Document:

<PAGE>
                                                                    Exhibit 10.6

                                      LEASE

                                 BY AND BETWEEN

          RREEF MID-CITIES INDUSTRIAL L.P., A TEXAS LIMITED PARTNERSHIP
                                   AS LANDLORD

                                       AND

            BABBAGE'S ETC. LLC, A DELAWARE LIMITED LIABILITY COMPANY
                                    AS TENANT
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Article                                                                     Page
<S>                                                                         <C>
1.    USE AND RESTRICTIONS ON USE.........................................    1

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

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

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

5.    SECURITY DEPOSIT....................................................    4

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

7.    REPAIR..............................................................    5

8.    LIENS...............................................................    6

9.    ASSIGNMENT AND SUBLETTING...........................................    6

10.   INDEMNIFICATION.....................................................    8

11.   INSURANCE...........................................................    8

12.   WAIVER OF SUBROGATION...............................................    9

13.   SERVICES AND UTILITIES..............................................    9

14.   HOLDING OVER........................................................    9

15.   SUBORDINATION.......................................................    9

16.   RULES AND REGULATIONS...............................................    9

17.   RE-ENTRY BY LANDLORD................................................   10

18.   DEFAULT.............................................................   10

19.   REMEDIES............................................................   11

20.   TENANT'S BANKRUPTCY OR INSOLVENCY...................................   13

21.   QUIET ENJOYMENT.....................................................   14

22.   DAMAGE BY FIRE, ETC.................................................   14

23.   EMINENT DOMAIN......................................................   15

24.   SALE BY LANDLORD....................................................   15

25.   ESTOPPEL CERTIFICATES...............................................   15

26.   SURRENDER OF PREMISES...............................................   16

27.   NOTICES.............................................................   16

28.   TAXES PAYABLE BY TENANT.............................................   16

29.   RELOCATION OF TENANT................................................   17

30.   DEFINED TERMS AND HEADINGS..........................................   17
</TABLE>

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<TABLE>
<CAPTION>
Article                                                                     Page
<S>                                                                         <C>
31.   TENANT'S AUTHORITY..................................................   17

32.   COMMISSIONS.........................................................   17

33.   TIME AND APPLICABLE LAW.............................................   17

34.   SUCCESSORS AND ASSIGNS..............................................   17

35.   ENTIRE AGREEMENT....................................................   18

36.   EXAMINATION NOT OPTION..............................................   18

37.   RECORDATION.........................................................   18

38.   LIMITATION OF LANDLORD'S LIABILITY..................................   18

39.   RENEWAL OPTION......................................................   18

40.   LANDLORD'S RIGHT TO TERMINATE.......................................   19

41.   TENANT'S RIGHT TO TERMINATE.........................................   19

42.   TENANT'S RIGHT TO USE ADJACENT AREA.................................   19

43.   PARKING.............................................................   20
</TABLE>

EXHIBIT A - PREMISES
EXHIBIT B - INITIAL ALTERATIONS
EXHIBIT C - RULES AND REGULATIONS
EXHIBIT D - ADDITIONAL SURRENDER CONDITIONS
EXHIBIT E - SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

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<PAGE>
                        MULTI-TENANT INDUSTRIAL NET LEASE
                                 REFERENCE PAGE

<TABLE>
<S>                                     <C>
BUILDING:                               2250 William D. Tate Avenue, Grapevine, Texas

LANDLORD:                               RREEF Mid-Cities Industrial L.P., a Texas limited
                                        partnership

LANDLORD'S ADDRESS:                     1406 Halsey Way, Suite 110, Carrollton, TX 75007

LEASE REFERENCE DATE:                   March 6, 1997

TENANT:                                 Babbage's Etc. LLC, a Delaware limited liability
                                        company

TENANT'S ADDRESS:
(a)  As of beginning of Term:           2250 William D. Tate Avenue, Grapevine, Texas 76051
(b)  Prior to beginning of Term
(if different)
                                        -------------------------------------------------------

PREMISES IDENTIFICATION:                Suite Number 2250
                                        (for outline of Premises see Exhibit A)

PREMISES RENTABLE AREA:                 approximately 168,450 sq. ft.

USE:                                    Office/warehouse & distribution of merchandise for sale
                                        at retail or wholesale, including, without limitation,
                                        consumer software and related merchandise and other
                                        incidental lawful uses relating to Tenant's business

COMMENCEMENT DATE:                      April 22, 1997

TERMINATION DATE:                       June 30, 2002

TERM OF LEASE (subject to renewal
option per Section 39 hereof):          5 years, 2 months and 9 days beginning on the
                                        Commencement Date and ending on the Termination
                                        Date (unless sooner terminated pursuant to the Lease)

ANNUAL RENT (Article 3):                $872,571.00

MONTHLY INSTALLMENT OF
ANNUAL RENT (Article 3):                $72,714.25

INITIAL ESTIMATED MONTHLY
INSTALLMENT OF RENT
ADJUSTMENTS (inclusive of Direct
Expenses and Taxes) (Article 4):        $15,300.00

TENANT'S PROPORTIONATE SHARE:           70

SECURITY DEPOSIT:                       $88,014.25

ASSIGNMENT/SUBLETTING FEE:              $2,500.00

REAL ESTATE BROKER DUE COMMISSION:      The Staubach Company
</TABLE>

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

LANDLORD:                               TENANT:

RREEF Mid-Cities Industrial L.P.,       Babbage's Etc. LLC, a Delaware
a Texas limited partnership             limited liability company

By:    RREEF Management Company,
       a California corporation

By:    /s/ Phyllis L. Palis             By:     /s/ R. Richard Fontaine
       -------------------------               -----------------------------
           Phyllis L. Palis
Title:     District Manager             Title:     CEO
       -------------------------               -----------------------------

Dated: April 23, 1997                   Dated: 4/23/97
       -------------------------               -----------------------------

By:    /s/ Robert Chapman
       -------------------------
           Robert Chapman
           Portfolio Manager

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                                      -iii-
<PAGE>
                                      LEASE

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

1.    USE AND RESTRICTIONS ON USE.

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

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

2.    TERM.

      2.1   The Term of this Lease shall begin on the Commencement Date and
shall terminate, unless extended as provided herein, on the Termination Date
(unless sooner terminated pursuant to this Lease).

      2.2   Landlord and Tenant acknowledge and agree that this Lease amends,
restates, replaces and supersedes Tenant's license (the "License") pursuant to
the "Order" (defined below) to remain in possession

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<PAGE>
of the Building through June 30, 1997 on the terms and conditions set forth in
(i) that certain Commercial Lease Agreement dated October 19, 1995 (the "Prior
Lease") by and between MEPC Quorum Properties II Inc., as landlord, and NeoStar
Retail Group, Inc. ("NeoStar"), as tenant, and (ii) that certain "RREEF
Agreement" as defined in the Order. Accordingly, Landlord and Tenant acknowledge
and agree that, effective as of the Commencement Date of this Lease, the License
and any and all rights and obligations of Landlord and Tenant under the RREEF
Agreement and the Prior Lease will be deemed terminated and of no further force
and effect. Landlord and Tenant acknowledge and agree that Tenant, pursuant to
that certain Order pursuant to Sections 105(a), 363(b)(1), 363(f), 365(b) and
365(f) of the Bankruptcy Code Authorizing and Approving the Sale of Debtors'
Assets, the Assumption and Assignment of Leases, Rejection of Leases, and
Assumption and Assignment of Verifone Executory Contract (the "Order") entered
November 27, 1996 by the Honorable Steven A. Felsenthal, United States
Bankruptcy Court, Northern District of Texas, Dallas Subdivision, Case No.
395-36648-SAF-11 through Case No. 396-36652-SAF-11 (administratively
consolidated), has prepaid all rental obligations and other sums payable under
the Prior Lease and the RREEF Agreement, if any, through June 30, 1997, and
accordingly, all rental obligations under this Lease will not commence until
July 1, 1997. Notwithstanding anything in this Article 42 to the contrary,
Landlord does not hereby waive any of its rights or remedies it is entitled to
pursue, if any, against NeoStar under the Prior Lease, the RREEF Agreement or
the Order, or at law or equity with respect to those obligations of NeoStar, if
any, that existed under the Prior Lease or that resulted from the rejection of
the Prior Lease, including, without limitation, the payment of any and all sums
still due Landlord under the Prior Lease, the RREEF Agreement or the Order.

      2.3   Intentionally Deleted.

3.    RENT.

      3.1   Tenant agrees to pay to Landlord the Annual Rent in effect from time
to time by paying the Monthly Installment of Rent then in effect on or before
the first day of each full calendar month commencing on July 1, 1997 and
continuing through the remainder of the Term, except that the first month's rent
shall be paid upon the execution of this Lease. The Monthly Installment of Rent
in effect at any time shall be one- twelfth of the Annual Rent in effect at such
time. Rent for any period during the Term which is less than a full month shall
be a prorated portion of the Monthly Installment of Rent based upon a thirty
(30) day month. Said rent shall be paid to Landlord, without deduction or offset
(except as may be expressly provided herein) and without notice or demand, at
the Landlord's address, as set forth on the Reference Page, or to such other
person or at such other place as Landlord may from time to time designate in
writing.

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

4.    RENT ADJUSTMENTS.

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

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

            4.1.2 Direct Expenses: All direct costs of operation, maintenance,
repair and management of the Building (including the amount of any credits which
Landlord may grant to particular tenants of the Building in lieu of providing
any standard services or paying any standard costs described in this Section
4.1.2 for similar tenants), as determined in accordance with generally accepted
accounting principles, including the following costs by way of illustration, but
not limitation: water and sewer charges; insurance charges of or relating to all
insurance policies and endorsements deemed by Landlord to be reasonably
necessary or reasonably desirable and relating in any manner to the protection,
preservation, or operation of the Building or any part thereof; utility costs,
including, but not limited to, the cost of heat, light, power, steam, gas, and
waste disposal; the cost of janitorial services; the cost of security and alarm
services (including any central station signaling system); window cleaning
costs; labor costs; costs and expenses of managing the Building including
commercially-reasonable and competitively-priced management fees; air
conditioning maintenance costs; elevator maintenance fees and supplies; material
costs; equipment costs

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<PAGE>
including the cost of maintenance, repair and service agreements and rental and
leasing costs; purchase costs of equipment other than capital items; current
rental and leasing costs of items which would be amortizable capital items if
purchased; tool costs; licenses, permits and inspection fees; wages and
salaries; employee benefits and payroll taxes; reasonable accounting and legal
fees; any sales, use or service taxes incurred in connection therewith. Direct
Expenses shall not include depreciation or amortization of the Building or
equipment in the Building except as provided herein, loan principal payments,
costs of alterations of tenants' premises, leasing commissions, interest
expenses and amortization of debt, advertising costs or management salaries for
executive personnel other than off-site personnel directly engaged in the
management, operation and maintenance of the Building and further provided that
all costs of such personnel working on projects other than the Building shall be
limited to an equitable allocation. In addition, Landlord shall be entitled to
amortize and include as an additional rental adjustment: (i) an allocable
portion of the cost of capital improvement items which are reasonably calculated
to reduce operating expenses; (ii) fire sprinklers and suppression systems and
other life safety systems; and (iii) other capital expenses which are required
under any governmental laws, regulations or ordinances which were not applicable
to the Building at the time it was constructed. All such costs shall be
amortized over the reasonable life of such improvements in accordance with such
reasonable life and amortization schedules as shall be determined by Landlord in
accordance with generally accepted accounting principles, with interest on the
unamortized amount at one percent (1%) in excess of the prime lending rate
announced from time to time as such by The Northern Trust Company of Chicago,
Illinois.

