hazardous  waste,  hazardous  substance,
pollutant  or  contaminant  under any  governmental  statute,  code,  ordinance,
regulation,   rule  or  order,   and  any  amendment   thereto,   including  the
Comprehensive  Environmental  Response Compensation and Liability Act, 42 U.S.C.
ss.9601 et seq.,  and the  Resource  Conservation  and  Recovery  Act, 42 U.S.C.
ss.6901  et  seq.,  or (B)  that  is  toxic,  explosive,  corrosive,  flammable,
radioactive, carcinogenic, dangerous or otherwise hazardous, including gasoline,
diesel fuel, petroleum hydrocarbons, polychlorinated biphenyls (PCBs), asbestos,
radon and urea formaldehyde foam insulation.

               (2)  "Environmental  Requirements"  shall  mean all  present  and
future Laws,  orders,  permits,  licenses,  approvals,  authorizations and other
requirements of any kind applicable to Hazardous Materials.

               (3) "Handled by Tenant" and  "Handling by Tenant"  shall mean and
refer  to  any  installation,  handling,  generation,  storage,  use,  disposal,
discharge, release, abatement, removal, transportation, or any other activity of
any type by Tenant or its agents, employees, contractors,  licensees, assignees,
sublessees, transferees or representatives (collectively,  "Representatives") or
its guests, customers,  invitees, or visitors (collectively,  "Visitors"), at or
about the Premises in connection with or involving Hazardous Materials.

               (4)  "Environmental  Losses" shall mean all costs and expenses of
any  kind,  damages,  including  foreseeable  and  unforeseeable   consequential
damages,  fines and penalties  incurred in connection  with any violation of and
compliance  with   Environmental   Requirements  and  all  losses  of  any  kind
attributable  to the  diminution  of value,  loss of use or  adverse  effects on
marketability or use of any portion of the Premises or Property.

          (b) Tenant's  Covenants.  No Hazardous  Materials  shall be Handled by
Tenant at or about the Premises or Property  without  Landlord's  prior  written
consent,  which consent may be granted,  denied,  or conditioned upon compliance
with   Landlord's   requirements,   all  in  Landlord's   absolute   discretion.
Notwithstanding  the foregoing,  normal  quantities  and use of those  Hazardous
Materials customarily used in the conduct of general office activities,  such as
copier fluids and cleaning supplies ("Permitted  Hazardous  Materials"),  may be
used and  stored at the  Premises  without  Landlord's  prior  written  consent,
provided that Tenant's  activities at or about the Premises and Property and the
Handling by Tenant of all Hazardous Materials shall comply at all times with all
Environmental  Requirements.  At the  expiration  or  termination  of the Lease,
Tenant shall  promptly  remove from the  Premises  and  Property  all  Hazardous
Materials  Handled by Tenant at the Premises or the Property.  Tenant shall keep
Landlord  fully and  promptly  informed of all  Handling by Tenant of  Hazardous
Materials other than permitted Hazardous Materials.  Tenant shall be responsible
and liable for the compliance  with all of the provisions of this Section by all
of Tenant's  Representatives and Visitors, and all of Tenant's obligations under
this Section  (including its  indemnification  obligations  under  paragraph (e)
below) shall survive the expiration or termination of this Lease.

                                      -8-
<PAGE>

          (c)  Compliance.  Tenant shall at Tenant's  expense  promptly take all
actions required by any governmental agency or entity in connection with or as a
result of the Handling by Tenant of Hazardous Materials at or about the Premises
or Property,  including inspection and testing,  performing all cleanup, removal
and  remediation  work  required  with  respect  to those  Hazardous  Materials,
complying with all closure requirements and post-closure monitoring,  and filing
all required  reports or plans.  All of the  foregoing  work and all Handling by
Tenant  of all  Hazardous  Materials  shall  be  performed  in a good,  safe and
workmanlike manner by consultants  qualified and licensed to undertake such work
and in a manner that will not interfere with any other tenant's quiet  enjoyment
of the Property or Landlord's use, operation,  leasing and sale of the Property.
Tenant shall deliver to Landlord prior to delivery to any  governmental  agency,
or  promptly  after  receipt  from  any  such  agency,  copies  of all  permits,
manifests,  closure or remedial action plans,  notices,  and all other documents
relating  to the  Handling  by Tenant  of  Hazardous  Materials  at or about the
Premises or  Property.  If any lien  attaches to the Premises or the Property in
connection with or as a result of the Handling by Tenant of Hazardous Materials,
and  Tenant  does not cause the same to be  released,  by  payment,  bonding  or
otherwise,  within ten (10) days after the  attachment  thereof,  Landlord shall
have the right but not the  obligation  to cause the same to be released and any
sums expended by Landlord (plus Landlord's  administrative  costs) in connection
therewith shall be payable by Tenant on demand.

          (d)  Landlord's  Rights.  Landlord  shall have the right,  but not the
obligation, to enter the Premises at any reasonable time (i) to confirm Tenant's
compliance with the provisions of this Section 5.2, and (ii) to perform Tenant's
obligations  under this  Section if Tenant has failed to do so after  reasonable
notice to  Tenant.  Landlord  shall  also  have the  right to  engage  qualified
Hazardous Materials  consultants to inspect the Premises and review the Handling
by Tenant of Hazardous  Materials,  including  review of all  permits,  reports,
plans,  and other  documents  regarding  same.  Tenant  shall pay to Landlord on
demand  the costs of  Landlord's  consultants'  fees and all costs  incurred  by
Landlord in performing Tenant's  obligations under this Section.  Landlord shall
use  reasonable  efforts to minimize any  interference  with  Tenant's  business
caused  by  Landlord's  entry  into the  Premises,  but  Landlord  shall  not be
responsible for any interference caused thereby.

          (e) Tenant's  Indemnification.  Tenant  agrees to  indemnify,  defend,
protect and hold harmless  Landlord and its partners or members and its or their
partners, members, directors, officers, shareholders,  employees and agents from
all  Environmental  Losses  and all  other  claims,  actions,  losses,  damages,
liabilities,  costs and expenses of every kind, including reasonable attorneys',
experts' and consultants' fees and costs,  incurred at any time and arising from
or in connection with the Handling by Tenant of Hazardous  Materials at or about
the  Property  or  Tenant's  failure  to comply  in full with all  Environmental
Requirements with respect to the Premises.

          (f)  Asbestos.  Tenant  acknowledges  that  Tenant  has  received  the
asbestos notification letter attached as Exhibit E hereto pursuant to California
Health and Safety Code Sections 25915 et seq. (as amended from time to time, the
"Connelly Act"),  disclosing the existence of asbestos in the Building.  As part
of Tenant's  obligations  under paragraph (c) of this Section,  Tenant agrees to
comply with the Connelly Act, including  providing copies of Landlord's asbestos
notification letter to all of Tenant's  "employees" and "owners," as those terms
are defined in the Connelly Act.

                                      -9-
<PAGE>

6.       TENANT IMPROVEMENTS & ALTERATIONS.

         6.1 Landlord and Tenant shall  perforce  their  respective  obligations
with respect to design and  construction  of any  improvements to be constructed
and  installed in the Premises (the "Tenant  Improvements"),  as provided in the
Construction  Rider.  Except for any Tenant  Improvements  to be  constructed by
Tenant  as  provided  in the  Construction  Rider,  Tenant  shall  not  make any
alterations,  improvements or changes to the Premises, including installation of
any security system or telephone or data communication wiring,  ("Alterations"),
without Landlord's prior written consent;  provided,  however, that Tenant shall
not be  required  to obtain  Landlord's  prior  approval  or consent  for minor,
non-structural Alterations that cost less than $2,500, do not require a building
permit,  do not affect any of the  Building  Systems,  and are not visible  from
outside the Premises ("Minor  Alterations").  Any Alterations shall be completed
by Tenant at Tenant's sole cost and expense:  (i) with due diligence,  in a good
and workmanlike manner,  using new materials;  (ii) in compliance with plans and
specifications  approved by Landlord;  (iii) in compliance with the construction
rules  and  regulations  promulgated  by  Landlord  from  time to time;  (iv) in
accordance with all applicable Laws (including all work,  whether  structural or
nonstructural, inside or outside the Premises, required to comply fully with all
applicable  Laws and  necessitated  by  Tenant's  work);  and (v) subject to all
conditions which Landlord may in Landlord's  discretion impose.  Such conditions
may include requirements for Tenant to: (i) provide payment or performance bonds
or additional insurance (from Tenant or Tenant's contractors,  subcontractors or
design  professionals);  (ii) use  contractors or  subcontractors  designated by
Landlord;  and  (iii)  remove  all or part of the  Alterations  prior to or upon
expiration or  termination  of the Term, as designated by Landlord.  If any work
outside  the  Premises,  or any  work on or  adjustment  to any of the  Building
Systems,  is required in connection  with or as a result of Tenant's work,  such
work shall be  performed  at  Tenant's  expense  by  contractors  designated  by
Landlord.  Landlord's  right to review and approve  (or  withhold  approval  of)
Tenant's plans,  drawings,  specifications,  contractor(s)  and other aspects of
construction work proposed by Tenant is intended solely to protect Landlord, the
Property and Landlord's  interests.  No approval or consent by Landlord shall be
deemed or  construed  to be a  representation  or warranty by Landlord as to the
adequacy, sufficiency, fitness or suitability thereof or compliance thereof with
applicable  Laws  or  other  requirements.   Except  as  otherwise  provided  in
Landlord's  consent,  all Alterations shall upon installation become part of the
realty and be the property of Landlord.

         6.2 Before making any Alterations,  Tenant shall submit to Landlord for
Landlord's  prior approval  reasonably  detailed final plans and  specifications
prepared  by a  licensed  architect  or  engineer,  a copy  of the  construction
contract,  including the name of the contractor and all subcontractors  proposed
by Tenant to make the Alterations and a copy of the contractor's license. Tenant
shall  reimburse  Landlord upon demand for any expenses  incurred by Landlord in
connection  with any  Alterations  made by  Tenant,  including  reasonable  fees
charged  by  Landlord's   contractors   or   consultants  to  review  plans  and
specifications  prepared by Tenant and to update the existing as-built plans and
specifications  of the Building to reflect the Alterations.  Tenant shall obtain
all applicable  permits,  authorizations and governmental  approvals and deliver
copies of the same to Landlord before commencement of any Alterations.

         6.3 Tenant shall keep the  Premises and the Property  free and clear of
all liens arising out of any work performed,  materials  famished or obligations
incurred by Tenant.  If any such

                                      -10-
<PAGE>

lien  attaches to the  Premises or the  Property,  and Tenant does not cause the
same to be released by payment,  bonding or otherwise within ten (10) days after
the attachment thereof,  Landlord shall have the right but not the obligation to
cause  the  same to be  released,  and  any  sums  expended  by  Landlord  (plus
Landlord's  administrative  costs) in connection  therewith  shall be payable by
Tenant on demand with interest  thereon from the date of expenditure by Landlord
at the Interest Rate (as defined in Section 16.2 - Interest).  Tenant shall give
Landlord  at least  ten (10)  days'  notice  prior  to the  commencement  of any
Alterations  and cooperate with Landlord in posting and  maintaining  notices of
non-responsibility in connection therewith.

         6.4 Subject to the  provisions of Section 5 - Use and  Compliance  with
Laws and the  foregoing  provisions  of this  Section,  Tenant may  install  and
maintain  furnishings,  equipment,  movable  partitions,  business equipment and
other trade fixtures ("Trade Fixtures") in the Premises, provided that the Trade
Fixtures do not become an integral part of the Premises or the Building.  Tenant
shall promptly  repair any damage to the Premises or the Building  caused by any
installation or removal of such Trade Fixtures.

7.       MAINTENANCE AND REPAIRS.

         7.1 By  taking  possession  of the  Premises  Tenant  agrees  that  the
Premises are then in a good and tenantable condition. During the Term, Tenant at
Tenant's expense but under the direction of Landlord,  shall repair and maintain
the Premises,  including the interior walls,  floor coverings,  ceiling (ceiling
tiles and grid), Tenant Improvements,  Alterations, fire extinguishers,  outlets
and fixtures, and any appliances (including  dishwashers,  hot water heaters and
garbage  disposers) in the Premises,  in a first class  condition,  and keep the
Premises in a clean, safe and orderly condition.

         7.2 Landlord  shall  maintain or cause to be  maintained  in reasonably
good  order,  condition  and  repair,  the  structural  portions  of  the  roof,
foundations,  floors and exterior walls of the Building,  the Building  Systems,
and the public and common  areas of the  Property,  such as  elevators,  stairs,
corridors and restrooms;  provided,  however,  that Tenant shall pay the cost of
repairs  for any  damage  occasioned  by  Tenant's  use of the  Premises  or the
Property  or any act or  omission  of  Tenant  or  Tenant's  Representatives  or
Visitors,  to the extent (if any) not covered by Landlord's  property insurance.
Landlord  shall be under no  obligation  to inspect the  Premises.  Tenant shall
promptly  report in writing to Landlord any defective  condition known to Tenant
which  Landlord is required to repair.  As a material part of the  consideration
for this Lease,  Tenant hereby waives any benefits of any applicable existing or
future Law,  including the provisions of California Civil Code Sections 1932(1),
1941 and 1942, that allows a tenant to make repairs at its landlord's expense.

         7.3 Landlord  hereby  reserves the right,  at any time and from time to
time,  without  liability  to Tenant,  and  without  constituting  an  eviction,
constructive  or otherwise,  or entitling  Tenant to any abatement of rent or to
terminate  this  Lease  or  otherwise  releasing  Tenant  from  any of  Tenant's
obligations under this Lease:

               (a) To make alterations,  additions,  repairs, improvements to or
in or to  decrease  the size of area of,  all or any part of the  Building,  the
fixtures and equipment  therein,  and the Building Systems (except that Landlord
shall not have any right under this  provision

                                      -11-
<PAGE>

materially  to reduce the size of the Premises or  permanently,  materially  and
adversely  to affect  Tenant's  access to the  Premises  and  ability to use the
Premises for the purposes intended and contemplated under this Lease);

               (b) To change the Building's name or street address;

               (c) To install and maintain any and all signs on the exterior and
interior of the Building;

               (d) To reduce, increase,  enclose or otherwise change at any time
and from time to time the size,  number,  location,  lay-out  and  nature of the
common areas  (including the Parking  Facility) and other tenancies and premises
in the Property and to create additional rentable areas through use or enclosure
of common  areas  (except  that  Landlord  shall not have any right  under  this
provision  materially  to  reduce  the  size  of the  Premises  or  permanently,
materially and adversely to affect  Tenant's  access to the Premises and ability
to use the  Premises  for the  purposes  intended  and  contemplated  under this
Lease); and

               (e) If any governmental  authority promulgates or revises any Law
or imposes  mandatory or  voluntary  controls or  guidelines  on Landlord or the
Property  relating  to the use or  conservation  of energy or  utilities  or the
reduction of automobile or other emissions or reduction or management of traffic
or  parking  on the  Property  (collectively  "Controls"),  to comply  with such
Controls,  whether  mandatory  or  voluntary,  or make  any  alterations  to the
Property related thereto.

