Document:

Exhibit 10.21

                                 DESCRIPTION OF
             EGAMES, INC. 2000 EMPLOYEE INCENTIVE COMPENSATION PLAN

         On July 19,  1999,  the  Board  of  Directors  of  eGames,  Inc.  ("the
Company")   approved  the  adoption  of  a   company-wide   Employee   Incentive
Compensation Plan (the "Plan").  The amount of incentive  compensation that each
Company  employee  was  eligible  to earn under the Plan was  contingent  on the
Company achieving certain net income  objectives.  Under the Plan, each employee
was  eligible to earn a specified  percentage  of the  employee's  total  annual
salary in incentive  compensation.  These percentages  ranged from 10% of annual
salary for  administrative  employees to 50% of the annual  salary for the Chief
Executive Officer.

         No bonuses were to be earned until the Company had earned net income of
at least $1,135,000 (the "Minimum Threshold") during the 2000 fiscal year, which
amount was equivalent to the net income earned in fiscal 1998. Upon reaching the
Minimum  Threshold,  plus the amount  required to pay the bonuses  earned if the
Minimum  Threshold were achieved,  then 50% of the potential bonus to which each
employee was eligible  would be earned.  If net income of  $3,100,000  (the 100%
Threshold")  was earned during the 2000 fiscal year, plus the amount required to
pay the bonuses earned when that net income level had been  achieved,  then 100%
of the potential bonus to which each employee was eligible would be earned.

         If the  Company  earned net income  during  the 2000  fiscal  year that
exceeded  the  Minimum  Threshold,  plus the amount  required to pay the bonuses
earned,  then each  employee  would earn a bonus equal to the  percentage of the
potential  bonus to which they were eligible equal to the percentage of earnings
as measured  against the 100%  Threshold.  For  example,  if an employee  earned
$50,000  per year and was  eligible  to earn a bonus  equal to 10% of his or her
salary if the 100% Threshold were met, then that employee would be paid a $5,000
bonus if the 100% Threshold were met.

         On the date of adoption of the Plan,  based on the number of  employees
of the Company and their  respective bonus  percentages,  the Company would have
been required to achieve pre-bonus  earnings of approximately  $1,400,000 during
the 2000  fiscal  year in order to earn the minimum  bonus  (50%).  There was no
maximum  incentive   compensation  level.  If  the  Company  exceeded  the  100%
Threshold,  then additional  incentive  compensation would be earned on a linear
basis.

         Any bonuses earned were to be paid  subsequent to the completion of the
2000 fiscal year's financial  statement audit. Since the Company did not achieve
the 50% minimum  pre-bonus  earnings level,  the Company did not pay any bonuses
out under this Plan.SUBLEASE

         This SUBLEASE  ("Sublease") is effective as of May 1, 2000  ("Effective
Date"),   between   LADBROKE   RACING   CORPORATION,   a  Delaware   corporation
("Sublessor"),  and NEUROBIOLOGICAL  TECHNOLOGIES,  INC., a Delaware corporation
("Sublessee").

                                     RECITAL

         A.  Pursuant to that  certain  lease dated as of July 7, 1997  ("Master
Lease"),  3260 Blume  Associates,  LLC  ("Master  Lessor")  leased to  Sublessor
approximately  4,333  square  feet of  space  (the  "Premises")  located  in the
building commonly known as 3260 Blume Drive,  Suite 500,  Richmond,  California.
The Master  Lease is for a period that  commenced on or about August 1, 1997 and
terminates on July 31, 2002.  The Master Lease is attached  hereto as Exhibit A.
Sublessee  and Master  Lessor have  previously  expanded the Premises to include
other space (together with the Premises, the "Master Premises").

         B. Sublessee  desires to sublease from Sublessor and Sublessor  desires
to sublet to Sublessee the entire Premises.  The Premises are shown on the floor
plan attached hereto as Exhibit B.

         C. All  capitalized  terms used but not defined  herein  shall have the
meanings assigned to such terms in the Master Lease.

                     THE PARTIES THEREFORE AGREE AS FOLLOWS:

                  1. Demise. Conditioned upon receipt of Master Lessor's written
consent,  if required,  Sublessor  hereby subleases and demises to Sublessee and
Sublessee  hereby takes and hires from  Sublessor the  Premises,  subject to the
provisions hereinafter set forth.

                  2. Term.  The term ("Term") of this Sublease shall commence on
May 1. 2000  ("Commencement  Date") and, unless terminated  earlier by Sublessor
under the terms and conditions of this Sublease,  shall expire on the earlier of
July 31, 2002 or the date on which the Master Lease terminates  without fault of
Sublessor.  Notwithstanding  the  foregoing,  if  Sublessor  is unable,  for any
reason,  to deliver  the  Premises to  Sublessee  within five (5) days after the
Commencement  Date,  Sublessee  shall have the right to terminate  this Sublease
upon written notice delivered to Sublessor.

                  3.  Security  Deposit.  Concurrently  herewith,  Sublessor has
delivered  to  Sublessee  a security  deposit in the amount of $7,  582.75  (the
"Security Deposit") for the purpose of securing  Sublessee's  performance of its
obligations  hereunder.  The rights and  obligations  of Sublessor and Sublessee
with respect to the Security  Deposit shall be as set forth in Section 26 of the
Master Lease.

                  4. Use.  Sublessee  shall use the Premises for general  office
purposes  consistent  with the  requirements  and  limitations  set forth in the
Master Lease.

                  5. Rent.  Sublessee  shall pay to  Sublessor,  as rent for the
Premises,  $7,582.75 on the first day of each and every month of the Term.  Rent
for any partial  month of the Term

<PAGE>

shall be prorated  based on the actual  number of days in the month during which
the Term  commences  or ends.  Sublessee  shall  have no  obligation  to pay any
Additional  Rent and without  limitation,  shall have no  obligation  to pay any
increases in Base Operating Costs and Taxes.

                  6. Sublessor's Use of Premises. During the first two months of
the  Term,   during  normal   business   hours,   Sublessor  shall  be  afforded
non-exclusive  access to, and the right to  maintain  its  computer  servers and
related  fixtures and equipment in, the room that currently  houses  Sublessor's
computer  servers  (the  "Computer  Data  Room").  By the end of such  two-month
period,  unless  otherwise  agreed to in writing  by  Sublessor  and  Sublessee,
Sublessor  shall have removed all of its personal  property  and  equipment  and
shall have  surrendered the Computer Data Room to Sublessee.  Sublessor shall be
responsible  for any and all damages  caused by and  liabilities  arising out of
Sublessor's use of the Computer Data Room,  including,  without limitation,  any
damage caused by Sublessor's removal of its property therein. Sublessee shall be
responsible for any and all damages to Sublessor's  servers and equipment caused
by Sublessee's use of the Computer Data Room.  Sublessor shall have the right to
access  and use the  Computer  Data Room for the same  purposes  and to the same
extent  that  Sublessor  currently  uses such  room and to  service  and  remove
Sublessor's  property  contained  therein.  If Sublessor  requires access to the
Computer Data Room during  non-business  hours, it shall provide  Sublessee with
reasonable  advance  notice,  and  Sublessee  shall use  reasonable  efforts  to
accommodate Sublessor's request for access. Sublessee shall provide to Sublessor
a single key to the  Premises,  which may be used by Sublessor or its  qualified
consultant in the event Sublessor requires access during  non-business hours and
is unable to contact  Sublessee after  reasonable  attempts to do so.  Sublessor
shall advise Sublessee in writing of the name of the person that will retain the
Premises key. As  consideration  for  Sublessor's  continued use of the Computer
Data Room set forth above, Sublessee shall be entitled to a rent abatement equal
to $126.00 for each month during which the access is permitted.

                  7.  Condition  of  Premises;  Surrender.  Except  as set forth
below,  Sublessee  accepts  the  Premises  in an  "as  is"  condition  as of the
Effective Date, and Sublessee acknowledges that no representations or warranties
with respect to the condition  thereof have been made to it. Upon the expiration
date of or earlier  termination of this Sublease by Sublessor,  Sublessee  shall
surrender the Premises to Sublessor in good  condition and repair,  broom-clean,
ordinary wear and tear and damage for which lessee under the Master Lease has no
obligation to restore or repair excepted and otherwise in the condition required
by the Master Lease,  and shall repair any damage to the Premises  occasioned by
the  removal  of  Sublessee's   trade   fixtures,   furnishings  and  equipment.
Notwithstanding  the  foregoing,  Sublessor  represents  and  warrants  that the
Premises are in good  condition,  free,  to best of  Sublessor's  knowledge,  of
Hazardous  Materials,  and that no damage or  condition  exists in or around the
Premises that would  require,  pursuant to the terms hereof or the Master Lease,
Sublessor or Sublessee to make  repairs  prior to  surrendering  the Premises to
Master Lessor.

                  8. Subordination.  This Sublease is subject and subordinate to
the Master Lease.

                  9. Indemnification.  (a) Sublessee shall defend, indemnify and
hold  Sublessor  harmless  from and  against  any and all  losses,  liabilities,
claims, causes of action, damages, costs and expenses (including attorneys' fees
and expert  witnesses'  fees) arising from

<PAGE>

or  related  to (i) any act or  omission  of  Sublessee,  Sublessee's  officers,
agents, employees,  contractors,  invitees or licensees, (ii) Sublessee's use of
the Premises, or (iii) the conduct of Sublessee's business, or (iv) any activity
on or with respect to the Premises  occurring on or after the Commencement  Date
(other than as covered by Sublessor's  indemnity  below).  In case any action or
proceeding is brought against Sublessor by reason of any such claim,  Sublessee,
upon written notice from  Sublessor,  shall, at Sublessee's  expense,  resist or
defend such action or  proceeding by counsel  reasonably  approved by Sublessor.
For the  purposes  of this  Paragraph,  "Sublessor"  shall  include  any and all
officers, directors, employees,  shareholders,  parents, agents or affiliates of
Sublessor.

                  (b)  Sublessor  shall  defend,  indemnify  and hold  Sublessee
harmless  from and against any and all losses,  liabilities,  claims,  causes of
action,  damages,  costs and  expenses  (including  attorneys'  fees and  expert
witnesses'  fees)  arising  from  or  related  to (i)  any  act or  omission  of
Sublessor,  Sublessor's officers,  agents, employees,  contractors,  invitees or
licensees, whether prior to or after the Commencement Date, (ii) Sublessor's use
of the Premises prior or after to the  Commencement  Date, (iii) any obligations
of the tenant under the Master Lease not assumed by  Sublessee  hereunder,  (iv)
any entry to the Premises by Sublessor or its  consultants  during  non-business
hours, and (v) any  unauthorized  copying or distribution of the Premises key by
Sublessor  or its  consultants.  In case any  action or  proceeding  is  brought
against  Sublessee by reason of any such claim,  Sublessor,  upon written notice
from Sublessee,  shall, at Sublessor's expense,  resist or defend such action or
proceeding by counsel reasonably approved by Sublessee. For the purposes of this
Paragraph, "Sublessee" shall include any and all officers, directors, employees,
shareholders, parents, agents or affiliates of Sublessee.

                  10.  Insurance.  Sublessee shall, at Sublessee's sole cost and
expense,  maintain during the term of this Sublease the insurance required to be
maintained by the tenant under the Master Lease.

                  11.  Master  Lease.  Except for the  paragraphs  of the Master
Lease which relate to the payment of Rent  (including  Additional  Rent) and any
future  options to purchase,  renew or expand,  and to the extent not  otherwise
inconsistent with the provisions of this Sublease,  the provisions of the Master
Lease  are  hereby   incorporated   herein  by   reference   on  the   following
understandings:

                           a) The term "Premises" (or word of similar import) as
used therein shall refer to the Premises;

                           b) The term  "tenant" (or word of similar  import) as
used therein shall refer to Sublessee;

                           c) The term "landlord" (or word of similar import) as
used therein shall refer to Sublessor;

                           d) All of Master  Lessor's  rights  under the  Master
Lease shall inure to the benefit of Sublessor as well as to Master Lessor.

                           e)  With   respect   to  work,   services,   repairs,
repainting and restoration or the performance of other  obligations  required of
or imposed upon Master  Lessor under the

<PAGE>

Master Lease,  Sublessor's  obligation  with respect thereto shall be to request
the same of Master Lessor,  upon request by Sublessee,  and to attempt to obtain
the same from Master Lessor.  Sublessee shall have the right to request the same
directly  from Master  Lessor.  Sublessee  shall  perform such  maintenance  and
repairs  with  respect to the  Premises as are  required to be  performed by the
tenant under the Master Lease.

                           f) Sublessee hereby assumes and agrees to perform all
of the  obligations  of the tenant  under the Master Lease that arise during the
term of this  Sublease  in the manner and  within  the time  required  under the
Master Lease (provided,  however, that if the Premises consists of less than all
of  the  Master  Premises,  the  obligation  of  Sublessee  hereunder  shall  be
interpreted  to apply only to the extent to which the  obligations of the tenant
under the Master Lease are applicable or allocable to the  Premises).  Sublessee
further covenants that Sublessee will neither commit, nor permit to be committed
by any  third  party,  any act or  omission  which  would  violate  any  term or
condition of the Master Lease,  or be cause for  termination of the Master Lease
by Master  Lessor.  Sublessor  agrees to perform all of the  obligations  of the
tenant  under the  Master  Lease that are  applicable  or  allocable  to the any
portion of the Master  Premises that are not a part of the Premises,  as well as
those  obligations  which are not  assumed by  Sublessee  hereunder,  including,
without  limitation,  the  payment  of  all  Additional  Rent  allocable  to the
Premises.  Sublessor further  covenants that Sublessor will neither commit,  nor
permit to be  committed  by any third  party,  any act or  omission  which would
violate any term or condition of the Master Lease,  or be cause for  termination
of the Master Lease by Master Lessor.

                           g)  In  connection  with  any  alterations  Sublessee
desires to make to the Premises,  Sublessee first shall obtain the prior written
consent of  Sublessor  and, if required  under the terms and  conditions  of the
Master Lease, the prior written consent of Master Lessor.

                           h) Any  act or  omission  by  Sublessee  which  would
constitute  a breach or  default  by the tenant  under the  Master  Lease  shall
constitute  a default on the part of  Sublessee  hereunder.  In the event of any
breach or default by Sublessee  hereunder or under the Master  Lease,  Sublessor
shall have each and all of the rights and remedies  afforded Master Lessor under
the Master Lease.

                           i) Sublessee and Sublessor each represent and warrant
that they have read and are familiar with the terms and conditions of the Master
Lease.

                           j)  Sublessor  represents  and  warrants to Sublessee
that as of the Effective Date of this Sublease,  there are no defaults under the
terms of the Master  Lease and all rental and other  payments  have been made to
Master Lessor under the terms and conditions of the Master Lease.

                           k) The event  described  in  Section  16.3(a)  of the
Master Lease  constitutes an Event of Default by Master Lessor or Sublessor,  as
the case may be.

                           l)  Sections 4, 24 and 33 and Exhibit B of the Master
Lease are not a part of this  Sublease.  None of the  amendments  to the  Master
Lease are a part of this Sublease.
<PAGE>

                  12.  Sublessee's  Sign. If the Premises  consists of less than
all of the Master  Premises and if the Master Lease contains any  limitations on
the  number of signs that may be placed on the  Master  Premises,  such night to
place  signs on the  Premises  shall  be  allocated  between  the  parties  on a
proportionate basis with respect to each party's relative square footage of use.
Notwithstanding the above,  Sublessee's rights to install and maintain a sign on
the Premises  shall be limited to the  provisions  of the Master Lease and shall
otherwise be conditioned  upon receipt of prior written consent of Sublessor and
Master Lessor.

                  13.  Brokers.  Sublessee  and  Sublessor  each  represent  and
warrant  that no real  estate  broker  or other  party,  who  might  claim or be
entitled to a commission or other  compensation  as a result of the execution or
performance of this Sublease,  has participated in this transaction,  other than
BT Commercial  and Technology  Commercial,  whose  commissions,  if any are due,
shall  be  paid  for by  Sublessor  pursuant  to a  separate  agreement  between
Sublessor  and BT  Commercial.  Sublessee and  Sublessor  each shall  indemnify,
defend  and hold the other  harmless  from and  against  all  claims,  costs and
damages incurred as a result of the breach of the foregoing  representations and
warranties.  The provisions of this Paragraph  shall survive the  termination of
this Sublease.

                  14.  Notices.  Any notices or demands to be given  pursuant to
the Master  Lease or this  Sublease  shall be in writing and shall be  delivered
personally  or sent by reputable  overnight  courier that  provides  evidence of
delivery, or by registered or certified mail, return receipt requested, with all
postage and fees  prepaid,  to  Sublessor  or  Sublessee,  respectively,  at the
following  addresses,  or at such other address as such party shall designate by
written notice to the other party. Such addresses are:

SUBLESSOR:                              Ladbroke Racing Corporation

                                        Race Track Road

                                        P.O. Box 499

                                        Meadow Lands, Pennsylvania 15347

                                        Attention:  Mr. Robert Vogel

SUBLESSEE:                              Neurobiological Technologies, Inc.

                                        3260 Blume Drive, Suite 500

                                        Richmond, California 94806

                                        Attention:  Mr. Paul Freiman

Such notices  shall be deemed to have been  received and to be effective for all
purposes upon receipt or refusal to accept delivery at such address as indicated
on the return receipt or other record of delivery, or (if earlier) on the second
business  day after being mailed in  accordance  with the  requirements  of this
paragraph.

                  15.  No  Oral  Agreements.  There  are no oral  agreements  or
understandings between the parties hereto affecting this Sublease. This Sublease
cannot be  changed or

<PAGE>

terminated  orally  but only by an  agreement  in  writing  signed  by the party
against whom  enforcement or any waiver,  change,  modification  or discharge is
sought.

                  16.  Governing  Law.  This  Sublease  shall  be  governed  and
construed in accordance with the laws of the State of California.

                  17.   Attorneys'  Fees.  If  there  is  any  legal  action  or
proceeding  between  Sublessor  and  Sublessee to enforce any  provision of this
Sublease,  or to protect  or to  establish  any right or remedy of either  party
hereunder,  the prevailing  party in such action or proceeding shall be entitled
to recover  from the other party all costs and  expenses,  including  reasonable
attorneys' fees and expert  witnesses' fees incurred by such prevailing party in
connection with any such action or any appeal in connection therewith.