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

      4.2   Tenant shall pay, in accordance with Section 4.4 below, as
additional rent for each Lease Year Tenant's Proportionate Share of Direct
Expenses and Taxes incurred for such Lease Year.

      4.3   The annual determination of Direct Expenses shall be made by
Landlord and delivered to Tenant within one hundred fifty (150) days of the end
of each Lease Year and, if certified by a nationally recognized firm of public
accountants selected by Landlord, shall be binding upon Landlord and Tenant.
Tenant and/or its consultants may review the books and records supporting such
determination in the office of Landlord, or Landlord's agent, during normal
business hours, upon giving Landlord five (5) days' advance written notice
within sixty (60) days after receipt of such determination, but in no event more
often than once in any one year period. In the event that during all or any
portion of any Lease Year, the Building is not fully rented and occupied
Landlord may make any appropriate adjustment in occupancy-related Direct
Expenses for such year for the purpose of avoiding distortion of the amount of
such Direct Expenses to be attributed to Tenant by reason of variation in total
occupancy of the Building, by employing sound accounting and management
principles to determine Direct Expenses that would have been paid or incurred by
Landlord had the Building been fully rented and occupied, and the amount so
determined shall be deemed to have been Direct Expenses for such Lease Year.

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

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

            4.5.1 If the total additional rent Tenant actually paid pursuant to
Section 4.4 on account of Direct Expenses and/or Taxes for the Lease Year is
less than Tenant's liability for Direct Expenses and/or Taxes, then Tenant shall
pay such deficiency to Landlord as additional rent in one lump sum within thirty
(30) days of receipt of Landlord's bill therefor; and

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<PAGE>
            4.5.2 If the total additional rent Tenant actually paid pursuant to
Section 4.4 on account of Direct Expenses and/or Taxes for the Lease Year is
more than Tenant's liability for Direct Expenses and/or Taxes, then Landlord
shall credit the difference against the then next due payments to be made by
Tenant under this Article 4.

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

5.    SECURITY DEPOSIT.

      Tenant shall deposit the Security Deposit with Landlord upon the execution
of this Lease. Said sum shall be held by Landlord as security for the faithful
performance by Tenant of all the terms, covenants and conditions of this Lease
to be kept and performed by Tenant and not as an advance rental deposit or as a
measure of Landlord's damage in case of Tenant's default. In the event of an
"Event of Default" (as hereinafter defined) by Tenant, Landlord may use any part
of the Security Deposit for the payment of any rent or any other sum in default,
or for the payment of any amount which Landlord may spend or become obligated to
spend by reason of Tenant's default, or to compensate Landlord for any other
loss or damage which Landlord may suffer by reason of Tenant's default. If any
portion is so used, Tenant shall within fifteen (15) days after written demand
therefor, deposit with Landlord an amount sufficient to restore the Security
Deposit to its original amount and Tenant's failure to do so shall be a material
breach of this Lease. Except to such extent, if any, as shall be required by
law, Landlord shall not be required to keep the Security Deposit separate from
its general funds, and Tenant shall not be entitled to interest on such deposit.
The Security Deposit or any balance thereof (subsequent to Landlord's exercise
of its rights set forth in this Article 5) shall be returned to Tenant at such
time after termination of this Lease (but not more than ninety (90) days after
such termination, provided Tenant has given Landlord Tenant's forwarding address
in writing) when Landlord shall have determined that all of Tenant's obligations
under this Lease have been fulfilled.

6.    ALTERATIONS.

      6.1   Except for those, if any, specifically provided for in Article 42
hereof or in Exhibit B to this Lease, Tenant shall not make or suffer to be made
any alterations, additions, or improvements, including, but not limited to, the
attachment of any fixtures or equipment in, on, or to the Premises or any part
thereof or the making of any improvements as required by Article 7, without the
prior written consent of Landlord, which, in connection with improvements as
required by Articles 7 and 42 hereof, shall be reasonably and promptly given.
When applying for such consent, Tenant shall, if reasonably requested by
Landlord, furnish complete plans and specifications for such alterations,
additions and improvements.

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

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

      6.4   All alterations, additions, and improvements in, on, or to the
Premises made or installed by Tenant, including carpeting, shall be and remain
the property of Tenant during the Term but, excepting furniture, furnishings,
movable partitions of less than full height from floor to ceiling and other
trade fixtures, shall become a part of the realty and belong to Landlord without
compensation to Tenant upon the expiration or sooner termination of the Term, at
which time title shall pass to Landlord under this Lease as

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<PAGE>
by a bill of sale, unless Landlord elects otherwise. Upon such election by
Landlord, Tenant shall upon demand by Landlord, at Tenant's sole cost and
expense, forthwith and with all due diligence remove any such alterations,
additions or improvements which are designated by Landlord to be removed, and
Tenant shall forthwith and with all due diligence, at its sole cost and expense,
repair and restore the Premises to their original condition, reasonable wear and
tear and damage by fire or other casualty excepted.

7.    REPAIR.

      7.1   Landlord shall have no obligation to alter, remodel, improve,
repair, decorate or paint the Premises, except as specified in Exhibit B if
attached to this Lease and except that Landlord shall repair, replace and
maintain the roof, foundation and the structural soundness of the exterior walls
of the Building. Landlord shall also maintain and replace the landscaping
surrounding the exterior of the Building and within the Land to a condition no
less than that existing as of the Commencement Date. By taking possession of the
Premises, Tenant accepts them (except for those items Landlord shall be
obligated to repair, replace and maintain pursuant to the preceding sentence) as
being in good order, condition and repair and in the condition in which Landlord
is obligated to deliver them. It is hereby understood and agreed that no
representations respecting the condition of the Premises or the Building have
been made by Landlord to Tenant, except as specifically set forth in this Lease.
Landlord shall not be liable for any failure to make any repairs or to perform
any maintenance unless such failure shall persist for a period of time in excess
of thirty (30) days (or such longer period of time as may be reasonably required
by virtue of the nature of the matter to be cured, provided Landlord commences
such cure within said thirty (30) day period and diligently pursues same to
completion) after written notice of the need of such repairs or maintenance is
given to Landlord by Tenant.

      7.2   Except as provided in Section 7.1 hereof, Tenant shall at its own
cost and expense keep and maintain all parts of the non-structural elements of
the Premises and such portion of the Building and improvements as are within the
exclusive control of Tenant in good condition, inclusive of Tenant's
Proportionate Share of the parking lot within the Land, promptly making all
necessary repairs and replacements, whether ordinary or extraordinary, with
materials and workmanship of the same character, kind and quality as the
original (including, but not limited to, repair and replacement of all fixtures
installed by Tenant, water heaters exclusively serving the Premises, windows,
glass and plate glass, doors, exterior stairs, skylights, any special office
entries, interior walls and finish work, floors and floor coverings, heating and
air conditioning systems exclusively serving the Premises, electrical systems
and fixtures, sprinkler systems, dock boards, truck doors, dock bumpers,
plumbing work and fixtures, and performance of regular removal of trash and
debris). Tenant as part of its obligations hereunder shall keep the Premises in
a clean and sanitary condition. Tenant will, as far as possible keep all such
parts of the Premises from deterioration due to ordinary wear and from failing
temporarily out of repair, and upon termination of this Lease in any way Tenant
will yield up the Premises to Landlord in good condition and repair, reasonable
wear and tear, and loss by fire or other casualty excepted (but not excepting
any damage to glass). Tenant shall, at its own cost and expense, repair any
damage to the Premises or the Building resulting from and/or caused in whole or
in part by the negligence or misconduct of Tenant, its agents, employees,
invitees, or any other person entering upon the Premises as a result of Tenant's
business activities or caused by Tenant's default hereunder.

      7.3   Except as provided in Article 22 hereof, there shall be no abatement
of rent and no liability of Landlord by reason of any injury to or interference
with Tenant's business arising from the making of any repairs, alterations or
improvements in or to any portion of the Building or the Premises or to
fixtures, appurtenances and equipment in the Building. Except to the extent, if
any, prohibited by law, Tenant waives the right to make repairs at Landlord's
expense under any law, statute or ordinance now or hereafter in effect.

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

      7.5   Intentionally Deleted.

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                                       -5-
<PAGE>
8.    LIENS.

      Tenant shall keep the Premises, the Building and appurtenant land and
Tenant's leasehold interest in the Premises free from any liens arising out of
any services, work or materials performed, furnished, or contracted for by
Tenant, or obligations incurred by Tenant. In the event that Tenant shall not,
within twenty (20) days following the imposition of any such lien, either cause
the same to be released of record or provide Landlord with insurance against the
same issued by a major title insurance company or such other protection against
the same as Landlord shall accept, Landlord shall have the right to cause the
same to be released by such means as it shall deem proper, including payment of
the claim giving rise to such lien. All such sums paid by Landlord and all
expenses incurred by it in connection therewith shall be considered additional
rent and shall be payable to it by Tenant on demand.

9.    ASSIGNMENT AND SUBLETTING.

      9.1   Tenant shall not have the right to assign or pledge this Lease or to
sublet the whole or any part of the Premises whether voluntarily or by operation
of law, or permit the use or occupancy of the Premises by anyone other than
Tenant, and shall not make, suffer or permit such assignment, subleasing or
occupancy, without the prior written consent of Landlord, which consent shall
not be unreasonably withheld or delayed, and said restrictions shall be binding
upon any and all assignees of the Lease and subtenants of the Premises. In the
event Tenant desires to sublet, or permit such occupancy of, the Premises, or
any portion thereof, or assign this Lease, Tenant shall give written notice
thereof to Landlord at least ninety (90) days but no more than one hundred
eighty (180) days prior to the proposed commencement date of such subletting or
assignment, which notice shall set forth the name of the proposed subtenant or
assignee, the relevant terms of any sublease or assignment and copies of
financial reports and other relevant financial reports and other relevant
financial information of the proposed subtenant or assignee.

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

      9.3   In addition to Landlord's right to approve of any subtenant or
assignee, Landlord shall have the option, in its sole discretion, in the event
of any proposed subletting or assignment, to terminate this Lease, or in the
case of a proposed subletting of less than the entire Premises, to recapture the
portion of the Premises to be sublet, as of the date the subletting or
assignment is to be effective. The option shall be exercised, if at all, by
Landlord giving Tenant written notice given by Landlord to Tenant within sixty
(60) days following Landlord's receipt of Tenant's written notice as required
above. If this Lease shall be terminated with respect to the entire Premises
pursuant to this Section, the Term of this Lease shall end on the date stated in
Tenant's notice as the effective date of the sublease or assignment as if that
date had been originally fixed in this Lease for the expiration of the Term. If
Landlord recaptures under this Section only a portion of the Premises, the rent
to be paid from time to time during the unexpired Term shall abate
proportionately based on the proportion by which the approximate square footage
of the remaining portion of the Premises shall be less than that of the Premises
as of the date immediately prior to such recapture. If Landlord recaptures all
or a portion of the Premises under this Section 9.3, Tenant shall, at Tenant's
own cost and expense, discharge in full any outstanding commission obligation
(said commission being eight cents ($.08) per square foot of Premises' Rentable
Area and amortized on a straight-line basis over a five (5) year Term) on the
part of Landlord with respect to this Lease (or pro rata portion thereof in the
case of a partial recapture), and any commissions which may be due and owing as
a result of any assignment or subletting.