8.       TENANT'S TAXES. "Tenant's Taxes" shall mean (a) all taxes, assessments,
license fees and other  governmental  charges or impositions  levied or assessed
against or with respect to Tenant's  personal  property or Trade Fixtures in the
Premises,  whether any such  imposition  is levied  directly  against  Tenant or
levied  against  Landlord  or the  Property,  (b) all rental,  excise,  sales or
transaction privilege taxes arising out of this Lease (excluding, however, state
and  federal  personal  or  corporate  income  taxes  measured  by the income of
Landlord from all sources) imposed by any taxing authority upon Landlord or upon
Landlord's  receipt of any rent payable by Tenant  pursuant to the terms of this
Lease ("Rental Tax"), and (c) any increase in Taxes attributable to inclusion of
a value placed on Tenant's  personal  property,  Trade Fixtures or  Alterations.
Tenant  shall pay any Rental Tax to Landlord in addition to and at the same time
as Base Rent is payable under this Lease, and shall pay all other Tenant's Taxes
before  delinquency  (and,  at  Landlord's   request,   shall  furnish  Landlord
satisfactory  evidence thereof).  If Landlord pays Tenant's Taxes or any portion
thereof  Tenant  shall  reimburse  Landlord  upon  demand for the amount of such
payment, together with interest at the Interest Rate from the date of Landlord's
payment to the date of Tenant's reimbursement.

9.       UTILITIES AND SERVICES.

         9.1  Description  of Services.  Landlord shall furnish to the Premises:
reasonable amounts of heat, ventilation and air-conditioning during the Business
Hours specified in the Basic Lease  Information  ("Business  Hours") on weekdays
except public holidays ("Business Days"); reasonable amounts of electricity; and
janitorial  services five days a week (except public  holidays).  Landlord shall
also provide the  Building  with normal  fluorescent  tube  replacement,

                                      -12-
<PAGE>

window  washing,  elevator  service,  and common area toilet room supplies.  Any
additional  utilities or services that Landlord may agree to provide  (including
lamp or tube  replacement for other than Building  Standard  lighting  fixtures)
shall be at Tenant's sole expense.

        9.2   Payment for Additional Utilities and Services.

               (a) Upon  request  by Tenant in  accordance  with the  procedures
established by Landlord from time to time for  furnishing  HVAC service at times
other than Business Hours on Business Days,  Landlord shall furnish such service
to Tenant and Tenant shall pay for such  services on an hourly basis of the then
prevailing rate established for the Building by Landlord.

               (b) If the temperature otherwise maintained in any portion of the
Premises by the HVAC  systems of the Building is affected as a result of (i) any
lights,  machines  or  equipment  used by  Tenant in the  Premises,  or (ii) the
occupancy  of the  Premises  by more  than one  person  per 150  square  feet of
rentable  area,  then Landlord  shall have the right to install any machinery or
equipment   reasonably   necessary   to  restore  the   temperature,   including
modifications to the standard  air-conditioning  equipment. The cost of any such
equipment  and  modifications,  including  the  cost  of  installation  and  any
additional  cost of  operation  and  maintenance  of the same,  shall be paid by
Tenant to Landlord upon demand.

               (c) If Tenant's usage of electricity,  water or any other utility
service  exceeds  the use of such  utility  Landlord  determines  to be typical,
normal and customary for the Building, Landlord may determine the amount of such
excess use by any reasonable  means  (including the  installation  at Landlord's
request but at Tenant's  expense of a separate meter or other measuring  device)
and charge Tenant for the cost of such excess usage.  In addition,  Landlord may
impose a reasonable  charge for the use of any additional or unusual  janitorial
services  required  by Tenant  because of any  unusual  Tenant  Improvements  or
Alterations,  the  carelessness  of Tenant or the  nature of  Tenant's  business
(including hours of operation).

         9.3  Interruption  of Services.  In the event of an  interruption in or
failure or  inability  to provide any  services or  utilities to the Premises or
Building for any reason (a "Service  Failure"),  such Service Failure shall not,
regardless  of its  duration,  impose upon  Landlord any  liability  whatsoever,
constitute an eviction of Tenant,  constructive or otherwise,  entitle Tenant to
an abatement of rent or to terminate this Lease or otherwise release Tenant from
any of Tenant's  obligations under this Lease, except only as otherwise provided
in this Section 9.3.

               (a) If any Service Failure caused by Landlord's  gross negligence
or willful misconduct and not caused by Tenant or its  Representatives  prevents
Tenant from  reasonably  using a material  portion of the Premises and Tenant in
fact ceases to use such portion of the Premises,  Tenant shall be entitled to an
abatement  of Base Rent and  Additional  Rent with respect to the portion of the
Premises that Tenant is prevented  from using by reason of such Service  Failure
if the Service  Failure is not remedied  within five (5) Business Days following
Landlord's receipt of notice of the occurrence of the Service Failure,  and such
failure has persisted and  continuously  prevented  Tenant from using a material
portion of the Premises during that period, in which event the abatement of rent
shall commence on the sixth Business Day following  Landlord's receipt of notice
of the Service  Failure and continue until Tenant is no longer so prevented from
using such portion of the Premises.

                                      -13-
<PAGE>

               (b)  If  a   Service   Failure   is   caused  by  Tenant  or  its
Representatives,  Landlord shall nonetheless remedy the Service Failure,  at the
expense of Tenant,  pursuant to Landlord's  maintenance  and repair  obligations
under Section 7 - "Maintenance and Repair" or Section 12.1 - "Landlord's Duty to
Repair," as the case may be, but Tenant shall not be entitled to an abatement of
rent or to terminate this Lease as a result of any such Service Failure.

               (c) Notwithstanding  Tenant's entitlement to rent abatement under
the  preceding  provisions,  Tenant shall  continue to pay Tenant's then current
rent until  such time as  Landlord  and  Tenant  agree on the amount of the rent
abatement.  If  Landlord  and  Tenant  are unable to agree on the amount of such
abatement  within ten (10) Business Days of the date they commence  negotiations
regarding  the  abatement,  then  either  party may submit the matter to binding
arbitration  pursuant to Sections 1280 et seq. of the  California  Code of Civil
Procedure.

               (d) In  addition  to the  foregoing  provisions,  if  there  is a
Service Failure caused by Landlord's gross negligence or willful  misconduct and
not caused by Tenant or its  Representatives  and such Service Failure  prevents
Tenant from  reasonably  using a material  portion of the Premises and Tenant in
fact  ceases to use such  portion of the  Premises,  and (i)  Landlord  fails to
commence  reasonable  efforts to remedy the Service  Failure  within ninety (90)
days  following  Landlord's  receipt of notice of the  occurrence of the Service
Failure,  or (ii) the Service  Failure in all events is not remedied  within one
(1) year following Landlord's receipt of notice of the occurrence of the Service
Failure its occurrence and such failure has persisted and continuously prevented
Tenant from using a material  portion of the Premises  during that  period,  and
Tenant  in  fact  does  not  conduct  any   business  in  the  Premises  for  an
uninterrupted  period of one (1) year or more,  Tenant  shall  have the right to
terminate  this Lease by written  notice  delivered to Landlord  within ten (10)
Business Days following the event  described in clauses (i) or (ii) above giving
rise to the right to terminate.

               (e) Where the cause of a Service Failure is within the control of
a public  utility or other  public or  quasi-public  entity  outside  Landlord's
control,  notification  to such  utility or entity of the  Service  Failure  and
request to remedy the failure shall constitute  "reasonable efforts" by Landlord
to remedy the Service Failure.

               (f) Tenant hereby waives any benefits of any applicable  existing
or future  Law,  including  the  provisions  of  California  Civil Code  Section
1932(1),  permitting  the  termination  of this Lease due to such  interruption,
failure or inability.

10.      EXCULPATION AND INDEMNIFICATION.

         10.1 Landlord's  Indemnification  of Tenant.  Landlord shall indemnify,
protect,  defend and hold Tenant harmless from and against any claims,  actions,
liabilities,  damages,  costs or expenses,  including reasonable attorneys' fees
and costs  incurred in  defending  against the same  ("Claims")  asserted by any
third party against Tenant for loss,  injury or damage, to the extent such loss,
injury  or  damage is caused by the  willful  misconduct  or  negligent  acts or
omissions of Landlord or its authorized representatives.

         10.2  Tenant's  Indemnification  of Landlord.  Tenant shall  indemnify,
protect,  defend and hold  Landlord and  Landlord's  authorized  representatives
harmless  from and against  Claims

                                      -14-
<PAGE>

arising from (a) the acts or omissions of Tenant or Tenant's  Representatives or
Visitors  in or about  the  Property,  or (b) any  construction  or  other  work
undertaken by Tenant on the Premises (including any design defects),  or (c) any
breach or default under this Lease by Tenant, or (d) any loss, injury or damage,
howsoever and by whomsoever  caused, to any person or property,  occurring in or
about the  Premises  during the Term,  excepting  only Claims  described in this
clause (d) to the extent they are caused by the willful  misconduct or negligent
acts or omissions of Landlord or its authorized representatives.

         10.3  Damage to Tenant and  Tenant's  Property.  Landlord  shall not be
liable to Tenant for any loss,  injury or other  damage to Tenant or to Tenant's
property in or about the  Premises  or the  Property  from any cause  (including
defects in the Property or in any equipment in the Property;  fire, explosion or
other casualty;  bursting, rupture, leakage or overflow of any plumbing or other
pipes or lines, sprinklers,  tanks, drains, drinking fountains or washstands in,
above,  or about the Premises or the  Property;  or acts of other tenants in the
Property),  and Tenant  hereby waives all claims  against  Landlord for any such
loss,  injury or damage and the cost and  expense of  defending  against  claims
relating  thereto,  including  any loss,  injury or damage  caused by Landlord's
negligence  (active or passive) or willful  misconduct,  except only (subject to
the mutual waiver of rights of recovery and  subrogation  as provided in Section
11.3) for damage to tangible  personal property and bodily injury, to the extent
(but only to the extent) that the damage or injury is both (x) determined by the
final  judgment of a court of competent  jurisdiction  to have been  proximately
caused by Landlord's fraud,  willful injury to person or property,  violation of
law,  or  negligence  and not caused or  contributed  to by act or  omission  of
Tenant, and (y) not covered by any insurance carried by Tenant (and would not be
covered by any  insurance  required  to be carried  by Tenant  pursuant  to this
Lease). Notwithstanding any other provision of this Lease to the contrary, in no
event  shall  Landlord  be liable to Tenant for any  punitive  or  consequential
damages or damages for loss of business by Tenant.

         10.4  Survival.  The  obligations  of the parties under this Section 10
shall survive the expiration or termination of this Lease.

11.      INSURANCE.

         11.1 Tenant's Insurance.

               (a)  Liability  Insurance.  Tenant  shall  maintain in full force
throughout the Term,  commercial general liability  insurance providing coverage
on an  occurrence  form basis with limits of not less than Two  Million  Dollars
($2,000,000.00)  each occurrence for bodily injury and property damage combined,
Two Million Dollars  ($2,000,000.00)  annual general aggregate,  and Two Million
Dollars  ($2,000,000.00)  products and completed  operations  annual  aggregate.
Tenant's liability  insurance policy or policies shall: (i) include premises and
operations  liability  coverage,  products and  completed  operations  liability
coverage,  broad form property damage coverage including  completed  operations,
blanket  contractual  liability  coverage  including,   to  the  maximum  extent
possible,  coverage  for the  indemnification  obligations  of Tenant under this
Lease,  and  personal and  advertising  injury  coverage;  (ii) provide that the
insurance  company has the duty to defend all insureds  under the policy;  (iii)
provide that defense costs are paid in addition to and do not deplete any of the
policy limits;  (iv) cover liabilities  arising out of or incurred in connection
with  Tenant's  use or occupancy  of the  Premises or the

                                      -15-
<PAGE>

Property;  (v) extend  coverage to cover  liability  for the actions of Tenant's
Representatives  and  Visitors;  and  (vi)  designate  separate  limits  for the
Property. Each policy of liability insurance required by this Section shall: (1)
contain a cross  liability  endorsement  or separation of insureds  clause;  (2)
provide that any waiver of  subrogation  rights or release  prior to a loss does
not void coverage;  (3) provide that it is primary to and not contributing with,
any policy of insurance  carried by Landlord covering the same loss; (4) provide
that any failure to comply with the  reporting  provisions  by Tenant  shall not
affect  coverage  provided to  Landlord,  its  partners,  property  managers and
Mortgagees; and (5) name Landlord, its partners, the Property Manager identified
in the Basic Lease Information (the "Property Manager"),  and such other parties
in interest as Landlord may from time to time reasonably  designate to Tenant in
writing, as additional  insureds.  Such additional insureds shall be provided at
least the same extent of coverage as is provided to Tenant  under such  policies
with respect to liability  arising out of the  ownership,  maintenance or use of
the Premises. All endorsements effecting such additional insured status shall be
at least as broad as additional  insured  endorsement form number CG 20 11 11 85
or CG 20 11 11 01 96 promulgated by the Insurance Services Office.

               (b) Property  Insurance.  Tenant  shall at all times  maintain in
effect with respect to any  Alterations and Tenant's Trade Fixtures and personal
property,  commercial property insurance providing coverage, on an "all risk" or
"special form" basis, in an amount equal to at least 90% of the full replacement
cost of the covered  property.  Tenant may carry such insurance  under a blanket
policy,  provided that such policy  provides  coverage  equivalent to a separate
policy.  During the Term, the proceeds from any such policies of insurance shall
be used for the repair or  replacement  of the  Alterations,  Trade Fixtures and
personal  property so insured.  Landlord  shall be provided  coverage under such
insurance to the extent of its insurable interest and, if requested by Landlord,
both Landlord and Tenant shall sign all documents reasonably necessary or proper
in connection  with the  settlement  of any claim or loss under such  insurance.
Landlord  will have no obligation to carry  insurance on any  Alterations  or on
Tenant's Trade Fixtures or personal property.

               (c)  Requirements  For All  Policies.  Each  policy of  insurance
required  under this  Section  11.1 shall:  (i) be in a form,  and written by an
insurer,  reasonably acceptable to Landlord, (ii) be maintained at Tenant's sole
cost and expense, and (iii) require at least thirty (30) days' written notice to
Landlord  prior to any  cancellation,  nonrenewal or  modification  of insurance
coverage.   Insurance   companies   issuing  such  policies  shall  have  rating
classifications of "A" or better and financial size category ratings of "VII" or
better  according to the latest  edition of the A.M. Best Key Rating Guide.  All
insurance companies issuing such policies shall be admitted carriers licensed to
do business in the state where the Property is located.  Any  deductible  amount
under such insurance shall not exceed $5,000.  Tenant shall provide to Landlord,
upon  request,  evidence  that the  insurance  required  to be carried by Tenant
pursuant to this Section,  including any  endorsement  effecting the  additional
insured status, is in full force and effect and that premiums therefor have been
paid.

               (d)  Updating  Coverage.  Tenant  shall  increase  the amounts of
insurance as required by any Mortgagee, and, not more frequently than once every
three (3) years,  as  recommended  by Landlord's  insurance  broker,  if, in the
opinion of either of them,  the amount of  insurance  then  required  under this
Lease is not adequate.  Any limits set forth in this Lease on the

                                      -16-
<PAGE>

amount or type of coverage  required by Tenant's  insurance  shall not limit the
liability of Tenant under this Lease.

               (e) Certificates of Insurance. Prior to occupancy of the Premises
by Tenant,  and not less than thirty (30) days prior to expiration of any policy
thereafter,  Tenant  shall  furnish  to  Landlord  a  certificate  of  insurance
reflecting that the insurance required by this Section is in force,  accompanied
by an  endorsement  showing the required  additional  insureds  satisfactory  to
Landlord  in  substance  and  form.  Notwithstanding  the  requirements  of this
paragraph,  Tenant shall at Landlord's  request  provide to Landlord a certified
copy of each  insurance  policy  required to be in force at any time pursuant to
the requirements of this Lease or its Exhibits.