                  18.  Inurement.  This Sublease shall be binding upon and shall
inure  to  the  benefit  of  the  parties,   their   respective   heirs,   legal
representatives, successors and assigns.

                  19. Time. Time is of the essence of this Sublease and each and
all of its provisions.

         IN WITNESS  WHEREOF,  the parties  hereto have  executed  this Sublease
effective as of the day and year first above written.

SUBLESSOR:                          LADBROKE RACING CORPORATION
                                    a Delaware corporation

                                    By:/s/ Joseph W. Michaels
                                       ----------------------
                                    Its:  Director of Construction and Property
                                          -------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------

SUBLESSEE:                          NEUROBIOLOGICAL TECHNOLOGIES, INC.,
                                    a Delaware corporation

                                    By:/s/ Calvert Yee
                                       ---------------
                                    Its:  VP, Operations and Administration
                                          ------------------------------------
                                    By:
                                       ---------------------------------------
                                    Its:
                                        --------------------------------------

<PAGE>

                                     CONSENT

         The undersigned,  3260 Blume  Associates,  LLC, Master Lessor under the
Master Lease described in the Sublease to which this Consent is attached, hereby
consents to the  provisions  of the  foregoing  Sublease  effective as of May 1,
2000,   by  and  between   Ladbroke   Racing   Corporation,   as  Sublessor  and
Neurobiological Technologies, Inc., as Sublessee. Master Lessor agrees to notify
Sublessee  concurrently  of any default by Sublessor  under the Master Lease and
agrees that  Sublessee  shall be entitled to cure any such  default by Sublessor
within the applicable cure periods set forth in the Master Lease.  Master Lessor
further  agrees not to  terminate  the Master Lease by reason of such default by
Sublessor  if  Sublessee  diligently  proceeds  to cure the  default  within the
applicable time periods provided,  however, (a) if the default is not capable of
being cured within the time periods provided, or (b) if the default relates to a
portion of the Master  Premises that is not a part of the Premises leased by the
Sublease,  and provided Sublessee is not then in default of its rent obligations
hereunder,  Lessor  agrees to enter into a new lease with  Sublessee on the same
terms and  conditions  as set forth  herein  and for the  remaining  term of the
Master Lease. The foregoing Consent shall not be deemed to constitute consent by
the undersigned to any subletting other than that described in the Sublease.

                              3260 BLUME ASSOCIATES, LLC, a
                              ____________ limited liability company

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

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

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

<PAGE>

                                    EXHIBIT A

                                 (Master Lease)

<PAGE>

                                    EXHIBIT B

                              (Premises Floor Plan)

<PAGE>

                                 LEASE AGREEMENT

                                       for

                                    Plaza II
                                3260 Blume Drive
                               Richmond, CA 94806

                                    Suite 500

                                     between

                           3260 Blume Associates, LLC
                                  as "Landlord"

                                       and

                           Ladbroke Racing Corporation
                             a Delaware Corporation
                                   as "Tenant"

<PAGE>

                                 LEASE AGREEMENT

                                                                            Page

1.       PREMISES                                                             1

2.       TERM, POSSESSION                                                     1

3.       RENT                                                                 1

4.       ADDITIONAL RENT;
         INCREASES IN OPERATING COSTS AND TAXES                               1

5.       USE OF PREMISES                                                      4

6.       ALTERATIONS                                                          5

7.       MAINTENANCE AND REPAIRS                                              5

8.       TRADE FIXTURES                                                       6

9.       TENANT'S TAXES                                                       6

10.      UTILITIES AND SERVICES                                               6

11.      EXCULPATION AND INDEMNIFICATION                                      8

12.      INSURANCE                                                            9

13.      DAMAGE OR DESTRUCTION                                               10

14.      CONDEMNATION                                                        11

15.      ASSIGNMENT AND SUBLETTING                                           13

16.      DEFAULT AND REMEDIES                                                14

17.      LATE CHARGE; INTEREST                                               17

18.      WAIVER                                                              18

19.      ENTRY AND INSPECTION                                                18

20.      SURRENDER AND HOLDING OVER                                          18

21.      SUBORDINATION; ATTORNMENT; NON-DISTURBANCE                          19

22.      MORTGAGEE PROTECTION                                                19

23.      ESTOPPEL CERTIFICATES                                               19

                                       i
<PAGE>

                                 LEASE AGREEMENT

                                                                            Page

24.      NOTICES                                                             20

25.      ATTORNEYS' FEES                                                     20

26.      SECURITY DEPOSIT                                                    21

27.      QUIET POSSESSION                                                    21

28.      SECURITY MEASURES                                                   21

29.      FORCE MAJEURE                                                       21

30.      RULES AND REGULATIONS                                               21

31.      LANDLORD'S LIABILITY                                                21

32.      CONSENTS AND APPROVALS                                              22

33.      BROKERS                                                             22

34.      OTHER RIGHTS RESERVED BY LANDLORD                                   22

35.      HAZARDOUS MATERIALS                                                 23

36.      ENTIRE AGREEMENT                                                    24

37.      MISCELLANEOUS                                                       24

38.      AUTHORITY                                                           25

EXHIBIT A:  DESCRIPTION OF PREMISES

EXHIBIT B:  CONSTRUCTION RIDER

EXHIBIT C:  BUILDING RULES

EXHIBIT D:  ADDITIONAL PROVISIONS

                                       ii
<PAGE>

                                 LEASE AGREEMENT

         THIS  LEASE  is  Made as of July 7,  1997  by and  between  3260  Blume
Associates,  LLC,  ("Landlord"),  and Ladbroke  Racing  Corporation  ("Tenant").
Landlord and Tenant hereby agree as follows:

1.       PREMISES.  Landlord  hereby leases to Tenant,  and Tenant hereby leases
         from  Landlord,  upon the terms and subject to the  conditions  of this
         Lease,  approximately  4,333 rentable  square feet of office space (the
         "Premises"),  as shown on  Exhibit A  attached  hereto  and made a part
         hereof.  The Premises are located on the fifth (5th) floor,  Suite 500,
         of the building  known as the Plaza 11 and located at 3260 Blume Drive,
         Richmond, California (the "Building"). The Building contains a total of
         approximately 77,475 rentable square feet of office space.

2.       TERM; POSSESSION. The term of this Lease (the "Term") shall commence on
         August 15, 1997 (the scheduled  "Commencement  Date"),  but in no event
         sooner than the date of substantial completion of the Landlord provided
         improvements,  if any,  detailed in Exhibit B hereto and, unless sooner
         terminated  pursuant to the  provisions of this Lease,  shall expire on
         day preceding the sixty (60) month anniversary of the Commencement Date
         on August 14, 2002 ("Expiration Date").

3.       RENT.

         3.1      Base Rent. During the Term,  Tenant shall pay to Landlord,  as
                  monthly  base rent for the  Premises  ("Base  Rent"),  without
                  offset,  deduction,  prior  notice or  demand,  the  following
                  amounts:

                     August 1, 1997 through July 31, 1998           $7,149.45
                     August 1, 1998 through July 31, 1999           $7,366.10
                     August 1, 1999 through July 31, 2002           $7,582.75

                  Base Rent for the first  month of the Term for which Base Rent
                  is payable shall be payable in.  advance upon the execution of
                  this Lease. Thereafter,  Base Rent shall be payable in advance
                  on the first day of each  calendar  month during the Term that
                  follows  first  month  of the  Term  for  which  Base  Rent is
                  payable. Base Rent for any partial month during the Term shall
                  be  prorated,  based  upon the daily  Base Rent then in effect
                  (calculated  on the basis of a 30-day  month and the number of
                  days during the month that the Term is in effect).

         3.2      Payment of Rent. All amounts payable or reimbursable by Tenant
                  to Landlord  under this Lease,  including  amounts  payable as
                  late charges or interest, shall constitute "Rent" and shall be
                  payable and recoverable as Rent in the manner provided in this
                  Lease.  All sums payable to Landlord on demand under the terms
                  of this Lease shall be payable  within fifteen (15) days after
                  written  notice from  Landlord of the  amounts  due.  All Rent
                  shall be paid to Landlord in lawful money of the United States
                  at the address  specified in Section 24 - "Notices" or at such
                  other place as  Landlord  may from time to time  designate  in
                  writing.

4.       ADDITIONAL RENT: INCREASES IN OPERATING COSTS AND TAXES.

         4.1      Definitions.  For purposes of this Lease the  following  terms
                  shall be defined as follows:

                  (a)  "Base  Operating Costs and Taxes" means the sum of actual
                       1997  Operating  Costs and  Taxes,  excluding  therefrom,
                       however,  any Gross  Operating  Costs or Gross Taxes of a
                       nature  that  would  not  ordinarily  be  incurred  on an
                       annual, recurring basis;

                                       1
<PAGE>
                  (b)  "Gross   Operating  Costs"  means  all  direct  costs  of
                       managing,   operating,   maintaining  and  repairing  the
                       Property  including  the  associated  parking  and common
                       areas,  including,  but not  limited  to:  (i)  costs  of
                       maintenance  and repair of the  Property,  including  the
                       repair or  replacement  of glass and the roof covering or
                       membrane,  (ii) costs of maintenance  and  replacement of
                       landscaping  in the  Property;  (iii) costs of  providing
                       utilities - including  costs and charges for water,  gas,
                       sewage  disposal,  rubbish  removal,  security  services,
                       cleaning  and  janitorial  services,  window  washing and
                       supplies and materials;  (iv) charges for the services of
                       independent   contractors  and  compensation   (including
                       employment  taxes and fringe  benefits)  for  persons who
                       perform   duties  in  connection   with  the   operation,
                       maintenance and repair of the Building, such compensation
                       to be  appropriately  allocated  for  persons who perform
                       duties  unrelated  to  the  Building;  (v)  premiums  for
                       property insurance (including coverage for earthquake and
                       flood  is  carried  by  Landlord),  liability  insurance,
                       rental  income  and  other  insurance   relating  to  the
                       Property,  and  deductible  amounts under such  insurance
                       paid in connection  with the repair or restoration of the
                       Property  (including  the common  areas)  after damage or
                       destruction  of the  Property;  (vi) fees and charges for
                       licenses, permits and inspections: (vii) costs associated
                       with the  maintenance  of the Building;  (viii)  property
                       management  fees of not more  than  five (5)  percent  of
                       Building gross receipts; (ix) costs for accounting, legal
                       and other  professional  services  incurred in connection
                       with the operation of the Building and the calculation of
                       Gross Operating Costs and Gross Taxes (as defined below);
                       (X) a reasonable  allowance for depreciation on machinery
                       and equipment used to maintain the Property in the common
                       area (xi) the reasonable  cost of contesting the validity
                       or applicability of any governmental  enactments that may
                       affect the Property; (xii) the Building's share of common
                       area maintenance fees and expenses;  and (xiii) any other
                       expense or charge, whether or not hereinbefore described,
                       which in  accordance  with  generally  accepted  property
                       management  practices  would be  considered an expense of
                       managing,   operating,   maintaining  and  repairing  the
                       Property.

                       GrossOperating   Costs  shall  not  include  (i)  capital
                       improvements  subsequent to the initial  construction and
                       development   of   the   Building,   other   than   those
                       specifically  enumerated above in the definition of Gross
                       Operating Costs;  (ii) costs of special services rendered
                       to  individual  tenants  (including  Tenant)  for which a
                       special  charge is made;  (iii)  interest  and  principal
                       payments  on  loans  or   indebtedness   secured  by  the
                       Building; (iv) costs of improvements for other tenants of
                       the Building;  (v) costs of services or other benefits of
                       a type  which are not  available  to Tenant but which are
                       available to other  tenants or  occupants,  and costs for
                       which  Landlord  is  reimbursed  by other  tenants of the
                       Building other than through payment of tenants' shares of
                       Operating  Costs and  Taxes;  (vi)  leasing  commissions,
                       attorneys' fees and other expenses incurred in connection
                       with   negotiations   or  disputes  with  other  tenants,
                       prospective  tenants or occupants of the Property,  or in
                       connection  with the enforcement or violation by Landlord
                       or  such  tenant  or   occupant   of  any  lease;   (vii)
                       depreciation or amortization,  other than as specifically
                       enumerated  above in the  definition  of Gross  Operating
                       Costs;  (viii) costs,  fines or penalties incurred due to
                       Landlord's   violation   of  any   law  or   governmental
                       regulation;  and (ix) the excess of the cost of  supplies
                       and services  provided by subsidiaries  and affiliates of
                       Landlord over competitive costs by independent  suppliers
                       and  contractors of comparable  buildings in the vicinity
                       of the Property.

                  (c)  "Gross Taxes" means all real property  taxes and general,
                       special or  district  assessments  or other  governmental
                       impositions,  of whatever kind, nature or origin, imposed
                       on or by reason of the  ownership or use of the Property;
                       governmental  charges,  fees or  assessments  for transit
                       (including   without   limitation,    area-wide   traffic
                       improvement   assessments   and   transportation   system
                       management  fees),   housing,   police,   fire  or  other
                       governmental   service  or  purported   benefits  to  the
                       Property; personal property taxes assessed on the

                                       2
<PAGE>

                       personal  property of the Landlord  used in the operation
                       of the  Property;  service  payments in lieu of taxes and
                       taxes and assessments of every kind and nature whatsoever
                       levied  or  assessed  in  addition  to,  in lieu of or in
                       substitution  for existing or additional real or personal
                       property  taxes on the Property or the personal  property
                       described  above:  taxes and  assessments on the gross or
                       net rental receipts of Landlord derived from the Building
                       (excluding,   however,  state  and  federal  personal  or
                       corporate income taxes measured by the income of Landlord
                       from all sources);  and the reasonable cost of contesting
                       by  appropriate  Landlord  from  all  sources);  and  the
                       reasonable cost of contesting by appropriate  proceedings
                       the  amount or  validity  of any  taxes,  assessments  or
                       charges described above. The term "Gross Taxes" shall not
                       include  any  "Tenant's  Taxes" as defined in Section 9 -
                       "Tenant's Taxes".

                  (d)  "Operating  Costs" means the total Gross  Operating Costs
                       for any  calendar  year divided by the number of rentable
                       square feet of office  space in the  Building.  Operating
                       Costs for any year during which average  occupancy of the
                       Building is less than ninety-five  percent (95%) shall be
                       calculated  based  upon the Gross  Operating  Costs  that
                       would have been incurred if the Building were so occupied
                       during  the  entire  calendar  year.  Tenant's  Share  of
                       Operating  Costs  shall  not be  reduced  as a result  of
                       Tenant's  performing  for itself any of the services that
                       Landlord  provides for the Property or for the tenants of
                       the Property.

                  (e)  "Taxes"  means the  total  Taxes  for any  calendar  year
                       divided  by the  number of  rentable  square  feet in the
                       Building.   Taxes  for  any  year  during  which  average
                       occupancy  of  the  Building  is  less  than  ninety-five
                       percent  (95%) shall be  calculated  based upon the Gross
                       Taxes that would have been  incurred if the Building were
                       so occupied during the entire calendar year.

                  (f)  "Tenant's  Share"  means an amount equal to the number of
                       rentable  square  feet of  office  space in the  Premises
                       multiplied by any increases in Operating  Costs and Taxes
                       over Base Operating Costs and Taxes.

         4.2      Additional Rent. If Operating Costs and Taxes for any calendar
                  year during the term of this Lease exceed Base Operating Costs
                  and Taxes,  Tenant shall pay Landlord,  as "Additional  Rent",
                  Tenant's  Share of such increase in Operating  Costs and Taxes
                  (whether  such  increase,  in the case of Taxes,  is caused by
                  changes in valuation, rate or other factors or circumstances).

         4.3      Notice and Payment. As close as reasonably possible to the end
                  of each  calendar  year,  Landlord  shall notify Tenant of any
                  increases  in  Operating  Costs and Taxes over Base  Operating
                  Costs  and  Taxes  estimated  by  Landlord  for the  following
                  calendar year.  Commencing on the first day of January of each
                  calendar  year and on the first day of every month  thereafter
                  in such year,  Tenant  shall pay to  Landlord,  as  Additional
                  Rent,  one twelfth  (1/12th) of Tenant's Share of increases in
                  Operating Costs and Taxes as reasonably estimated by Landlord.
                  If at any time during any such calendar  year, it appears that
                  Operating  Costs  or  Taxes  for  such  year  will  vary  from
                  Landlord's  estimate,  Landlord  may,  by  written  notice  to
                  Tenant,  revise its estimate for such year and the  Additional
                  Rent  payments  by Tenant  for such year shall  thereafter  be
                  based upon such revised estimate.

                  As soon as possible  after each calendar year for which Tenant
                  has made  estimated  payments  or is liable for  increases  in
                  Operating  Costs and Taxes,  Landlord  shall furnish  Tenant a
                  statement  with respect to such year,  certified by Landlord's
                  controller,  showing  Gross  Operating  Costs and Gross Taxes,
                  Operating Costs and Taxes, the increase in Operating Costs and
                  Taxes in excess of Base  Operating  Costs and Taxes,  Tenant's
                  Share of such increase,  and the total payments made by Tenant
                  on the  basis  of any  previous  estimate  of such  increases.
                  Unless  Tenant raises any  objections to Landlord's  statement
                  within one (1) year after  receipt  of the same  .(except  for
                  fraud),  such statement  shall  conclusively be deemed correct
                  and Tenant  shall  have no right  thereafter  to dispute  such
                  statement or any item therein or the

                                       3
<PAGE>

                  computation  of increases of in Operating  Costs or Taxes.  If
                  Tenant does object to such  statement,  Landlord shall provide
                  Tenant with  reasonable  verification  of the figures shown on
                  the statement and the parties agree to negotiate in good faith
                  to resolve any  disputes.  Any amounts due  Landlord or Tenant
                  shall be paid in the manner set forth below.  Any objection of
                  Tenant to Landlord's  statement and  resolution of any dispute
                  shall not  postpone  the time for  payment of any  amounts due
                  Tenant or Landlord  based on Landlord's  statement,  nor shall
                  any failure of Landlord to deliver  Landlord's  statement in a
                  timely  manner  relieve  Tenant of its  obligation  to pay any
                  amounts due Landlord based on Landlord's statement.