      9.4   In the event that Tenant sells, sublets, assigns or transfers this
Lease, Tenant shall pay to Landlord as additional rent an amount equal to one
hundred percent (100%) of any Increased Rent (as defined below) when and as such
Increased Rent is received by Tenant. As used in this Section, "Increased Rent"
shall mean the excess of (i) all rent and other consideration which Tenant is
entitled to receive by reason of any sale, sublease, assignment or other
transfer of this Lease net of broker commissions, tenant improvements and other
reasonable costs incurred by Tenant in effecting such transfer, over (ii) the
rent otherwise payable by Tenant under this Lease at such time. For purposes of
the foregoing, any consideration received by Tenant in form other than cash
shall be valued at its fair market value as determined by Landlord in good
faith.

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

      9.6   Upon any request to assign or sublet, Tenant will pay to Landlord
the Assignment/Subletting Fee plus, on demand, a sum equal to all of Landlord's
costs, including reasonable attorneys' fees, incurred in investigating and
considering any proposed or purported assignment or pledge of this Lease or
sublease of any of the Premises, regardless of whether Landlord shall consent
to, refuse consent, or determine that Landlord's consent is not required for,
such assignment, pledge or sublease. Any purported sale, assignment, mortgage,
transfer of this Lease or subletting which does not comply with the provisions
of this Article 9 shall be void.

      9.7   If Tenant is a corporation, partnership, limited liability company
or trust, any transfer or transfers of or change or changes within any twelve
month period in the number of the outstanding voting shares of the corporation,
the general partnership interests in the partnership or the identity of the
persons or entities controlling the activities of such partnership, limited
liability company or trust resulting in the persons or entities owning or
controlling a majority of such shares, partnership interests, ownership
interests or activities of such partnership, limited liability company or trust
at the beginning of such period no longer having such ownership or control shall
be regarded as equivalent to an assignment of this Lease to the persons or
entities acquiring such ownership or control and shall be subject to all the
provisions of this Article 9 to the same extent and for all intents and purposes
as though such an assignment had occurred; provided, however, if such transferee
has a financial net worth equal to or greater than that of Tenant as of the
Commencement Date of this Lease (as reasonably determined by Landlord) then such
transfer will be deemed by Landlord as reasonable and provided Tenant and such
transferee comply with all other terms and conditions of this Article 9, such
assignment shall be consented to by Landlord.

      9.8   Notwithstanding the foregoing provisions of this Article 9 to the
contrary, Tenant shall be permitted to assign this Lease, or sublet all or a
portion of the Premises, to an Affiliate (as hereinafter defined) of Tenant
without the prior consent of Landlord, if all of the following conditions are
first satisfied: (1) no Event of Default shall then exist under this Lease; (2)
a fully executed copy of such assignment or sublease, the assumption of this
Lease by the assignee or acceptance of the sublease by the sublessee, and such
other information regarding the assignment or sublease as Landlord may
reasonably request, shall have been delivered to Landlord; (3) the Premises
shall continue to be operated solely for the use specified in the Reference Page
or other use acceptable to Landlord in its sole discretion; and (4) Tenant shall
pay all the costs and expenses referred to in Section 9.6 above. Tenant
acknowledges (and, at Landlord's request, at the time of such assignment or
subletting shall confirm) that in each instance Tenant shall remain liable for
performance of the terms and conditions of the Lease despite such assignment or
subletting. As used herein the term "Affiliate" shall mean an entity which (i)
directly or indirectly controls Tenant or (ii) is under the direct or indirect
control of Tenant or (iii) is under common direct or indirect control with
Tenant. Control shall mean ownership of fifty-one percent (51%) or more of the
voting securities or rights of the controlled entity.

10.   INDEMNIFICATION.

      None of the Landlord Entities shall be liable and Tenant hereby waives all
claims against them for any damage to any property or any injury to any person
in or about the Premises or the Building by or from any cause whatsoever
(including without limiting the foregoing, rain or water leakage of any
character from the roof, windows, walls, basement, pipes, plumbing works or
appliances, the Building not being in good condition or repair, gas, fire, oil,
electricity or theft), except that Landlord will indemnify and hold Tenant
harmless from such claims to the extent caused by or arising from the gross
negligence or willful misconduct of Landlord or its agents, employees or
contractors or any breach or default on the part of Landlord in the

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                                       -7-
<PAGE>
performance of any covenant or agreement on the part of the Landlord to be
performed pursuant to this Lease. Tenant shall protect, indemnify and hold the
Landlord Entities harmless from and against any and all loss, claims, liability
or costs (including court costs and reasonable attorneys' fees) incurred by
reason of (a) any damage to any property (including but not limited to property
of any Landlord Entity) or any injury (including but not limited to death) to
any person occurring in, on or about the Premises or the Building to the extent
that such injury or damage shall be caused by or arise from any actual or
alleged act, neglect, fault, or omission by or of Tenant, its agents, servants,
employees, invitees, or visitors to meet any standards imposed by any duty with
respect to the injury or damage; (b) the conduct or management of any work or
thing whatsoever done by the Tenant in or about the Premises or from
transactions of the Tenant concerning the Premises; (c) Tenant's failure to
comply with any and all governmental laws, ordinances and regulations applicable
to the non-structural condition or use of the Premises or its occupancy; or (d)
any breach or default on the part of Tenant in the performance of any covenant
or agreement on the part of the Tenant to be performed pursuant to this Lease.
The provisions of this Article shall survive the termination of this Lease with
respect to any claims or liability accruing prior to such termination.

11.   INSURANCE.

      11.1  Tenant shall keep in force throughout the Term: (a) a Commercial
General Liability insurance policy or policies to protect the Landlord Entities
against any liability to the public or to any invitee of Tenant or a Landlord
Entity incidental to the use of or resulting from any accident occurring in or
upon the Premises with a limit of not less than $1,000,000 per occurrence and
not less than $2,000,000 in the annual aggregate, or such larger amount as
Landlord may prudently and reasonably require from time to time, covering bodily
injury and property damage liability and $1,000,000 products/completed
operations aggregate; (b) Business Auto Liability covering owned, non-owned and
hired vehicles with a limit of not less than $1,000,000 per accident; (c)
insurance protecting against liability under Worker's Compensation Laws with
limits at least as required by statute; (d) Employer's Liability with limits of
$500,000 each accident, $500,000 disease policy limit, $500,000 disease--each
employee; (e) All Risk or Special Form coverage protecting Tenant against loss
of or damage to Tenant's alterations, additions, improvements, carpeting, floor
coverings, panelings, decorations, fixtures, inventory and other business
personal property situated in or about the Premises to the full replacement
value of the property so insured; and (f) Business Interruption Insurance with
limit of liability representing loss of at least approximately six months of
income.

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

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

      11.4  Landlord shall keep in force throughout the Term: (a) a Commercial
General Liability insurance policy or policies to protect Tenant against any
liability to the public or to Tenant's employees or invitees incidental to the
use of or arising from any accident occurring in or upon the common areas of the
Building with a limit of not less than $1,000,000 per occurrence and not less
than $2,000,000 in the annual aggregate, covering bodily injury and property
damage liability and $1,000,000 products/completed operations aggregate; and (b)
All Risk or Special Form coverage protecting Landlord against loss of or damage
to the Building or the Premises to the replacement value of the property so
insured.

12.   WAIVER OF SUBROGATION.

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

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                                       -8-
<PAGE>
13.   SERVICES AND UTILITIES.

      Tenant shall pay for all water, gas, heat, light, power, telephone, sewer,
sprinkler system charges and other utilities and services used on or from the
Premises, together with any taxes, penalties, and surcharges or the like
pertaining thereto and any maintenance charges for utilities. Tenant shall
furnish all electric light bulbs, tubes and ballasts, battery packs for
emergency lighting and fire extinguishers. If any such services are not
separately metered to Tenant, Tenant shall pay such proportion of all charges
jointly metered with other premises as determined by Landlord, in its sole
discretion, to be reasonable. Any such charges paid by Landlord and assessed
against Tenant shall be immediately payable to Landlord on demand and shall be
additional rent hereunder. Landlord shall in no event be liable for any
interruption or failure of utility services on or to the Premises unless due to
the gross negligence or willful misconduct of Landlord and in such event
Landlord's liability shall be limited to abatement of Annual Rental until such
utility services are restored.

14.   HOLDING OVER.

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

15.   SUBORDINATION.

      Without the necessity of any additional document being executed by Tenant
for the purpose of effecting a subordination, this Lease shall be subject and
subordinate at all times to ground or underlying leases and to the lien of any
mortgages or deeds of trust hereafter placed on, against or affecting the
Building, Landlord's interest or estate in the Building, or any ground or
underlying lease; provided that the holder of any mortgage, deed of trust,
ground or underlying leases entered into after the date hereof enters into a
subordination, non-disturbance and attornment agreement, in the form attached
hereto as Exhibit E and made a part hereof for all purposes, and containing such
reasonable modifications as the holder of any such mortgage, deed of trust,
ground or underlying leases might request, and; provided, however, that if the
lessor, mortgagee, trustee, or holder of any such mortgage or deed of trust
elects to have Tenant's interest in this Lease be superior to any such
instrument, then, by notice to Tenant, this Lease shall be deemed superior,
whether this Lease was executed before or after said instrument. Notwithstanding
the foregoing, Tenant covenants and agrees to execute and deliver upon demand
such further instruments evidencing such subordination or superiority of this
Lease as may be required by Landlord. Landlord acknowledges that the Building,
as of the Commencement Date, is not encumbered by a mortgage or deed of trust
lien.

16.   RULES AND REGULATIONS.

      Provided all tenants are subject to substantially the same rules and
regulations, Tenant shall faithfully observe and comply with all the rules and
regulations as set forth in Exhibit C to this Lease and all reasonable
modifications of and additions to them from time to time put into effect by
Landlord. Landlord shall use reasonable efforts to enforce such rules and
regulations on a uniform, non-discriminating basis; however, Landlord shall not
be responsible to Tenant for the non-performance by any other tenant or occupant
of the Building of any such rules and regulations.

17.   RE-ENTRY BY LANDLORD.

      17.1  Landlord reserves and shall at all times have the right to re-enter
the Premises to inspect the same, to show said Premises to prospective
purchasers, mortgagees or tenants, and to alter, improve or repair the Premises
and any portion of the Building, without abatement of rent, and may for that
purpose erect, use and maintain scaffolding, pipes, conduits and other necessary
structures and open any wall, ceiling or floor in and through the Building and
Premises where reasonably required by the character of the work to be

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                                       -9-
<PAGE>
performed, provided entrance to the Premises shall not be blocked thereby, and
further provided that the business of Tenant shall not be interfered with
unreasonably.