         11.2  Landlord's  Insurance.  During  the  Term,  to  the  extent  such
coverages  are  available at a  commercially  reasonable  cost,  Landlord  shall
maintain in effect  insurance on the Building with responsible  insurers,  on an
"all  risk" or  "special  form"  basis,  insuring  the  Building  and the Tenant
Improvements in an amount equal to at least 90% of the replacement cost thereof,
excluding land, foundations,  footings and underground  installations.  Landlord
may, but shall not be obligated to, carry insurance  against  additional  perils
and/or in greater amounts.

         11.3  Mutual  Waiver  of Right of  Recovery  & Waiver  of  Subrogation.
Landlord and Tenant each hereby  waive any right of recovery  against each other
and the  partners,  managers,  members,  shareholders,  officers,  directors and
authorized  representatives of each other for any loss or damage that is covered
by any policy of property  insurance  maintained by either party (or required by
this Lease to be maintained) with respect to the Premises or the Property or any
operation therein, regardless of cause, including negligence (active or passive)
of the  party  benefiting  from the  waiver.  If any such  policy  of  insurance
relating to this Lease or to the  Premises or the  Property  does not permit the
foregoing  waiver or if the coverage  under any such policy would be invalidated
as a result of such waiver,  the party maintaining such policy shall obtain from
the  insurer  under  such  policy a waiver  of all right of  recovery  by way of
subrogation  against either party in connection  with any claim,  loss or damage
covered by such policy.

12.      DAMAGE OR DESTRUCTION.

         12.1 Landlord's Duty to Repair.

               (a) If all or a  substantial  part of the  Premises  are rendered
untenantable  or  inaccessible by damage to all or any part of the Property from
fire or other  casualty  then,  unless either party is entitled to and elects to
terminate this Lease  pursuant to Sections 12.2 - Landlord's  Right to Terminate
and 12.3 - Tenant's  Right to Terminate,  Landlord  shall,  at its expense,  use
reasonable  efforts to repair and restore the Premises  and/or the Property,  as
the case may be, to substantially their former condition to the extent permitted
by then applicable Laws; provided, however, that in no event shall Landlord have
any obligation for repair or restoration beyond the extent of insurance proceeds
received by  Landlord  for such  repair or  restoration,  or for any of Tenant's
personal property, Trade Fixtures or Alterations.

               (b) If Landlord  is  required  or elects to repair  damage to the
Premises and/or the Property,  this Lease shall continue in effect, but Tenant's
Base Rent and Additional  Rent shall be abated with regard to any portion of the
Premises  that  Tenant is  prevented  from using by

                                      -17-
<PAGE>

reason  of such  damage  or its  repair  from  the  date of the  casualty  until
substantial  completion  of  Landlord's  repair of the  affected  portion of the
Premises as required  under this Lease.  In no event shall Landlord be liable to
Tenant by reason of any injury to or  interference  with  Tenant's  business  or
property  arising from fire or other casualty or by reason of any repairs to any
part of the Property necessitated by such casualty.

         12.2  Landlord's  Right to  Terminate.  Landlord may elect to terminate
this  Lease  following  damage by fire or other  casualty  under  the  following
circumstances:

               (a) If, in the reasonable judgment of Landlord,  the Premises and
the Property cannot be substantially repaired and restored under applicable Laws
within one (1) year from the date of the casualty;

               (b) If, in the reasonable judgment of Landlord, adequate proceeds
are not, for any reason,  made available to Landlord from  Landlord's  insurance
policies  (and/or from  Landlord's  funds made  available for such  purpose,  at
Landlord's sole option) to make the required repairs;

               (c) If the  Building is damaged or  destroyed to the extent that,
in the  reasonable  judgment  of  Landlord,  the cost to repair and  restore the
Building would exceed twenty-five  percent (25%) of the full replacement cost of
the Building, whether or not the Premises are at all damaged or destroyed; or

               (d) If the fire or other casualty  occurs during the last year of
the Term.

If any of the circumstances  described in subparagraphs  (a), (b), (e) or (d) of
this Section 12.2 occur or arise,  Landlord  shall give Tenant notice within one
hundred and twenty (120) days after the date of the casualty, specifying whether
Landlord  elects  to  terminate  this  Lease  as  provided  above  and,  if not,
Landlord's   estimate  of  the  time  required  to  complete  Landlord's  repair
obligations under this Lease.

         12.3 Tenant's Right to Terminate.  If all or a substantial  part of the
Premises are rendered  untenantable or inaccessible by damage to all or any part
of the Property  from fire or other  casualty,  and  Landlord  does not elect to
terminate as provided  above,  then Tenant may elect to terminate  this Lease if
Landlord's   estimate  of  the  time  required  to  complete  Landlord's  repair
obligations under this Lease is greater than one (1) year, in which event Tenant
may elect to terminate this Lease by giving  Landlord notice of such election to
terminate within thirty (30) days after Landlord's  notice to Tenant pursuant to
Section 12.2 - Landlord's Right to Terminate.

         12.4 Waiver.  Landlord and Tenant each hereby waive the  provisions  of
California  Civil  Code  Sections  1932(2),  1933(4)  and any  other  applicable
existing or future Law  permitting the  termination of a lease  agreement in the
event of damage or destruction under any circumstances other than as provided in
Sections  12.2 -  Landlord's  Right to  Terminate  and 12.3 - Tenant's  Right to
Terminate.

                                      -18-
<PAGE>

13.      CONDEMNATION.

         13.1 Definitions.

               (a) "Award"  shall mean all  compensation,  sums,  or anything of
value awarded, paid or received on a total or partial Condemnation.

               (b)  "Condemnation"  shall  mean  (i) a  permanent  taking  (or a
temporary  taking for a period extending beyond the end of the Term) pursuant to
the  exercise of the power of  condemnation  or eminent  domain by any public or
quasi-public  authority,  private  corporation  or individual  having such power
("Condemnor"),  whether by legal  proceedings or otherwise,  or (ii) a voluntary
sale or  transfer  by Landlord to any such  authority,  either  under  threat of
condemnation or while legal proceedings for condemnation are pending.

               (c) "Date of  Condemnation"  shall  mean the  earlier of the date
that  title to the  property  taken is vested in the  Condemnor  or the date the
Condemnor has the right to possession of the property being condemned.

         13.2 Effect on Lease.

               (a) If the Premises are totally taken by Condemnation, this Lease
shall terminate as of the Date of Condemnation.  If a portion but not all of the
Premises is taken by Condemnation,  this Lease shall remain in effect; provided,
however,  that if the portion of the Premises  remaining after the  Condemnation
will be  unsuitable  for Tenant's  continued  use,  then upon notice to Landlord
within  thirty (30) days after  Landlord  notifies  Tenant of the  Condemnation,
Tenant may terminate this Lease effective as of the Date of Condemnation.

               (b) If twenty-five percent (25%) or more of the Project or of the
parcel(s) of land on which the  Building is situated or of the Parking  Facility
or of the floor area in the Building is taken by Condemnation, or if as a result
of any Condemnation the Building is no longer reasonably  suitable for use as an
office building,  whether or not any portion of the Premises is taken,  Landlord
may elect to terminate this Lease, effective as of the Date of Condemnation,  by
notice to Tenant within thirty (30) days after the Date of Condemnation.

               (c) If all or a portion of the Premises is temporarily taken by a
Condemnor  for a period not  extending  beyond  the end of the Term,  this Lease
shall remain in full force and effect.

         13.3  Restoration.  If this  Lease is not  terminated  as  provided  in
Section  13.2 - Effect on Lease,  Landlord,  at its  expense,  shall  diligently
proceed to repair and restore the Premises to substantially its former condition
(to the extent  permitted by then applicable Laws) and/or repair and restore the
Building to an architecturally complete office building; provided, however, that
Landlord's  obligations  to so repair and restore shall be limited to the amount
of any Award  received by Landlord and not required to be paid to any  Mortgagee
(as  defined  in  Section  20.2  below).  In no event  shall  Landlord  have any
obligation  to repair or replace any  improvements  in the  Premises  beyond the
amount of any Award received by Landlord for such repair or to repair or replace
any of Tenant's personal property, Trade Fixtures, or Alterations.

                                      -19-
<PAGE>

         13.4 Abatement and Reduction of Rent. If any portion of the Premises is
taken in a  Condemnation  or is  rendered  permanently  untenantable  by repairs
necessitated by the  Condemnation,  and this Lease is not  terminated,  the Base
Rent and  Additional  Rent  payable  under  this Lease  shall be  proportionally
reduced as of the Date of  Condemnation  based upon the  percentage  of rentable
square feet in the Premises so taken or rendered  permanently  untenantable.  In
addition,  if this Lease remains in effect following a Condemnation and Landlord
proceeds to repair and restore the Premises,  the Base Rent and Additional  Rent
payable  under this Lease  shall be abated  during the period of such  repair or
restoration to the extent such repairs prevent Tenant's use of the Premises.

         13.5  Awards.  Any Award  made  shall be paid to  Landlord,  and Tenant
hereby  assigns to  Landlord,  and waives all  interest in or claim to, any such
Award,  including  any  claim  for the value of the  unexpired  Term;  provided,
however,  that Tenant  shall be entitled to receive,  or to prosecute a separate
claim for, an Award for a temporary  taking of the Premises or a portion thereof
by a  Condemnor  where this Lease is not  terminated  (to the extent  such Award
relates  to the  unexpired  Term),  or an Award or  portion  thereof  separately
designated for relocation  expenses or the interruption of or damage to Tenant's
business or as compensation for Tenant's  personal  property,  Trade Fixtures or
Alterations.

         13.6 Waiver.  Landlord and Tenant each hereby waive the  provisions  of
California Code of Civil  Procedure  Section  1265.130 and any other  applicable
existing or future Law allowing  either party to petition for a  termination  of
this Lease upon a partial taking of the Premises and/or the Property.

14.      ASSIGNMENT AND SUBLETTING.

         14.1 Landlord's Consent Required. Tenant shall not assign this Lease or
any interest therein, or sublet or license or permit the use or occupancy of the
Premises or any part  thereof by or for the benefit of anyone other than Tenant,
or in any other manner transfer all or any part of Tenant's  interest under this
Lease  (each  and all a  "Transfer"),  without  the  prior  written  consent  of
Landlord,  which  consent  (subject to the other  provisions of this Section 14)
shall not be unreasonably  withheld.  If Tenant is a business entity, any direct
or indirect transfer of fifty percent (50%) or more of the ownership interest of
the entity  (whether in a single  transaction  or in the aggregate  through more
than one transaction) shall be deemed a Transfer.  Notwithstanding any provision
in this Lease to the contrary, Tenant shall not mortgage, pledge, hypothecate or
otherwise encumber this Lease or all or any part of Tenant's interest under this
Lease.

         14.2 Reasonable Consent.

               (a)  Prior to any  proposed  Transfer,  Tenant  shall  submit  in
writing to Landlord (i) the name and legal composition of the proposed assignee,
subtenant,  user or other  transferee (each a "Proposed  Transferee");  (ii) the
nature of the  business  proposed  to be  carried  on in the  Premises;  (iii) a
current balance sheet,  income  statements for the last two years and such other
reasonable financial and other information concerning the Proposed Transferee as
Landlord may request;  and (iv) a copy of the proposed  assignment,  sublease or
other agreement  governing the proposed  Transfer.  Within fifteen (15) Business
Days after Landlord receives all such

                                      -20-
<PAGE>

information  it shall  notify  Tenant  whether it approves or  disapproves  such
Transfer or if it elects to proceed  under  Section 14.7 -  Landlord's  Right to
Space.

               (b)  Tenant   acknowledges   and   agrees   that,   among   other
circumstances for which Landlord could reasonably withhold consent to a proposed
Transfer,  it shall be reasonable for Landlord to withhold consent where (i) the
Proposed  Transferee  does not intend itself to occupy the entire portion of the
Premises  assigned  or  sublet,  (ii)  Landlord  reasonably  disapproves  of the
Proposed  Transferee's  business  operating  ability or history,  reputation  or
creditworthiness  or  the  character  of the  business  to be  conducted  by the
Proposed  Transferee  at  the  Premises,  (iii)  the  Proposed  Transferee  is a
governmental  agency  or unit or an  existing  tenant in the  Project,  (iv) the
proposed  Transfer  would violate any  "exclusive"  rights of any tenants in the
Project, (v) Landlord or Landlord's agent has shown space in the Building to the
Proposed  Transferee or responded to any inquiries from the Proposed  Transferee
or the  Proposed  Transferee's  agent  concerning  availability  of space in the
Building,  at any time  within  the  preceding  nine  months,  or (vi)  Landlord
otherwise  determines  that the  proposed  Transfer  would  have the  effect  of
decreasing the value of the Building or increasing the expenses  associated with
operating,  maintaining  and  repairing  the  Property.  In no event may  Tenant
publicly offer or advertise all or any portion of the Premises for assignment or
sublease at a rental less than that then sought by Landlord  for a direct  lease
(nonsublease) of comparable space in the Project.

         14.3 Excess Consideration. If Landlord consents to the Transfer, Tenant
shall pay to Landlord as additional rent,  within ten (10) days after receipt by
Tenant,  any  consideration  paid by any transferee (the  "Transferee")  for the
Transfer, including, in the case of a sublease, the excess of the rent and other
consideration  payable  by the  subtenant  over  the  amount  of Base  Rent  and
Additional Rent payable hereunder applicable to the subleased space.

         14.4 No Release Of Tenant. No consent by Landlord to any Transfer shall
relieve  Tenant of any  obligation  to be  performed by Tenant under this Lease,
whether occurring before or after such consent, assignment,  subletting or other
Transfer. Each Transferee shall be jointly and severally liable with Tenant (and
Tenant  shall be jointly  and  severally  liable with each  Transferee)  for the
payment of rent (or, in the case of a sublease,  rent in the amount set forth in
the sublease) and for the  performance of all other terms and provisions of this
Lease.  The consent by Landlord to any Transfer  shall not relieve Tenant or any
such Transferee from the obligation to obtain  Landlord's  express prior written
consent to any subsequent  Transfer by Tenant or any Transferee.  The acceptance
of rent by  Landlord  from any other  person  (whether  or not such person is an
occupant of the Premises)  shall not be deemed to be a waiver by Landlord of any
provision of this Lease or to be a consent to any Transfer.

         14.5  Expenses  and  Attorneys'  Fees.  Tenant shall pay to Landlord on
demand all costs and expenses (including reasonable attorneys' fees) incurred by
Landlord in connection  with  reviewing or  consenting to any proposed  Transfer
(including  any request for  consent to, or any waiver of  Landlord's  rights in
connection  with,  any  security  interest  in any of  Tenant's  property at the
Premises).  Landlord shall not be entitled under this provision to reimbursement
from Tenant for expenses in excess of $500 per request

         14.6  Effectiveness  of  Transfer.  Prior  to the  date  on  which  any
permitted  Transfer  (whether  or  not  requiring  Landlord's  consent)  becomes
effective,  Tenant shall deliver to

                                      -21-
<PAGE>

Landlord a counterpart  of the fully executed  Transfer  document and Landlord's
standard form of Consent to Assignment or Consent to Sublease executed by Tenant
and the  Transferee  in which each of Tenant  and the  Transferee  confirms  its
obligations  pursuant  to this  Lease.  Failure or refusal  of a  Transferee  to
execute any such  instrument  shall not release or discharge the Transferee from
liability as provided herein.  The voluntary,  involuntary or other surrender of
this Lease by Tenant, or a mutual cancellation by Landlord and Tenant, shall not
work a merger,  and any such surrender or  cancellation  shall, at the option of
Landlord,  either  terminate  all or any  existing  subleases  or  operate as an
assignment to Landlord of any or all of such subleases.