                  If Tenant's Share for the year as finally  determined  exceeds
                  the  total   payments  made  by  Tenant  based  on  Landlord's
                  estimates, Tenant shall pay Landlord the deficiency within ten
                  (10) days of Tenant's receipt of Landlord's statement.  If the
                  total payments made by Tenant based on Landlord's  estimate of
                  the  increases  in Operating  Costs and Taxes exceed  Tenant's
                  Share of the  increases,  as determined by Landlord,  Tenant's
                  excess  payment shall be credited  toward  future  payments by
                  Tenant of Rent or estimated  increases in Operating  Costs and
                  Taxes and if no future  payments  are due,  payable  to Tenant
                  within ten (10) days.

                  For  any  partial   calendar  year  at  the   commencement  or
                  termination of this Lease,  Tenant's Share of any increases in
                  Operating  Costs and Taxes over Base Operating Costs and Taxes
                  for such year shall be prorated on the basis of a 365-day year
                  by  computing  Tenant's  Share of the  increases  in Operating
                  Costs and Taxes for the entire  year and then  prorating  such
                  amount  for the  number of days the term of this  Lease was in
                  effect during such year.  Notwithstanding  the  termination of
                  this Lease,  and within ten (10) days of  Tenant's  receipt of
                  Landlord's  statement regarding the determination of increases
                  in Operating  Costs and Taxes for the  calendar  year in which
                  this  Lease  terminates,  Tenant  shall  pay  to  Landlord  or
                  Landlord  shall pay to  Tenant,  as the case may be, an amount
                  equal to the difference  between  Tenant's Share (as prorated)
                  of the  increases in Operating  Costs and Taxes for such year,
                  as finally  determined by Landlord,  and the amount previously
                  paid by Tenant toward such increases.

5.       USE OF PREMISES. The Premises shall be used for general office purposes
         and for no other  business or purpose  without  the written  consent of
         Landlord.

         Tenant  shall  comply with all present  and future  governmental  laws,
         ordinances, rules and regulations relating to Tenant's use or occupancy
         of the Premises and shall  observe the  Building  Rules,  as defined in
         Section 30 - "Rules and Regulations".  Tenant shall not do, bring, keep
         or sell  anything in or about the Premises  that is  prohibited  by the
         standard  form  of  fire   insurance   policy  or  that  will  cause  a
         cancellation  of, or an  increase  in the  existing  premium  for,  any
         insurance policy covering the Property or any part thereof.  Any breach
         of this  covenant  shall  constitute a default  under this Lease and in
         addition shall obligate Tenant to pay to Landlord any and all increases
         in insurance premiums resulting from such breach.

         Tenant shall not occupy or use the Premises,  or permit the Premises to
         be occupied  or used,  in any manner  that will  constitute  waste or a
         nuisance or will  disturb the quiet  enjoyment  of or  otherwise  annoy
         other  tenants in the  Building.  Tenant  shall not,  without the prior
         consent of Landlord,  bring into the Building or the Premises or use or
         incorporate in the Premises any  apparatus,  equipment or supplies that
         may cause substantial noise, odor or vibration or overload the Premises
         or the Building or any of its utility or elevator systems or jeopardize
         the structural integrity of the Building or any part thereof. If any of
         Tenant's office  machines or equipment  disturb any other tenant in the
         Building,  then Tenant shall provide  adequate  insulation or take such
         other action as may be necessary to eliminate the disturbance.

         Tenant shall not, without the prior consent of Landlord, connect to the
         utility  systems of the  Building  any  apparatus,  machinery  or other
         equipment  except typical office  machines and devices such as electric
         typewriters,  word processors, mini and micro-computers and office-size
         photocopiers.  Tenant shall pay the cost of all  utilities and services
         supplied to Tenant in connection with Tenant's use of additional office
         equipment approved by Landlord

                                       4
<PAGE>

         hereunder,   as  provided  in  Section  10.2  "Payment  for  Additional
         Utilities and Services". Tenant shall not, without the prior consent of
         Landlord,  connect to any dedicated  electrical circuit in the Premises
         electrical  apparatus or equipment of any type having in the  aggregate
         electrical  power  requirements  in  excess  of two  amps  per  outlet.
         Notwithstanding  Landlord's consent to such excess loading of circuits,
         Tenant shall pay the cost of any additional or above-standard  capacity
         electrical  circuits  necessitated by such excess loading  circuits and
         the installation thereof.

6.       ALTERATIONS.  All alterations,  improvements or changes to the Premises
         (other than the suite  improvements  provided  for in the  Construction
         Rider)  desired  by Tenant  ("Alterations")  shall be made at  Tenant's
         expense and shall require Landlord's prior approval.  If Tenant desires
         any Alteration,  Tenant shall submit to Landlord for its prior approval
         (which approval shall not, provided such Alteration does not affect the
         structural  portions  or  the  mechanical  or  utility  systems  of the
         Property,  and subject to other terms of this  Lease,  be  unreasonably
         withheld or delayed) reasonably detailed final plans and specifications
         and  the  name  of the  contractor  proposed  by  Tenant  to  make  the
         Alteration. Tenant shall obtain all applicable permits,  authorizations
         and governmental  approvals before commencement of the Alteration,  and
         the Alteration shall be completed with due diligence in compliance with
         the  plans and  specifications  approved  by  Landlord.  In making  any
         Alteration,  Tenant  shall comply in all  respects  with the  "Building
         Rules" (as  defined in  Section  30 - "Rules and  Regulations  and with
         Section 5 - "Use of Premises".

         All  Alterations  shall be made at such  times  and in such  manner  as
         Landlord may  designate,  only by such  contractors or mechanics as are
         approved  by  Landlord,  and  subject  to all  other  conditions  which
         Landlord may in its discretion impose.

         All Alterations shall be the property of Landlord,  and upon expiration
         or termination of this Lease,  all  Alterations  which are  permanently
         affixed shall be  surrendered  with the Premises at the end of the term
         of this Lease in accordance with Section 20.1 - "Surrender.

         Tenant shall obtain liability insurance, in form and amount and from an
         insurance  company  acceptable  to Landlord,  insuring  Tenant  against
         damage to person and property  arising out of the  construction  of the
         Alteration.  Tenant shall keep the  Premises and the Property  free and
         clear  of  all  liens  arising  out of any  work  performed,  materials
         furnished or obligations incurred by Tenant. Tenant shall give Landlord
         at least  five  (5)  days'  notice  prior  to the  commencement  of any
         Alterations.  Landlord  may post and  record an  appropriate  notice of
         non-responsibility  with respect to any Alteration or the  installation
         of any "Trade  Fixtures"  (as defined in Section 8 - "Trade  Fixtures")
         and Tenant shall  maintain any such notices posted by Landlord in or on
         the  Premises.  In the event any such lien  attaches to the Premises or
         the  Property,  and Tenant  does not cause the same to be  released  by
         payment,  bonding  or  otherwise,   within  ten  (10)  days  after  the
         attachment  thereof,   Landlord  shall  have  the  right  but  not  the
         obligation  to cause the same to be  released by such means as it shall
         deem proper, and any sums expended by Landlord in connection  therewith
         shall be payable by Tenant on demand  with  interest  thereon  from the
         date of expenditure by Landlord at the rate specified in Section 17.2 -
         "Interest" hereof.

7.       MAINTENANCE AND REPAIRS.  By taking possession of the Premises,  Tenant
         agrees that the Premises are then in a tenantable  and good  condition.
         During  the term of this  Lease  Tenant  shall  take  good  care of the
         Premises and keep the Premises in a clean and orderly  condition.  As a
         material part of the consideration for this Lease, Tenant hereby waives
         the provisions of California Civil Code Sections 1932(l), 1941 and 1942
         or  any  other  applicable   existing  or  future  law,   ordinance  or
         governmental  regulation  permitting  Tenant  to  make  repairs  at the
         Landlord's expense.

         Landlord  shall  maintain or cause to be maintained in reasonably  good
         order,  condition  and  repair,  the  structural  portions of the roof,
         foundations,  floors and exterior walls of the Building,  the equipment
         and  facilities  by which  utilities  and services are provided and the
         public and common areas of the  Building,  such as  elevators,  stairs,
         corridors and restrooms;  provided,  however, that Tenant shall pay the
         costs of repairs  for damage  occasioned  by or any act or  omission of
         Tenant  (collectively  Tenant's  "Representatives").  Landlord shall be
         under no

                                       5
<PAGE>

         obligation to inspect the  Premises.  Tenant shall  promptly  report in
         writing to Landlord any defective  condition known to it which Landlord
         is required to repair,  and failure to so report such defect shall make
         Tenant  responsible to Landlord for any liability  incurred by Landlord
         by reason of such condition.

         Landlord  hereby reserves the right, in any time and from time to time,
         without the same  constituting an actual or constructive  eviction,  to
         make  alterations,  additions,  repairs,  improvements  to  or in or to
         decrease  the size of area of,  all or any  part of the  Building,  the
         fixtures   and   equipment   therein,    the   heating,    ventilation,
         air-conditioning,  plumbing,  electrical, fire protection, life safety,
         security and mechanical systems of the Building  ("Building  Systems"),
         the common areas and all other parts of the Building, and to change the
         arrangement  and/or  location of  entrances or  passageways,  doors and
         doorways, corridors,  elevators, stairs, toilets and other public parts
         of the  Building-provided  that such  changes  shall not  detrimentally
         impact parking, access or maintenance of the Building as a first- class
         office building.

8.       TRADE  FIXTURES.  Subject  to the  provisions  of  Section  5 - "Use of
         Premises" and Section 6 -"Alterations", Tenant may install and maintain
         furnishings, equipment, movable partitions, business machines and other
         trade fixtures  ("Trade  Fixtures") in the Premises,  provided that the
         Trade  Fixtures do not become an integral  part of the  Premises or the
         Building. Tenant, if not then in default under this Lease, may after or
         remove any of its Trade  Fixtures  at any time  during the term of this
         Lease or upon its  expiration  or  termination.  Tenant shall  promptly
         repair  any  damage  to the  Premises  or the  Building  caused by such
         removal.  If Tenant fails to make such  repairs,  Landlord may do so at
         Tenant's expense.

9.       TENANT'S TAXES.

         9.1      Definition.  For purposes of this  Section,  "Tenant's  Taxes"
                  shall  mean all  taxes,  assessments,  license  fees and other
                  governmental charges or impositions levied or assessed against
                  or  with  respect  to  Tenant's  personal  property  or  Trade
                  Fixtures  installed,  located  or  attached  to the  Premises,
                  whether  levied  directly  against  Tenant or  levied  against
                  Landlord or the Property.

         9.2      Payment.   Tenant   shall  pay  all   Tenant's   Taxes  before
                  delinquency and, at Landlord's request, shall furnish Landlord
                  satisfactory  evidence thereof.  If Tenant fails timely to pay
                  any Tenant's  Taxes levied  directly  against  Tenant,  if any
                  Tenant's Taxes are levied against Landlord or the Property, or
                  if the  assessed  value of the  Building is  increased  by the
                  inclusion  of a value  placed on Tenant's  personal  property,
                  Trade Fixtures or Alterations, Landlord may pay the portion of
                  Tenant's Taxes that is not paid by Tenant or that is levied or
                  assessed  against  Landlord or the Property.  Landlord may pay
                  such Tenant's  Taxes  regardless of the validity of their levy
                  or assessment  and whether or not Tenant elects to contest the
                  same if, in the reasonable  judgment of Landlord,  the failure
                  to pay such taxes will  jeopardize the interest of Landlord in
                  the Property.  If Landlord pays Tenant's  Taxes or any portion
                  thereof,  Tenant shall,  immediately  upon demand by Landlord,
                  reimburse  Landlord for the amount of such  payment,  together
                  with  interest  at  the  rate  specified  in  Section  17.2  -
                  "Interest" from the date of Landlord's  payment to the date of
                  Tenant's reimbursement.

10.      UTILITIES AND SERVICES.

         10.1     Description of Services. During the hours of 7:00 a.m. to 7:00
                  p.m.  ("Business  Hours") on weekdays  except public  holidays
                  ("Business Days"); and subject to the rules and regulations of
                  the Building, Landlord shall furnish to the Premises "Building
                  Standard"    amounts    of    electricity,     water,    heat,
                  air-conditioning  and elevator  service  consisting  of either
                  attended  or  non-attended  automatic  elevators.  On Business
                  Days,  subject to the rules and  regulations  of the Building,
                  Landlord  shall  furnish  to the  Premises  and its  attendant
                  restrooms   and  other  common  areas,   "Building   Standard"
                  janitorial   service,   window   washing,   fluorescent   tube
                  replacement and toilet room supplies;  provided, however, that
                  Landlord shall not be required to provide janitorial  services
                  required  due  to the  use of  portions  of the  Premises  for
                  preparation or consumption of food or beverages or for similar
                  purposes.  During non-Business

                                       6
<PAGE>

                  Hours,  Landlord  shall  furnish the  Premises  with water and
                  elevator  service and,  subject to the  provisions  of Section
                  10.2 - "Payment for Additional  Utilities and Services",  and,
                  upon  twenty-four  (24) hours notice from  Tenant,  reasonable
                  heat and air conditioning. Any additional utilities or service
                  that  Landlord may agree to provide at Tenant's  request shall
                  be at Tenant's sole expense.

         10.2     Payment for Additional Utilities and Services. Tenant hall pay
                  for heat and  air-conditioning  furnished at Tenant's  request
                  during  non-Business  Hours  on an  hourly  basis  at the then
                  prevailing  rate  established  for the  Building  by  Landlord
                  calculated  based on the  estimated  actual cost of  providing
                  such heat and  air-conditioning.  If the service  requested by
                  Tenant  is not a  continuation  of  service  furnished  during
                  Business Hours, Tenant shall pay for such service at such rate
                  for a period of two (2) hours  preceding the  commencement  of
                  service.

                  If the temperature  otherwise maintained in any portion of the
                  Premises  by the  heating,  ventilating  and  air-conditioning
                  ("HVAC) systems of the Building is affected as a result of (a)
                  any  lights,  machines  or  equipment  used by  Tenant  in the
                  Premises;  or (b) the  occupancy  of the Premises by more than
                  one person per 115 square feet of rentable area; then Landlord
                  shall have the right to install  any  machinery  or  equipment
                  that   Landlord   reasonably   deems   necessary   to  restore
                  temperature balance,  including  modifications to the standard
                  air-conditioning  equipment  calculated to cover the estimated
                  actual cost of providing such heat and  air-conditioning.  The
                  cost of any such  equipment and  modifications,  including the
                  cost of installation  and any additional cost of operation and
                  maintenance  of the same,  shall be paid by Tenant to Landlord
                  upon demand.

                  In the event the Tenant's usage of  electricity,  water or any
                  other utility exceeds the customary  office usage  consumption
                  of such  utility,  Landlord may  determine  the amount of such
                  excess use by any reasonable means (including, but not limited
                  to, the  installation  at  Landlord's  election  and expense a
                  separate meter or measuring  device.  If it is determined that
                  Tenant is using excessive  consumption,  Tenant will reimburse
                  Landlord the cost of the meter or measuring  device and pay to
                  Landlord the  additional  charge for excessive  utilities.  In
                  addition,  Landlord may impose a reasonable charge for the use
                  of any additional or unusual  janitorial  services required by
                  Tenant   because  of  any  unusual   Suite   Improvements   or
                  Alterations,  the  carelessness  of  Tenant  or the  nature of
                  Tenant's  business  (including  hours of operation).  All sums
                  payable  hereunder  by Tenant for  additional  services or for
                  excess  utility  usage  shall be payable  within ten (10) days
                  after  notice from  Landlord of the amounts  due;  except that
                  Landlord may require  Tenant to pay monthly for the  estimated
                  cost of Tenant's  excess utility usage if such usage occurs on
                  a regular basis,  and such estimated  amounts shall be payable
                  in advance on the first day of each month.

         10.3     Interruption of Services.  In the event of an interruption in,
                  or failure or  inability  to provide  any of the  services  or
                  utilities   described  in  Section  10.1  -  "Description   of
                  Services" (a "Service  Failure"),  such Service  Failure shall
                  not,  regardless  of its  duration,  constitute an eviction of
                  Tenant, constructive or otherwise, or impose upon Landlord any
                  liability whatsoever, including, but not limited to, liability
                  for  consequential  damages or loss of  business by Tenant of,
                  except as provided  herein,  entitle Tenant to an abatement of
                  Rent or to terminate this Lease.

                  (a)      If any  Service  Failure  not caused by Tenant or its
                           Representatives  or  Visitors  prevents  Tenant  from
                           reasonably  using a material  portion of the Premises
                           and Tenant in fact ceases to use such  portion of the
                           Premises, Tenant shall be entitled to an abatement of
                           Base Rent and  Additional  Rent with  respect  to the
                           portion of the Premises that Tenant is prevented from
                           using  by  reason  of  such  Service  Failure  in the
                           following  circumstances:  (i) if  Landlord  fails to
                           commence  reasonable  efforts to remedy  the  Service
                           Failure  within two (2) Business  Days  following the
                           occurrence of the Service Failure or fails thereafter
                           to pursue diligently  reasonable action to remedy the
                           Service

                                       7
<PAGE>

                           Failure,  the abatement of Rent shall commence on the
                           third Business Day following the Service  Failure and
                           continue  for the balance of the period  during which
                           Tenant is so prevented from using such portion of the
                           Premises;  and  (ii) if the  Service  Failure  in all
                           events  is not  remedied  within  fifteen  (15)  days
                           following the  occurrence of the Service  Failure and
                           Tenant  in fact  does  not use  such  portion  of the
                           Premises for an uninterrupted  period of fifteen (15)
                           days or more by reason of such Service  Failure,  the
                           abatement  of Rent shall  commence  no later than the
                           sixteenth day following the occurrence of the Service
                           Failure  and  continue  for the balance of the period
                           during which  Tenant is so presented  from using such
                           portion of the Premises.

                  (b)      If a  Service  Failure  is  caused  by  Tenant or its
                           Representatives    or   Visitors,    Landlord   shall
                           nonetheless  remedy  the  Service  Failure,   at  the
                           expense of Tenant, pursuant to Landlord's maintenance
                           and repair obligations under Section 7 - "Maintenance
                           and  Repair" or Section  13.1 -  "Landlord's  Duty to
                           Repair" as the case may be,  but Tenant  shall not be
                           entitled to an abatement of Rent or to terminate this
                           Lease as a result of any such Service Failure.