      17.2  Landlord shall have the right at any time to change the arrangement
and/or locations of driveway entrances, landscaping or other public parts of the
Building, if any, and to change the name, number or designation by which the
Building is commonly known; provided entrances to the Premises shall not be
blocked thereby, and further provided that the business of Tenant shall not be
interfered with unreasonably. In the event that Landlord damages any portion of
any wall or wall covering, ceiling, or floor or floor covering within the
Premises, Landlord shall repair or replace the damaged portion to match the
original as nearly as commercially reasonable but shall not be required to
repair or replace more than the portion actually damaged.

      17.3  Provided Landlord complies with the provisions of this Article 17,
Tenant hereby waives any claim for damages for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy or quiet enjoyment of
the Premises, and any other loss occasioned by any action of Landlord authorized
by this Article 17. Tenant agrees to reimburse Landlord, on demand, as
additional rent, for any expenses which Landlord may incur in thus effecting
compliance with Tenant's obligations under this Article 17.

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

18.   DEFAULT.

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

            18.1.1 Tenant shall fail to pay when due any sum of money becoming
due to be paid to Landlord under this Lease, whether such sum be any installment
of the rent reserved by this Lease, any other amount treated as additional rent
under this Lease, or any other payment or reimbursement to Landlord required by
this Lease, whether or not treated as additional rent under this Lease, and such
failure shall continue for a period of ten (10) days after written notice that
such payment was not made when due, but if any such notice shall be given twice
in any twelve-month period, for the twelve month period commencing with the date
of such second notice, the failure to pay within ten (10) days after due any
additional sum of money becoming due to be paid to Landlord under this Lease
during such period shall be an Event of Default, without notice.

            18.1.2 Tenant shall fail to comply with any term, provision or
covenant of this Lease which is not provided for in another Section of this
Article and shall not cure such failure within thirty (30) days (forthwith, if
the failure involves a hazardous condition) after written notice of such failure
to Tenant, except that if, due to the nature of the failure, a cure cannot be
reasonably completed within a thirty (30) day period, Tenant shall not be in
default if Tenant commences such cure within such thirty (30) day period and
pursues same with diligence to completion but provided however, that such cure
is completed within sixty (60) days from the date of such notice from Landlord.

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

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

            18.1.5 A court of competent jurisdiction shall enter an order,
judgment or decree adjudicating Tenant bankrupt, or appointing a receiver of
Tenant, or of the whole or any substantial part of its property, without the
consent of Tenant, or approving a petition filed against Tenant seeking

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                                      -10-
<PAGE>
reorganization or arrangement of Tenant under the bankruptcy laws of the United
States, as now in effect or hereafter amended, or any state thereof, and such
order, judgment or, decree shall not be vacated or set aside or stayed within
thirty (30) days from the date of entry thereof.

19.   REMEDIES.

      19.1  Except as otherwise provided in Article 20, upon the occurrence of
any of the Events of Default described or referred to in Article 18, Landlord
shall have the option to pursue any one or more of the following remedies
without any notice or demand whatsoever, concurrently or consecutively and not,
except as limited by applicable law, alternatively:

            19.1.1 Landlord may, at its election, terminate this Lease or
terminate Tenant's right to possession only, without terminating the Lease.

            19.1.2 Upon any termination of this Lease, whether by lapse of time
or otherwise, or upon any termination of Tenant's right to possession without
termination of the Lease, Tenant shall surrender possession and vacate the
Premises immediately, and deliver possession thereof to Landlord, and Tenant
hereby grants to Landlord full and free license to enter into and upon the
Premises in such event and to repossess Landlord of the Premises as of
Landlord's former estate and to expel or remove Tenant and any others who may be
occupying or be within the Premises and to remove Tenant's signs and other
evidence of tenancy and all other property of Tenant therefrom without being
deemed in any manner guilty of trespass, eviction or forcible entry or detainer,
and without incurring any liability for any damage resulting therefrom, Tenant
waiving any right to claim damages for such re-entry and expulsion, and without
relinquishing Landlord's right to rent or any other right given to Landlord
under this Lease or by operation of law.

            19.1.3 Upon any termination of this Lease, whether by lapse of time
or otherwise, Landlord shall be entitled to recover as damages, all rent,
including any amounts treated as additional rent under this Lease, and other
sums due and payable by Tenant on the date of termination, plus as liquidated
damages and not as a penalty, an amount equal to the sum of: (a) an amount equal
to the then present value of the rent reserved in this Lease for the residue of
the stated Term of this Lease including any amounts treated as additional rent
under this Lease and all other sums provided in this Lease to be paid by Tenant,
minus the fair rental value of the Premises for such residue; (b) the value of
the time and expense necessary to obtain a replacement tenant or tenants, and
the estimated expenses described in Section 19.1.4 relating to recovery of the
Premises, preparation for reletting and for reletting itself; and (c) the cost
of performing any other covenants which would have otherwise been performed by
Tenant.

            19.1.4 Upon any termination of Tenant's right to possession only
without termination of the Lease:

                  19.1.4.1 Neither such termination of Tenant's right to
possession nor Landlord's taking and holding possession thereof as provided in
Section 19.1.2 shall terminate the Lease or release Tenant, in whole or in part,
from any obligation, including Tenant's obligation to pay the rent, including
any amounts treated as additional rent, under this Lease for the full Term.

                  19.1.4.2 Landlord may, but need not, relet the Premises or any
part thereof for such rent and upon such terms as Landlord, in its
commercially-reasonable business judgment, shall determine (including the right
to relet the premises for a greater or lesser term than that remaining under
this Lease, the right to relet the Premises as a part of a larger area, and the
right to change the character or use made of the Premises). In connection with
or in preparation for any reletting, Landlord may, but shall not be required to,
make repairs, alterations and additions in or to the Premises and redecorate the
same to the extent Landlord deems necessary or desirable, and Tenant shall, upon
demand, pay the cost thereof, together with Landlord's expenses of reletting,
including, without limitation, any commission incurred by Landlord. If Landlord
decides to relet the Premises or a duty to relet is imposed upon Landlord by
law, Landlord and Tenant agree that nevertheless Landlord shall at most be
required to use only the same efforts Landlord then uses to lease premises in
the Building generally and that in any case that Landlord shall not be required
to give any preference or priority to the showing or leasing of the Premises
over any other space that Landlord may be leasing or have available and may
place a suitable prospective tenant in any such other space regardless of when
such other space becomes available. Landlord shall not be required to observe
any instruction given by Tenant about any reletting or accept any tenant offered
by Tenant unless such offered tenant has a credit-worthiness acceptable to
Landlord and leases the entire Premises upon terms and conditions including a
rate of rent (after giving effect to all expenditures by Landlord for tenant
improvements, broker's commissions and other leasing costs) all no less
favorable to Landlord than as called for in this Lease, nor shall Landlord be
required to make or permit any assignment or sublease for more than the current
term or which Landlord would not be required to permit under the provisions of
Article 9.

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                  19.1.4.3 Until such time as Landlord shall elect to terminate
the Lease and shall thereupon be entitled to recover the amounts specified in
such case in Section 19.1.3, Tenant shall pay to Landlord upon demand the full
amount of all rent, including any amounts treated as additional rent under this
Lease and other sums reserved in this Lease for the remaining Term, together
with the reasonable costs of repairs, alterations, additions, redecorating and
Landlord's expenses of reletting and the collection of the rent accruing
therefrom (including reasonable attorneys' fees and broker's commissions), as
the same shall then be due or become due from time to time, less only such
consideration as Landlord may have received from any reletting of the Premises;
and Tenant agrees that Landlord may file suits from time to time to recover any
sums falling due under this Article 19 as they become due. Any proceeds of
reletting by Landlord in excess of the amount then owed by Tenant to Landlord
from time to time shall be credited against Tenant's future obligations under
this Lease but shall not otherwise be refunded to Tenant or inure to Tenant's
benefit.

      19.2  Landlord may, at Landlord's option, enter into and upon the Premises
if Landlord determines in its sole discretion that Tenant is not acting within a
commercially reasonable time to maintain, repair or replace anything for which
Tenant is responsible under this Lease (and with respect to which an Event of
Default has occurred) and correct the same, without being deemed in any manner
guilty of trespass, eviction or forcible entry and detainer and without
incurring any liability for any damage or interruption of Tenant's business
resulting therefrom. If Tenant shall have vacated the Premises, Landlord may at
Landlord's option re-enter the Premises at any time during the last six months
of the then current Term of this Lease and make any and all such changes,
alterations, revisions, additions and tenant and other improvements in or about
the Premises as Landlord shall elect, all without any abatement of any of the
rent otherwise to be paid by Tenant under this Lease.

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

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

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

      19.6  Within fifteen (15) days after request from Tenant, Landlord shall
execute a subordination agreement in favor of Tenant's lender with respect to
any liens arising in favor of Landlord against Tenant's fixtures, inventory and
personal property. Such subordination agreement shall be in a form reasonably
acceptable to Tenant, Tenant's lender, Landlord and, if any, Landlord's lender.

      19.7  Any and all property which may be removed from the Premises by
Landlord pursuant to the authority of this Lease or of law, to which Tenant is
or may be entitled, may be handled, removed and/or stored, as the case may be,
by or at the direction of Landlord but at the risk, cost and expense of Tenant,
and Landlord shall in no event be responsible for the value, preservation or
safekeeping thereof. Tenant shall pay to Landlord, upon demand, any find all
expenses incurred in such removal and all storage charges against such property
so long as the same shall be in Landlord's possession or under Landlord's
control. Any such property of Tenant not retaken by Tenant from storage within
thirty (30) days after removal from the

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Premises shall, at Landlord's option, be deemed conveyed by Tenant to Landlord
under this Lease as by a bill of sale without further payment or credit by
Landlord to Tenant.

      19.8  In the event of any default by Landlord of any of its obligations
under this Lease, Tenant shall give Landlord (and any mortgagee of which Tenant
has received written notice) written notice specifying such default with
particularity and Landlord (and any mortgagee) shall thereupon have thirty (30)
days (plus such additional reasonable period as may be required in the exercise
by Landlord or the mortgagee of due diligence in order to cure defaults that are
not reasonably susceptible of being cured within 30 days) in which to cure any
such default. Unless and until Landlord (and any mortgagee) fails to cure any
default within such 30 day (or longer) period after such notice, except as
otherwise expressly stated in this Lease, Tenant shall not have any remedy or
cause of action by reason thereof. If Landlord (and any mortgagee) fails to cure
any default within the 30 day (or longer) period after notice thereof from
Tenant pursuant to this Section 19.8, Tenant may pursue any and all remedies
available to it at law or equity under this Lease.