         14.7  Landlord's  Right  to  Space.  Notwithstanding  any of the  above
provisions of this Section to the contrary,  if Tenant notifies Landlord that it
desires  to enter  into a  Transfer,  Landlord,  in lieu of  consenting  to such
Transfer, may elect (x) in the case of an assignment or a sublease of the entire
Premises, to terminate this Lease, or (y) in the case of a sublease of less than
the entire Premises, to terminate this Lease as it relates to the space proposed
to be  subleased by Tenant.  In such event,  this Lease will  terminate  (or the
space proposed to be subleased will be removed from the Premises subject to this
Lease  and  the  Base  Rent  and  Tenant's  Share  under  this  Lease  shall  be
proportionately  reduced) on the date the Transfer was proposed to be effective,
and  Landlord  may lease  such  space to any party,  including  the  prospective
Transferee identified by Tenant

         14.8  Assignment  of  Sublease  Rents.  Tenant  hereby  absolutely  and
irrevocably  assigns to  Landlord  any and all rights to receive  rent and other
consideration  from any  sublease  and agrees that  Landlord,  as assignee or as
attorney-in-fact  for  Tenant for  purposes  hereof,  or a  receiver  for Tenant
appointed on Landlord's  application may (but shall not be obligated to) collect
such  rents  and  other   consideration  and  apply  the  same  toward  Tenant's
obligations  to Landlord  under this Lease;  provided,  however,  that  Landlord
grants to Tenant at all times  prior to  occurrence  of any breach or default by
Tenant  a  revocable   license  to  collect  such  rents  (which  license  shall
automatically  and  without  notice be and be deemed  to have been  revoked  and
terminated immediately upon any Event of Default).

15.      DEFAULT AND REMEDIES.

         15.1 Events of Default.  The  occurrence of any of the following  shall
constitute an "Event of Default" by Tenant:

               (a) Tenant  fails to make any  payment  of rent when due,  or any
amount  required  to  replenish  the  security  deposit as provided in Section 4
above,  if payment is full is not  received  by Landlord  within  three (3) days
after written notice that it is due.

               (b) Tenant abandons the Premises.

               (c) Tenant  fails timely to deliver any  subordination  document,
estoppel  certificate or financial  statement  requested by Landlord  within the
applicable  time  period  specified  in Sections  20 -  Encumbrances  - and 21 -
Estoppel Certificates and Financial Statements - below.

               (d) Tenant  violates  the  restrictions  on Transfer set forth in
Section 14 - Assignment and Subletting.

                                      -22-
<PAGE>

               (e) Tenant  ceases doing  business as a going  concern;  makes an
assignment for the benefit of creditors;  is  adjudicated an insolvent,  files a
petition (or files an answer  admitting the material  allegations of a petition)
seeking relief under any state or federal  bankruptcy or other  statute,  law or
regulation  affecting  creditors'  rights;  all or substantially all of Tenant's
assets are subject to judicial seizure or attachment and are not released within
30 days, or Tenant  consents to or acquiesces in the  appointment  of a trustee,
receiver or liquidator for Tenant or for all or any substantial part of Tenant's
assets.

               (f) Tenant fails,  within ninety (90) days after the commencement
of any  proceedings  against  Tenant  seeking  relief under any state or federal
bankruptcy or other statute,  law or regulation  affecting creditors' rights, to
have such proceedings dismissed,  or Tenant fails, within ninety (90) days after
an  appointment,  without  Tenant's  consent or  acquiescence,  of any  trustee,
receiver or liquidator for Tenant or for all or any substantial part of Tenant's
assets, to have such appointment vacated.

               (g) Tenant fails to perform or comply with any  provision of this
Lease other than those  described  in (a) through (f) above,  and does not fully
cure such  failure  within  fifteen (15) days after notice to Tenant or, if such
failure cannot be cured within such fifteen (15)-day period, Tenant fails within
such fifteen  (15)-day  period to commence,  and thereafter  diligently  proceed
with, all actions necessary to cure such failure as soon as reasonably  possible
but in all events  within  ninety (90) days of such notice;  provided,  however,
that if Landlord in Landlord's  reasonable judgment determines that such failure
cannot or will not be cured by Tenant  within such  ninety (90) days,  then such
failure  shall  constitute an Event of Default  immediately  upon such notice to
Tenant.

         15.2  Remedies.  Upon the  occurrence of an Event of Default,  Landlord
shall have the  following  remedies,  which shall not be exclusive  but shall be
cumulative  and shall be in addition to any other  remedies  now or  hereinafter
allowed by law:

               (a) Landlord may  terminate  Tenant's  right to possession of the
Premises at any time by written notice to Tenant. Tenant expressly  acknowledges
that in the  absence  of such  written  notice  from  Landlord,  no other act of
Landlord,  including re-entry into the Premises,  efforts to relet the Premises,
reletting of the Premises for  Tenant's  account,  storage of Tenant's  personal
property and Trade  Fixtures,  acceptance of keys to the Premises from Tenant or
exercise of any other rights and remedies under this Section,  shall  constitute
an acceptance of Tenant's  surrender of the Premises or constitute a termination
of this Lease or of Tenant's  right to  possession  of the  Premises.  Upon such
termination  in writing of Tenant's  right to  possession  of the  Premises,  as
herein  provided,  this Lease shall  terminate and Landlord shall be entitled to
recover damages from Tenant as provided in California  Civil Code Section 1951.2
and any other  applicable  existing  or future Law  providing  for  recovery  of
damages for such breach,  including the worth at the time of award of the amount
by which the rent which would be payable by Tenant  hereunder  for the remainder
of the Term after the date of the award of damages, including Additional Rent as
reasonably  estimated  by  Landlord,  exceeds  the amount of such rental loss as
Tenant  proves could have been  reasonably  avoided,  discounted at the discount
rate published by the Federal  Reserve Bank of San Francisco for member banks at
the time of the award plus one percent (1%).

                                      -23-
<PAGE>

               (b) Landlord shall have 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 Tenant has the
right to sublet or assign, subject only to reasonable limitations).

               (c) Landlord  may cure the Event of Default at Tenant's  expense.
If  Landlord  pays any sum or incurs any expense in curing the Event of Default,
Tenant shall  reimburse  Landlord  upon demand for the amount of such payment or
expense with  interest at the Interest Rate from the date the sum is paid or the
expense is incurred until Landlord is reimbursed by Tenant.

               (d) Landlord may remove all Tenant's  property from the Premises,
and such  property may be stored by Landlord in a public  warehouse or elsewhere
at the sole cost and for the account of Tenant.  If  Landlord  does not elect to
store  any or all of  Tenant's  property  left  in the  Premises,  Landlord  may
consider  such  property to be abandoned by Tenant,  and Landlord may  thereupon
dispose of such  property in any manner  deemed  appropriate  by  Landlord.  Any
proceeds  realized  by Landlord on the  disposal of any such  property  shall be
applied first to offset all expenses of storage and sale, then credited  against
Tenant's  outstanding  obligations to Landlord under this Lease, and any balance
remaining after satisfaction of all obligations of Tenant under this Lease shall
be delivered to Tenant.

16.      LATE CHARGE AND INTEREST.

         16.1 Late  Charge.  If any payment of rent is not  received by Landlord
when due,  Tenant shall pay to Landlord on demand as a late charge an additional
amount equal to four percent  (4%) of the overdue  payment.  A late charge shall
not be imposed more than once on any particular  installment  not paid when due,
but  imposition  of a late  charge  on any  payment  not made  when due does not
eliminate or supersede late charges  imposed on other (prior)  payments not made
when due or  preclude  imposition  of a late  charge  on other  installments  or
payments not made when due.

         16.2 Interest. In addition to the late charges referred to above, which
are  intended to defray  Landlord's  costs  resulting  from late  payments,  any
payment  from Tenant to Landlord  not paid when due shall at  Landlord's  option
bear  interest from the date due until paid to Landlord by Tenant at the rate of
fifteen  percent  (15%) per annum or the maximum  lawful rate that  Landlord may
charge to Tenant under applicable laws, whichever is less (the "Interest Rate").
Acceptance of any late charge and/or  interest  shall not constitute a waiver of
Tenant's  default  with  respect to the  overdue  sum or prevent  Landlord  from
exercising any of its other rights and remedies under this Lease.

17.      WAIVER.  No provisions of this Lease shall be deemed waived by Landlord
unless such waiver is in a writing signed by Landlord. The waiver by Landlord of
any breach of any  provision  of this Lease shall not be deemed a waiver of such
provision or of any subsequent breach of the same or any other provision of this
Lease.  No delay or omission in the  exercise of any right or remedy of Landlord
upon any default by Tenant  shall impair such right or remedy or be construed as
a waiver.  Landlord's  acceptance  of any  payments of rent due under this Lease
shall  not be  deemed a  waiver  of any  default  by  Tenant  under  this  Lease
(including  Tenant's

                                      -24-
<PAGE>

recurrent  failure to timely pay rent)  other than  Tenant's  nonpayment  of the
accepted sums, and no endorsement or statement on any check or payment or in any
letter or document  accompanying  any check or payment shall be deemed an accord
and  satisfaction.  Landlord's  consent  to or  approval  of any  act by  Tenant
requiring  Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by Tenant.

18.      ENTRY,  INSPECTION AND CLOSURE.  Upon reasonable oral or written notice
to Tenant (and  without  notice in  emergencies),  Landlord  and its  authorized
representatives may enter the Premises at all reasonable times to: (a) determine
whether the Premises are in good  condition,  (b)  determine  whether  Tenant is
complying with its obligations  under this Lease, (c) perform any maintenance or
repair of the Premises or the Building that Landlord has the right or obligation
to perform, (d) install or repair improvements for other tenants where access to
the Premises is required for such  installation  or repair,  (e) serve,  post or
keep posted any notices  required or allowed under the provisions of this Lease,
(f) show the  Premises to  prospective  brokers,  agents,  buyers,  transferees,
Mortgagees or tenants, or (g) do any other act or thing necessary for the safety
or  preservation  of the Premises or the  Building.  When  reasonably  necessary
Landlord may temporarily close entrances,  doors, corridors,  elevators or other
facilities  in the  Building  without  liability  to  Tenant  by  reason of such
closure.  Landlord shall conduct its  activities  under this Section in a manner
that will minimize  inconvenience to Tenant without incurring additional expense
to  Landlord.  In no event shall  Tenant be entitled to an  abatement of rent on
account of any entry by Landlord, and Landlord shall not be liable in any manner
for any  inconvenience,  loss of  business  or other  damage  to Tenant or other
persons arising out of Landlord's  entry on the Premises in accordance with this
Section.  No action by Landlord  pursuant to this paragraph shall  constitute an
eviction of Tenant, constructive or otherwise, entitle Tenant to an abatement of
rent or to terminate this Lease or otherwise release Tenant from any of Tenant's
obligations under this Lease.

19.      SURRENDER AND HOLDING OVER.

         19.1  Surrender.  Upon the  expiration  or  termination  of this Lease,
Tenant shall surrender the Premises and all Tenant  Improvements and Alterations
to Landlord  broom-clean and in their original condition,  except for reasonable
wear and tear,  damage from casualty or condemnation  and any changes  resulting
from approved  Alterations;  provided,  however, that prior to the expiration or
termination  of this Lease Tenant shall remove all  telephone  and other cabling
installed  in the  Building by Tenant and remove from the  Premises all Tenant's
personal  property and any Trade Fixtures and all Alterations  that Landlord has
elected  to  require  Tenant to  remove  as  provided  in  Section  6.1 - Tenant
Improvements  &  Alterations,  and repair any damage caused by such removal.  If
such removal is not completed  before the expiration or termination of the Term,
Landlord shall have the right (but no obligation) to remove the same, and Tenant
shall pay  Landlord on demand for all costs of removal  and storage  thereof and
for the rental  value of the  Premises  for the period  from the end of the Term
through the end of the time reasonably required for such removal. Landlord shall
also have the right to retain or dispose of all or any portion of such  property
if Tenant does not pay all such costs and retrieve the property  within ten (10)
Business  Days after  notice  from  Landlord  (in which  event title to all such
property  described in  Landlord's  notice shall be  transferred  to and vest in
Landlord).  Tenant waives all Claims against  Landlord for any damage or loss to
Tenant resulting from Landlord's

                                      -25-
<PAGE>

removal,  storage,   retention,  or  disposition  of  any  such  property.  Upon
expiration or termination of this Lease or of Tenant's possession,  whichever is
earliest,  Tenant shall  surrender all keys to the Premises or any other part of
the  Building  and  shall  deliver  to  Landlord  all keys for or make  known to
Landlord the combination of locks on all safes,  cabinets and vaults that may be
located in the Premises.  Tenant's  obligations under this Section shall survive
the expiration or termination of this Lease.

         19.2 Holding  Over.  If Tenant  (directly or through any  Transferee or
other  successor-in-interest  of Tenant)  remains in  possession of the Premises
after the expiration or termination of this Lease, Tenant's continued possession
shall be on the basis of a tenancy  at the  sufferance  of  Landlord.  No act or
omission by Landlord,  other than its specific written consent, shall constitute
permission  for Tenant to continue in possession  of the  Premises,  and if such
consent is given or  declared to have been given by a court  judgment,  Landlord
may terminate  Tenant's holdover tenancy at any time upon seven (7) days written
notice.  In such event,  Tenant shall continue to comply with or perform all the
terms and  obligations of Tenant under this Lease,  except that the monthly Base
Rent during Tenant's  holding over shall be 175% of the Base Rent payable in the
last full month prior to the termination hereof.  Acceptance by Landlord of rent
after such  termination  shall not  constitute  a renewal or  extension  of this
Lease;  and  nothing  contained  in this  provision  shall  be  deemed  to waive
Landlord's  right of  re-entry or any other right  hereunder  or at law.  Tenant
shall indemnify,  defend and hold Landlord  harmless from and against all Claims
arising or resulting  directly or  indirectly  from  Tenant's  failure to timely
surrender the Premises,  including (i) any rent payable by or any loss, cost, or
damages claimed by any prospective  tenant of the Premises,  and (ii) Landlord's
damages as a result of such prospective  tenant  rescinding or refusing to enter
into the  prospective  lease of the Premises by reason of such failure to timely
surrender the Premises.

20.      ENCUMBRANCES.

         20.1   Subordination.   This  Lease  is  expressly   made  subject  and
subordinate to any mortgage,  deed of trust,  ground lease,  underlying lease or
like encumbrance  affecting any part of the Property or any interest of Landlord
therein which is now existing or hereafter executed or recorded ("Encumbrance");
provided, however, that such subordination shall only be effective, as to future
Encumbrances,  if the holder of the  Encumbrance  agrees  that this Lease  shall
survive the  termination  of the  Encumbrance  by lapse of time,  foreclosure or
otherwise  so long as Tenant is not in default  under this Lease.  Provided  the
conditions of the  preceding  sentence are  satisfied,  Tenant shall execute and
deliver to  Landlord,  within ten (10) days after  written  request  therefor by
Landlord  and  in a  form  reasonably  requested  by  Landlord,  any  additional
documents  evidencing the  subordination  of this Lease with respect to any such
Encumbrance  and  the  nondisturbance  agreement  of  the  holder  of  any  such
Encumbrance. If the interest of Landlord in the Property is transferred pursuant
to or in lieu of proceedings  for enforcement of any  Encumbrance,  Tenant shall
immediately  and  automatically  attorn to the new owner,  and this Lease  shall
continue in full force and effect as a direct lease between the  transferee  and
Tenant on the terms and conditions set forth in this Lease.