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

                  (d)      In addition to the foregoing provisions,  if there is
                           a  Service  Failure  not  caused  by  Tenant  or  its
                           Representatives  or Visitors and such Service Failure
                           prevents  Tenant from  conducting its business in the
                           Premises  in the  manner in which  Tenant  intends to
                           conduct  such  business,  and (i)  Landlord  fails to
                           commence  reasonable  efforts to remedy  the  Service
                           Failure  within two (2) days following the occurrence
                           of the Service  Failure,  or (ii) the Service Failure
                           in all  events  is not  remedied  within  one-hundred
                           eighty (180) days following its occurrence and Tenant
                           in fact does not conduct any business in the Premises
                           for an  uninterrupted  period of  one-hundred  eighty
                           (180)  days or more,  Tenant  shall have the right to
                           terminate this Lease by written  notice  delivered to
                           Landlord  within ten (10) Business Days following the
                           event  described  in clauses (i) or (ii) above giving
                           rise to the right to terminate.

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

                  (f)      Tenant  hereby  waives the  provisions  of California
                           Civil Code  Section  1932(l) or any other  applicable
                           existing or future  law,  ordinance  or  governmental
                           regulation  permitting the  termination of this Lease
                           due to such interruption, failure of inability.

         10.4     Governmental Controls. In the event any governmental authority
                  having  jurisdiction over the Property  promulgates or revises
                  any law,  ordinance or regulation  or building,  fire or other
                  code or imposes mandatory or voluntary  controls or guidelines
                  on   Landlord  or  the   Property   relating  to  the  use  or
                  conservation  of  energy  or  utilities  or the  reduction  of
                  automobile or other emissions (collectively  "Controls") or in
                  the event  Landlord is required or elects to make  alterations
                  to the  Property  in order to comply  with such  mandatory  or
                  voluntary  Controls,  Landlord  may,  in its sole  discretion,
                  comply  with such  Controls  or make such  alterations  to the
                  Property  related  thereto.  Such compliance and the making of
                  such  alterations  shall not constitute an eviction of

                                       8
<PAGE>

                  Tenant, constructive or otherwise, or impose upon Landlord any
                  liability whatsoever, including, but not limited to, liability
                  for consequential damages or loss of business by Tenant.

11.      EXCULPATION  AND  INDEMNIFICATION.  Except for the gross  negligence of
         Landlord,  Landlord shall not be liable to Tenant for any loss,  injury
         or other damage to any person or property  (including,  but not limited
         to,  Tenant  or  Tenant's  property)  in or about the  Premises  or the
         Property from any cause (including,  but not limited to: defects in the
         Property or in any equipment in the Property,  fire, explosion or other
         casualty;  bursting,  rupture,  leakage or overflow of any  plumbing or
         other pipes or lines, sprinklers,  tanks, drains, drinking fountains or
         washstands in, above, or about the Premises or the Property; or acts of
         other tenants in the Building). Tenant hereby waives all claims against
         Landlord for such damage and the cost and expense of defending  against
         claims  relating to such damage,  except that Landlord shall  indemnify
         and hold  Tenant  harmless  from and  against  any  claims,  liability,
         damages,  costs or expenses,  including  reasonable  attomeys' fees and
         costs incurred in defending against the same ("Claims"),  to the extent
         the same are caused by the willful or  negligent  acts or  omissions of
         Landlord or its authorized representatives. In no event, however, shall
         Landlord be liable to Tenant for any punitive or consequential  damages
         or damages for loss of business by Tenant.

         Tenant shall indemnify and hold Landlord  harmless from and against any
         Claims  arising  from  (a)  the  acts or  omissions  of  Tenant  or its
         Representatives or Visitors in or about the Property from and after the
         date hereof, or (b) any construction or other work undertaken by Tenant
         on the Premises from and after the date hereof,  or (c) from any breach
         or default  under this Lease by Tenant from and after the date  hereof,
         or (d) any  accident,  injury or damage,  howsoever  and by  whomsoever
         caused,  to any person or property,  occurring in or about the Premises
         during the Term;  excepting  only such  Claims to the  extent  they are
         caused by the negligent or willful acts or omissions of Landlord or its
         authorized representatives.

         Landlord shall  indemnify and hold Tenant harmless from and against any
         Claims  arising  from  (a) the acts or  omissions  of  Landlord  or its
         Representatives or Visitors in or about the Property from and after the
         date  hereof,  or (b) any  construction  or other  work  undertaken  by
         Landlord on the Premises  from and after the date  hereof,  or (c) from
         any breach or default  under this Lease by  Landlord  from an after the
         date hereof,  or (d) any accident,  injury or damage,  howsoever and by
         whomsoever caused, to any person or property, occurring in or about the
         Premises  during the Term-,  excepting  only such  Claims to the extent
         they are caused by the negligent or willful acts or omissions of Tenant
         or its authorized representatives.

         The  obligations of the parties under this Section 11 shall survive the
         expiration or termination of this Lease.

12.      INSURANCE.

         12.1     Tenant's Insurance.  Tenant, at its expense, shall maintain in
                  full force during the term of this Lease, a policy or policies
                  of  commercial  general  liability  insurance  with a combined
                  single limit of at least two million dollars  ($2,000,000) for
                  each occurrence,  insuring against all liability of Tenant and
                  its representatives and Visitors for personal or bodily injury
                  or property  damage  arising out of or incurred in  connection
                  with  Tenant's  use  or  occupancy  of  the  Premises  or  the
                  Property.  Such policy or policies  shall  further  insure the
                  indemnification obligations of Tenant under this Lease.

                  Tenant shall at all times  maintain in effect  insurance  with
                  respect  to  its  Alterations  and  Trade  Fixtures  providing
                  coverage against fire,  extended coverage perils and vandalism
                  and  malicious  mischief,  to the  extent  of at least  eighty
                  percent (80%) of the full replacement cost thereof. Tenant may
                  carry such  insurance  under a blanket  policy,  provided that
                  such policy provides equivalent coverage to a separate policy.
                  During  the  term of this  Lease  the  proceeds  from any such
                  policies  of  insurance  shall  be  used  for  the  repair  or
                  replacement of the  Alterations and Trade Fixtures so insured.
                  Landlord  shall have no interest in such  insurance  and shall
                  sign  all   documents   reasonably   necessary  or  proper  in
                  connection with the settlement of any

                                       9
<PAGE>

                  claim or loss by Tenant.  Landlord will not carry insurance on
                  Tenant's personal property or Trade Fixtures.

                  Each policy of  insurance  required  under this  Section  12.1
                  shall require at least  fifteen (15) days'  written  notice to
                  Landlord prior to any termination or alteration of the policy.
                  Each policy of liability  insurance  shall name Landlord,  its
                  partners and its property manager and mortgagees as additional
                  insured   and   provide   that  it  is  primary  to,  and  not
                  contributing with, any policy carried by Landlord covering the
                  same loss.  Tenant shall  provide to Landlord,  upon  request,
                  evidence that the  insurance  required to be carried by Tenant
                  pursuant to this  Section 12.1 is in full force and effect and
                  the premiums therefor have been paid.

                  Any  limits  set forth in this  Lease on the amount or type of
                  coverage  required by Tenant's  insurance  shall not limit the
                  liability of Tenant under this Lease.

         12.2     Landlord's  Insurance.  During the term of this Lease Landlord
                  shall  maintain in effect  insurance on the  Building  against
                  fire,  extended  coverage  perils and  vandalism and malicious
                  mischief (to the extent such  coverages are  available),  with
                  responsible  insurers  licensed to do business in the state in
                  which the  Building is located,  insuring the Building and the
                  Suite  Improvements in an amount equal to one-hundred  percent
                  (100%) of the replacement cost thereof, excluding foundations,
                  footings  and  underground  installations.  Landlord  may, but
                  shall not be obligated to, carry insurance against  additional
                  perils  and/or in greater  amounts.  Upon  written  request of
                  Tenant and  notification  by Tenant of the insurable  value of
                  Tenant's Alterations,  Landlord will have such insurance cover
                  Tenant's  Alterations.  Tenant shall reimburse Landlord within
                  ten (10) days after  notification  of the amounts due, for all
                  premiums for insurance maintained by Landlord pursuant to this
                  Section 12.2 on Tenant's Alterations.

         12.3     Waiver  of  Subrogation.  To the  extent  permitted  by  their
                  respective  policies of  insurance,  Landlord  and Tenant each
                  hereby  waive any right of recovery  against the other and the
                  authorized representatives of the other for any loss or damage
                  that is  covered  by any  policy of  insurance  maintained  by
                  either  party with  respect to the Premises or the Property or
                  any operation therein.  If any policy of insurance relating to
                  this Lease or to the Premises or the Property  does not permit
                  the foregoing  waiver or if the coverage under any such policy
                  would be  invalidated  as a result of such  waiver,  the party
                  maintaining  such policy shall,  if possible,  obtain from the
                  insurer under such policy a waiver of all right of recovery by
                  way of subrogation against either party in connection with any
                  claim,  loss or damage covered by such policy. If either party
                  is not able to obtain such waiver,  then such party shall have
                  the other  party  named as an  additional  insured on all such
                  policies of insurance.

13.      DAMAGE OR DESTRUCTION.

         13.1     Landlord's Duty to Repair. If all or a substantial part of the
                  Premises are rendered  untenantable  or inaccessible by damage
                  to all or any part of the Property from fire or other casualty
                  then,  unless  either  party  is  entitled  to and  elects  to
                  terminate  this Lease  pursuant to Sections 13.2 - "Landlord's
                  Right to Terminate"  and 13.3 - "Tenant's  Right to Terminate"
                  Landlord  shall,  at its expense,  use  reasonable  efforts to
                  repair and restore the Premises  and/or the  Property,  as the
                  case may be, to  substantially  their former  condition to the
                  extent  permitted  by the  then  applicable  codes,  laws  and
                  regulations;   provided,  however,  that  in  no  event  shall
                  Landlord  have any  obligation  to repair or replace the Suite
                  Improvements  beyond the extent of insurance proceeds received
                  for the  repair  or  restoration  thereof  or any of  Tenant's
                  personal    property,    Trade   fixtures   or    Alterations.
                  Notwithstanding  the above, if Landlord,  at Tenant's request,
                  has insured  Tenant's  Alterations as provided in Section 12.2
                  "Landlord's  Insurance",  Landlord's  obligation  to repair or
                  restore shall also include such  Alterations,  but only to the
                  extent Landlord receives  insurance proceeds covering the cost
                  of such repair or restoration.

                                       10
<PAGE>

                  If  Landlord  is  required  or elects to repair  damage to the
                  Premises  and/or the  Property  this Lease  shall  continue in
                  effect but  Tenant's  Base Rent and  Additional  Rent from the
                  date  of  the  casualty   through  the  date  of   substantial
                  completion  of the  repair  shall be  abated.  The  amount and
                  period of rental  abatement shall be determined by Landlord in
                  the  exercise  of its good faith  reasonable  judgment.  In no
                  event  shall  Landlord  be  liable  to Tenant by reason of any
                  injury to or interference  with Tenant's  business or property
                  arising  from  fire or  other  casualty  or by  reason  of any
                  repairs to any part of the  Property  made  necessary  by such
                  casualty.

         13.2     Landlord's Right to Terminate. Landlord may elect to terminate
                  this Lease,  effective as of the date of the  casualty,  under
                  the following circumstances:

                  (a)      Where,  in the reasonable  judgment of Landlord,  the
                           damage cannot be substantially  repaired and restored
                           under  applicable laws and  governmental  regulations
                           within one (1) year from the date of the casualty;

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

                  (c)      Where the  Property  is damaged or  destroyed  to the
                           extent  that  the  cost to  repair  and  restore  the
                           Property  exceeds  twenty-five  percent  (25%) of the
                           full replacement cost of the Property, whether or not
                           the Premises are at all damaged or destroyed.

                  If any of the  circumstances  described in subparagraphs  (a),
                  (b) or (c) of this  subsection  occur or arise,  Landlord must
                  notify  Tenant in writing of that fact  within one hundred and
                  twenty  (120) days after the date of the  casualty and in such
                  notice  Landlord must also advise Tenant whether  Landlord has
                  elected  to  terminate  this  Lease  as of  the  date  of  the
                  casualty.

         13.3     Tenant's Right to Terminate.  If all or a substantial  part of
                  the Premises  are rendered  untenantable  or  inaccessible  by
                  damage to all or any part of the  Property  from fire or other
                  casualty,  then Tenant may elect to terminate this Lease under
                  the following circumstances:

                  (a)      Where  Landlord  has the right under  Section  13.2 -
                           "Landlord's  Right to  Terminate"  to terminate  this
                           Lease  but  has  not  elected  to  so  terminate  and
                           Landlord fails to commence the required repair within
                           one hundred  and twenty  (120) days after the date of
                           the  casualty,  in which  event  Tenant  may elect to
                           terminate  this Lease upon notice to  Landlord  given
                           within  ten (10)  days  after  such one  hundred  and
                           twenty  (120)-day  period,  effective  as of the next
                           calendar month following such notice to Landlord.

                  (b)      In the circumstance  described in Subsection  13.2(a)
                           above;  in which event  Tenant may elect to terminate
                           this Lease as of the date of the  casualty  by giving
                           Landlord notice of such election to terminate  within
                           thirty  (30) days after  Landlord's  notice to Tenant
                           pursuant to Section 13.2.

         13.4     Waiver of  Statutory  Provisions.  Landlord  and  Tenant  each
                  hereby waive the provisions of California  Civil Code Sections
                  1932(2),  1933(4) and any other applicable  existing or future
                  law,  ordinance  or  regulation  with  respect  to  damage  or
                  destruction  of  leased   premises  or  with  respect  to  the
                  termination  of a lease  agreement in the event of such damage
                  or destruction under any circumstances  other than as provided
                  in  Section  13.2  "Landlord's  Right to  Terminate"  and 13.3
                  -"Tenant's Right to Terminate".

                                       11
<PAGE>

14.      CONDEMNATION.

         14.1     Definitions. For purposes of this Section, the following terms
                  shall be defined as follows:

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

                  (b)      "Condemnation"   shall  mean  (i)  a   permanent   or
                           temporary  taking  pursuant  to  the  exercise  by  a
                           Condemnor  of the power of  condemnation  or  eminent
                           domain, whether by legal proceedings or otherwise, or
                           (ii) a voluntary  sale or transfer by Landlord to any
                           Condemnor,  either  under threat of  condemnation  or
                           while legal proceedings for condemnation are pending.

                  (c)      "Condemnor"  shall  mean any  public or quasi  public
                           authority,  private  corporation or individual having
                           the power of condemnation or eminent domain.

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

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

                  If  twenty-five  percent  (25%)  or more of the Land or of the
                  floor area in the Building is taken by  Condemnation,  whether
                  or not any portion of the  Premises is so taken,  Landlord may
                  elect to  terminate  this Lease at any time up to thirty  (30)
                  days  after  to the  Date  of  Condemnation.  If  Landlord  so
                  terminates this Lease,  the termination  shall be effective as
                  of the  Date  of  Condemnation.  If all  or a  portion  of the
                  Premises  is taken by a  temporary  Condemnation,  this  Lease
                  shall remain in full force and effect.

         14.3     Restoration.  If this Lease is not  terminated  as provided in
                  Section  14.2  -  "Condemnation"   following  a  Condemnation,
                  Landlord,  at its expense,  shall diligently proceed to repair
                  and restore the Premises to substantially its former condition
                  (to the extent  permitted by the then applicable  codes,  laws
                  and regulations)  and/or repair and restore the Building to an
                  architecturally complete office building;  provided,  however,
                  that Landlord's  obligations to so repair and restore shall be
                  limited to the amount of any Award  received by  Landlord  and
                  not  required  to be paid to any lender  holding a mortgage or
                  deed of trust on the Property. In no event shall Landlord have
                  any  obligation  to repair or replace  any Suite  Improvements
                  beyond the amount of any Award  received by Landlord  for such
                  repair or  replacement or any of Tenant's  personal  property,
                  Trade Fixtures, or Alterations.

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

                                       12
<PAGE>

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

                  Landlord  and  Tenant  each  hereby  waive the  provisions  of
                  California  Code of Civil Procedure  Section  1265.130 and any
                  other  applicable   existing  or  future  law,   ordinance  or
                  governmental  regulation  providing  for, or  allowing  either
                  party to  petition  the  courts  of the  state  in  which  the
                  Property is located  for, a  termination  of this Lease upon a
                  partial taking of the Premises and/or the Property.

15.      ASSIGNMENT AND SUBLETTING.

         15.1     Landlord's   Consent   Required.   Tenant  shall  not  assign,
                  transfer, mortgage, pledge, hypothecate or encumber this Lease
                  or any interest  therein  (each a  "Transfer"),  and shall not
                  sublet the  Premises  or any part  thereof,  without the prior
                  written  consent of Landlord  and any attempt to do so without
                  such consent being first had and obtained shall be wholly void
                  and shall constitute a breach of this Lease.

         15.2     Reasonable Consent.

                  (a)      If Tenant  complies  with the  following  conditions,
                           Landlord shall not unreasonably  withhold its consent
                           to the  subletting  of the  Premises  or any  portion
                           thereof or the assignment of this Lease. Tenant shall
                           submit in writing to Landlord  (i) the name and legal
                           composition  of the  proposed  subtenant or assignee;
                           (ii)  the  nature  of  the  business  proposed  to be
                           carried  on in the  Premises;  (iii)  the  terms  and
                           provisions  of  the  proposed  sublease;   (iv)  such
                           reasonable  financial  information  as  Landlord  may
                           request   concerning   the   proposed   subtenant  or
                           assignee;  and (v) the form of the proposed  sublease
                           or  assignment.  Within five (5) business  days after
                           Landlord  receives  all  such  information  it  shall
                           notify Tenant whether it approves such  assignment or
                           subletting  or if it elects to proceed  under Section
                           15.8 below.

                  (b)      The parties hereto agree and acknowledge  that, among
                           other   circumstances   for  which   Landlord   could
                           reasonably  withhold  its  consent to a  sublease  or
                           assignment,  it shall be  reasonable  for Landlord to
                           withhold its consent  where (i)  Landlord  reasonably
                           disapproves of the Transferee's  reputation or credit
                           worthiness  or the  character  of the  business to be
                           conducted by the Transferee at the Premises, (ii) the
                           Transferee  is an  existing  tenant of the  Building,
                           (iii) the assignment or subletting would increase the
                           burden  on the  Building  services  or the  number of
                           people   occupying   the   Premises,   (iv)  Landlord
                           otherwise  reasonably  determines that the assignment
                           or sublease  would have the effect of decreasing  the
                           value of the  Property  or  increasing  the  expenses
                           associated with operating the Property.