20.   TENANT'S BANKRUPTCY OR INSOLVENCY.

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

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

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

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

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

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

21.   QUIET ENJOYMENT.

      Landlord represents and warrants that it has full right and authority to
enter into this Lease, that there are no ground or superior leases existing as
of the Commencement Date, and that Tenant, while paying the rental and
performing its other covenants and agreements contained in this Lease, shall
peaceably and quietly have, hold and enjoy the Premises for the Term without
hindrance or molestation from Landlord subject to the terms and provisions of
this Lease. Provided that Landlord shall have used commercially reasonable
efforts to end or minimize interference or disturbance by tenants or third
persons after Tenant has requested Landlord to do so, Landlord shall not be
liable for any such interference or disturbance by other tenants, or third
persons, nor shall Tenant be released from any of the obligations of this Lease
because of such interference or disturbance.

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22.   DAMAGE BY FIRE, ETC.

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

      22.2  If such repairs cannot, in Landlord's reasonable estimation, be made
within one hundred eighty (180) days, Tenant shall have the option of giving
Landlord, at any time within sixty (60) days after such damage (provided Tenant
has received notice of Landlord's reasonable estimation within said forty-five
(45) day period), notice terminating this Lease as of the date of such damage.
If such repairs cannot, in Landlord's reasonable estimation, be made within two
hundred fifty (250) days, Landlord and Tenant shall each have the option of
giving the other at any time within sixty (60) days after such damage (provided
Tenant has received notice of Landlord's reasonable estimation within said
forty-five (45) day period), notice terminating this Lease as of the date of
such damage. In the event of the giving of such notice, this Lease shall expire
and all interest of the Tenant in the Premises shall terminate as of the date of
such damage as if such date had been originally fixed in this Lease for the
expiration of the Term. In the event that neither Landlord nor Tenant exercises
its option to terminate this Lease, then Landlord shall repair or restore such
damage, this Lease continuing in full force and effect, and the rent hereunder
shall be proportionately abated as provided in Section 22.1.

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

      22.4  In the event that Landlord should fail to complete such repairs and
material restoration within sixty (60) days after the date estimated by Landlord
therefor as extended by this Section 22.4, Tenant may at its option and as its
sole remedy terminate this Lease by delivering; written notice to Landlord,
within fifteen (15) days after the expiration of said period of time, whereupon
the Lease shall end on the date of such notice or such later date fixed in such
notice as if the date of such notice was the date originally fixed in this Lease
for the expiration of the Term; provided, however, that if construction is
delayed because of changes, deletions or additions in construction requested by
Tenant, strikes, lockouts, casualties, Acts of God, war, material or labor
shortages, government regulation or control or other causes beyond the
reasonable control of Landlord, the period for restoration, repair or rebuilding
shall be extended for the amount of time Landlord is so delayed, but in no event
more than ninety (90) days of delay.

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

      22.6  In the event of any damage or destruction to the Building or
Premises by any peril covered by the provisions of this Article 22, it shall be
Landlord's responsibility to properly secure the Premises; however, it shall be
the responsibility of Tenant upon notice from Landlord to remove forthwith, at
its sole

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<PAGE>
cost and expense, such portion of all of the property belonging to Tenant or its
licensees from such portion or all of the Building or Premises as Landlord shall
reasonably request.

23.   EMINENT DOMAIN.

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

24.   SALE BY LANDLORD.

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

25.   ESTOPPEL CERTIFICATES.

      Within fifteen (15) days following any written request which Landlord may
make from time to time, Tenant shall execute and deliver to Landlord or
mortgagee or prospective mortgagee an estoppel certificate stating: (a) the date
of commencement of this Lease; (b) the fact that this Lease is unmodified and in
full force and effect (or, if there have been modifications to this Lease, that
this lease is in full force and effect, as modified, and stating the date and
nature of such modifications); (c) the date to which the rent and other sums
payable under this Lease have been paid; (d) the fact that there are no current
defaults under this Lease by either Landlord or Tenant except as specified in
Tenant's statement; and (e) such other matters as may be reasonably requested by
Landlord. Landlord and Tenant intend that any statement delivered pursuant to
this Article 25 may be relied upon by any mortgagee, beneficiary or purchaser
and Tenant shall be liable for all loss, cost or expense resulting from the
failure of any sale or funding of any loan caused by any material misstatement
contained in such estoppel certificate. Within fifteen (15) days following any
written request which Tenant may make from time to time (but not more than once
in any given calendar year), Landlord shall execute and deliver to Tenant an
estoppel certificate in a form substantially similar to that referred to above
in this Article 25.

26.   SURRENDER OF PREMISES.

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

      26.2  At the end of the Term or any renewal of the Term or other sooner
termination of this Lease, Tenant will peaceably deliver up to Landlord
possession of the Premises, together with all improvements or additions upon or
belonging to the same, by whomsoever made, in the same conditions received or
first installed, broom clean and free of all debris, excepting only ordinary
wear and tear and damage by fire or

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<PAGE>
other casualty and in accordance with the terms and conditions referenced on
Exhibit D and made a part hereof for all purposes. Tenant may, and at Landlord's
request shall, at Tenant's sole cost, remove upon termination of this Lease, any
and all furniture, furnishings, movable partitions of less than full height from
floor to ceiling, trade fixtures and other, except as otherwise provided in
Article 6 hereof, property installed by Tenant, title to which shall not be in
or pass automatically to Landlord upon such termination, repairing all damage
caused by such removal, reasonable wear and tear excepted. Property not so
removed shall, unless requested to be removed, be deemed abandoned by the Tenant
and title to the same shall thereupon pass to Landlord under this Lease as by a
bill of sale. All other alterations, additions and improvements in, on or to the
Premises shall be dealt with and disposed of as provided in Article 6.

      26.3  All obligations of Landlord and Tenant under this Lease not fully
performed or waived as of the expiration or earlier termination of the Term
shall survive the expiration or earlier termination of the Term. In the event
that Tenant's failure to perform its obligations under this Article 26
materially prevents Landlord from releasing the Premises, Tenant shall continue
to pay rent pursuant to the provisions of Article 14 until such performance is
substantially complete. Upon the expiration or earlier termination of the Term,
Tenant shall pay to Landlord (subject to the provisions of the last sentence of
this Section 26.3) the amount, as estimated by Landlord, necessary to repair and
restore the Premises as provided in this Lease and/or to discharge Tenant's
obligation for unpaid amounts due or to become due to Landlord. All such amounts
shall be used and held by Landlord for payment of such obligations of Tenant,
with Tenant being liable for any additional costs upon demand by Landlord, or
with any excess to be returned to Tenant after all such obligations have been
determined and satisfied. Any otherwise unused Security Deposit shall be
credited against the amount payable by Tenant under this Lease.

27.   NOTICES.

      Any notice or document required or permitted to be delivered under this
Lease shall be addressed to the intended recipient, shall be transmitted
personally, by fully prepaid registered or certified United States Mail return
receipt requested, or by reputable independent contract delivery service
furnishing a written record of attempted or actual delivery, and shall be deemed
to be delivered when tendered for delivery to the addressee at its address set
forth on the Reference Page, or at such other address as it has then last
specified by written notice delivered in accordance with this Article 27, or if
to Tenant at either its aforesaid address or it last known registered office.

28.   TAXES PAYABLE BY TENANT.

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

29.   RELOCATION OF TENANT.

      Intentionally Deleted.

30.   DEFINED TERMS AND HEADINGS.

      The Article headings shown in this Lease are for convenience of reference
and shall in no way define, increase, limit or describe the scope or intent of
any provision of this Lease. Any indemnification or insurance of Landlord shall
apply to and inure to the benefit of all the following "Landlord Entities,"
being Landlord, Landlord's investment manager, and the trustees, boards of
directors, officers, general partners, beneficiaries, stockholders, employees
and agents of each of them. Any option granted to Landlord shall also include or
be exercisable by Landlord's trustee, beneficiary, agents and employees, as the
case my be. In any case where this Lease is signed by more than one person, the
obligations under this Lease shall be joint and several. The terms "Tenant" and
"Landlord" or any pronoun used in place thereof shall indicate

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<PAGE>
and include the masculine or feminine, the singular or plural number,
individuals, firms or corporations, and each of their respective successors,
executors, administrators and permitted assigns, according to the context
hereof. The term "rentable area" shall mean the rentable area of the Premises or
the Building as calculated by the Landlord on the basis of the plans and
specifications of the Building including a proportionate share of any common
areas. Tenant hereby accepts and agrees to be bound by the figures for the
rentable space footage of the Premises and Tenant's Proportionate Share shown on
the Reference Page.

31.   TENANT'S AUTHORITY.

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

32.   COMMISSIONS.

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

33.   TIME AND APPLICABLE LAW.

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

34.   SUCCESSORS AND ASSIGNS.

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

35.   ENTIRE AGREEMENT.

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

36.   EXAMINATION NOT OPTION.

      Submission of this Lease shall not be deemed to be a reservation of the
Premises. Landlord shall not be bound by this Lease until it has received a copy
of this Lease duly executed by Tenant and has delivered to Tenant a copy of this
Lease duly executed by Landlord, and until such delivery Landlord reserves the
right to exhibit and lease the Premises to other prospective tenants.
Notwithstanding anything contained in this Lease to the contrary, Landlord may
withhold delivery of possession of the Premises from Tenant until such time as
Tenant has paid to Landlord any security deposit required by Article 5, the
first month's rent as set forth in Article 3 and any sum owed pursuant to this
Lease.

37.   RECORDATION.

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

38.   LIMITATION OF LANDLORD'S LIABILITY.

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

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<PAGE>
general partners thereof, or any beneficiaries, stockholders, employees, or
agents of Landlord or the investment manager.

39.   RENEWAL OPTION.

      Tenant shall, have at its option (the "Renewal Option"), the right to
renew and extend this Lease for one term of five (5) years (the "Renewal Term").
The Renewal Term shall commence immediately upon the expiration of the initial
Term by Tenant's giving written notice thereof to Landlord no sooner than nine
(9) months nor later than six (6) months prior to the expiration of the initial
Term; provided, however. Tenant shall have the right to give notice to Landlord
that Tenant desires to exercise the Renewal Option up to twelve (12) months
prior to the expiration of the initial Term in the event of a casualty described
in Article 22. Once Tenant shall exercise any Renewal Option, Tenant may not
thereafter revoke such exercise, except as expressly set forth below. Tenant
shall not have the right to exercise any Renewal Option while an Event of
Default by Tenant exists under this Lease or in the event an Event of Default
existed more than three (3) times during the Term of this Lease. Tenant's
failure to exercise timely a Renewal Option for any reason whatsoever shall
conclusively be deemed a waiver of such Renewal Option. At Landlord's option,
Landlord may adjust the Base Rental for the Renewal Term at an annual rate equal
to the Fair Market Value Rate (as hereinafter defined) as of the beginning of
the Renewal Term. As used in this Lease, "Fair Market Value Rate" shall mean the
fair market value rental rate per square foot of rentable area per year in
effect at the commencement of the Renewal Term for comparable tenants taking
comparable space in comparable conditions under comparable terms in comparable
buildings in the same rental market (hereinafter called "Comparable Buildings");
provided, however, that in no event shall the Base Rent for the Renewal Term be
less than the Base Rent for the initial Term as adjusted according to the terms
of this Lease. It is also agreed and understood that the Fair Market Value Rate
shall include: (a) base rent; (b) rental operating expenses, property tax, and
utility and expense adjustments that are being included as part of the terms and
conditions of industrial tenant leases for comparable tenants in Comparable
Buildings as of the time of determination of the Fair Market Value Rate.
Landlord shall advise Tenant in writing within twenty (20) days after Tenant
exercises the Renewal Option of the Fair Market Value Rate which shall be in
effect as of the commencement date of the Renewal Term. Tenant shall then have
fifteen (15) days to notify Landlord of its acceptance or rejection of the Fair
Market Value Rate for the Renewal Term. In the event Tenant fails to so notify
Landlord within the fifteen (15) day period Tenant shall be deemed to have not
accepted the Fair Market Value Rate proposed by Landlord. Notwithstanding the
prohibition on Tenant's right to revoke its exercise of the Renewal Option, in
the event Tenant and Landlord are unable to agree on the Fair Market Value Rate
for the Renewal Term within sixty (60) days after Tenant exercises the Renewal
Option, Tenant shall be deemed to have revoked the Renewal Option and the
Renewal Option shall be deemed null and void and of no further force or effect.
Tenant shall take the Premises "as is" for the Renewal Term and Landlord shall
have no obligation to make any improvements or alterations to the Premises.
Except as set forth in this Article 39, the leasing of the Premises for the
Renewal Term shall be upon the same terms and conditions as the leasing of the
Premises for the initial Term and shall be upon and subject to all of the
provisions of this Lease. Any Renewal Option granted to Tenant under this
Article 39 shall be personal to Tenant and shall not be transferred, encumbered,
or assigned by Tenant or in any manner transferred to, or exercised by, any
subtenant of Tenant. The Renewal Term will contain no further renewal options
unless expressly granted by Landlord in writing.