         20.2  Mortgagee  Protection.  Tenant  agrees to give any  holder of any
Encumbrance covering any part of the Property ("Mortgagee"), by registered mail,
a copy of any notice of default  served upon  Landlord,  provided  that prior to
such notice  Tenant has been notified in

                                      -26-
<PAGE>

writing (by way of notice of  assignment  of rents and leases,  or otherwise) of
the  address of such  Mortgagee.  If  Landlord  shall  have  failed to cure such
default  within  thirty  (30) days  from the  effective  date of such  notice of
default,  then the Mortgagee  shall have an  additional  thirty (30) days within
which to cure such default or if such default  cannot be cured within that time,
then such  additional  time as may be necessary to cure such default  (including
the time  necessary  to foreclose or otherwise  terminate  its  Encumbrance,  if
necessary to effect such cure),  and this Lease shall not be  terminated so long
as such remedies are being diligently pursued.

21.      ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS.

         21.1 Estoppel Certificates.  Within ten (10) days after written request
therefor, Tenant shall execute and deliver to Landlord, in a form provided by or
satisfactory to Landlord, a certificate stating that this Lease is in full force
and effect,  describing any amendments or  modifications  hereto,  acknowledging
that this Lease is subordinate or prior,  as the case may be, to any Encumbrance
and stating any other information Landlord may reasonably request, including the
Term, the monthly Base Rent, the date to which Rent has been paid, the amount of
any security deposit or prepaid rent,  whether either party hereto is in default
under  the  terms  of  the  Lease,   and  whether  Landlord  has  completed  its
construction  obligations  hereunder (if any). Tenant  irrevocably  constitutes,
appoints and authorizes Landlord as Tenant's special  attorney-in-fact  for such
purpose to complete, execute and deliver such certificate if Tenant fails timely
to execute and deliver such  certificate as provided above. Any person or entity
purchasing,  acquiring an interest in or extending financing with respect to the
Property shall be entitled to rely upon any such certificate. If Tenant fails to
deliver such certificate  within ten (10) days after  Landlord's  second written
request therefor, Tenant shall be liable to Landlord for any damages incurred by
Landlord  including  any profits or other  benefits  from any  financing  of the
Property or any interest therein which are lost or made unavailable as a result,
directly  or  indirectly,  of Tenant's  failure or refusal to timely  execute or
deliver such estoppel certificate.

         21.2 Financial  Statements.  Within ten (10) days after written request
therefor, but not more than once a year, Tenant shall deliver to Landlord a copy
of the financial  statements  (including at least a year end balance sheet and a
statement  of profit  and loss) of Tenant  (and of each  guarantor  of  Tenant's
obligations  under this  Lease) for each of the three  most  recently  completed
years,  prepared in accordance  with generally  accepted  accounting  principles
(and, if such is Tenant's normal practice,  audited by an independent  certified
public accountant),  all then available subsequent interim statements,  and such
other  financial  information  as may  reasonably  be  requested  by Landlord or
required by any Mortgagee.

22.      NOTICES. Any notice, demand,  request,  consent or approval that either
party  desires or is  required to give to the other party under this Lease shall
be in writing and shall be served personally,  delivered by messenger or courier
service,  or sent by U.S.  certified  mail,  return receipt  requested,  postage
prepaid,  addressed  to the other party at the  party's  address for notices set
forth in the Basic Lease  Information.  Any notice required pursuant to any Laws
may be incorporated  into, given  concurrently with or given separately from any
notice required under this Lease. Notices shall be deemed to have been given and
be  effective on the earlier of (a) receipt (or refusal of delivery or receipt);
or (b) one (1) day after acceptance by the independent service for delivery,  if
sent by  independent  messenger  or  courier  service,  or three (3) days  after
mailing if sent by mail in accordance with this Section. Either party may change
its

                                      -27-
<PAGE>

address for notices  hereunder,  effective fifteen (15) days after notice to the
other party complying with this Section. If Tenant sublets the Premises, notices
from Landlord shall be effective on the subtenant when given to Tenant  pursuant
to this Section.

23.      ATTORNEYS'  FEES.  In the event of any  dispute  between  Landlord  and
Tenant in any way related to this Lease, and whether  involving  contract and/or
tort claims,  the  non-prevailing  party shall pay to the  prevailing  party all
reasonable  attorneys'  fees  and  costs  and  expenses  of  any  type,  without
restriction  by statute,  court rule or  otherwise,  incurred by the  prevailing
party in connection with any action or proceeding  (including any appeal and the
enforcement  of any judgment or award),  whether or not the dispute is litigated
or prosecuted to final judgment  (collectively,  "Fees"). The "prevailing party"
shall be determined based upon an assessment of which party's major arguments or
positions  taken  in the  action  or  proceeding  could  fairly  be said to have
prevailed (whether by compromise,  settlement, abandonment by the other party of
its claim or defense, final decision,  after any appeals, or otherwise) over the
other party's major  arguments or positions on major disputed  issues.  Any Fees
incurred in enforcing a judgment shall be recoverable  separately from any other
amount  included  in the  judgment  and shall  survive  and not be merged in the
judgment. The Fees shall be deemed an "actual pecuniary loss" within the meaning
of Bankruptcy Code Section 365(b)(1)(B),  and notwithstanding the foregoing, all
Fees  incurred by either  party in any  bankruptcy  case filed by or against the
other party, from and after the order for relief until this Lease is rejected or
assumed in such  bankruptcy  case,  will be  "obligations of the debtor" as that
phrase is used in Bankruptcy Code Section 365(d)(3).

24.      QUIET  POSSESSION.  Subject to Tenant's full and timely  performance of
all of  Tenant's  obligations  under this Lease and subject to the terms of this
Lease,  including  Section  20 -  Encumbrances,  Tenant  shall  have  the  quiet
possession  of the  Premises  throughout  the Term as  against  any  persons  or
entities lawfully claiming by, through or under Landlord.

25.      SECURITY  MEASURES.  Landlord may, but shall be under no obligation to,
implement security measures for the Property, such as the registration or search
of all persons entering or leaving the Building,  requiring  identification  for
access to the Building,  evacuation of the Building for cause,  suspected cause,
or for drill purposes,  the issuance of magnetic pass cards or keys for Building
or  elevator   access  and  other  actions  that  Landlord  deems  necessary  or
appropriate  to prevent any threat of property loss or damage,  bodily injury or
business   interruption;   provided,   however,  that  such  measures  shall  be
implemented  in  a  way  as  not  to  inconvenience   tenants  of  the  Building
unreasonably.  If Landlord  uses an access  card  system,  Landlord  may require
Tenant to pay  Landlord a deposit  for each  after-hours  Building  access  card
issued to Tenant. Tenant shall be responsible for any loss, theft or breakage of
any such cards,  which must be returned by Tenant to Landlord upon expiration or
earlier  termination of the Lease.  Landlord may retain the deposit for any card
not so returned.  Landlord shall at all times have the right to change, alter or
reduce any such security services or measures. Tenant shall cooperate and comply
with,  and cause Tenant's  Representatives  and Visitors to cooperate and comply
with, such security measures.  Landlord,  its agents and employees shall have no
liability to Tenant or its Representatives or Visitors for the implementation or
exercise of, or the failure to implement or exercise, any such security measures
or for any resulting disturbance of Tenant's use or enjoyment of the Premises.

                                      -28-
<PAGE>

26.      FORCE  MAJEURE.  If Landlord is delayed,  interrupted or prevented from
performing any of its  obligations  under this Lease,  including its obligations
under  the  Construction  Rider  (if  any),  and  such  delay,  interruption  or
prevention is due to fire, act of God, governmental act or failure to act, labor
dispute, unavailability of materials or any cause outside the reasonable control
of  Landlord,  then the time for  performance  of the  affected  obligations  of
Landlord shall be extended for a period  equivalent to the period of such delay,
interruption or prevention.

27.      RULES AND  REGULATIONS.  Tenant shall be bound by and shall comply with
the rules and regulations attached to and made a part of this Lease as Exhibit C
to the extent those rules and  regulations are not in conflict with the terms of
this Lease, as well as any reasonable rules and regulations hereafter adopted by
Landlord  for all  tenants  of the  Building,  upon  notice  to  Tenant  thereof
(collectively,  the "Building  Rules").  Landlord  shall not be  responsible  to
Tenant or to any other person for any violation  of, or failure to observe,  the
Building Rules by any other tenant or other person.

28.      LANDLORD'S LIABILITY. The term "Landlord," as used in this Lease, shall
mean only the owner or owners of the  Building at the time in  question.  In the
event of any  conveyance of title to the Building,  then from and after the date
of such conveyance,  the transferor  Landlord shall be relieved of all liability
with respect to Landlord's  obligations  to be performed  under this Lease after
the date of such conveyance. Notwithstanding any other term or provision of this
Lease, the liability of Landlord for its obligations under this Lease is limited
solely to Landlord's  interest in the Building as the same may from time to time
be  encumbered,  and no  personal  liability  shall at any time be  asserted  or
enforceable  against any other assets of Landlord or against Landlord's partners
or  members  or  its  or  their  respective  partners,  shareholders,   members,
directors,  officers or managers on account of any of Landlord's  obligations or
actions under this Lease.

29.      CONSENTS AND APPROVALS.

         29.1  Determination  in Good Faith.  Wherever  the  consent,  approval,
judgment or determination of Landlord is required or permitted under this Lease,
Landlord  may  exercise  its  good  faith  business   judgment  in  granting  or
withholding such consent or approval or in making such judgment or determination
without  reference  to any  extrinsic  standard  of  reasonableness,  unless the
specific provision contained in this Lease providing for such consent, approval,
judgment or determination  specifies that Landlord's  consent or approval is not
to be unreasonably  withheld,  or that such judgment or  determination  is to be
reasonable,  or  otherwise  specifies  the  standards  under which  Landlord may
withhold its  consent.  If it is  determined  that  Landlord  failed to give its
consent  where  it was  required  to do so under  this  Lease,  Tenant  shall be
entitled to injunctive  relief but shall not to be entitled to monetary  damages
or to terminate this Lease for such failure.

         29.2 No Liability  Imposed on Landlord.  The review and/or  approval by
Landlord of any item or matter to be reviewed or approved by Landlord  under the
terms of this Lease or any  Exhibits  or Addenda  hereto  shall not impose  upon
Landlord  any  liability  for the  accuracy or  sufficiency  of any such item or
matter or the quality or suitability of such item for its intended use. Any such
review or approval is for the sole purpose of protecting  Landlord's interest in
the Property, and no third parties,  including Tenant or the Representatives and
Visitors of Tenant or

                                      -29-
<PAGE>

any person or entity claiming by, through or under Tenant, shall have any rights
as a consequence thereof.

30.      WAIVER  OF  RIGHT  TO JURY  TRIAL.  Landlord  and  Tenant  waive  their
respective rights to trial by jury of any contract or tort claim,  counterclaim,
cross-complaint,  or cause of  action  in any  action,  proceeding,  or  hearing
brought by either party against the other on any matter arising out of or in any
way  connected  with this Lease,  the  relationship  of Landlord and Tenant,  or
Tenant's  use or  occupancy of the  Premises,  including  any claim of injury or
damage or the  enforcement  of any  remedy  under  any  current  or future  law,
statute, regulation, code, or ordinance.

31.      BROKERS.  Landlord  shall pay the fee or  commission  of the  broker or
brokers  identified in the Basic Lease  Information (the "Broker") in accordance
with  Landlord's  separate  written  agreement with the Broker,  if any.  Tenant
warrants and  represents to Landlord that in the  negotiating  or making of this
Lease  neither  Tenant nor anyone  acting on Tenant's  behalf has dealt with any
broker or finder who might be  entitled  to a fee or  commission  for this Lease
other than the Broker.  Tenant shall  indemnify and hold Landlord  harmless from
any claim or claims,  including costs,  expenses and attorney's fees incurred by
Landlord  asserted by any other broker or finder for a fee or  commission  based
upon any dealings with or statements made by Tenant or Tenant's Representatives.

32.      RELOCATION OF PREMISES.  For the purpose of  maintaining  an economical
and proper  distribution  of  tenants  acceptable  to  Landlord  throughout  the
Project,  Landlord  shall  have the right  from time to time  during the Term to
relocate the Premises  within the  Project,  provided  that (a) the rentable and
usable area of the new Premises is of equivalent size to the existing  Premises,
subject to a variation of up to ten percent  (10%),  (b) Landlord  shall pay the
cost of  providing  tenant  improvements  in the new  Premises,  which  shall be
substantially  comparable in layout to those in the existing  Premises,  and (c)
Landlord shall pay  reasonable  costs (to the extent such costs are submitted in
writing to Landlord and  approved in writing by Landlord  prior to such move) of
moving  Tenant's  Trade  Fixtures  and  personal  property to the new  Premises.
Landlord  shall  deliver to Tenant  written  notice of  Landlord's  election  to
relocate  the  Premises,  specifying  the new  location  and the  amount of rent
payable  therefor,  at least sixty (60) days prior to the date the relocation is
to be effective.

33.      ENTIRE  AGREEMENT.  This Lease,  including the Exhibits and any Addenda
attached hereto,  and the documents  referred to herein, if any,  constitute the
entire  agreement  between  Landlord  and Tenant with  respect to the leasing of
space by Tenant in the  Building,  and  supersede  all prior or  contemporaneous
agreements,  understandings,  proposals and other  representations by or between
Landlord and Tenant,  whether  written or oral,  all of which are merged herein.
Neither  Landlord  nor  Landlord's  agents  have  made  any  representations  or
warranties with respect to the Premises, the Building, the Project or this Lease
except as expressly set forth herein, and no rights, easements or licenses shall
be acquired by Tenant by  implication  or otherwise  unless  expressly set forth
herein.  The  submission of this Lease for  examination  does not  constitute an
option for the  Premises  and this Lease  shall  become  effective  as a binding
agreement only upon execution and delivery thereof by Landlord to Tenant.

                                      -30-
<PAGE>

34.      MISCELLANEOUS.  This Lease may not be amended or  modified  except by a
writing  signed by Landlord and Tenant  Subject to Section 14 -  Assignment  and
Subletting and Section 28 - Landlord's Liability, this Lease shall be binding on
and shall inure to the benefit of the parties and their  respective  successors,
assigns and legal representatives.  The determination that any provisions hereof
may be void,  invalid,  illegal  or  unenforceable  shall not  impair  any other
provisions  hereof and all such other  provisions  of this Lease shall remain in
full force and effect.  The  unenforceability,  invalidity  or illegality of any
provision  of  this  Lease  under  particular  circumstances  shall  not  render
unenforceable,  invalid or illegal other  provisions of this Lease,  or the same
provisions  under  other  circumstances.  This  Lease  shall  be  construed  and
interpreted in accordance with the laws (excluding  conflict of laws principles)
of the State in which the  Building is  located.  The  provisions  of this Lease
shall be construed in accordance  with the fair meaning of the language used and
shall not be strictly construed against either party, even if such party drafted
the  provision  in  question.  When  required by the context of this Lease,  the
singular  includes  the plural.  Wherever the term  "including"  is used in this
Lease,  it shall be interpreted as meaning  "including,  but not limited to" the
matter or matters  thereafter  enumerated.  The captions contained in this Lease
are for  purposes of  convenience  only and are not to be used to  interpret  or
construe  this Lease.  If more than one person or entity is identified as Tenant
hereunder,  the  obligations  of each and all of them under this Lease  shall be
joint and several.  Time is of the essence with respect to this Lease, except as
to the  conditions  relating to the  delivery of  possession  of the Premises to
Tenant. Neither Landlord nor Tenant shall record this Lease.