         15.3     Excess  Consideration.  If Landlord consents to the assignment
                  or  sublease,   Landlord  shall  be  entitled  to  receive  as
                  additional  Rent  hereunder  any  consideration  paid  by  the
                  Transferee  for the assignment or sublease and, in the case of
                  a  sublease,  the  excess of the rent and other  consideration
                  payable  by the  subtenant  over the  amount  of Base Rent and
                  Additional Rent payable hereunder  applicable to the subleased
                  space.

         15.4     No Release Of Tenant. No consent by Landlord to any assignment
                  or subletting by Tenant shall relieve Tenant of any obligation
                  to be performed by Tenant under this Lease,  whether occurring
                  before or after such consent,  assignment or  subletting,  and
                  the  Transferee  shall be jointly  and  severally  liable with
                  Tenant for the payment of

                                       13
<PAGE>

                  Rent (or that portion applicable to the subleased space in the
                  case of a sublease) and for the performance of all other terms
                  and  provisions  of the Lease.  The consent by Landlord to any
                  assignment or subletting shall not relieve Tenant and any such
                  Transferee  from the obligation to obtain  Landlord's  express
                  written  consent to any  subsequent  assignment or subletting.
                  The acceptance of rent by Landlord from any other person shall
                  not be deemed to be a waiver by Landlord of any  provision  of
                  this Lease or to be a consent to any assignment, subletting or
                  other transfer. Consent to one assignment, subletting or other
                  transfer  shall  not be deemed to  constitute  consent  to any
                  subsequent assignment, subletting or other transfer.

         15.5     Attorneys'  Fees.  Tenant  shall  pay  Landlord's   reasonable
                  attorneys'  fees  incurred in  connection  with  reviewing any
                  proposed assignment or sublease.

         15.6     Effectiveness Of Transfer. No permitted assignment (whether or
                  not requiring  Landlord's  consent)  shall be effective  until
                  Landlord has received a counterpart  of the  assignment and an
                  instrument  in  recordable  form  executed by the  assignee in
                  which the assignee assumes all of Tenant's  obligations  under
                  this  Lease  arising  on or after the date of  assignment.  No
                  permitted  subletting  (whether  or not  requiring  Landlord's
                  consent)  by Tenant  shall be  effective  until there has been
                  delivered  to Landlord a  counterpart  of the  sublease and an
                  instrument  in  recordable  form  executed by the subtenant in
                  which  the  subtenant  agrees  to be and  remain  jointly  and
                  severally  liable  with Tenant for the payment of Rent and for
                  the  performance  of all of the terms and  provisions  of this
                  Lease;  provided,  however, that the subtenant shall be liable
                  to  Landlord  for Rent  only in the  amount  set  forth in the
                  sublease.  The failure or refusal of an assignee or  subtenant
                  to execute any such instrument  shall not release or discharge
                  the assignee or subtenant  from its liability set forth above.
                  The voluntary, involuntary or other surrender of this Lease by
                  Tenant, or a mutual cancellation by Landlord and Tenant, shall
                  not work a  merger,  and any such  surrender  or  cancellation
                  shall, at the option of Landlord,  either terminate all or any
                  existing  subleases or operate as an assignment to Landlord of
                  any or all of such subleases.

         15.7     Landlord's  Right To Space.  Notwithstanding  any of the above
                  provisions  of this  Section  15 to the  contrary,  if  Tenant
                  notifies  Landlord  that it  desires  to assign  this Lease or
                  sublet all or any part of the Premises,  Landlord,  in lieu of
                  consenting  to such  assignment  or  sublease,  may  elect  to
                  terminate  this  Lease  (in  the  case of an  assignment  or a
                  sublease of the entire  Premises),  or to terminate this Lease
                  as it relates to the space  proposed to be subleased by Tenant
                  (in the case of a sublease of less than the entire  Premises).
                  In such event,  this Lease (or portion thereof) will terminate
                  on the date the  assignment  or sublease was to be  effective,
                  and Landlord may lease such space to any party,  including the
                  prospective Transferee identified by Tenant.

         15.8     Transfer to Affiliate.  Tenant may assign this Lease or sublet
                  the  Premises  or  any  portion  thereof,  without  Landlord's
                  consent, to any corporation or other entity which controls, is
                  controlled by, or is under common  control with Tenant,  or to
                  any  corporation  or other entity  resulting  from a merger or
                  consolidation  with  Tenant,  or to any person or entity which
                  acquires  substantially  all the  assets  of Tenant as a going
                  concern  (collectively,  an  "Affiliate"),  provided  that the
                  Affiliate assumes in writing all of Tenant's obligations under
                  this Lease.

         15.9     Involuntary  Assignment.  In the event that Landlord consents,
                  pursuant to Section 365 of the Federal Bankruptcy Code, to any
                  assumption,  assignment or sublease ("transfer") of the rights
                  or interest of Tenant under this Lease, "adequate assurance of
                  future  performance"  of this  Lease by the  transferee  shall
                  include,   but  not  be  limited  to,   establishment  by  the
                  transferee  of an impound  account  into which the  transferee
                  shall deposit,  subject to withdrawal  solely by Landlord from
                  time to time as the same  becomes  due, an amount equal to the
                  aggregate amount of all Rent which shall become due under this
                  Lease during the remainder of the term of this Lease.

                                       14
<PAGE>

16.      DEFAULT AND REMEDIES.

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

                  (a)      Tenant  fails to make any  payment of Rent within ten
                           (10) days of when due and such  failure  is not cured
                           within three (3) days after notice to Tenant thereof.

                  (b)      Within ten (10) days  after  written  notice,  Tenant
                           fails to timely make payments of Rent within ten (10)
                           days of when due under this  Lease  three (3) or more
                           times during any twelve (12) month period  during the
                           term of this Lease.

                  (c)      Within ten (10) days  after  written  notice,  Tenant
                           abandons  the  Premises  for thirty (30)  consecutive
                           days, which failure shall be deemed an abandonment of
                           the Premises by Tenant.

                  (d)      Within ten (10) days  after  written  notice,  Tenant
                           fails to deliver any estoppel  certificate  requested
                           by Landlord within the period described in Section 23
                           - "Estoppel Certificates".

                  (e)      Within ten (10) days  after  written  notice,  Tenant
                           fails to comply with any of the provisions of Section
                           35 - "Hazardous Materials".

                  (f)      Tenant  ceases  doing  business  as a going  concern,
                           makes an assignment for the benefit of creditors,  is
                           adjudicated an insolvent,  files a petition (or files
                           an answer admitting the material  allegations of such
                           petition)  seeking  relief under any  reorganization,
                           arrangement,       consolidation,       readjustment,
                           liquidation,  dissolution  or similar  arrangement or
                           proceeding  under any state or federal  bankruptcy or
                           other statute, law or regulation,  or Tenant consents
                           to or acquiesces in the appointment,  pursuant to any
                           state or federal bankruptcy or other statute,  law or
                           regulation,  of a trustee, receiver or liquidator for
                           the   Premises,   for   Tenant  or  for  all  or  any
                           substantial part of Tenant's assets.

                  (g)      Tenant  fails,  within  ninety  (90)  days  after the
                           commencement  of  any   proceedings   against  Tenant
                           seeking relief under any reorganization, arrangement,
                           consolidation, readjustment, liquidation, dissolution
                           or similar  arrangement or proceeding under any state
                           or  federal  bankruptcy  or  other  statute,  law  or
                           regulation,  to have such  proceedings  dismissed  or
                           stayed,  or Tenant  fails,  within  ninety  (90) days
                           after an appointment pursuant to any state or federal
                           bankruptcy  or  other  statute,  law  or  regulation,
                           without  Tenant's  consent  or  acquiescence,  of any
                           trustee, receiver or liquidator for the Premises, for
                           Tenant or for all or any substantial part of Tenant's
                           assets, to have such appointment vacated.

                  (h)      Tenant fails to- perform or comply with any provision
                           of this  Lease  other  than  those  described  in (a)
                           through  (g)  above,  and such  failure  is not cured
                           within  fifteen  (15) days after notice to Tenant or,
                           if such  failure  cannot be cured within such fifteen
                           (15)-day  period,  Tenant  fails  within such fifteen
                           (15)-day   period   to   commence,   and   thereafter
                           diligently  proceed  with,  all actions  necessary to
                           cure such failure as soon as reasonably  possible but
                           in all events within ninety (90) days of such notice.

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

                                       15
<PAGE>

                  (a)      Landlord may terminate  Tenant's  right to possession
                           of the  Premises  at any time by  written  notice  to
                           Tenant.  Tenant  expressly  acknowledges  that in the
                           absence of such  written  notice  from  Landlord,  no
                           other act of Landlord, including, but not limited to,
                           its re-entry into the Premises,  efforts to relet the
                           Premises,  its reletting of the Premises for Tenant's
                           account,  its storage of Tenant's  personal  property
                           and Trade  Fixtures,  its  acceptance  of keys to the
                           Premises  from  Tenant or its  exercise  of any other
                           rights and remedies  under this Section  16.2,  shall
                           constitute an acceptance of  ------------  - Tenant's
                           surrender  of the  Premises or of  Tenant's  right to
                           possession of the Premises.

                           Upon such termination in writing of Tenant's right to
                           possession of the Premises, as herein provided,  this
                           Lease shall  terminate and Landlord shall be entitled
                           to  recover   damages  from  Tenant  as  provided  in
                           California  Civil  Code  Section  1951.2 or any other
                           applicable  existing  or  future  law,  ordinance  or
                           regulation providing for recovery of damages for such
                           breach, including but not limited to the following:

                           (1)      The   reasonable   cost  of  recovering  the
                                    Premises; plus,

                           (2)      All  unpaid  Rent  due or  earned  hereunder
                                    prior to the date of  termination,  less the
                                    proceeds  of any  reletting  or  any  rental
                                    received from  subtenants  prior to the date
                                    of   termination   applied  as  provided  in
                                    subsection (b) below, together with interest
                                    at the  rate  specified  in  Section  17.2 -
                                    "Interest" of this Lease,  on such sums from
                                    the date such Rent is due and payable  until
                                    the date of the award of damages; plus,

                           (3)      The amount by which the Rent which  would be
                                    payable  by  Tenant   hereunder,   including
                                    Tenant's  Share of  increases  in  Operating
                                    Costs and Taxes, as reasonably  estimated by
                                    Landlord, from the date of termination until
                                    the date of the award of damages exceeds the
                                    amount of such rental loss as Tenant  proves
                                    could have been reasonably  avoided together
                                    with  interest  at  the  rate  specified  in
                                    Section 17.2 - "Interest"  on such sums from
                                    the date such Rent is due and payable  until
                                    the date of the award of damages; plus,

                           (4)      The amount by which the Rent which  would be
                                    payable  by  Tenant   hereunder,   including
                                    Tenant's  Share of  increases  in  Operating
                                    Costs and Taxes, as reasonably  estimated by
                                    Landlord.  for  the  remainder  of the  then
                                    term, after the date of the award of damages
                                    exceeds  the amount of such  rental  loss as
                                    Tenant  proves  could  have been  reasonably
                                    avoided,  discounted  at the  discount  rate
                                    published by the Federal Reserve Bank of San
                                    Francisco  for  member  banks at the time of
                                    the award plus one percent (1%); plus,

                           (5)      Such other amounts in addition to or in lieu
                                    of the  foregoing as may be  permitted  from
                                    time to time by applicable law.

                  (b)      Landlord  may  continue  this Lease in full force and
                           effect and may  enforce  all its rights and  remedies
                           under this Lease, including,  but not limited to, the
                           right to recover Rent as it becomes  due.  During the
                           continuance  of an Event  of  Default,  Landlord  may
                           enter the Premises without terminating this Lease and
                           sublet all or any part of the  Premises  for Tenant's
                           account to any person,  for such term (which may be a
                           period beyond the remaining  term of this Lease),  at
                           such rents and on such other terms and  conditions as
                           Landlord  deems  advisable.  In the event of any such
                           subletting,  rents  received  by  Landlord  from such
                           subletting shall be applied (i) first, to the payment
                           of the costs of maintaining, preserving, altering and
                           preparing the Premises for subletting and other costs
                           of subletting,  including but not limited to brokers'
                           commissions,  attorneys' fees and expenses of removal
                           of  Tenant's  personal

                                       16
<PAGE>

                           property,  Trade  Fixtures,   alterations  and  Suite
                           Improvements:  (ii)  second,  to the  payment of Rent
                           then due and payable:  and (iii) third,  the balance,
                           if any, shall be paid to Tenant upon (but not before)
                           expiration  of the term of this  Lease.  If the rents
                           received  by  Landlord  from such  subletting,  after
                           application as provided  above,  are  insufficient in
                           any month to pay the Rent due and  payable  hereunder
                           for such month,  Tenant shall pay such  deficiency to
                           Landlord  monthly  upon demand.  Notwithstanding  any
                           such   subletting   for  Tenant's   account   without
                           termination,  Landlord may at any time thereafter, by
                           written  notice to Tenant,  elect to  terminate  this
                           Lease by virtue of a previous Event of Default.

                           During the continuance of an Event of Default, for so
                           long as Landlord does not terminate Tenant's right to
                           possession  of the Premises and subject to Section 15
                           "Assignment  and  Subletting" and the options granted
                           to   Landlord   thereunder,    Landlord   shall   not
                           unreasonably withhold its consent to an assignment or
                           sublease of Tenant's  interest in the  Premises or in
                           this Lease.

                  (c)      During  the  continuance  of  an  Event  of  Default,
                           Landlord may enter the Premises  without  terminating
                           this Lease and remove all Tenant's personal property,
                           Alterations and Trade Fixtures from the Premises.  If
                           Landlord  removes such property from the Premises and
                           stores it at Tenant's risk and expense, and if Tenant
                           fails to pay the  cost of such  removal  and  storage
                           after written demand  therefor and/or to pay any Rent
                           then due,  after the  property  has been stored for a
                           period of thirty (30) days or more  Landlord may sell
                           such  property  at public  or  private  sale,  in the
                           manner and at such times and  places as  Landlord  in
                           sole   discretion   deems   commercially   reasonable
                           following reasonable notice to Tenant of the time and
                           place of such  sale.  The  proceeds  of any such sale
                           shall be applied first to the payment of the expenses
                           for removal and storage of the property,  preparation
                           for and conducting such sale, and attorneys' fees and
                           other   legal   expenses   incurred  by  Landlord  in
                           connection  therewith,   and  the  balance  shall  be
                           applied as provided in subsection (b) above.

                           Tenant  hereby waives all claims for damages that may
                           be  caused  by  Landlord's   reentering   and  taking
                           possession  of the  Premises or removing  and storing
                           Tenant's  personal property pursuant to this Section,
                           and Tenant  shall  hold  Landlord  harmless  from and
                           against any loss,  cost or damage  resulting from any
                           such act. No reentry by Landlord shall  constitute or
                           be construed as a forcible entry by Landlord.

                  (d)      Landlord  may  require  Tenant to remove  any and all
                           Suite  Improvements  from the  Premises or, if Tenant
                           fails to do so within ten (10) days after  Landlord's
                           request, Landlord may do so at Tenant's expense.

                  (e)      See page 17A, Sections 16.3 and 16.4.

17.      LATE CHARGE; INTEREST.

         17.1     Late Charge.  Tenant acknowledges that the late payment of any
                  Rent due hereunder  will cause  Landlord to incur expenses not
                  contemplated  by this Lease and that the exact  amount of such
                  expenses  would be extremely  difficult and  impracticable  to
                  fix. Such expenses include, but are not limited to, processing
                  and  accounting  charges,  late charges that may be imposed on
                  Landlord by the terms of any  encumbrance  or note  secured by
                  the  Property  and the  loss of the  use of  delinquent  Rent.
                  Therefore,  if any payment of Rent is not received by Landlord
                  within ten (10) days of when due, Tenant shall pay to Landlord
                  on demand as a late charge an additional  amount equal to four
                  percent  (4%) of the overdue sum,  which  amount  represents a
                  fair and  reasonable  estimate of the costs that Landlord will
                  incur by reason of late payment. Acceptance of any late charge
                  shall not constitute a waiver of Tenant's default with

                                       17
<PAGE>

                  respect to the overdue sum or prevent Landlord from exercising
                  any of its other rights and remedies under this Lease.

         17.2     Interest.  In addition to the late charges  referred to above,
                  which are intended to defray  Landlord's  costs resulting from
                  late payments,  any late payment of Rent shall,  at Landlord's
                  option, bear interest from the due date of any such payment to
                  the date same is paid at a eighteen percent (18%) per annum or
                  the  maximum  lawful rate that  Landlord  may charge to Tenant
                  under applicable laws, whichever is less.

                                       18
<PAGE>

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

                  (a)      Landlord   fails  to  perform  or  comply   with  any
                           provision  of this Lease and such  failure,  where no
                           cure or grace  period is otherwise  provided,  is not
                           cured  within  fifteen  (15)  days  after  notice  to
                           Landlord or, if such  failure  where no cure or grace
                           period is otherwise provided,  cannot be cured within
                           such fifteen (15) day period,  Landlord  fails within
                           such  fifteen  (15)  day  period  to  commence,   and
                           thereafter   diligently  proceed  with,  all  actions
                           necessary to cure such failure as soon as  reasonably
                           possible but in all events within ninety (90) days of
                           such notice.

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

                  (a)      Tenant  may   terminate   this  Lease  and   Tenant's
                           obligations hereunder.

                           Upon such  termination  in  writing  of this Lease by
                           Tenant,  this Lease shall  terminate and Tenant shall
                           be  entitled  to recover  damages  from  Landlord  as
                           provided in California  Civil Code Section  1951.2 or
                           any  other   applicable   existing   or  future  law,
                           ordinance  or  regulation  providing  for recovery of
                           damages for such breach, including but not limited to
                           the following:

                           (1)      All Rent paid for periods  subsequent to the
                                    termination of this Lease, plus,

                           (2)      Such other amounts in addition to or in lieu
                                    of the  foregoing as may be  permitted  from
                                    time to time by applicable law.

                  (b)      Tenant  may  continue  this  Lease in full  force and
                           effect and may  enforce  all its rights and  remedies
                           under this Lease.

                  (c)      Tenant may cure the Event of  Default  at  Landlord's
                           expense. If Tenant pays any sum or incurs any expense
                           in  curing  the  Event  of  Default,  Landlord  shall
                           reimburse  Tenant  upon demand for the amount of such
                           payment  or  expense   with   interest  at  the  rate
                           specified in Section 17.2 - "Interest"  from the date
                           the sum is  paid or the  expense  is  incurred  until
                           Tenant is reimbursed by Landlord.