40.   LANDLORD'S RIGHT TO TERMINATE.

      Landlord and Tenant hereby agree that Landlord shall have the right at any
time up through and including June 30, 1998 to give notice to Tenant that it
desires to terminate the Lease, such termination to become effective six (6)
months after the date of delivery of such termination notice ("Right to
Terminate"). Therefore, notice to terminate may be given by Landlord at any time
between the Commencement Date and June 30, 1998. If Landlord exercises its Right
to Terminate, the giving of notice will not affect in any way Tenant's
obligations hereunder, including the obligation to pay Rent, between the time of
the giving of such notice and the termination of the Lease. Once Landlord has
exercised its Right to Terminate, Tenant shall have six (6) months to surrender
the Premises in a clean condition (as described in Exhibit D to this Lease) and
in accordance with Article 26 of the Lease, and neither party will have any
obligations to the other except for those obligations which by their terms shall
survive the termination of this Lease.

      Landlord agrees that regardless of the actual date of such termination
notice, the effective date of the Lease termination shall not occur during the
months of October, November, December and January (the "Blackout Period") of any
lease year, but shall occur on the first (1st) business day following such
Blackout Period.

      It is hereby agreed and understood that if Landlord elects to lease the
Building as a multi-tenant building and leases the Adjacent Area (as hereinafter
defined) of the Building to another tenant pursuant to

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<PAGE>
the provisions of Section 42 hereof, Landlord's Right to Terminate as set forth
in this Section 40 shall become null and void.

41.   TENANT'S RIGHT TO TERMINATE.

      Landlord and Tenant hereby agree that Tenant shall have a one-time right
to terminate this Lease (the "Termination Option") effective on June 30, 2000,
by giving Landlord written notice no later than December 31, 1999, provided the
Lease is in full force and effect, an Event of Default does not, as of such
exercise date, then exist and an Event of Default has not existed more than
three (3) times during the Term of this Lease. Should Tenant elect to exercise
the Termination Option, Tenant shall pay to Landlord a termination fee equal to
$291,294.75 (the "Termination Fee"). Tenant's notice will not be effective for
any purpose unless it is accompanied by the Termination Fee. Once such notice is
given, Tenant's Termination Option will be irrevocable and the Termination Fee
deemed fully and completely earned by Landlord and non-refundable to Tenant. The
giving of such notice by Tenant will not affect in any way Tenant's obligations
under this Lease, including the obligation to pay Rent, between the time of the
giving of such notice and the termination of the Lease. Once the Lease is
terminated pursuant to this paragraph, neither party will have any obligations
to the other except for those obligations which by their terms shall survive the
termination of this Lease. If Tenant fails to exercise the Termination Option by
December 31, 1999, the Termination Option shall become void and of no further
force and effect.

42.   TENANT'S RIGHT TO USE ADJACENT AREA.

      Landlord agrees that Tenant may, at its option, use and occupy that
portion of the Building shown and labeled on Exhibit A hereto as the "Adjacent
Area," such Adjacent Area consisting of approximately 73,500 square feet.
Tenant's use and occupancy of the Adjacent Area shall be in accordance with, and
Tenant agrees to comply with, all of the terms and conditions of this Lease;
provided, however, such use and occupancy shall not result in any increase in
any of Tenant's rental obligations hereunder including, without limitation, Rent
Adjustments per Article 4 hereof, nor shall the same cause an increase in
Tenant's Proportionate Share. Tenant acknowledges and agrees that Landlord shall
have the right at any time during the Term of this Lease to lease the Building
as a multi-tenant building and lease, all or any portion of the Adjacent Area to
another tenant. Commencing on July 1, 1997, if Landlord elects to do so,
Landlord shall give Tenant thirty (30) days' advance written notice (honoring
the Blackout Period) and Tenant shall be required to reduce its use and
occupancy of the Premises by that portion of the Adjacent Area leased such other
tenant (up to 73,506 square feet) and in such event, Tenant shall surrender the
vacated portion of the Premises in a clean condition (as described in Exhibit D
to this Lease) and in accordance with Article 26 of the Lease. Notwithstanding
the reduction in square footage of the Premises, the Monthly Installment of Rent
of $72,714.25 per month, the Tenant's Proportionate Share and all other terms
and conditions of this Lease shall remain in full force and effect as stated
herein. In such event, Landlord shall, at its cost, demise the new space to such
tenant and separate the utilities from the Premises to such new space and in
connection with such work Landlord will not unreasonably interfere with Tenant's
ingress/egress rights to and from the Premises and to the loading dock areas
located thereon. If any utilities are not separately metered to Tenant, Tenant
shall pay such proportion of all charges jointly metered with other premises as
determined by Landlord, in its sole discretion, to be reasonable. Tenant shall
have the right, at its cost, to make alterations to the Premises (such as, by
way of example, new pedestrian and warehouse entrances and loading dock areas)
on account of such reduction in space, subject to Landlord's approval as to
location and design only, such approval not to be unreasonably withheld or
delayed.

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<PAGE>
43.   PARKING.

      In addition to the parking rights referred to in Paragraph 22 of Exhibit
C, Landlord agrees that all code-required off-street parking (without variance,
special exception or the like) applicable to any tenant(s) of the Adjacent Area
must be satisfied by the total number of parking spaces on the Land less the
Tenant's Proportionate Share as specified in paragraph 22 of Exhibit C.

LANDLORD:                               TENANT:

RREEF Mid-Cities Industrial L.P.,       Babbage's Etc. LLC, a Delaware
a Texas limited partnership             limited liability company

By:    RREEF Management Company,
       a California corporation

By:    /s/ Phyllis L. Palis             By:    /s/ R. Richard Fontaine
       --------------------------              ---------------------------
           Phyllis L. Palis
Title:     District Manager             Title: CEO
       --------------------------              ---------------------------

Dated: April 23, 1997                   Dated: 4/23/97
       --------------------------              --------------------------

By:    /s/ Robert Chapman
       --------------------------
           Robert Chapman
           Portfolio Manager

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                                                                        Initials
                                      -20-
<PAGE>
                                    EXHIBIT A

                 attached to and made part of Lease bearing the
                  Lease Reference Date of March 6, 1997 between
 RREEF Mid-Cities Industrial L.P., a Texas limited partnership, as Landlord and
                Babbage's Etc. LLC, a Delaware company, as Tenant

                                    PREMISES

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

                                     [chart]

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<PAGE>
                                    EXHIBIT B

                 attached to and made part of Lease bearing the
                  Lease Reference Date of March 6, 1997 between
 RREEF Mid-Cities Industrial L.P., a Texas limited partnership, as Landlord and
                Babbage's Etc. LLC, a Delaware company, as Tenant

                               INITIAL ALTERATIONS

Tenant shall take the Premises in its "as-is" condition and Landlord shall have
no obligation to make any improvements thereto.

                                                                        --------
                                                                        Initials
<PAGE>
                                    EXHIBIT C

                 attached to and made part of Lease bearing the
                  Lease Reference Date of March 6, 1997 between
 RREEF Mid-Cities Industrial L.P., a Texas limited partnership, as Landlord and
                Babbage's Etc. LLC, a Delaware company, as Tenant

                              RULES AND REGULATIONS

1.    No sign, placard, picture, advertisement, name or notice shall be
installed or displayed on any part of the outside or inside of the Building
without the prior written consent of the Landlord which consent shall not be
unreasonably withheld or delayed. Landlord shall have the right to remove, at
Tenant's expense and without notice, any sign installed or displayed in
violation of this rule. All approved signs or lettering on doors and walls shall
be printed, painted, affixed or inscribed at the expense of Tenant by a person
or vendor chosen by Landlord.

2.    If Landlord objects in writing to any curtains, blinds, shades or screens
attached to or hung in or used in connection with any window or door of the
Premises, Tenant shall immediately discontinue such use. No awning shall be
permitted on any part of the Premises. Tenant shall not place anything or allow
anything to be placed against or near any glass partitions or doors or windows
which may appear unsightly, in the opinion of Landlord, from outside the
Premises.

3.    Tenant shall not obstruct any sidewalks, halls, passages, exits,
entrances, elevators, escalators or stairways of the Building. The halls,
passages, exits, entrances, shopping malls, elevators, escalators and stairways
are not for the general public, and Landlord shall in all cases retain the right
to control and prevent access to the Building of all persons whose presence in
the judgment of Landlord would be prejudicial to the safety, character,
reputation and interests of the Building and its tenants provided that nothing
contained in this rule shall be construed to prevent such access to persons with
whom any tenant normally deals in the ordinary course of its business, unless
such persons are engaged in illegal activities. No tenant and no employee or
invitee of any tenant shall go upon the roof of the Building except when
necessary to make HVAC repairs.

4.    If a directory of the Building is provided it will exclusively be for the
display of the name and location of tenants only and Landlord reserves the right
to exclude any other names therefrom.

5.    Landlord will furnish Tenant free of charge with two keys to the front
door in the Premises. Landlord may make a reasonable charge for any additional
keys, and Tenant shall not alter any lock or install a new or additional lock or
bolt on any door of its Premises without Landlord's prior consent. Tenant, upon
the termination of its tenancy, shall deliver to Landlord the keys of all doors
which have been furnished to Tenant, and in the event of loss of any keys so
furnished, shall pay Landlord therefor.

6.    If Tenant requires telegraphic, telephonic, burglar alarm or similar
services, it shall first obtain, and comply with, Landlord's instructions in
their installation.