35.      AUTHORITY. If Tenant is a corporation,  partnership,  limited liability
company or other form of business  entity,  each of the persons  executing  this
Lease on  behalf  of  Tenant  warrants  and  represents  that  Tenant  is a duly
organized and validly existing entity,  that Tenant has full right and authority
to enter  into this Lease and that the  persons  signing on behalf of Tenant are
authorized  to do so and have the  power to bind  Tenant to this  Lease.  Tenant
shall provide  Landlord upon request with evidence  reasonably  satisfactory  to
Landlord confirming the foregoing representations.

                                      -31-
<PAGE>

         WITNESS WHEREOF, Landlord and Tenant have entered into this Lease as of
the date first above written.

TENANT:                                LANDLORD:
AMERICOM USA, INC.                     PRUNEYARD ASSOCIATES, LLC,
a Delaware corporation                 a California limited liability company

By: /s/ Authorized Signatory           By: Cornerstone Holdings, LLC,
   -------------------------               a Delaware limited liability company,
       Name:    ______________             its Manager
       Title:   ______________

By:    /s/ David Loomis                By: /s/ Authorized Signatory
       -----------------------            --------------------------
       Name: David Loomis              Name:
       Title:  President               Title:  Authorized Signatory

                                      -32-Exhibit 4.1

      NEITHER THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.

No. 1                                                               $50,000.00

                                -------------
                      12% SECURED CONVERTIBLE DEBENTURE
                             DUE DECEMBER 1, 2000

      THIS DEBENTURE is issued by IVOICE.COM, INC., a Delaware corporation
having a principal place of business at 1230 Highway 34, Aberdeen, New Jersey
07747 (the "Company"), and is designated as the Company's 12% Secured
Convertible Debentures, due December 1, 2000 (the "Debentures").

      FOR VALUE RECEIVED, the Company promises to pay to AJW PARTNERS, LLC, or
its registered assigns (the "Holder"), the principal sum of Fifty Thousand and
no/100 ($50,000.00) Dollars, on December 1, 2000 or such earlier date as the
Debentures are required or permitted to be repaid as provided hereunder (the
"Maturity Date") and to pay interest to the Holder on such principal sum at the
rate of 12% per annum, payable on a quarterly basis on March 31, June 30,
September 30 and December 31 of each year while such Debentures are outstanding
(each an "Interest Payment Date") and on each Conversion Date (as defined
herein) for such principal amount, commencing on the earlier to occur of a
Conversion Date for such principal amount and January 1, 2000, in cash or shares
of Common Stock (as defined in Section 7). Subject to the terms and conditions
herein, the decision whether to pay interest hereunder in Common Stock or cash
shall be at the discretion of the Company. Interest shall accrue daily
commencing on the Original Issue Date (as defined in Section 7) until payment in
full of the principal sum, together with all accrued and unpaid interest and
other amounts which may become due hereunder, has been made. Any interest not
paid on any Interest Payment Date shall continue to accrue and shall be due and
payable upon conversion of the Debentures. Interest hereunder will be paid to
the Person (as defined in Section 7) in whose name this Debenture is registered
on the records of the Company regarding registration and transfers of Debentures
(the "Debenture Register"). All overdue accrued and unpaid interest shall entail
a late fee at the rate of 15% per annum (to accrue daily, from the date such
interest is due hereunder through and including the date of payment), payable in
cash. Not less than ten (10) Trading Days (as defined in Section 7) prior to
Interest Payment Date, the Company shall provide the Holder notice of its
intention to pay interest in cash or shares of Common Stock (the Company may
indicate in such notice that the election contained in such notice shall
continue for later periods until revised). If interest is paid in shares of
Common Stock, the number of shares of Common Stock issuable on account of such
interest shall equal the cash amount of such interest on such Interest Payment
Date divided by the Conversion Price (as defined below) on such date.
Notwithstanding anything to contrary set forth herein, for purposes of
determining the number of shares of Common Stock that are issuable as payment of
interest hereunder, the Conversion Price shall not be subject to any Floor to
which the Conversion Price would otherwise be subject.

      Notwithstanding anything to the contrary contained herein, the Company may
not issue shares of Common Stock in payment of interest on the principal amount
if:

            (i) the number of shares of Common Stock at the time authorized,
unissued and unreserved for all purposes, or held as treasury stock, is
insufficient to pay interest hereunder in shares of Common Stock;

<PAGE>

            (ii) after the Interest Effectiveness Date (as defined in Section 7)
such shares (x) are not registered for resale pursuant to an effective
Underlying Shares Regulation A Filing (as defined in Section 7) and (y) may not
be sold without volume restrictions pursuant to Rule 144(k) promulgated under
the Securities Act (as defined in Section 7), as determined by counsel to the
Company pursuant to a written opinion letter, addressed to the Company's
transfer agent in the form and substance acceptable to the applicable Holder and
such transfer agent (if the Company is permitted and elects to pay interest in
shares of Common Stock under this clause (ii) prior to the Interest
Effectiveness Date and thereafter an Underlying Shares Regulation A Filing shall
be declared effective by the Commission (as defined in Section 7), the Company
shall, within three (3) Trading Days after the date of such declaration of
effectiveness, exchange such shares for shares of Common Stock that are free of
restrictive legends of any kind)

            (iii) such shares are not listed or quoted on either the Nasdaq
National Market ("NASDAQ") or on the New York Stock Exchange, American Stock
Exchange or the Nasdaq SmallCap Market or OTC Bulletin Board (each, a
"Subsequent Market");

            (iv) the  Company  has  failed to timely  satisfy  its  conversion
obligations hereunder; or

            (v) the  issuance of such shares  would  result in a violation  of
Section 4(a)(ii)(A).

      This Debenture is subject to the following additional provisions:

            Section 1. This Debenture is exchangeable for an equal aggregate
principal amount of Debentures of different authorized denominations, as
requested by the Holder surrendering the same. No service charge will be made
for such registration of transfer or exchange.

            Section 2 Prior to due presentment to the Company for transfer of
this Debenture, the Company and any agent of the Company may treat the Person
(as defined in Section 7) in whose name this Debenture is duly registered on the
Debenture Register as the owner hereof for the purpose of receiving payment as
herein provided and for all other purposes, whether or not this Debenture is
overdue, and neither the Company nor any such agent shall be affected by notice
to the contrary.

            Section 3   Events of Default.

            (a) "Event of Default", wherever used herein, means any one of the
following events (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):

            (i) any default in the payment of the principal of, interest on or
      liquidated damages in respect of, this Debenture, free of any claim of
      subordination except in accordance with a subordination agreement executed
      by the Holder, as and when the same shall become due and payable (whether
      on the applicable Interest Payment Date, a Conversion Date or the Maturity
      Date or by acceleration or otherwise);

            (ii) the Company shall fail to observe or perform any other
      covenant, agreement or warranty contained in, or otherwise commit any
      breach of any of, this Debenture, the Purchase Agreement, the Registration
      Rights Agreement (as defined in Section 7) or the Security Agreements (as
      defined in Section 7), and such failure or breach shall not have been
      remedied within 30 days after the date on which notice of such failure or
      breach shall have been given;

            (iii) the Company or any of its subsidiaries shall commence, or
      there shall be commenced against the Company or any such subsidiary a case
      under any applicable bankruptcy or insolvency laws as now or hereafter in
      effect or any successor thereto, or the Company commences any other
      proceeding under any reorganization, arrangement, adjustment of debt,
      relief of debtors, dissolution, insolvency or liquidation or similar law
      of any jurisdiction whether now or hereafter in effect relating to the
      Company or any subsidiary thereof or there is commenced against the
      Company or any subsidiary thereof any such bankruptcy, insolvency

<PAGE>

      or other proceeding which remains undismissed for a period of 60 days; or
      the Company or any subsidiary thereof is adjudicated insolvent or
      bankrupt; or any order of relief or other order approving any such case or
      proceeding is entered; or the Company or any subsidiary thereof suffers
      any appointment of any custodian or the like for it or any substantial
      part of its property which continues undischarged or unstayed for a period
      of 60 days; or the Company or any subsidiary thereof makes a general
      assignment for the benefit of creditors; or the Company shall fail to pay,
      or shall state that it is unable to pay, or shall be unable to pay, its
      debts generally as they become due; or the Company or any subsidiary
      thereof shall call a meeting of its creditors with a view to arranging a
      composition, adjustment or restructuring of its debts; or the Company or
      any subsidiary thereof shall by any act or failure to act indicate its
      consent to, approval of or acquiescence in any of the foregoing; or any
      corporate or other action is taken by the Company or any subsidiary
      thereof for the purpose of effecting any of the foregoing;

            (iv) the Company shall default in any of its obligations under any
      mortgage, credit agreement or other facility, indenture agreement or other
      instrument under which there may be issued, or by which there may be
      secured or evidenced any indebtedness of the Company in an amount
      exceeding ten thousand dollars ($10,000), whether such indebtedness now
      exists or shall hereafter be created and such default shall result in such
      indebtedness becoming or being declared due and payable prior to the date
      on which it would otherwise become due and payable;

            (v) the Common Stock shall be delisted from either the NASDAQ or a
      Subsequent Market or shall be suspended from trading on the NASDAQ without
      resuming trading and/or being relisted thereon or on a Subsequent Market
      or having such suspension lifted, as the case may be, within two (2) days;

            (vi) the Company shall be a party to any Change of Control
      Transaction (as defined in Section 7), shall agree to sell or dispose all
      or in excess of 50% of its assets in one or more transactions (whether or
      not such sale would constitute a Change of Control Transaction), or shall
      redeem or repurchase more than a de minimis number of shares of Common
      Stock or other equity securities of the Company (other than redemptions of
      Underlying Shares (as defined in Section 7));

            (vii) an Underlying Shares Regulation A Filing shall not have been
      declared effective by the Commission on or prior to the 150th day after
      the date hereof (the "Effectiveness Date").

            (viii) if, during the Effectiveness Period, the effectiveness of the
      Underlying Shares Regulation A Filing lapses for any reason for more than
      an aggregate of five (5) Trading Days (which need not be consecutive
      days), or the Holder shall not be permitted to resell Registrable
      Securities under the Underlying Shares Regulation A Filing for more than
      an aggregate of five (5) Trading Days (which need not be consecutive
      days);

            (ix) an Event (as hereinafter defined) shall not have been cured to
      the satisfaction of the Holder prior to the expiration of thirty (30) days
      from the Event Date (as defined below) relating thereto (other than an
      Event resulting from a failure of an Underlying Shares Regulation A Filing
      to be declared effective by the Commission on or prior to the
      Effectiveness Date, which shall be covered by Section 3(a)(vii));

            (xi) the Company shall fail for any reason to deliver certificates
      to a Holder prior to the tenth (10th) day after a Conversion Date pursuant
      to Section 4(b) or the Company shall provide notice to the Holder,
      including by way of public announcement, at any time, of its intention not
      to comply with requests for conversions of any Debentures in accordance
      with the terms hereof;

            (xii) the Company shall fail for any reason to deliver the payment
      in cash pursuant to a Buy-In within seven (7) days after notice is deemed
      delivered hereunder;

<PAGE>

            (xiii) the Company shall issue any shares of Common Stock or Common
      Stock Equivalents (as defined herein) in connection with or to any present
      or future lender or creditor of the Company or any subsidiary thereof;

            (xiv) the Company shall agree to pay or settle any litigation or
      claim for an amount in stock or cash that exceeds by more than $25,000 the
      insurance coverage for such litigation or claim; or

            (xv) the Company shall restructure any material portion of its
      present or future debt obligations or payables.

            (b) If any Event of Default occurs and is continuing, the full
principal amount of this Debenture (and, at the Holder's option, all other
Debentures then held by such Holder), together with interest and other amounts
owing in respect thereof, to the date of acceleration shall become, immediately
due and payable in cash. The aggregate amount payable upon an Event of Default
shall be equal to the sum of (i) the Optional Prepayment Price (as defined in
Section 7) plus (ii) the product of (A) the number of Underlying Shares issued
in respect of conversions hereunder or as payment of interest hereunder, in
either case, within thirty (30) days of the date of a declaration of an Event of
Default and then held by the Holder and (B) the Per Share Market Value (as
defined in Section 7) on the date prepayment is due or the date the full
prepayment price is paid, whichever is greater. Interest shall accrue on the
prepayment amount hereunder from the seventh day after such amount is due (being
the date of an Event of Default) through the date of prepayment in full thereof
at the rate of 15% per annum. All Debentures and Underlying Shares for which the
full repayment price hereunder shall have been paid in accordance herewith shall
be promptly surrendered to or as directed by the Company. The Holder need not
provide and the Company hereby waives any presentment, demand, protest or other
notice of any kind, and the Holder may immediately and without expiration of any
grace period enforce any and all of its rights and remedies hereunder and all
other remedies available to it under applicable law. Such declaration may be
rescinded and annulled by Holder at any time prior to payment hereunder. No such
rescission or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon.

            Section 4.  Conversion.

            (a) (i) Conversion at Option of Holder. This Debenture shall be
convertible into shares of Common Stock at the option of the Holder, in whole or
in part at any time and from time to time, after the Original Issue Date
(subject to the limitations on conversion set forth in Section 4(a)(ii) hereof).
The number of shares of Common Stock issuable upon a conversion hereunder shall
be determined by dividing the outstanding principal amount of this Debenture to
be converted, plus all accrued but unpaid interest thereon, by the Conversion
Price. The Holder shall effect conversions by surrendering the Debentures (or
such portions thereof) to be converted, together with the form of conversion
notice attached hereto as Exhibit A (a "Conversion Notice") to the Company. Each
Conversion Notice shall specify the principal amount of Debentures to be
converted and the date on which such conversion is to be effected, which date
may not be prior to the date such Conversion Notice is deemed to have been
delivered hereunder (a "Conversion Date"). If no Conversion Date is specified in
a Conversion Notice, the Conversion Date shall be the date that such Conversion
Notice is deemed delivered hereunder. Subject to Section 4(b), each Conversion
Notice, once given, shall be irrevocable. If the Holder is converting less than
all of the principal amount represented by the Debenture(s) tendered by the
Holder with the Conversion Notice, or if a conversion hereunder cannot be
effected in full for any reason, the Company shall honor such conversion to the
extent permissible hereunder and shall promptly deliver to such Holder (in the
manner and within the time set forth in Section 4(b)) a new Debenture for such
principal amount as has not been converted.

                  (ii)  Certain Conversion Restrictions

                  (A)(1) A Holder may not convert Debentures or receive shares
of Common Stock as payment of interest hereunder to the extent such conversion
or receipt of such interest payment would result in the Holder, together with
any affiliate thereof, beneficially owning (as determined in accordance with
Section 13(d) of the Exchange Act (as defined in Section 7) and the rules
promulgated thereunder) in excess of 4.999% of the then issued

<PAGE>

and outstanding shares of Common Stock, including shares issuable upon
conversion of, and payment of interest on, the Debentures held by such Holder
after application of this Section. The Holder shall have the sole authority and
obligation to determine whether the restriction contained in this Section
applies and to the extent that the Holder determines that the limitation
contained in this Section applies, the determination of which portion of the
principal amount of Debentures are convertible shall be in the sole discretion
of the Holder. The provisions of this Section may be waived by a Holder (but
only as to itself and not to any other Holder) upon not less than 5 days prior
notice to the Company. Other Holders shall be unaffected by any such waiver.