18.      WAIVER.  No provisions of this Lease shall be deemed waived by Landlord
         unless such waiver is in a writing  signed by  Landlord.  The waiver by
         Landlord  of any breach of any  provision  of this  Lease  shall not be
         deemed a waiver of such  provision or of any  subsequent  breach of the
         same or any other  provision of this Lease. No delay or omission in the
         exercise of any right or remedy of Landlord  upon any default by Tenant
         shall  impair  such  night  or  remedy  or be  construed  as a  waiver.
         Landlord's  acceptance  of any  payments  of Rent due under  this Lease
         shall not be deemed a waiver of any default by Tenant  under this Lease
         (including  Tenant's  recurrent  failure to timely pay Rent) other than
         Tenant's  nonpayment  of  the  accepted  sums,  and no  endorsement  or
         statement on any check or  accompanying  any check or payment  shall be
         deemed an accord and satisfaction. Landlord's consent to or approval of
         any act by Tenant requiring Landlord's consent or approval shall not be
         deemed to waive or render unnecessary Landlord's consent to or approval
         of any subsequent act by Tenant.

19.      ENTRY AND  INSPECTION.  Upon  reasonable  verbal or  written  notice to
         Tenant  (except  where  in  Landlord's  judgment  the  existence  of an
         emergency  necessitates  an immediate  entry into the Premises  without
         notice to avoid  damage,  loss or injury to persons or  property or any
         part of the Property),  Landlord and its authorized representatives may
         enter the Premises at all  reasonable  times to  determine  whether the
         Premises  are  in  good  condition,  to

                                       19
<PAGE>

         determine  whether Tenant is complying with its obligations  under this
         Lease,  to perform  any  maintenance  or repair of the  Premises or the
         Property  that  Landlord  has the right or  obligation  to perform,  to
         install or repair improvements for other tenants that require access to
         the Premises for such  installation or repair,  to serve,  post or keep
         posted any notices  required or allowed  under the  provisions  of this
         Lease,  to show the Premises to prospective  brokers,  agents,  buyers,
         transferees,  mortgagees  or  tenants,  or to do any other act or thing
         necessary  for  the  safety  or  preservation  of the  Premises  or the
         Property. In the event Tenant is in default of the Lease, or during the
         last six (6)  months of the term of the Lease,  Landlord  or its agents
         may show the premises to prospective new tenants.

         Landlord shall not be liable in any manner for any inconvenience,  loss
         of business or other damage to Tenant or other  persons  arising out of
         Landlord's entry on the Premises as provided in this Section.  Landlord
         shall  conduct  activities  under this  Section  in a manner  that will
         minimize  inconvenience to Tenant without incurring  additional expense
         to Landlord.  When reasonably  necessary Landlord may temporarily close
         entrances,  doors,  corridors,  elevators  or other  facilities  in the
         Property  without  liability  to Tenant by reason of such  closure  and
         without  such  action  being  construed  as an  eviction of Tenant or a
         release  of Tenant  from its  obligations  under  this Lease so long as
         parking,  access  and  use of the  Premises  are  not  interfered  with
         unreasonably.  In no event shall  Tenant be entitled to an abatement of
         rent on account of any entry by the Landlord.

20.      SURRENDER, HOLDING OVER.

         20.1     Surrender.  Upon the  expiration or termination of this Lease,
                  Tenant shall surrender the Premises and all Suite Improvements
                  and Alterations to Landlord  broom-clean and in their original
                  condition,  except for reasonable  wear and tear,  damage from
                  casualty  or  condemnation  and  any  changes  resulting  from
                  approved  alterations;  provided,  however,  that prior to the
                  expiration  or  termination  of this Lease Tenant shall remove
                  from the Premises all Tenant's  personal  property.;  or Trade
                  Fixtures,  Alterations and Suite  Improvements that Tenant has
                  the right or is  required  by  Landlord  to  remove  under the
                  provisions of this Lease.  If such removal is not completed at
                  the  expiration  or  termination  of this Lease,  Landlord may
                  remove  the  same  at  Tenant's  expense.  Any  damage  to the
                  Premises  or the  Building  caused  by such  removal  shall be
                  repaired  promptly  by Tenant  or,  if Tenant  fails to do so,
                  Landlord may do so at Tenant's expense.  Tenant's  obligations
                  under this Section shall survive the expiration or termination
                  of this Lease. Upon expiration or termination of this Lease or
                  of Tenant's possession, Tenant shall surrender all keys to the
                  Premises  or any other  part of the  Building  and shall  make
                  known to  landlord  the  combination  of  locks on all  safes,
                  cabinets and vaults that may be located in the Premises.

         20.2     Holding Over. If Tenant  remains in possession of the Premises
                  after the expiration or  termination  of this Lease,  Tenant's
                  continued possession shall be on the basis of a tenancy at the
                  sufferance  of Landlord,  and Tenant shall  continue to comply
                  with or perform  all the terms and  obligations  of the Tenant
                  under this Lease,  except  that the Base Rent during  Tenant's
                  holding  over shall be at 150% of the Base Rent payable in the
                  last  month  prior to the  termination  hereof.  Tenant  shall
                  indemnify  and hold  Landlord  harmless  from and  against all
                  claims,  liability,  damages,  costs  or  expenses,  including
                  reasonable  attorneys  fees and costs of  defending  the same,
                  incurred by Landlord and arising  directly or indirectly  from
                  Tenant's failure to timely  surrender the Premises,  including
                  (i)  any  rent  payable  by or any  loss,  cost,  or  damages,
                  including lost profits,  claimed by any prospective  tenant of
                  the Premises,  and (ii) Landlord's damages as a result of such
                  prospective  tenant  rescinding  or refusing to enter into the
                  prospective lease of the Premises by reason of such failure to
                  timely surrender the Premises.

21.      SUBORDINATION;  ATTORNMENT;  NON-DISTURBANCE.  This Lease is  expressly
         made subject and  subordinate  to any mortgage,  deed of trust,  ground
         lease, underlying lease or like encumbrance recorded affecting any part
         of the  Property  or any  interest  of  Landlord  therein  which is now
         existing or  hereafter  executed or recorded  ("Encumbrance"),  and any
         memorandum of this Lease, whether or not recorded in the public records
         of the  county  in

                                       20
<PAGE>

         which the Property is located, shall so state; provided,  however, that
         such subordination shall only be effective,  as to future Encumbrances,
         if the holder of the  Encumbrance  agrees that this Lease shall survive
         the  termination of the  Encumbrance  by lapse of time,  foreclosure or
         otherwise  so  long as  Tenant  is not in  default  under  this  Lease.
         Provided the conditions of the preceding sentence are satisfied, Tenant
         covenants  and agrees to execute and deliver,  upon request by Landlord
         and  in  a  form  reasonably  requested  by  Landlord,  any  additional
         documents  evidencing the  subordination  of this Lease with respect to
         any such Encumbrance and the non-disturbance agreement of the holder of
         any such  Encumbrance.  If the  interest of Landlord in the Property is
         transferred  to any  person (  "Purchaser")  pursuant  to or in lieu of
         proceedings   for   enforcement  of  any   Encumbrance,   Tenant  shall
         immediately and automatically  attorn to the Purchaser,  and this Lease
         shall  continue in full force and effect as a direct lease  between the
         Purchaser  and  Tenant on the terms  and  conditions  set forth in this
         Lease.

22.      MORTGAGEE  PROTECTION.   Tenant  agrees  to  give  any  holder  of  any
         Encumbrance  covering  any  part  of  the  Property  ("Mortgagee"),  by
         registered  mail,  a copy of any  notice  of  default  served  upon the
         Landlord,  provided  that prior to such notice Tenant has been notified
         in writing  (by way of notice of  assignment  of rents and  leases,  or
         otherwise)  of the address of such  Mortgagee.  If Landlord  shall have
         failed to cure such default  within thirty (30) days from the effective
         date of such  notice  of  default,  then the  Mortgagee  shall  have an
         additional  thirty  (30) days within  which to cure such  default or if
         such  default  cannot be cured within that time,  then such  additional
         time as may be  necessary  to cure  such  default  (including  the time
         necessary  to  foreclose or otherwise  terminate  its  Encumbrance,  if
         necessary to effect such cure),  and this Lease shall not be terminated
         so long as such remedies are being diligently pursued.

23.      ESTOPPEL CERTIFICATES. Upon ten (10) days' notice from Landlord, Tenant
         shall  execute  and  deliver  to  Landlord,  in  form  provided  by  or
         satisfactory to Landlord,  a certificate  stating that this Lease is in
         full force and  effect,  describing  any  amendments  or  modifications
         hereto,  acknowledging  that this Lease is subordinate or prior, as the
         case may be, to any  Encumbrance  and  stating  any  other  information
         Landlord may reasonably request,  including the term of this Lease, the
         monthly Base Rent,  the date to which Rent has been paid, the amount of
         any security deposit or prepaid Rent, whether either party hereto is in
         default  under the terms of the Lease,  whether  Landlord has completed
         its  construction   obligation  hereunder  and  any  other  information
         reasonably  requested  by  Landlord.  Any person or entity  purchasing,
         acquiring  an interest in or  extending  financing  with respect to the
         Property  shall be entitled to rely upon any such  certificate.  Tenant
         shall be  liable to  Landlord  for any  damages  incurred  by  Landlord
         including  any  profits or other  benefits  from any  financing  of the
         Property or any interest  therein which are lost or made unavailable as
         a result,  directly or  indirectly,  of Tenant's  failure or refusal to
         timely execute or deliver such estoppel certificates.

24.      NOTICES.   Any   notice,   demand,   request,   consent,   approval  or
         communication  that either party  desires or is required to give to the
         other  party  under this Lease  shall be in writing and shall be served
         personally,  delivered by independent  messenger or courier service, or
         sent by U.S.  registered or certified mail,  return receipt  requested,
         postage prepaid,  addressed to the other party at the address set forth
         below:

         To Tenant:           Ladbroke Racing Corporation
         (at the Premises)    3260 Blume Drive, Suite 500
                              Richmond, CA 94806          and
                              Attn: John J. Ford               John R. Long
                              Vice President & General         President
                              Counsel

         To Landlord:         3260 Blume Drive, L.L.C.
                              3260 Blume Drive            and  1970 Broadway
                              Richmond, CA 94806               Oakland, CA 94612

         Either  party may  change its  address  by a notice to the other  party
         complying  with this Section.  In the event Tenant sublets the Premises
         in accordance  with Section 15 - "Assignment and

                                       21
<PAGE>

         Subletting",  notices from Landlord shall be effective on the subtenant
         when given to Tenant pursuant to this Section. ,

         Notices  delivered  personally  will  be  effective   immediately  upon
         delivery to an authorized representative of the party at the designated
         address;  notices sent by independent messenger or courier service will
         be effective one (1) day after  acceptance by the  independent  service
         for delivery; notices sent by mail in accordance with this Section will
         be effective two (2) days after mailing.  In the event Tenant  requests
         dual notices hereunder,  Tenant will be bound by such notice,  from the
         earlier of the effective times of the dual notices.

25.      ATTORNEYS' FEES.

         25.1     If Tenant or Landlord brings any action for the enforcement or
                  interpretation  of this Lease,  including any suit by Landlord
                  for the recovery of Rent or possession  of the  Premises,  the
                  losing  party shall pay to the  prevailing  party a reasonable
                  sum  for  attorneys'  fees.  The  "prevailing  party"  will be
                  determined  by the court  before  whom the action was  brought
                  based upon an assessment  of which party's major  arguments or
                  positions taken in the suit or proceeding could fairly be said
                  to have  prevailed  over the other party's major  arguments or
                  positions on major disputed issues in the court's decision.

         25.2     If Landlord, without fault on Landlord's part, is made a party
                  to any  litigation  instituted by Tenant or by any third party
                  against  Tenant,  or by or against any person holding under or
                  using the Premises by license of Tenant or  otherwise  arising
                  out of or resulting  from any act or  transaction of Tenant or
                  of any such other  person,  Tenant  covenants to hold Landlord
                  harmless from any judgment  rendered  against  Landlord or the
                  Premises or any part  thereof,  and  reimburse  Landlord  upon
                  demand  for  all  costs  and  expenses,  including  reasonable
                  attorneys' fees, incurred by Landlord in or in connection with
                  such litigation.

         25.3     If Tenant,  without fault on Tenant's part, is made a party to
                  any  litigation  instituted  by Landlord or by any third party
                  against Landlord, or by or against any person holding under or
                  using the Premises by license of Landlord or otherwise arising
                  out of or resulting from any act or transaction of Landlord or
                  of any such other  person,  Landlord  covenants to hold Tenant
                  harmless  from any  judgment  rendered  against  Tenant or the
                  Premises or any part thereof, and reimburse Tenant upon demand
                  for all costs and expenses,  including  reasonable  attorney's
                  fees,  incurred  by  Tenant  in or  in  connection  with  such
                  litigation.

26.      SECURITY DEPOSIT. On execution of this Lease, Tenant shall deposit with
         Landlord the sum of $7,582.75 as a security deposit for the performance
         by  Tenant  of the  provisions  of  this  Lease.  Landlord  may use the
         security  deposit or any  portion  thereof to cure any Event of Default
         under this Lease or to compensate  Landlord for any damage it incurs as
         a  result  of  Tenant's  failure  to  perform  any of  its  obligations
         hereunder.  In such event Tenant shall  immediately  pay to Landlord an
         amount  sufficient  to  replenish  the  security  deposit  to  the  sum
         initially  deposited with Landlord.  If Tenant is not in default at the
         expiration  or  termination  of this Lease,  Landlord  shall  return to
         Tenant the  security  deposit or the balance  thereof  then held by the
         security deposit with Landlord's  general and other funds, and Landlord
         shall not be  required  to pay  interest  on the  security  deposit  to
         Tenant.  Upon  termination  of  Landlord's  interest  in the  Property,
         whether by sale of the Property or  otherwise,  Landlord  shall have no
         further  obligation  to Tenant with respect to the security  deposit or
         any other sums due hereunder and prepaid by Tenant upon transfer of the
         security deposit to Landlord's successor in interest.

27.      QUIET  POSSESSION.  Subject to Tenant's full and timely  performance of
         all its  obligations  under this Lease and subject to the terms of this
         Lease,    including   Section   21   -   "Subordination;    Attornment;
         Non-Disturbance",  Tenant  shall  have  the  quiet  possession  of  the
         Premises  throughout  the term of this Lease as against  any persons or
         entities lawfully claiming by, through or under Landlord.

                                       22
<PAGE>

28.      SECURITY  MEASURES.  Landlord may, but shall be under no obligation to,
         implement  security measures for the Building or the Property,  such as
         the  registration  or search of all  persons  entering  or leaving  the
         Building,  requiring identification for to the Building,  evacuation of
         the Building for cause,  suspected  cause, or for drill  purposes,  the
         issuance of magnetic pass cards or keys for Building or elevator access
         and other  actions that  Landlord  deems  necessary or  appropriate  to
         prevent  any  threat  of  property  loss or  damage,  bodily  injury or
         business interruption;  provided,  however, that such measures shall be
         implemented in a way as not to  unreasonably  inconvenience  tenants of
         the Building.  Tenant shall  cooperate  and comply with,  and cause its
         Representatives  and  Visitors  to  cooperate  and  comply  with,  such
         security  measures.  Landlord,  its agents and employees  shall have no
         liability  to  Tenant  or  its  Representatives  or  Visitors  for  any
         resulting disturbance of Tenant's use or enjoyment of the Premises.

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

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

31.      LANDLORD'S LIABILITY. The term "Landlord", as used in this Lease, shall
         mean only the owner or owners of the  Property at the time in question.
         Notwithstanding  any  other  term  or  provision  of  this  Lease,  the
         liability of Landlord for its  obligations  under this Lease is limited
         solely to Landlord's interest in the Property as the same may from time
         to time be encumbered,  and no personal  liability shall at any time be
         asserted or enforceable against any other assets of Landlord or against
         Landlord's stockholders,  directors, officers or partners on account of
         any of Landlord's obligations or actions under this Lease. In addition,
         in the  event  of any  conveyance  of  title  to  the  Building  or the
         Property,  then from and after  the date of such  conveyance,  Landlord
         shall  be  relieved  of  all  liability   with  respect  to  Landlord's
         obligations  to be  performed  under this Lease  after the date of such
         conveyance.  Upon  any  conveyance  of  title  to the  Building  or the
         Property,  the grantee or  transferee,  by accepting  such  conveyance,
         shall be deemed to have assumed Landlord's  obligations to be performed
         under this Lease  from and after the date of  transfer,  subject to the
         limitations on liability set forth above in this Section 31.

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

         The review  and/or  approval  by Landlord of any item to be reviewed or
         approved  by  Landlord  under the terms of this  Lease or any  Exhibits
         hereto  shall not impose upon  Landlord any  liability  for accuracy or
         sufficiency of any such item or the quality or suitability of such item
         for its  intended  use.  Any such  review or  approval  is for the sole
         purpose of protecting  Landlord's

                                       23
<PAGE>

         interest  in the  Property  under  this  Lease,  and no third  parties,
         including Tenant or the  Representatives  and Visitors of Tenant or any
         person or entity  claiming by, through or under Tenant,  shall have any
         rights hereunder.

33.      BROKERS.  Tenant  warrants  and  represents  to  Landlord  that  in the
         negotiating or making of this Lease neither Tenant nor anyone acting on
         its behalf has dealt with any real estate broker or finder who might be
         entitled to a fee or commission  for this Lease,  with the exception of
         Grubb & Ellis Company and Ellwood Commercial Real Estate. Tenant agrees
         to  indemnify  and hold  Landlord  harmless  from any claim or  claims,
         including  costs,  expenses and  attorney's  fees  incurred by Landlord
         asserted by any other  broker or finder for a fee or  commission  based
         upon  any  dealings   with  or   statements   made  by  Tenant  or  its
         Representatives.  Landlord agrees to indemnify and hold Tenant harmless
         from any claim or claims, including costs, expenses and attorney's fees
         incurred by Tenant  asserted by any other broker or finder for a fee or
         commission  based upon any dealings with or statements made by Landlord
         or its Representatives.