7.    Tenant shall not place a load upon any floor which exceeds the load per
square foot which such floor was designed to carry and which is allowed by law.
Landlord shall have the right to prescribe the weight, size and position to all
equipment, materials, furniture or other properly brought into the Building.
Heavy objects shall, stand on such platforms as determined by Landlord to be
necessary to properly distribute the weight. Business machines and mechanical
equipment belonging to Tenant which cause noise or vibration that may be
transmitted to the structure of the Building or to any space in the Building to
such a degree as to be objectionable to Landlord or to any tenants shall be
placed and maintained by Tenant, at Tenant's expense, on vibration eliminators
or other devices sufficient to eliminate noise or vibration. The persons
employed to move such equipment in or out of the Building must be acceptable to
Landlord. Landlord will not be responsible for loss of, or damage to, any such
equipment or other property from any cause, and all damage done to the Building
by maintaining or moving such equipment or other property shall be repaired at
the expense of Tenant.

8.    Tenant shall not use any method of heating or air conditioning other than
that supplied by Landlord. Tenant shall not waste electricity, water or air
conditioning.

9.    Tenant shall close and lock the doors of its Premises and entirely shut
off all water faucets or other water apparatus and electricity, gas or air
outlets before Tenant and its employees leave the Premises. Tenant

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                                                                        Initials
<PAGE>
shall be responsible for any damage or injuries sustained by other tenants or
occupants of the Building or by Landlord for noncompliance with this rule.

10.   The toilet rooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were constructed, no
foreign substance of any kind whatsoever shall be thrown into any of them, and
the expense of any breakage, stoppage or damage resulting from the violation of
this rule shall be borne by the Tenant who, or whose employees or invitees,
shall have caused it.

11.   Tenant shall not install any radio or television antenna, satellite dish,
loudspeaker or other device on the roof or exterior walls of the Building.
Tenant shall not interfere with radio or television broadcasting or reception
from or in the Building or elsewhere.

12.   Except as approved by Landlord, Tenant shall not excessively mark, drive
nails, screw or drill into the partitions, woodwork or plaster or in any way
deface the Premises. Tenant shall not cut or bore holes for wires. Tenant shall
not affix any floor covering to the floor of the Premises in any manner except
as approved by Landlord. Tenant shall repair any damage resulting from
noncompliance with this rule.

13.   Tenant shall store all its trash and garbage within its Premises. Tenant
shall not place in any trash box or receptacle any material which cannot be
disposed of in the ordinary and customary manner of trash and garbage disposal.
All garbage and refuse disposal shall be made in accordance with directions
issued from time to time by Landlord.

14.   Tenant shall not use the name of the Building in connection with or in
promoting or advertising the business of Tenant except as Tenant's address.

15.   The requirements of Tenant will be attended to only upon appropriate
application to the Building by an authorized individual. Employees of Landlord
shall not perform any work or do anything outside of their regular duties unless
under special instruction from Landlord, and no employee of Landlord will admit
any person (Tenant or otherwise) to any office without specific instructions
from Landlord.

16.   These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of premises in the Building.

17.   Landlord reserves the right to make such other reasonable rules and
regulations non-discriminately and uniformly applied as in its judgment may from
time to time be needed for safety and security, for care and cleanliness on the
Building and for the preservation of good order in and about the Building.
Tenant agrees to abide by all such reasonable rules and regulations in this
Exhibit C stated and any additional rules and regulations which are adopted.

18.   Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees, agents, clients, customers, invitees and guests.

19.   Tenant shall not at any time occupy any part of the leased premises or
project as sleeping or lodging quarters.

20.   No dogs, cats, fowl, or other animals (except for seeing eye dogs) shall
be brought into or kept in or about the leased premises or project.

21.   None of the parking, recreation or lawn areas entries, passages or doors
shall be blocked or obstructed, or any rubbish, litter, trash, or material of
any nature placed, emptied or thrown into these areas or such area be used by
Tenant's agents, employees or invitees at any time for purposes inconsistent
with their designation by Landlord.

22.   During the Term, as the same may be extended in accordance with this
Lease, Tenant shall have the right to use, on a non-exclusive basis with the
other tenants in the Building, if any, Tenant's Proportionate Share of the
parking spaces shown within the Land and more fully delineated on Exhibit A.
Landlord agrees that it will use reasonable efforts to prevent parties other
than Tenant, other tenant(s) of the Adjacent Area, if any, and their agents,
employees, guests, visitors and invitees from using such parking spaces;
provided, however, Landlord shall not be liable to Tenant in any way in the
event that such other parties do use such parking spaces from time to time.

23.   Tenant and its employees, agents and invitees shall park their vehicles,
i.e., cars, trucks, only in those parking areas designated by Landlord. Tenant
shall not leave any vehicle in a state of disrepair (including,

                                                                        --------
                                                                        Initials
                                       -2-
<PAGE>
without limitation, flat tires, out of date inspection stickers or license
plates) on the leased premises or project. If Tenant or its employees, agents or
invitees park their vehicles in areas other than the designated parking areas or
leave any vehicle in a state of disrepair, Landlord, after posting written
notice on the vehicle of such violation, shall have the right to remove such
vehicles at vehicle owner's expense.

24.   The areas located directly in front of the dock doors shall strictly be
used for loading and unloading and shall not be used for additional parking.
Semi-trailers and/or trucks may not block or obstruct the traffic flow of the
parking lot.

25.   Tenant shall not permit any objectionable or unpleasant odors, smoke,
dust, gas, noise or vibrations to emanate from the Premises, nor take any other
action that would constitute a nuisance or would unreasonably disturb,
unreasonably interfere with, or endanger Landlord or any other tenants of the
Building in which the Premises are a part.

26.   Any signage Tenant desires for the Premises shall be subject to Landlord's
written approval, such approval not to be unreasonably withheld, and shall be
submitted to Landlord within 30 days of the Commencement Date of this Lease.
Tenant's signage must in any event comply with all Applicable Laws. Tenant shall
repair, paint and/or replace the building facia surface to which its signs are
attached upon vacation of the Premises, or removal or alteration of its signage.
Tenant shall not (i) make any changes to the exterior of the Building, (ii)
install any exterior lights, decorations, balloons, flags, pennants, banners or
painting, or (iii) erect or install any signs, windows or door lettering,
placards, decorations or advertising media of any type which can be viewed from
the exterior of the Building, without Landlord's prior written consent, such not
to be unreasonably withheld. All signs, decorations, advertising media, blinds,
draperies and other window treatment or bars or other security installations
visible from outside the Building shall conform in all respects to the criteria
established by Landlord and Landlord acknowledges that all such items in place
in the Premises as of the Commencement Date of this Lease are acceptable to
Landlord in their current condition.

                                                                        --------
                                                                        Initials
                                       -3-
<PAGE>
                                    EXHIBIT D

                 attached to and made part of Lease bearing the
                  Lease Reference Date of March 6, 1997 between
 RREEF Mid-Cities Industrial L.P., a Texas limited partnership, as Landlord and
                Babbage's Etc. LLC, a Delaware company, as Tenant

                         ADDITIONAL SURRENDER CONDITIONS

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

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

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

3.    Overhead doors must be serviced and repaired.

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

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

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

7.    Fire sprinkler system (if available) must have a current year inspection.

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

If the Tenant elects not to do any of the above, please note that the Landlord
will have the necessary repairs made and deduct the expenses from the Security
Deposit.

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                                                                        Initials
<PAGE>
                                    EXHIBIT E

                 attached to and made part of Lease bearing the
                  Lease Reference Date of March 6, 1997 between
 RREEF Mid-Cities Industrial L.P., a Texas limited partnership, as Landlord and
                Babbage's Etc. LLC, a Delaware company, as Tenant

                         SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT

      THIS AGREEMENT is dated the ___ day of _________________ 19____, and is
made by and among _________________________, having an address,
___________________________ ("Mortgagee"), _______________________________,
having an address of ________________________ ("Tenant"), and
_______________________________, having an address of ________________________
("Landlord").

                                    RECITALS:

      A.    Tenant has entered into a lease ("Lease") dated __________________,
19_____ with ______________________________________ as lessor ("Landlord"),
covering the premises known as __________________________________________ (the
"Premises") within the property known as ______________________________________,
more particularly described as shown on Exhibit A, attached hereto (the "Real
Property").

      B.    Mortgagee has made, or has agreed to make, a mortgage loan secured
by a mortgage of the Real Property (the "Mortgage"), and the parties desire to
set forth their agreement herein.

      THEREFORE, in consideration of the premises and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

            1.    The Lease and all extensions, renewals, replacements or
modifications thereof are and shall be subject and subordinate to the lien of
the Mortgage and to all renewals, modifications, consolidations, replacements
and extensions thereof, to the full extent of amounts secured thereby and
interest thereon.

            2.    Tenant shall attorn to and recognize any purchaser at a
foreclosure sale under the Mortgage, any transferee who acquires the Premises by
deed in lieu of foreclosure, and the successors and assigns of such
purchaser(s), as its landlord for the unexpired balance (any extensions, if
exercised) of the term of the Lease on the same terms and conditions set forth
in the Lease.

            3.    If it becomes necessary to foreclose the Mortgage, Mortgagee
or any purchaser at a foreclosure sale under the Mortgage, any transferee who
acquires the Premises by deed in lieu of foreclosure, and the successors and
assigns of such purchaser(s), shall neither terminate the Lease nor join Tenant
in summary or foreclosure proceedings so long as Tenant is not in default under
any of the terms, covenants, or conditions of the Lease beyond any grace periods
provided in the Lease.

            4.    If Mortgagee (or any purchaser at foreclosure sale) succeeds
to the interest of Landlord under the Lease, Mortgagee (or any purchaser at
foreclosure sale) shall perform all obligations of Landlord under the Lease,
provided, however:

            a.    If Tenant gives Mortgagee written notice of a default by
      Landlord under the Lease prior to Mortgagee's (or such other party's)
      acquisition of title to the Real Property, Tenant will retain any and all
      rights of abatement, setoff or counterclaim accruing to Tenant under the
      Lease, if any, for reasons of such notified default, regardless of the
      ownership status of the Real Property; provided further, however, Tenant
      will not be entitled to recover a money judgement against Mortgagee (or
      such other party) for the acts or omissions of Landlord (or any prior
      Landlord) except by way of offset, setoff or counterclaim against amounts
      sought from Tenant by Mortgagee (or such other party);

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                                                                        Initials
<PAGE>
            b.    Should Tenant not give Mortgagee written notice of default as
      provided in subparagraph (a) above, neither Mortgagee nor such other party
      will be liable for any act or omission of any prior landlord under the
      Lease (including Landlord) unless such act or omission is continued by
      Mortgagee or such other party after the Mortgagee's (or such other
      party's) acquisition of title to the Real Property, and then Mortgagee (or
      such other party) will only be liable for the setoff, abatement or
      counterclaim rights accruing and continuing subsequent to such
      acquisition;

            c.    Except as provided in subparagraphs (a) and (b) above,
      Mortgagee shall not be subject to any offsets or defenses that Tenant
      might have against any prior landlord (including Landlord);

            d.    Mortgagee shall not be bound by any rent or additional rent
      that Tenant might have paid for more than the current month to any prior
      landlord (including Landlord);

            e.    Mortgagee shall not be bound by any amendment, modification,
      or termination of the Lease made without Mortgagee's consent;

            f.    Mortgagee shall not be personally liable under the Lease,
      Mortgagee's liability thereunder being limited to its interest in the Real
      Property; or

            g.    Mortgagee shall not be bound by any notice of termination
      given by Landlord to Tenant without Mortgagee's prior written consent
      thereto.