                        (2) A Holder  may not  convert  Debentures  or receive
shares of Common Stock as payment of interest hereunder to the extent such
conversion or receipt of such interest payment would result in the Holder,
together with any affiliate thereof, beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the rules promulgated
thereunder) in excess of 9.999% of the then issued and outstanding shares of
Common Stock, including shares issuable upon conversion of, and payment of
interest on, the Debentures held by such Holder after application of this
Section. The Holder shall have the sole authority and obligation to determine
whether the restriction contained in this Section applies and to the extent that
the Holder determines that the limitation contained in this Section applies, the
determination of which portion of the principal amount of Debentures are
convertible shall be in the sole discretion of the Holder. The provisions of
this Section may be waived by a Holder (but only as to itself and not to any
other Holder) upon not less than 15 days prior notice to the Company. Other
Holders shall be unaffected by any such waiver.

                  (B) If the Common Stock is then listed for trading on the
NASDAQ or the Nasdaq SmallCap Market and the Company has not obtained the
Shareholder Approval (as defined below), then the Company may not issue in
excess of [ ] shares of Common Stock upon conversions of Debentures or as
payment of interest thereon in shares of Common Stock, which number shall be
subject to adjustment pursuant to Sections 4(c)(ii), (iii), (v), (vi) and (x)
(such number of shares, the "Issuable Maximum"). The Issuable Maximum equals
19.999% of the number of shares of Common Stock outstanding immediately prior to
the closing of transactions set forth in the Purchase Agreement. If on any
Conversion Date (A) the Common Stock is listed for trading on the NASDAQ or the
Nasdaq SmallCap Market, (B) the Conversion Price then in effect is such that the
aggregate number of shares of Common Stock that would then be issuable upon
conversion in full of all then outstanding Debentures and as payment of interest
thereon in shares of Common Stock, together with any shares of Common Stock
previously issued upon conversion of Debentures and as payment of interest
thereon, would exceed Issuable Maximum, and (C) the Company shall not have
previously obtained the vote of shareholders (the "Shareholder Approval"), if
any, as may be required by the applicable rules and regulations of the Nasdaq
Stock Market (or any successor entity) applicable to approve the issuance of
shares of Common Stock in excess of the Issuable Maximum pursuant to the terms
hereof, then the Company shall issue to the Holder so requesting a conversion a
number of shares of Common Stock equal to the Issuable Maximum and, with respect
to the remainder of the principal amount of Debentures then held by such Holder
for which a conversion in accordance with the Conversion Price would result in
an issuance of shares of Common Stock in excess of the Issuable Maximum (the
"Excess Principal"), the converting Holder shall have the option to require the
Company to either (1) use its best efforts to obtain the Shareholder Approval
applicable to such issuance as soon as is possible, but in any event not later
than the 75th day after such request, or (2) pay cash to the converting Holder
in an amount equal to the Optional Prepayment Amount for the Excess Principal.
If the Company fails to pay the Optional Prepayment Amount in full pursuant to
this Section, the Company will pay interest thereon at a rate of 15% per annum
to the converting Holder, accruing daily from the Conversion Date until such
amount, plus all such interest thereon, is paid in full.

            (b) (i) Not later than five (5) Trading Days after any Conversion
Date, the Company will deliver to the Holder (i) a certificate or certificates
which shall be free of restrictive legends and trading restrictions representing
the number of shares of Common Stock being acquired upon the conversion of
Debentures (subject to the limitations set forth in Section 4(a)(ii) hereof),
(ii) Debentures in a principal amount equal to the principal amount of
Debentures not converted, (iii) a bank check in the amount of accrued and unpaid
interest (if the Company has elected or is required to pay accrued interest in
cash), and (iv) if the Company has elected and is permitted hereunder to pay
accrued interest in shares of Common Stock, certificates, which shall be free of
restrictive legends and trading restrictions (other than those required by
Section 3.1 (b) of the Purchase Agreement), representing such shares of Common
Stock; provided,

<PAGE>

that the Company shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon conversion of the principal amount of
Debentures until Debentures are delivered for conversion to the Company, or the
Holder notifies the Company that such Debentures have been lost, stolen or
destroyed and provides a bond (or other adequate security) reasonably
satisfactory to the Company to indemnify the Company from any loss incurred by
it in connection therewith. The Company shall, upon request of the Holder, if
available, use its best efforts to deliver any certificate or certificates
required to be delivered by the Company under this Section electronically
through the Depository Trust Corporation or another established clearing
corporation performing similar functions. If in the case of any Conversion
Notice such certificate or certificates, including for purposes hereof, any
shares of Common Stock to be issued on the Conversion Date on account of accrued
but unpaid interest hereunder, are not delivered to or as directed by the
applicable Holder by the third (3rd) Trading Day after the Conversion Date, the
Holder shall be entitled by written notice to the Company at any time on or
before its receipt of such certificate or certificates thereafter, to rescind
such conversion, in which event the Company shall immediately return the
certificates representing the principal amount of Debentures tendered for
conversion.

                  (ii) If the Company fails to deliver to the Holder such
certificate or certificates pursuant to Section 4(b)(i), including for purposes
hereof, any shares of Common Stock to be issued on the Conversion Date on
account of accrued but unpaid interest hereunder, by the fifth (5th) Trading Day
after the Conversion Date, the Company shall pay to such Holder, in cash, as
liquidated damages and not as a penalty, $250.00 for each Trading Day after such
fifth (5th) Trading Day until such certificates are delivered. Nothing herein
shall limit a Holder's right to pursue actual damages for the Company's failure
to deliver certificates representing shares of Common Stock upon conversion
within the period specified herein and such Holder shall have the right to
pursue all remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief. The
exercise of any such rights shall not prohibit the Holders from seeking to
enforce damages pursuant to any other Section hereof or under applicable law.
Further, if the Company shall not have delivered any cash due in respect of
conversions of Debentures or as payment of interest thereon by the fifth (5th)
Trading Day after the Conversion Date, the Holder may, by notice to the Company,
require the Company to issue shares of Common Stock pursuant to Section 4(c),
except that for such purpose the Conversion Price applicable thereto shall be
the lesser of the Conversion Price on the Conversion Date and the Conversion
Price on the date of such Holder demand. Any such shares will be subject to the
provision of this Section.

                  (iii) In addition to any other rights available to the Holder,
if the Company fails to deliver to the Holder such certificate or certificates
pursuant to Section 4(b)(i), including for purposes hereof, any shares of Common
Stock to be issued on the Conversion Date on account of accrued but unpaid
interest hereunder, by the fifth (5th) Trading Day after the Conversion Date,
and if after such fifth (5th) Trading Day the Holder purchases (in an open
market transaction or otherwise) Common Stock to deliver in satisfaction of a
sale by such Holder of the Underlying Shares which the Holder anticipated
receiving upon such conversion (a "Buy-In"), then the Company shall (A) pay in
cash to the Holder (in addition to any remedies available to or elected by the
Holder) the amount by which (x) the Holder's total purchase price (including
brokerage commissions, if any) for the Common Stock so purchased exceeds (y) the
product of (1) the aggregate number of shares of Common Stock that such Holder
anticipated receiving from the conversion at issue multiplied by (2) the market
price of the Common Stock at the time of the sale giving rise to such purchase
obligation and (B) at the option of the Holder, either reissue Debentures in
principal amount equal the principal amount of the attempted conversion or
deliver to the Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its delivery requirements under
Section 4(b)(i). For example, if the Holder purchases Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an attempted
conversion of Debentures with respect to which the market price of the
Underlying Shares on the date of conversion was a total of $10,000 under clause
(A) of the immediately preceding sentence, the Company shall be required to pay
the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In.
Notwithstanding anything contained herein to the contrary, if a Holder requires
the Company to make payment in respect of a Buy-In for the failure to timely
deliver certificates hereunder and the Company timely pays in full such payment,
the Company shall not be required to pay such Holder liquidated damages under
Section 4(b)(ii) in respect of the certificates resulting in such Buy-In.

<PAGE>

            (c) (i) The conversion price (the "Conversion Price") in effect on
any Conversion Date shall be 50% of the average of the bid price during the
twenty (20) Trading Days immediately preceding the applicable Conversion Date,
provided, that such twenty (20) Trading Day period shall be extended for the
number of Trading Days during such period in which (A) trading in the Common
Stock is suspended by the NASDAQ or a Subsequent Market on which the Common
Stock is then listed, or (B) after the date declared effective by the
Commission, the Underlying Shares Regulation A Filing is not effective, or (C)
after the date declared effective by the Commission, the Prospectus included in
the Underlying Shares Regulation A Filing may not be used by the Holder for the
resale of Underlying Shares. If (a) an Underlying Shares Regulation A Filing is
not filed on or prior to the Filing Date (as defined under the Registration
Rights Agreement) (if the Company files such Underlying Shares Regulation A
Filing without affording the Holder the opportunity to review and comment on the
same as required by Section 3(a) of the Registration Rights Agreement, the
Company shall not be deemed to have satisfied this clause (a)), or (b) the
Company fails to file with the Commission a request for acceleration in
accordance with Rule 12d1-2 promulgated under the Exchange Act, within five (5)
days of the date that the Company is notified (orally or in writing, whichever
is earlier) by the Commission that an Underlying Shares Regulation A Filing will
not be "reviewed," or not subject to further review, or (c) the Underlying
Shares Regulation A Filing is not declared effective by the Commission on or
prior to the Effectiveness Date, or (d) such Underlying Shares Regulation A
Filing is filed with and declared effective by the Commission but thereafter
ceases to be effective as to all Registrable Securities at any time prior to the
expiration of the Effectiveness Period (as defined in the Registration Rights
Agreement), without being succeeded within ten (10) days by an amendment to such
Underlying Shares Regulation A Filing or by a subsequent Underlying Shares
Regulation A Filing filed with and declared effective by the Commission, or (e)
the Common Stock shall be delisted or suspended from trading on the NASDAQ or on
any Subsequent Market for more than three (3) Business Days (which need not be
consecutive days), (f) the conversion rights of the Holders are suspended for
any reason or (g) an amendment to the Underlying Shares Regulation A Filing is
not filed by the Company with the Commission within ten (10) days of the
Commission's notifying the Company that such amendment is required in order for
the Underlying Shares Regulation A Filing to be declared effective (any such
failure or breach being referred to as an "Event," and for purposes of clauses
(a), (c), (f) the date on which such Event occurs, or for purposes of clause (b)
the date on which such five (5) day period is exceeded, or for purposes of
clauses (d) and (g) the date which such 10 day-period is exceeded, or for
purposes of clause (e) the date on which such three (3) Business Day-period is
exceeded, being referred to as "Event Date"), then, on the Event Date and on
each monthly anniversary thereof until such time as the applicable Event is
cured, the Company shall pay to the Holder 2.5% of the aggregate principal
amount of the Debentures then outstanding in cash, as liquidated damages and not
as penalty. The provisions of this Section are not exclusive and shall in no way
limit the Company's obligations under the Registration Rights Agreement.

                  (ii) If the Company, at any time while any Debentures are
outstanding, (a) shall pay a stock dividend or otherwise make a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock, (b) subdivide
outstanding shares of Common Stock into a larger number of shares, (c) combine
outstanding shares of Common Stock into a smaller number of shares, or (d) issue
by reclassification of shares of the Common Stock any shares of capital stock of
the Company, then the Conversion Price shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding before such event and of which the
denominator shall be the number of shares of Common Stock outstanding after such
event. Any adjustment made pursuant to this Section shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
re-classification.

                  (iii) INTENTIONALLY OMITTED

                  (iv) If the Company or any subsidiary thereof, as applicable
with respect to Common Stock Equivalents (as defined below), at any time while
Debentures are outstanding, shall issue shares of Common Stock or rights,
warrants, options or other securities or debt that is convertible into or
exchangeable for shares of Common Stock ("Common Stock Equivalents") entitling
any Person to acquire shares of Common Stock at a price per share less than the
Conversion Price, then the Conversion Price shall be

<PAGE>

multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately prior to the issuance of such shares of
Common Stock or such Common Stock Equivalents plus the number of shares of
Common Stock which the offering price for such shares of Common Stock or Common
Stock Equivalents would purchase at the Conversion Price, and the denominator of
which shall be the sum of the number of shares of Common Stock outstanding
immediately prior to such issuance plus the number of shares of Common Stock so
issued or issuable, provided, that for purposes hereof, all shares of Common
Stock that are issuable upon conversion, exercise or exchange of Common Stock
Equivalents shall be deemed outstanding immediately after the issuance of such
Common Stock Equivalents. Such adjustment shall be made whenever such shares of
Common Stock or Common Stock Equivalents are issued.

                  (v)  INTENTIONALLY OMITTED

                  (vi) In case of any reclassification of the Common Stock or
any compulsory share exchange pursuant to which the Common Stock is converted
into other securities, cash or property, the Holders shall have the right
thereafter to, at their option, (A) convert the then outstanding principal
amount, together with all accrued but unpaid interest and any other amounts then
owing hereunder in respect of this Debenture only into the shares of stock and
other securities, cash and property receivable upon or deemed to be held by
holders of the Common Stock following such reclassification or share exchange,
and the Holders of the Debentures shall be entitled upon such event to receive
such amount of securities, cash or property as the shares of the Common Stock of
the Company into which the then outstanding principal amount, together with all
accrued but unpaid interest and any other amounts then owing hereunder in
respect of this Debenture could have been converted immediately prior to such
reclassification or share exchange would have been entitled or (B) require the
Company to prepay the aggregate of its outstanding principal amount of
Debentures, plus all interest and other amounts due and payable thereon, at a
price determined in accordance with Section 3(b). The entire prepayment price
shall be paid in cash. This provision shall similarly apply to successive
reclassifications or share exchanges.

                  (vii) All calculations under this Section 4 shall be made to
the nearest 1/100th of a cent or share, as the case may be.

                  (viii) Whenever the Conversion Price is adjusted pursuant to
any of Section 4(c)(ii) - (v), the Company shall promptly mail to each Holder a
notice setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.

                  (ix) If (A) the Company shall declare a dividend (or any other
distribution) on the Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (C) the
Company shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights; (D) the approval of any stockholders of the Company
shall be required in connection with any reclassification of the Common Stock,
any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share of exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of the Debentures, and shall
cause to be mailed to the Holders at their last addresses as they shall appear
upon the stock books of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided, however, that
the failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such

<PAGE>

notice. Holders are entitled to convert Debentures during the 20-day period
commencing the date of such notice to the effective date of the event triggering
such notice.