34.      OTHER RIGHTS RESERVED By LANDLORD. In addition to the foregoing rights,
         Landlord retains and shall have the rights set forth below, exercisable
         without notice and without  liability to Tenant for damage or injury to
         property,  person  or  business  and  without  effecting  an  eviction,
         constructive or actual, or disturbance of Tenant's use or possession of
         the  Premises or giving rise to any claim for set-off or  abatement  of
         Rent:

                  (a)      To change the Building's name.

                  (b)      To install,  affix and  maintain any and all signs on
                           the exterior and interior of the Building.

                  (c)      To grant to anyone the exclusive night to conduct any
                           business or render any service in or to the  Building
                           and its tenants,  provided such exclusive right shall
                           not  operate  to require  Tenant to use or  patronize
                           such  business  or service or to exclude  Tenant from
                           its use of the Premises expressly permitted herein.

                  (d)      To  prohibit  the  placing of  vending or  dispensing
                           machines of any kind in or about the Premises without
                           the prior written permission of the Landlord.

                  (e)      To reduce,  increase,  enclose or otherwise change at
                           any  time and from  time to time  the  size,  number,
                           location,  lay-out and nature of the common areas and
                           facilities  and other  tenancies  and premises in the
                           Property  and to  create  additional  rentable  areas
                           through use or  enclosure  of common areas so long as
                           parking,  access  and  use  of  the  premises  is not
                           negatively impacted.

35.      HAZARDOUS MATERIALS.

         35.1     Definitions.

                  (a)      "Hazardous  Materials" shall mean any substance:  (A)
                           that now or in the future is  regulated  or  governed
                           by, requires  investigation or remediation  under, or
                           is defined as a hazardous waste, hazardous substance,
                           pollutant  or  contaminant   under  any  governmental
                           statute, code, ordinance,  regulation, rule or order,
                           and any amendment thereto, including for example only
                           and    without    limitation,    the    Comprehensive
                           Environmental  Response  Compensation  and  Liability
                           Act,  42  U.S.C.  ss 9601 et seq.,  and the  Resource
                           Conservation  and Recovery Act, 42 U.S.C.  ss 6901 et
                           seq.,  or (B) that is  toxic,  explosive,  corrosive,
                           flammable,  radioactive,  carcinogenic,  dangerous or
                           otherwise  hazardous,  including for example only and
                           without  limitation,   gasoline,   diesel,  petroleum
                           hydrocarbons,   polychlorinated   biphenyls   (PCBs),
                           asbestos,    radon   and   urea   formaldehyde   foam
                           insulation.

                  (b)      "Environmental  Requirements"  shall mean all present
                           and future governmental statutes,  codes, ordinances,
                           regulations,   rules,  orders,   permits,

                                       24
<PAGE>

                           licenses,   approvals,   authorizations   and   other
                           requirements  of any  kind  applicable  to  Hazardous
                           Materials.

                  (c)      "Handle,"  "Handled,"  or  "Handling"  shall mean any
                           installation,    handling,    generation,    storing,
                           treatment,   use,   disposal,   discharge,   release,
                           manufacture,    refinement,    presence,   migration,
                           emission, abatement, removal, transportation,  or any
                           other  activity  of any  type in  connection  with or
                           involving   Hazardous  Materials  by  Tenant  or  its
                           officers,    employees,    contractors,    assignees,
                           sublessees, agents or invitees.

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

         35.2     Tenant's Covenants. No Hazardous Materials shall be Handled at
                  or about the  Premises or Property  without  Landlord's  prior
                  written  consent,  which  consent may be granted,  denied,  or
                  conditioned upon compliance with Landlord's requirements,  all
                  in  Landlord's   absolute   discretion.   Notwithstanding  the
                  foregoing,  normal  quantities  and  use  of  those  Hazardous
                  Materials  customarily  used in the conduct of general  office
                  activities,  for example, copier fluids and cleaning supplies,
                  may be used and  stored  at the  Premises  without  Landlord's
                  prior  written  consent.  Tenant's  activities at or about the
                  Premises  and  Property  and  the  Handling  of all  Hazardous
                  Materials  shall  comply at all times  with all  Environmental
                  Requirements.  At the  expiration or termination of the Lease,
                  Tenant  shall  promptly  remove from the Premises and Property
                  all  Hazardous  Materials  Handled  at  the  Premises  or  the
                  Property.  Tenant  shall  keep  Landlord  fully  and  promptly
                  informed of all Handling of Hazardous Materials.

          35.3    Compliance.  Tenant  covenants and warrants that it shall,  at
                  its own  expense,  promptly  take all actions  required by any
                  governmental  agency or entity in connection with the Handling
                  of  Hazardous  Materials at or about the Premises or Property,
                  including   without   limitation,   inspection   and  testing,
                  performing all cleanup,  removal and remediation work required
                  with respect to those Hazardous Materials,  complying with all
                  closure requirements and post-closure  monitoring,  and filing
                  all required  reports or plans.  All of the foregoing work and
                  all Handling of all Hazardous  Materials shall be performed in
                  a good, safe and workmanlike  manner by consultants  qualified
                  and licensed to undertake  such work and in a manner that will
                  not interfere with Landlord's use, operation, leasing and sale
                  of the Property and other  tenants'  quiet  enjoyment of their
                  premises in the  Property.  Tenant  shall  deliver to Landlord
                  prior to  delivery  to any  governmental  agency,  or promptly
                  after  receipt  from any such  agency,  copies of all permits,
                  manifests,  closure or remedial action plans, notices, and all
                  other   documents   relating  to  the  Handling  of  Hazardous
                  Materials at or about the  Premises or Property.  Tenant shall
                  remove at its own expense, by bond or otherwise,  all liens or
                  charges of any kind filed or recorded  against the Premises or
                  Property  in   connection   with  the  Handling  of  Hazardous
                  Materials,  within ten (10) days after the filing or recording
                  of such lien or charge, and if Tenant fails to do so, Landlord
                  shall have the right,  but not the  obligation,  to remove the
                  lien or charge at  Tenant's  expense  in any  manner  Landlord
                  deems expedient.

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

                                       25
<PAGE>

                  Tenant's   business  caused  by  Landlord's   entry  into  the
                  Premises,  but  Landlord  shall  not be  responsible  for  any
                  interference caused thereby.

         35.5     Tenant's Indemnification.  Tenant agrees to indemnify,  defend
                  and  hold  harmless   Landlord  and  its  partners  and  their
                  directors, officers,  shareholders,  employees and agents from
                  air  Environmental  Losses  and  all  other  claims,   losses,
                  damages,  liabilities,  costs  and  expenses  of  every  kind,
                  including  without  limitation,   reasonable   attorneys'  and
                  consultants' fees and costs,  incurred at any time by Landlord
                  arising from or in  connection  with the Handling of Hazardous
                  Materials  at or about the  Premises  or  Property or Tenant's
                  failure to comply in full with all Environmental  requirements
                  with respect to the Premises.

                  Tenant's  obligations  under this  Section  shall  survive the
                  expiration or termination of this Lease.

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

37.      MISCELLANEOUS.  This Lease may not be amended or  modified  except by a
         writing  signed  by  Landlord  and  Tenant.  Subject  to  Section  15 -
         "Assignment and Subletting" and Section 31 "Landlord's Liability", this
         Lease shall be binding on and shall inure to the benefit of the parties
         and their respective successors, assigns and legal representatives. The
         determination that any provisions hereof may be void, invalid,  illegal
         or unenforceable  shall not impair any other provisions  hereof and all
         such  other  provisions  of this Lease  shall  remain in full force and
         effect. The unenforceability, invalidity or illegality of any provision
         of  this  Lease  under  particular   circumstances   shall  not  render
         unenforceable, invalid or illegal other provisions of this Lease or the
         same  provisions  under  other  circumstances.  So as to avoid the rule
         against  perpetuities,  in all events if the Commencement  Date has not
         occurred  within two (2) years from the date this Lease is signed,  all
         rights and obligations of the parties  hereunder shall terminate.  This
         Lease shall be construed and interpreted in accordance with the laws of
         the state in which the  Property is  located.  The  provisions  of this
         Lease shall be  construed  in  accordance  with the fair meaning of the
         language used and shall not be strictly construed against either party.
         When required by the contents of this Lease, the singular  includes the
         plural.  Wherever the term  "including" is used in this Lease, it shall
         be interpreted as meaning  "including,  but not limited to," the matter
         or matters thereafter enumerated.  The captions contained in this Lease
         and  for  purposes  of  convenience  only  and  are  not to be  used to
         interpret or construe  this Lease.  If there be more than one person or
         entity as Tenant hereunder,  the obligations imposed hereunder shall be
         joint and  several.  Time is of the essence with respect to this Lease,
         except as to the  conditions  relating to the delivery of possession of
         the Premises to Tenant.  Neither  Landlord nor Tenant shall record this
         Lease.

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

                                       26
<PAGE>

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

LANDLORD:                                   TENANT:
3260 Blume Associates, LLC                  Ladbroke Racing Corporation
                                            A Delaware Corporation

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

Its:                                        Its:
     --------------------------                 --------------------------------

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

                                       27
<PAGE>

                                    EXHIBIT A

                                   Floor Plan

                                       28
<PAGE>

                                    EXHIBIT B

                               CONSTRUCTION RIDER

1.       Tenant Improvements.

         Landlord  shall  with   reasonable   diligence   through  a  contractor
         designated  by  Landlord  (which  contractor  may  be an  affiliate  of
         Landlord) to construct and install within the Premises the improvements
         and  fixtures  provided  for  in  this   Construction   Rider  ("Tenant
         Improvements").

         1.1.     Plans.

                  The Tenant Improvements shall be constructed  substantially as
                  shown on the conceptual  space plan for the Premises dated May
                  28,  1997 (the  "Space  Plan"),  utilizing  Building  Standard
                  materials and finishes.

                  Upon  Tenant's  approval of the final  Space  Plan,  the Space
                  Planner will prepare and deliver to Tenant  detailed plans and
                  specifications  sufficient to permit the  construction  of the
                  Tenant  Improvements by Landlord's  contractor  ("Construction
                  Documents"). Landlord will provide Tenant with a cost estimate
                  for  Tenant's  portion  of the  work  (if  any)  shown  in the
                  Construction   Documents.   Tenant   shall   respond   to  the
                  Construction Documents and cost estimate within three (3) days
                  after receipt thereof, specifying any changes or modifications
                  Tenant  desires  in  the  Construction  Documents.  The  Space
                  Planner  will  then  devise  the  Construction  Documents  and
                  resubmit  them to Tenant for its approval  and  Landlord  will
                  provide  Tenant with a revised  cost  estimate.  Tenant  shall
                  approve or  disapprove  the same  within  three (3) days after
                  receipt. The revised Construction Documents and cost estimate,
                  as  approved  by Tenant,  are  hereinafter  referred to as the
                  "Final  Construction  Documents"  and "Final  Cost  Estimate,"
                  respectively.

                  Additional  interior  decorating  services  and  advice on the
                  furnishing  and  decoration  of  the  Premises,  such  as  the
                  selection  of  fixtures,  furnishings  or design of mill work,
                  shall be  provided  by  Tenant  at its  expense,  but shall be
                  subject to the reasonable approval of Landlord.

         1.2.     Construction.

                  Upon  approval by Tenant of the Final  Construction  Documents
                  and the Final  Cost  Estimate,  Landlord  shall  proceed  with
                  reasonable  diligence to cause the Tenant  Improvements  to be
                  Substantially  Complete.  The  Tenant  Improvements  shall  be
                  deemed  to be  "Substantially  Completed"  when they have been
                  completed in accordance with the Final Construction Documents,
                  except for finishing details, minor omissions, decorations and
                  mechanical  adjustments  of  the  type  normally  found  on an
                  architectural  "punch list".  (The definition of Substantially
                  Completed shall also define the terms "Substantial Completion"
                  and "Substantially Complete.")

                  Following  Substantial  Completion of the Tenant  Improvements
                  and within  thirty (30) days after Tenant takes  possession of
                  the  Premises,  Landlord and Tenant shall inspect the Premises
                  and  jointly  prepare  a  "punch  list"  of  agreed  items  of
                  construction remaining to be complete. Landlord shall complete
                  the items set  forth in the punch  list as soon as  reasonably
                  possible. Tenant shall cooperate with and accommodate Landlord
                  and its workers in completing the items on the punch list.

         1.3.     Cost of Tenant Improvements.

         Landlord  shall pay for the cost of the Space  Plan,  the  Construction
         Documents   and  the  cost  to   construct   and   install  the  Tenant
         Improvements, including building standard suite and directory signage.

                                       29
<PAGE>

         1.4.     Changes.

                  If Tenant requests any change, addition or alteration in or to
                  any Final Construction  Documents  ("Changes")  Landlord shall
                  cause  the  Space   Planner   to  prepare   additional   Plans
                  implementing  such Changes.  As soon as practicable  after the
                  completion of such additional Construction Documents, Landlord
                  shall  notify  Tenant of the  estimated  cost of the  Changes.
                  Within  three (3)  working  days  after  receipt  of such cost
                  estimate,  Tenant  shall  notify  Landlord in writing  whether
                  Tenant  approves the Changes.  If Tenant approves the Changes,
                  Landlord  shall  proceed  with the Changes and Tenant shall be
                  liable for any Additional Cost resulting from the Changes.  If
                  Tenant fails to approve the Changes  within such three (3) day
                  period,  construction of the Tenant Improvements shall proceed
                  as  provided  in  accordance  with the  original  Construction
                  Documents.

         1.5.     Delays.

                  Tenant  shall be  responsible  for, and shall pay to Landlord,
                  any and  all  costs  and  expenses  incurred  by  Landlord  in
                  connection with any delay in the commencement or completion of
                  any Tenant Improvements and any increase in the cost of Tenant
                  Improvements   caused  by  (i)  Tenant's   failure  to  submit
                  information  to the Space  Planner or approve  any Space Plan,
                  Construction  Documents  or cost  estimates  within  the  time
                  periods  required  herein,  (ii) any delays in  obtaining  any
                  items   or   materials   constituting   part  of  the   Tenant
                  Improvements  requested  by  Tenant  that  are not part of the
                  standard  improvements  (iii) any  Changes,  or (iv) any other
                  delay  requested  or caused by Tenant  (collectively,  "Tenant
                  Delays").

2.       Delivery of Premises.

         Upon Substantial Completion of the Tenant Improvements,  Landlord shall
         deliver  possession  of the  Premises to Tenant.  If  Landlord  has not
         Substantially Completed the Tenant Improvements and tendered possession
         of the Premises to Tenant on or before the Scheduled  Commencement Date
         specified in Section 2 - Term;  Possession of the Lease, or if Landlord
         is unable for any other reason to deliver possession of the Premises to
         Tenant on or before such date, neither Landlord nor its representatives
         shall be liable to Tenant  for any damage  resulting  from the delay in
         completing such construction  obligations and/or delivering  possession
         to Tenant and the Lease  shall  remain in full force and effect  unless
         and  until  it is  terminated  under  the  express  provisions  of this
         Paragraph.  If  any  delays  in  Substantially  Completing  the  Tenant
         Improvements are attributable to Tenant Delays, then the Premises shall
         be deemed to have been Substantially  Completed and delivered to Tenant
         on the date on which  Landlord could have  Substantially  Completed the
         Premises  and  tendered  the  Premises  to Tenant  but for such  Tenant
         Delays.

         Notwithstanding  the  foregoing.  if  the  Commencement  Date  has  not
         occurred or been deemed to have  occurred  within sixty (60) days after
         the Scheduled  Commencement Date, Tenant, by written notice to Landlord
         given within ten (10) days after the  expiration of such sixty (60) day
         period,  may  terminate  this Lease  without any liability to Landlord,
         provided, however, that if the delay in the Commencement Date is caused
         by delays of the type  described  in  Section  29 Force  Majeure of the
         Lease, and if Tenant elects to terminate as provided above, then Tenant
         shall  reimburse  Landlord,  within  thirty (30) days after  receipt of
         notification from Landlord of the amounts due, for any amounts expended
         by  Landlord  for  the  construction  and  installation  of the  Tenant
         Improvements.  If Tenant  fails to perform any of Tenant's  obligations
         under this Construction Rider within the time periods specified herein,
         Landlord may terminate the Lease or, in lieu of  terminating  the Lease
         under the foregoing,  provisions,  treat such failure of performance as
         an Event of Default under the Lease.

3.     Access to Premises.

       Landlord  shall allow  Tenant and Tenant's  Representatives  to enter the
       Premises  prior to the  Commencement  Date to  permit  Tenant to make the
       Premises ready for its use and occupancy;  provided,  however, that prior
       to such entry of the Premises,  Tenant shall provide evidence  reasonably
       satisfactory to Landlord that Tenant's insurance, as described in Section
       12.1 - Tenant's  Insurance of the Lease,  shall be in effect prior to the
       time of such  entry.  Such  permission  may be  revoked  at any time upon
       twenty-four (24) hours' notice, and Tenant and its

                                       30
<PAGE>

       Representatives   shall  not   interfere   with  Landlord  or  Landlord's
       contractor in completing the Building or the Tenant Improvements.

       Tenant  agrees  that  Landlord  shall  not be  liable  in any way for any
       injury, loss or damage which may occur to any of Tenant's property placed
       upon or installed in the Premises  prior to the  Commencement  Date,  the
       same  being at  Tenant's  sole risk,  and Tenant  shall be liable for all
       injury, loss or damage to persons or property arising as a result of such
       entry into the Premises by Tenant or its Representatives.

4.     Ownership of Tenant Improvements.

       All Tenant  Improvements,  whether installed by Landlord or Tenant, shall
       become a part of the  Premises,  shall be come  property of Landlord and,
       subject to the  provisions of the Lease,  shall be  surrendered by Tenant
       with the Premises,  without any compensation to Tenant, at the expiration
       or  termination  of the Lease in  accordance  with the  provisions of the
       Lease.

                                       31
<PAGE>

                                    EXHIBIT C

                                 BUILDING RULES

The following Building Rules are additional provisions of the foregoing Lease to
which  they are  attached.  The  capitalized  terms  used  herein  have the same
meanings as these terms are given in the Lease.

1.       Use of Common Areas.

         Tenant  will  not  obstruct  the  sidewalks,  halls,  passages,  exits,
         entrances, elevators or stairways of the Building ("Common Areas"), and
         Tenant will not use the Common Areas for any purpose other than ingress
         and egress to and from the Premises.  The Common Areas,  except for the
         sidewalks, are not open to the general public and Landlord reserves the
         right to control and prevent  access to the Common  areas or any person
         whose  presence,  in Landlord's  opinion,  would be  prejudicial to the
         safety, reputation and interests of the Building and its tenants.