            5.    This Agreement shall be binding on and shall inure to the
benefit of the parties hereto and their successors and assigns.

            6.    Tenant shall give Mortgagee simultaneously, by certified mail,
return receipt requested, or by commercial overnight delivery service, a copy of
any notice of default served on Landlord, at Mortgagee's address set forth above
or at such other address as to which Tenant has been notified in writing. If
Landlord shall have failed to cure such default within the time provided for in
the Lease, then Mortgagee shall have an additional ten (10) days within which to
cure any default capable of being cured by the payment of money and an
additional thirty (30) days within which to cure any other default or if such
default due to its nature cannot be cured within that time, then such additional
time as may be necessary to cure such default shall be granted if within such
thirty (30) days Mortgagee has commenced and is diligently pursuing the remedies
necessary to cure such default (including, but not limited to, commencement of
foreclosure proceedings, if necessary to effect such cure), but in no event
greater than sixty (60) days from the date of default, in which event the Lease
shall not be terminated while such remedies are being so diligently pursued.

            7.    Landlord has agreed under the Mortgage and other loan
documents that rentals payable under the Lease shall be paid directly by Tenant
to Mortgagee upon an event of default by Landlord under the Mortgage. After
receipt of notice from Mortgagee to Tenant, at the address set forth above or at
such other address as to which Mortgagee has been notified in writing, that
rentals under the Lease should be paid to Mortgagee, Tenant shall pay to
Mortgagee all monies due or to become due to Landlord under the Lease from and
after the date that is ten (10) days subsequent to Tenant's receipt of such
notice. Tenant shall have no responsibility to ascertain whether such demand by
Mortgagee is permitted under the Mortgage, or to inquire into the existence of
an event of default. Landlord hereby waives any right, claim, or demand it may
now or hereafter have against Tenant by reason of such payment to Mortgagee, and
any such payment shall discharge the obligations of Tenant to make such payment
to Landlord.

            8.    Tenant declares, agrees and acknowledges that Mortgagee, in
making disbursements pursuant to any agreement relating to the Loan, is under no
obligation or duty to, nor has Mortgagee represented that it will, see to the
application of such proceeds by the person or persons to whom Mortgagee
disburses such proceeds, and any application or use of such proceeds for
purposes other than those provided for in such agreement shall not defeat the
subordination herein made in whole or in part.

                                                                        --------
                                                                        Initials
                                       -2-
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have executed these presents as of
the day and year first above written.

                                        MORTGAGEE:

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

Date:                                   By:
     -----------------------------         ---------------------------------
                                        Name:
                                             -------------------------------
                                        Title:
                                              ------------------------------

                                        TENANT:

Date:                                   By:
     -----------------------------         ---------------------------------
                                        Name:
                                             -------------------------------
                                        Title:
                                              ------------------------------

                                        LANDLORD:

Date:                                   By:
     -----------------------------         ---------------------------------
                                        Name:
                                             -------------------------------
                                        Title:
                                              ------------------------------

                                  [CORPORATION]

[STATE OF _________________________]                )
                                                    ) ss.
[COUNTY OF ________________________]                )

      On this _______ day of _______________ in the year ________ before me,
_________________, a Notary Public, the undersigned officer, personally appeared
_______________________________, who acknowledged himself to be the
_________________________ of ____________________________, a corporation, and
the foregoing instrument for the purposes therein contained, by signing the name
of the corporation by himself as such officer.

      IN WITNESS WHEREOF, I hereunto set my hand and official seal the day and
year aforesaid.

                                        ---------------------------------------
                                        Notary Public

                                  [PARTNERSHIP]

STATE OF ________________)
                         ) ss.
COUNTY OF _______________)

      On this ______ day of ______________, 19___, before me,
________________________, a Notary Public of said State, duly commissioned and
sworn, personally appeared _______________________, known to me (or proved to me
on the oath of ___________________________) to be a general partner of a limited
partnership that executed the within instrument, and acknowledged to me that
such partnership executed the same.

                                        ---------------------------------------
                                        Notary Public in and for said State

                                                                        --------
                                                                        Initials
                                       -3-<PAGE>
                                                                    Exhibit 10.7

                            FIRST AMENDMENT TO LEASE

      THIS FIRST AMENDMENT TO LEASE ("this Amendment") is entered on to be
effective as of December 30, 1999, by and between RREEF MIDCITIES INDUSTRIAL
L.P., a Texas limited partnership, as landlord ("Landlord"), and BABBAGE'S ETC.
LLC, a Delaware limited liability company, as tenant ("Tenant").

                                    RECITALS

      WHEREAS, Landlord and Tenant entered into that certain Lease dated March
6, 1997 (the "Lease"), pursuant to which Tenant leased from Landlord certain
industrial space consisting of approximately 168,450 square feet (the "Original
Premises") in the building located at 2250 William D. Tate Avenue, Grapevine,
Texas (the "Building"); and

      WHEREAS, Tenant desires to extend the term of the Lease and to lease the
remaining approximately 73,500 square feet of space in the Building, such space
being shown by hatching on Exhibit A-1 attached hereto and made a part hereof
for all purposes (the "Additional Space") the Original Premises and the
Additional Space being referred to collectively herein as the "Premises"); and

      WHEREAS, Landlord and Tenant desire to set forth the terms and conditions
upon which the term of the Lease will be extended and the Additional Space will
be leased to Tenant.

      NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Landlord and Tenant hereby agree that
the Lease should be, and hereby is, amended as follows:

      1.    Lease Term. The Term of the Lease (as defined therein) is hereby
extended to January 31, 2006, and the term "Termination Date" is hereby amended
to mean January 31, 2006.

      2.    Additional Space. Landlord hereby leases to Tenant and Tenant
accepts from Landlord the Additional Space for a term commencing on February 1,
2000 (the "Additional Space Commencement Date") and continuing through the
Termination Date, as amended hereby, unless sooner terminated pursuant to the
terms of the Lease. In addition, effective as of the Additional Space
Commencement Date, the term "Premises", as defined in the Lease, shall be
amended to include the Additional Space, and the term "Premises Rentable Area",
as defined in the Lease, shall be increased by approximately 73,500 square feet
attributable to the Additional Space to an aggregate Premises Rentable Area of
approximately 241,950 square feet. Finally, as of the Additional Space
Commencement Date, Exhibit A to the Lease shall be deleted in its entirety and
Exhibit A attached hereto shall be substituted therefor.

      3.    Base Rent. The term "Annual Rent" (as defined in the Lease) is
hereby amended to mean the following amounts for the time periods specified: (a)
from February 1, 2000 through January 31, 2002, $873,439.50, and (b) from
February 1, 2002 through January 31, 2006, $1,112,970.00. The term "Monthly
Installment of Rent" (as defined in the Lease) is hereby amended to mean the
following amounts for the time periods specified: (a) from February 1, 2000
through January 31, 2002, $72,786.63, and (b) from February 1, 2002 through
January 31, 2006, $92,747.50. Annual Rent and Monthly Installments of Rent prior
to the Additional Space Commencement Date shall remain as currently set forth in
the Lease.

      4.    Tenant's Proportionate Share. Effective as of the Additional Space
Commencement Date, "Tenant's Proportionate Share", as such term is defined in
the Lease, shall be amended to mean 100%.

      5.    Leasehold Improvements. Tenant shall take the Additional Space in
its "as-is" condition, and Landlord shall have no obligation to make any
improvements to the Premises in connection with this Amendment.

      6.    Renewal Option. Landlord and Tenant hereby acknowledge and agree
that Tenant shall continue to be entitled to exercise the renewal option
described in Article 39 of the Lease, notwithstanding the extension of the Lease
described in this Amendment. Any and all references in such Article 39 to
"initial Term" shall mean the Term, as extended by this Amendment.

                                                                        --------
                                                                        Initials
<PAGE>
      7.    Landlord's Right to Terminate. Article 40 of the Lease is hereby
deleted in its entirety.

      8.    Tenant's Right to Terminate. Article 41 of the Lease is hereby
deleted in its entirety.

      9.    Tenant's Right to Use Adjacent Area. Article 42 of the Lease is
hereby deleted in its entirety.

      10.   Brokerage Commissions. Each of the parties hereto represents and
warrants to the other that it has not dealt with any broker or finder in
connection with this Amendment except RREEF Management Company. Any commissions
payable to RREEF Management Company in connection with this Amendment shall be
paid by Landlord, at Landlord's sole cost and expense.

      11.   Effectiveness. Except as modified herein, all other terms and
conditions of the Lease shall remain unchanged and shall continue in full force
and effect.

      12.   Governing Law. The laws of the State of Texas and of the United
States of America shall govern the rights, remedies, and duties of the parties
hereto and the validity, construction, enforcement, and interpretation hereof.

      13.   Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

      14.   Illegality. If any provision of this Amendment is held to be
illegal, invalid, or unenforceable under present or future laws, such provision
shall be fully severable; this Amendment shall be construed and enforced as if
such illegal, invalid, or unenforceable provision had never comprised a part
hereof; and the remaining provisions hereof shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance herefrom.

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

                                                                        --------
                                                                        Initials
                                       -2-
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.

                                        LANDLORD:

                                        RREEF MIDCITIES INDUSTRIAL L.P.,
                                        a Texas limited partnership

                                        By: RREEF MANAGEMENT COMPANY,
                                            a Delaware corporation

                                            By:/s/ Michelle Wilkins
                                               --------------------------------
                                            Name:  Michelle Wilkins
                                            Title: District Manager

                                        TENANT:

                                        BABBAGE'S ETC. LLC,
                                        a Delaware limited liability company

                                        By: /s/ R. Richard Fontaine
                                            -----------------------------------
                                        Name: R. Richard Fontaine
                                              ---------------------------------
                                        Title: CEO
                                               --------------------------------

                                                                        --------
                                                                        Initials
                                       -3-
<PAGE>
                                    EXHIBIT A

                attached to and made a part of Lease bearing the
                  Lease Reference Date of March 6, 1997 between
  RREEF Midcities Industrial L.P., a Texas limited partnership, as Landlord and
            Babbage's Etc. LLC, a Delaware limited liability company

                                    PREMISES

              2250 William D. Tate Avenue, Grapevine, Texas 76051;
                  Containing Approximately 249,950 Square Feet

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

                                     [CHART]

                                                                        --------
                                                                        Initials
<PAGE>
                                   EXHIBIT A-1

                                ADDITIONAL SPACE

              2250 William D. Tate Avenue, Grapevine, Texas 76051;
                   Containing Approximately 73,500 Square Feet

Exhibit A-1 is intended only to show the general layout of the Additional Space
as of the execution of this Amendment. It does not in any way supersede any of
Landlord's rights set forth in Section 17.2 of the Lease with respect to
arrangements and/or locations of public parts of the Building and changes in
such arrangements and/or locations. It is not to be scaled; any measurements or
distances shown should be taken as approximate.

                                     [CHART]

                                                                        --------
                                                                        Initials

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