                  (x) In case of any (1) merger or consolidation of the Company
with or into another Person that would constitute a Change of Control
Transaction, or (2) sale by the Company of more than one-half of the assets of
the Company (on an as valued basis) in one or a series of related transactions,
or (3) tender or other offer or exchange (whether by the Company or another
Person) pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, stock, cash or property of the
Company or another Person; then a Holder shall have the right to (A) if
permitted under Section 3(b) hereof, exercise its rights of prepayment under
Section 3(b) with respect to such event, (B) convert its aggregate principal
amount of Debentures then outstanding into the shares of stock and other
securities, cash and property receivable upon or deemed to be held by holders of
Common Stock following such merger, consolidation or sale, and such Holder shall
be entitled upon such event or series of related events to receive such amount
of securities, cash and property as the shares of Common Stock into which such
aggregate principal amount of Debentures could have been converted immediately
prior to such merger, consolidation or sales would have been entitled, (C) in
the case of a merger or consolidation, (x) require the surviving entity to issue
shares of convertible preferred stock or convertible debentures with such
aggregate stated value or in such face amount, as the case may be, equal to the
aggregate principal amount of Debentures then held by such Holder, plus all
accrued and unpaid interest and other amounts owing thereon, which newly issued
shares of preferred stock or debentures shall have terms identical (including
with respect to conversion) to the terms of this Debenture (except, in the case
of preferred stock, as may be required to reflect the differences between equity
and debt) and shall be entitled to all of the rights and privileges of a Holder
of Debentures set forth herein and the agreements pursuant to which the
Debentures were issued (including, without limitation, as such rights relate to
the acquisition, transferability, registration and listing of such shares of
stock other securities issuable upon conversion thereof), and (y) simultaneously
with the issuance of such convertible preferred stock or convertible debentures,
shall have the right to convert such instrument only into shares of stock and
other securities, cash and property receivable upon or deemed to be held by
holders of Common Stock following such merger or consolidation, or (D) in the
event of an exchange or tender offer or other transaction contemplated by clause
(3) of this Section, tender or exchange its aggregate principal amount of
Debentures for such securities, stock, cash and other property receivable upon
or deemed to be held by holders of Common Stock that have tendered or exchanged
their shares of Common Stock following such tender or exchange, and such Holder
shall be entitled upon such exchange or tender to receive such amount of
securities, cash and property as the shares of Common Stock into which such
aggregate principal amount of Debentures could have been converted (taking into
account all then accrued and unpaid dividends) immediately prior to such tender
or exchange would have been entitled as would have been issued. In the case of
clause (C), the conversion price applicable for the newly issued shares of
convertible preferred stock or convertible debentures shall be based upon the
amount of securities, cash and property that each share of Common Stock would
receive in such transaction and the Conversion Price in effect immediately prior
to the effectiveness or closing date for such transaction. The terms of any such
merger, sale, consolidation, tender or exchange shall include such terms so as
continue to give the Holders of Debentures the right to receive the securities,
cash and property set forth in this Section upon any conversion or redemption
following such event. This provision shall similarly apply to successive such
events.

            (d) The Company covenants that it will at all times reserve and keep
available out of its authorized and unissued shares of Common Stock solely for
the purpose of issuance upon conversion of the Debentures and payment of
interest on the Debentures, each as herein provided, free from preemptive rights
or any other actual contingent purchase rights of persons other than the
Holders, not less than such number of shares of the Common Stock as shall
(subject to any additional requirements of the Company as to reservation of such
shares set forth in the Purchase Agreement) be issuable (taking into account the
adjustments and restrictions of Section 4(b)) upon the conversion of the
outstanding principal amount of the Debentures and payment of interest
hereunder. The Company covenants that all shares of Common Stock that shall be
so issuable shall, upon issue, be duly and validly authorized, issued and fully
paid, nonassessable and, if the Underlying Shares Regulation A Filing has been
declared effective under the Securities Act, registered for public sale in
accordance with such Underlying Shares Regulation A Filing.

            (e) Upon a conversion hereunder the Company shall not be required to
issue stock certificates representing fractions of shares of the Common Stock,
but may if otherwise permitted, make a cash payment in respect

<PAGE>

of any final fraction of a share based on the Per Share Market Value at such
time. If the Company elects not, or is unable, to make such a cash payment, the
Holder shall be entitled to receive, in lieu of the final fraction of a share,
one whole share of Common Stock.

            (f) The issuance of certificates for shares of the Common Stock on
conversion of the Debentures shall be made without charge to the Holders thereof
for any documentary stamp or similar taxes that may be payable in respect of the
issue or delivery of such certificate, provided that the Company shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issuance and delivery of any such certificate upon conversion in a name
other than that of the Holder of such Debentures so converted and the Company
shall not be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.

            (g) Any and all notices or other communications or deliveries to be
provided by the Holders of the Debentures hereunder, including, without
limitation, any Conversion Notice, shall be in writing and delivered personally,
by facsimile, sent by a nationally recognized overnight courier service or sent
by certified or registered mail, postage prepaid, addressed to the Company, at
1230 Highway 34, Aberdeen, New Jersey 07747 facsimile number (732) 441-7700),
attention Chief Executive Officer, or such other address or facsimile number as
the Company may specify for such purposes by notice to the Holders delivered in
accordance with this Section, with a copy to The N.I.R. Group, LLC, 155 First
Street, Suite B, Mineola, New York 11501 (facsimile number (516) 739-7115),
attention CSR. Any and all notices or other communications or deliveries to be
provided by the Company hereunder shall be in writing and delivered personally,
by facsimile, sent by a nationally recognized overnight courier service or sent
by certified or registered mail, postage prepaid, addressed to each Holder of
the Debentures at the facsimile telephone number or address of such Holder
appearing on the books of the Company, or if no such facsimile telephone number
or address appears, at the principal place of business of the holder. Any notice
or other communication or deliveries hereunder shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section prior to 8:00 p.m. (New York City time), (ii) the date
after the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section later than
8:00 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York
City time) on such date, (iii) four days after deposit in the United States
mail, (iv) the Business Day following the date of mailing, if send by nationally
recognized overnight courier service, or (v) upon actual receipt by the party to
whom such notice is required to be given.

            Section 5.   Optional Prepayment.

            (a) The Company shall have the right, exercisable at any time upon
twenty (20) Trading Days prior written notice to the Holders of the Debentures
to be prepaid and accompanied by any waiver required by holders of senior
indebtedness of the Company for such prepayment (the "Optional Prepayment
Notice"), to prepay, all or any portion of the outstanding principal amount of
the Debentures which have not previously been repaid or for which Conversion
Notices have not previously been delivered. The prepayment price applicable to
such prepayments shall equal the Optional Prepayment Price (as defined in
Section 7) and shall be paid in cash. Any such prepayment shall be free of any
claim of subordination. The Holders shall have the right to tender, and the
Company shall honor, Conversion Notices delivered prior to the expiration of the
twentieth (20th) Trading Day after receipt by the Holders of an Optional
Prepayment Notice for such Debentures (the 20th Trading Day after receipt by the
Holders of an Optional Prepayment Notice is referred to herein as the "Optional
Prepayment Date").

            (b) If any portion of the Optional Prepayment Price shall not be
paid by the Company by the second (2nd) Business Day following the Optional
Prepayment Date, the Optional Prepayment Price shall be increased by 15% per
annum (to accrue daily) until paid (which amount shall be paid as liquidated
damages and not as a penalty). In addition, if any portion of the optional
Prepayment Price remains unpaid through the expiration of the Optional
Prepayment Date, the Holder subject to such prepayment may elect by written
notice to the Company to either (x) demand conversion in accordance with the
formula and the time period therefor set forth in Section 4 of any portion of
the principal amount of Debentures for which the Optional Prepayment Price, plus
accrued liquidated damages thereof,

<PAGE>

has not been paid in full (the "Unpaid Prepayment Principal Amount"), in which
event the applicable Per Share Market Value shall be the lower of the Per Share
Market Value calculated on the Optional Prepayment Date and the Per Share Market
Value as of the Holder's written demand for conversion, or (y) invalidate ab
initio such optional redemption, notwithstanding anything herein contained to
the contrary. If the Holder elects option (x) above, the Company shall within
three (3) Trading Days such election is deemed delivered hereunder to the Holder
the shares of Common Stock issuable upon conversion of the Unpaid Prepayment
Principal Amount subject to such conversion demand and otherwise perform its
obligations hereunder with respect thereto; or, if the Holder elects option (y)
above, the Company shall promptly, and in any event not later than three (3)
Trading Days from receipt of notice of such election, return to the Holder new
Debentures for the full Unpaid Prepayment Principal Amount. If, upon an election
under option (x) above, the Company fails to deliver the shares of Common Stock
issuable upon conversion of the Unpaid Prepayment Principal Amount within the
time period set forth in this Section, the Company shall pay to the Holder in
cash, as liquidated damages and not as a penalty, $2,500 per day until the
Company delivers such Common Stock to the Holder.

            Section 6.   INTENTIONALLY OMITTED

            Section 7.  Definitions.  For the purposes  hereof,  the following
terms shall have the following meanings:

            "Business Day" means any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of New York or the State of California are authorized or required by law
or other government action to close.

            "Change of Control Transaction" means the occurrence of any of (i)
an acquisition after the date hereof by an individual or legal entity or "group"
(as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of in
excess of 33% of the voting securities of the Company, (ii) a replacement of
more than one-half of the members of the Company's board of directors which is
not approved by those individuals who are members of the board of directors on
the date hereof in one or a series of related transactions, (iii) the merger of
the Company with or into another entity, consolidation or sale of all or
substantially all of the assets of the Company in one or a series of related
transactions, unless following such transaction, the holders of the Company's
securities continue to hold at least 33% of such securities following such
transaction or (iv) the execution by the Company of an agreement to which the
Company is a party or by which it is bound, providing for any of the events set
forth above in (i), (ii) or (iii).

            "Commission" means the Securities and Exchange Commission.

            "Common Stock" means the Class A Common Stock, $.01 par value per
share, of the Company and stock of any other class into which such shares may
hereafter have been reclassified or changed.

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

            "Interest Effectiveness Date" means the earlier to occur of (x) the
Effectiveness Date and (y) the date that an Underlying Shares Regulation A
Filing is declared effective by the Commission.

            "Optional Prepayment Price" for any Debentures shall equal 120% of
principal amount of Debentures to be prepaid, plus all accrued and unpaid
interest thereon.

            "Original Issue Date" shall mean the date of the first issuance of
the Debentures regardless of the number of transfers of any Debenture and
regardless of the number of instruments which may be issued to evidence such
Debenture.

            "Per Share Market Value" means on any particular date (a) the
closing bid price per share of the Common Stock on such date on the NASDAQ or on
such Subsequent Market on which the Common Stock is then listed or quoted, or if
there is no such price on such date, then the closing bid price on the NASDAQ or
on such Subsequent

<PAGE>

Market on the date nearest preceding such date, or (b) if the Common Stock is
not then listed or quoted on the NASDAQ or a Subsequent Market, the closing bid
price for a share of Common Stock in the over-the-counter market, as reported by
the National Quotation Bureau Incorporated or similar organization or agency
succeeding to its functions of reporting prices) at the close of business on
such date, or (c) if the Common Stock is not then reported by the National
Quotation Bureau Incorporated (or similar organization or agency succeeding to
its functions of reporting prices), then the average of the "Pink Sheet" quotes
for the relevant conversion period, as determined in good faith by the Holder,
or (d) if the Common Stock is not then publicly traded the fair market value of
a share of Common Stock as determined by an Appraiser selected in good faith by
the Holders of a majority in interest of the principal amount of Debentures then
outstanding.

            "Person" means a corporation, an association, a partnership,
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.

            "Purchase Agreement" means the Secured Convertible Debenture
Purchase Agreement, dated as of the Original Issue Date, between the Company and
the original Holder of Debentures, as amended, modified or supplemented from
time to time in accordance with its terms.

            "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Original Issue Date, between the Company and the
original Holder of Debentures, as amended, modified or supplemented from time to
time in accordance with its terms.

            "Securities Act" means the Securities Act of 1933, as amended.

            "Security Agreements" means the Security Agreement, of even date
herewith between the Company and the original Holder of Debentures, as amended
modified or supplemented from time to time in accordance with its terms.

            "Trading Day" means (a) a day on which the Common Stock is traded on
the NASDAQ or on such Subsequent Market on which the Common Stock is then listed
or quoted, or (b) if the Common Stock is not listed on the NASDAQ or a
Subsequent Market, a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (c) if the
Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding
its functions of reporting prices); provided, however, that in the event that
the Common Stock is not listed or quoted as set forth in (a), (b) and (c)
hereof, then Trading Day shall mean any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.

            "Underlying Shares" means the shares of Common Stock issuable upon
conversion of Debentures or as payment of interest in accordance with the terms
hereof.

            "Underlying Shares Regulation A Filing" means a filing pursuant to
Regulation a meeting the requirements set forth in the Registration Rights
Agreement, covering among other things the resale of the Underlying Shares and
naming the Holder as a "selling stockholder" thereunder.

            Section 8. Except as expressly provided herein, no provision of this
Debenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of, interest and liquidated damages (if
any) on, this Debenture at the time, place, and rate, and in the coin or
currency, herein prescribed. This Debenture is a direct obligation of the
Company. This Debenture ranks pari passu with all other Debentures now or
hereafter issued under the terms set forth herein. The Company may only
voluntarily prepay the outstanding principal amount on the Debentures in
accordance with Section 5 hereof.

<PAGE>

            Section 9. This Debenture shall not entitle the Holder to any of the
rights of a stockholder of the Company, including without limitation, the right
to vote, to receive dividends and other distributions, or to receive any notice
of, or to attend, meetings of stockholders or any other proceedings of the
Company, unless and to the extent converted into shares of Common Stock in
accordance with the terms hereof.

            Section 10. If this Debenture shall be mutilated, lost, stolen or
destroyed, the Company shall execute and deliver, in exchange and substitution
for and upon cancellation of a mutilated Debenture, or in lieu of or in
substitution for a lost, stolen or destroyed debenture, a new Debenture for the
principal amount of this Debenture so mutilated, lost, stolen or destroyed but
only upon receipt of evidence of such loss, theft or destruction of such
Debenture, and of the ownership hereof, and indemnity, if requested, all
reasonably satisfactory to the Company.

            Section 11. This Debenture shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
conflicts of laws thereof. The Company and the Holders hereby irrevocably submit
to the exclusive jurisdiction of the state and federal courts sitting in the
County of Nassau, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, or that such suit, action or proceeding is improper. Each of the
Company and the Holder hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
receiving a copy thereof sent to the Company at the address in effect for
notices to it under this instrument and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.

            Section 12. Any waiver by the Company or the Holder of a breach of
any provision of this Debenture shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other
provision of this Debenture. The failure of the Company or the Holder to insist
upon strict adherence to any term of this Debenture on one or more occasions
shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Debenture. Any waiver must be in writing.

            Section 13. If any provision of this Debenture is invalid, illegal
or unenforceable, the balance of this Debenture shall remain in effect, and if
any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.

            Section 14. Whenever any payment or other obligation hereunder shall
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day.

            Section 15. The payment obligations under this Debenture and the
obligations of the Company to the Holder arising upon the conversion of all or
any of the Debentures in accordance with the provisions hereof are secured
pursuant to the Security Agreements.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                            SIGNATURE PAGE FOLLOWS]

<PAGE>

            IN WITNESS WHEREOF, the Company has caused this Secured Convertible
Debenture to be duly executed by a duly authorized officer as of the date first
above indicated.

                              IVOICE.COM, INC.

                              By:________________________________
                                 Name:
                                 Title:

Attest:

By:___________________________
   Name:
   Title:

<PAGE>

                                   EXHIBIT A

                             NOTICE OF CONVERSION

(To be Executed by the Registered Holder
in order to Convert the Debenture)

The undersigned hereby elects to convert the attached Debenture into shares of
Class A Common Stock, no par value per share (the "Common Stock"), of
____________________(the "Company") according to the conditions hereof, as of
the date written below. If shares are to be issued in the name of a person other
than undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates and opinions as
reasonably requested by the Company in accordance therewith. No fee will be
charged to the holder for any conversion, except for such transfer taxes, if
any.

Conversion calculations:
                           ____
                              Date to Effect Conversion

                              ________________________________________________
                              Principal Amount of Debentures to be Converted

                                          _________________________________
                              Number of shares of Common Stock to be Issued

                              ________________________________________________
                              Applicable Conversion Price

                              ________________________________________________
                              Signature

                              ________________________________________________
                              Name

                              ________________________________________________
                              Address

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