2.       No Access to Roof.

         Tenant has no right of access to the roof of the  Building and will not
         install,  repair or replace any antenna,  aerial,  aerial  wires,  fan,
         air-conditioner  or other device on the roof of the  Building,  without
         the prior  written  consent  of  Landlord.  Any such  device  installed
         without such written consent is subject to removal at Tenant's  expense
         without  notice at any time. In any event Tenant will be liable for any
         damages  or  repairs   incurred   or   required  as  a  result  of  its
         installation,  use,  repair,  maintenance or removal of such devices on
         the roof and agrees to indemnify  and hold  harmless  Landlord from any
         liability,   loss,  damage,  cost  or  expense,   including  reasonable
         attorneys'  fees,  arising from any activities of Tenant or of Tenant's
         representatives on the roof of the Building.

3.       Signage.

         No sign, placard,  picture, name,  advertisement or notice visible from
         the exterior of the Premises  will be  inscribed,  painted,  affixed or
         otherwise displayed by Tenant on or in any part of the Building without
         the prior written consent of Landlord.  Landlord  reserves the right to
         adopt and furnish Tenant with general  guidelines  relating to signs in
         or on the Building. All approved signage will be inscribed,  painted or
         affixed at Tenant's  expense by a person  approved by  Landlord,  which
         approval will not be unreasonably withheld.

4.       Prohibited Uses.

         The  Premises  will not be used for  manufacturing,  for the storage of
         merchandise held for sale to the general public, for lodging or for the
         sale of goods to the  general  public.  Tenant will not permit any food
         preparation  on the Premises  except that Tenant may use  Underwriters'
         Laboratory  approved  equipment for brewing coffee,  tea, hot chocolate
         and similar  beverages  so long as such use is in  accordance  with all
         applicable federal, state and city laws, codes,  ordinances,  rules and
         regulations.

5.       Janitorial Services.

         Tenant  will not  employ any person  for the  purpose of  cleaning  the
         Premises or permit any person to enter the  Building  for such  purpose
         other than the Landlord's  janitorial  service,  except with Landlord's
         prior written consent. Tenant will not necessitate,  and will be liable
         for the cost of,  any  undue  amount of  janitorial  labor by reason of
         Tenant's  carelessness in or  indifference to the  preservation of good
         order and cleanliness in the Premises.  Janitorial  service will not be
         furnished  to areas in the  Premises  on  nights  when  such  areas are
         occupied  after 9:30 p.m.,  unless such  service is extended by written
         agreement  to a later  hour in  specifically  designated  areas  of the
         Premises.

                                       32
<PAGE>

6.       Keys and Locks.

         Landlord will furnish Tenant,  free of charge, two keys to each door or
         lock in the  Premises.  Landlord may make a  reasonable  charge for any
         additional  or  replacement  keys.  Tenant will not duplicate any keys,
         alter any locks or install  any new or  additional  lock or bolt on any
         door of its Premises or on any other part of the  Building  without the
         prior  written  consent of  Landlord  and,  in any event,  Tenant  will
         provide  Landlord with a key for any such lock. On the  termination  of
         the Lease,  Tenant will  deliver to  Landlord  all keys to any locks or
         doors in the Building which have been obtained by Tenant.

7.       Freight.

         Upon not less than  twenty-four  hours prior notice to Landlord,  which
         notice may be verbal,  an elevator will be made  available for Tenant's
         use for  transportation  of  freight,  subject  to such  scheduling  as
         Landlord  in  its  discretion  deems  appropriate.   Tenant  shall  not
         transport  freight in loads  exceeding the weight  limitations  of such
         elevator. Landlord reserves the right to prescribe the weight, size and
         position  of all  equipment,  materials,  furniture  or other  property
         brought  into the  Building,  and no  property  will be received in the
         Building  or carried up or down the freight  elevator or stairs  except
         during such hours and along such  routes and by such  persons as may be
         designated  by  Landlord.  Landlord  reserves the right to require that
         heavy objects will stand on wood strips of such length and thickness as
         is necessary to property  distribute  the weight.  Landlord will not be
         responsible  for loss of or damage to any such property from any cause,
         and Tenant will be liable for all damage or  injuries  caused by moving
         or maintaining such property.

8.       Nuisances and Dangerous Substances.

         Tenant  will not  conduct  itself  or  permit  its  agents,  employees,
         contractors  or  invitees  to conduct  themselves,  in the  Premises or
         anywhere on or in the Property in a manner which is offensive or unduly
         annoying to any other Tenant or Landlord's  property  managers.  Tenant
         will not install or operate any  phonograph,  radio  receiver,  musical
         instrument,  or television  or other similar  device in any part of the
         Common  Areas and shall not operate any such  device  installed  in the
         Premises  in such  manner as to disturb or annoy  other  tenants of the
         Building.  Tenant will not use or keep in the  Premises or the Property
         any kerosene,  gasoline or other  combustible  fluid or material  other
         than  limited   quantities   thereof   reasonably   necessary  for  the
         maintenance of office equipment,  or, without  Landlord's prior written
         approval, use any method of heating or air conditioning other than that
         supplied by  Landlord.  Tenant will not use or keep any foul or noxious
         gas or substance in the Premises or permit or suffer the Premises to be
         occupied or used in a manner  offensive or objectionable to Landlord or
         other  occupants  of  the  Building  by  reason  of  noise,   odors  or
         vibrations,  or interfere in any way with other tenants or those having
         business therein. Tenant will not bring or keep any animals in or about
         the Premises or the Property.

9.       Building Name and Address.

         Without Landlord's prior written consent,  Tenant will not use the name
         of the  Building in  connection  with or in  promoting  or  advertising
         Tenant's business except as Tenant's address.

10.      Building Directory.

         A directory  for the  Building  will be provided for the display of the
         name and  location of tenants.  Landlord  reserves the right to approve
         any  additional  names Tenant desires to place in the directory and, if
         so approved,  Landlord  may assess a reasonable  charge for adding such
         additional names.

11.      Window Coverings.

         No curtains,  draperies,  blinds, shutters, shades, awnings, screens or
         other coverings, window ventilators,  hangings,  decorations or similar
         equipment  shall be attached  to, hung or placed in, or used in or with
         any  window of the  Building  without  the  prior  written  consent  of
         Landlord,

                                       33
<PAGE>

         and Landlord  shall have the right to control all  lighting  within the
         Premises that may be visible from the exterior of the Building.

12.      Floor Coverings.

         Tenant will not lay or otherwise  affix linoleum,  tile,  carpet or any
         other floor  covering to the floor of the Premises in any manner except
         as approved in writing by Landlord.  Tenant will be liable for the cost
         of repair of any damage  resulting  from the  violation of this rule or
         the  removal  of any  floor  covering  by  Tenant  or its  contractors,
         employees or invitees.

13.      Electrical Installations.

         Landlord  will  direct  Tenant's  electricians  as  to  where  and  how
         telephone,  telegraph  and  electrical  wires are to be  installed.  No
         boring or cuffing for wires will be allowed  without the prior  written
         consent of Landlord.  The location of burglar alarms,  smoke detectors,
         telephones,  call  boxes  and other  office  equipment  affixed  to the
         Premises shall be subject to the written approval of Landlord.

14.      Office Closing Procedures.

         Tenant  will see that the doors of the  Premises  are closed and locked
         and that all water faucets,  water apparatus and utilities are shut off
         before  Tenant or its employees  leave the  Premises,  so as to prevent
         waste or  damage.  Tenant  will be liable  for all  damage or  injuries
         sustained  by other  tenants or  occupants  of the Building or Landlord
         resulting  from  Tenant's  carelessness  in this regard or violation of
         this rule. Tenant will keep the doors to the Building  corridors closed
         at all times except for ingress and egress.

15.      Plumbing Facilities.

         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 and no foreign  substance of any kind  whatsoever  shall be
         disposed of therein.  Tenant will be liable for any breakage,  stoppage
         or damage resulting from the violation of this rule by the Tenant,  its
         employees or invitees.

16.      Use of Hand Trucks.

         Tenant  will not use or  permit  to be used in the  Premises  or in the
         Common Areas any hand trucks,  carts or dollies  except those  equipped
         with rubber  tires and side guards or such other  equipment as Landlord
         may approve.

17.      Refuse.

         Tenant will store all its trash and  garbage  within the  Premises.  No
         material  will be  placed  in the trash  boxes or  receptacles  if such
         material may not be disposed of in the ordinary and customary manner of
         removing  and  disposing  of trash and garbage in the city in which the
         Building is located  without being in violation of any law or ordinance
         governing  such  disposal.  All trash and garbage  removal will be only
         through such Common Areas  provided for such purposes and at such times
         as Landlord may designate.

18.      Soliciting.

         Canvassing,  peddling,  soliciting and distribution of handbills or any
         other written materials in the Building are prohibited, and Tenant will
         cooperate to prevent the same.

19.      Parking.

         Tenant will use, and will cause its agents, employees,  contractors and
         invitees to use, the parking  spaces to which it is entitled  under the
         Lease in a manner  consistent  with  Landlord's  directional  signs and
         markings in the Parking Facility. Specifically, but without limitation,
         Tenant will not park, or permit its agents,  employees,  contractors or
         invitees  to park,  in a

                                       34
<PAGE>

         manner  that  impedes  access to and from the  Building  or the Parking
         Facility or that violates space  reservations  for handicapped  drivers
         registered as such with the  California  Department of Motor  Vehicles.
         Landlord may use such  reasonable  means as may be necessary to enforce
         the directional signs and markings in the Parking Facility.

20.      Fire, Security and Safety Regulations.

         Tenant  will  comply with all safety,  security,  fire  protection  and
         evacuation  measures  and  procedures  established  by  Landlord or any
         governmental agency.

21.      Responsibility for Theft.

         Tenant assumes any and all  responsibility  for protecting the Premises
         from theft, robbery and pilferage,  which includes keeping doors locked
         and other means of entry to the Premises closed.

22.      Sales and Auctions.

         Tenant will not display or sell merchandise  outside the exterior walls
         and doorways of the  Premises  nor use such areas for  storage.  Tenant
         will not install any exterior  lighting,  amplifiers or similar devices
         or use in or about the  Premises  an  advertising  medium  which may be
         heard  or  seen  outside  the  Premises,   including  flashing  lights,
         searchlights,  loudspeakers,  phonographs or radio  broadcasts.  Tenant
         will not conduct or permit to be conducted any sale by auction in, upon
         or from the Premises or elsewhere in the Property, whether said auction
         be voluntary,  involuntary,  pursuant to any assignment for the payment
         of  creditors  or  pursuant  to  any  bankruptcy  or  other  insolvency
         proceeding.

23.      Enforcement.

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

24.      Effect on Lease.

         These  Building Rules 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 the Lease.  Violation of these  Building
         Rules  constitutes  a failure to fully  perform the  provisions  of the
         Lease, as referred to in Section 16.1 - "Events of Default".

25.      Additional and Amended Rules.

         Landlord  reserves the right to rescind or amend these  Building  Rules
         and/or adopt any other and reasonable  rules and  regulations as in its
         judgment  may from  time to time be  needed  for the  safety,  care and
         cleanliness  of the  Building  and for the  preservation  of good order
         therein.

                                       35
<PAGE>

                                    EXHIBIT D

                           ADDITIONAL PROVISIONS RIDER

1.       Parking.

         Tenant shall have the right to use seventeen (17)  unreserved  stall in
         the Building  parking  facilities  in common with other  tenants of the
         Building at no additional  charge.  Tenant agrees not to overburden the
         parking  facilities  and agrees to  cooperate  with  Landlord and other
         tenants in use of the parking  facilities.  Landlord reserves the right
         in its absolute  discretion to determine whether the parking facilities
         are becoming  overburdened  and to allocate and assign  parking  spaces
         among Tenant and other tenants,  and to reconfigure the parking area or
         modify the  existing  ingress to and egress  from the  parking  area as
         Landlord shall deem appropriate.

2.       Termination Agreement

         Provided that Tenant is not in default,  nor has been in default during
         the term of the  Lease,  Tenant  shall  have a one time right to cancel
         this Lease on the third (3rd) anniversary with one-hundred eighty (180)
         days prior written notice to Landlord.  In the event Tenant  terminates
         this Lease, Tenant will pay to Landlord all unamoritized  leasing costs
         to include leasing commissions, tenant improvements,  permits and fees.
         In addition, Tenant will pay Landlord two (2) months rent.

3.       Expansion Right of First Refusal

         Tenant will have the right to expand the Premises an  additional  1,500
         square feet on the same terms and conditions as contained in this Lease
         (the "Expansion").  In the event Landlord receives a bona fide offer to
         lease space which covers such expansion area, which Landlord intends to
         accept,  Landlord will give notice of such offer to Tenant. Tenant will
         have  three (3)  business  days  after  receipt of such offer to decide
         whether to exercise the  Expansion,  provided that in such event,  such
         expansion  will be at the rental  rate as set forth in the offer and is
         conditioned  upon  Tenant  waiving the  termination  right set forth in
         Section 2 of this Exhibit D.

<PAGE>

                            FIRST AMENDMENT TO LEASE

                  THIS FIRST AMENDMENT TO LEASE (this "Amendment") is made as of
the 5th day of February,  1999 (the "Effective  Date") by and between 3260 Blume
Drive Associates ("Landlord" and Ladbroke Racing Corporation ('Tenant").

                                    RECITALS

         A.  Landlord and Tenant are parties to that certain  Office Lease dated
as of July 7, 1997 (the "Lease"), for certain premises containing  approximately
4,333  rentable   square  feet  of  space  commonly  known  as  Suite  500  (the
"Premises"),  in the building located at 3260 Blume Drive, Richmond,  California
(The Building").

         B.  Landlord  and Tenant  desire to amend the Lease to provide  for the
expansion of the space and to make certain additional amendments to the Lease as
are more particularly described herein.

         NOW  THEREFORE,   in  consideration  of  the  mutual  covenants  herein
contained, the parties hereto agree as follows:

         1. Definitions.  Unless otherwise defined herein, the capitalized words
and terms used in this Amendment shall have the meanings ascribed to them in the
Lease.

         2.  Premises.  The square  footage shall be increased by 2,721 rentable
square feet for a total of 7,054 rentable square feet. The existing Premises and
the Expansion Premises are outlined as shown on Exhibit A.

         3. Base Rent.  The Base Monthly Rent shall be increased to  incorporate
the expansion space and the total monthly Base Rent will be as follows:

                  March 1, 1999 through July 31, 1999:           $11,991.80
                  August 1, 1999 through July 31, 2002:          $12,334.50

                  3.1. Landlord will not be responsible for 1) any delays caused
by Tenant in approving  Construction  Documents within the time period required,
2) delay in  obtaining  any items or materials  constituting  part of the Tenant
Improvements requested by Tenant that are not part of the standard improvements,
3) any Changes, or 4) any other delay requested or caused by Tenant.

         4. Condition of Premises. Landlord, at its sole cost and expense, shall
provide and install  improvements as shown on the attached  Exhibit A, Page 1 of
1, dated 1/19/99 in accordance with Exhibit 8 to the Lease with the same quality
as  tenant's  existing  space  with  the  Scheduled  Commencement  Date  for the
expansion premises being March 1, 1999.

         5. No Brokers.  Tenant  represents  and warrants that Tenant has had no
dealings  or  communications  with any broker or agent in  connection  with this
Amendment other than Grubb & Ellis Company  ('Broker's"),  and that no person or
entity is entitled to any brokerage commission or finder's fee on account of the
negotiation, execution, delivery, and consummation of this Amendment, other than
any commission which may be payable by Landlord to Broker.  Tenant hereby agrees
to indemnify Landlord and to hold Landlord free and harmless of and from any and
all claims, losses, damages, costs and expenses of whatsoever nature,  including
attorney's  fees  and cost of  litigation.  arising  from or  relating  to,  any
brokerage commissions or finders fees payable or alleged to be payable by reason
of any act of  Tenant in  connection  with this  Amendment  or its  negotiation,
excluding any amounts payable to Brokers.

<PAGE>

         6. Exhibit D, Paragraph 1. Parking. The parking allocation is increased
to twenty-eight (28) unreserved stalls.

         7. Exhibit D.  Paragraph 2.  Termination  Agreement.  This paragraph is
canceled in its entirety.

         8 Exhibit  D.  Paragraph  3.  Expansion  Right of First  Refusal.  This
paragraph is canceled in its entirety.

         9. Miscellaneous.

                  9.1 Except as  modified by this  Amendment,  all of the terms,
conditions and provisions of the Lease shall remain in full force and effect and
are hereby ratified and confirmed. To the extent the terms of the Lease and this
Amendment are inconsistent, the terms of the Amendment shall control.

                  9.2 The submission of this Amendment to Tenant for examination
or execution does not create an option or constitute an offer to Tenant to amend
the Lease on the terms and conditions contained herein, and this Amendment shall
not become  effective  as an Amendment to the Lease unless and until it has been
executed and delivered by both Landlord and Tenant.  By executing and delivering
this Amendment,  the person or persons signing on behalf of Tenant represent and
warrant that they have the requisite authority to bind Tenant.

                  9.3 This Amendment  contains the entire  agreement of Landlord
and  Tenant  with  respect  to the  subject  matter  hereof.  There  are no oral
agreements  between  Landlord and Tenant  affecting the Lease as hereby amended,
and this  Amendment  supersedes  and cancels any and all previous  negotiations,
representations,  agreements and  understandings,  if any,  between Landlord and
Tenant and their  respective  agents with respect to the subject  matter hereof,
and none shall be used to  interpret  to construe  the Lease as amended  hereby.
Tenant acknowledges that prior  communications from Landlord and its agents were
not and are not, and shall not be construed to be  representations or warranties
by Landlord or its agents as the matters communicated, and have not and will not
be relied upon by Tenant.

                  IN WITNESS WHEREOF,  the parties have caused this Amendment to
be executed as of the day and year first written above.

"Landlord"                               "Tenant"

3260 Blume Drive Associates              Ladbroke Racing Corporation

By:/s/ Richard Granzella                 By:/s/ George P. Harbison
   -----------------------------------   -------------------------------------

Its:  Manager                            Its:  VP/CFO
    -------------------------------      --------------------------------

Date: 2/3/99                             Date:  2/2/99

<PAGE>

                                    EXHIBIT B

                              (Premises Floor Plan)

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