PLM INTERNATIONAL INC
EX-10.2
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>p13641_ex10-2.txt
<DESCRIPTION>EX-10.2
<TEXT>

                                 120 MONTGOMERY

                            SAN FRANCISCO, CALIFORNIA



                             OFFICE LEASE AGREEMENT

                                     BETWEEN

     120 MONTGOMERY ASSOCIATES, LLC, a California limited liability company
                                  ("LANDLORD")

                                       AND

               PLM FINANCIAL SERVICES INC., a Delaware corporation
                                   ("TENANT")

                                        i


<PAGE>



                                TABLE OF CONTENTS

I.      Basic Lease Information................................................1

II.     Lease Grant............................................................2

III.    Adjustment of Commencement Date; Possession............................3

IV.     Rent...................................................................3

V.      Compliance with Laws; Use..............................................7

VI.     Security Deposit.......................................................7

VII.    Services to be Furnished by Landlord...................................7

VIII.   Leasehold Improvements.................................................8

IX.     Repairs and Alterations................................................8

X.      Use of Electrical Services by Tenant..................................10

XI.     Entry by Landlord.....................................................10

XII.    Assignment and Subletting.............................................10

XIII.   Liens.................................................................12

XIV.    Indemnity and Waiver of Claims........................................12

XV.     Insurance.............................................................12

XVI.    Subrogation...........................................................13

XVII.   Casualty Damage.......................................................13

XVIII.  Condemnation..........................................................14

XIX.    Events of Default.....................................................14

XX.     Remedies..............................................................15

XXI.    Limitation of Liability...............................................16

XXII.   No Waiver.............................................................16

XXIII.  Quiet Enjoyment.......................................................16

XXIV.   Relocation............................................................17

XXV.    Holding Over..........................................................17

XXVI.   Subordination to Mortgages; Estoppel Certificate......................17

XXVII.  Attorneys' Fees.......................................................18

XXVIII. Notice................................................................18

XXIX.   Excepted Rights.......................................................18

XXX.    Surrender of Premises.................................................18

XXXI.   Miscellaneous.........................................................18

XXXII.  Entire Agreement......................................................20

                                        1
<PAGE>

                             OFFICE LEASE AGREEMENT

         THIS OFFICE LEASE  AGREEMENT  (the "Lease") is made and entered into as
of the ____ day of ___________,  2001, by and between 120 MONTGOMERY ASSOCIATES,
LLC, a California  limited  liability  company  ("Landlord")  and PLM  FINANCIAL
SERVICES, INC., a Delaware corporation ("Tenant").

I.       Basic Lease Information.

         A.       "Building"  shall mean the building  located at 120 Montgomery
                  Street,  San  Francisco,  California,  commonly  known  as 120
                  Montgomery.

         B.       "Rentable  Square  Footage  of the  Building"  is deemed to be
                  422,059 square feet.

         C.       "Premises"  shall  mean the area  shown on  Exhibit  A to this
                  Lease. The Premises are located on floor 13 and known as suite
                  number 1350. The "Rentable  Square Footage of the Premises" is
                  deemed to be 3,563 square feet. If the Premises include one or
                  more floors in their  entirety,  all  corridors  and  restroom
                  facilities  located on such full floor(s)  shall be considered
                  part of the Premises.  Landlord and Tenant stipulate and agree
                  that the  Rentable  Square  Footage  of the  Building  and the
                  Rentable  Square Footage of the Premises are correct and shall
                  not be remeasured.

         D.       "Base Rent":
<TABLE>
<CAPTION>

 ------------------------ ---------------------------- ------------------------ ---------------------
                                  Annual Rate                  Annual                 Monthly
         Period                 Per Square Foot               Base Rent              Base Rent
 ------------------------ ---------------------------- ------------------------ ---------------------
 ------------------------ ---------------------------- ------------------------ ---------------------
<S>                                 <C>                      <C>                     <C>
     5/19/01-5/31/01                $60.00                   $213,780.00             $3,562.98
                                                                                    ($593.83 per
                                                                                   diem x 6 days)
 ------------------------ ---------------------------- ------------------------ ---------------------
 ------------------------ ---------------------------- ------------------------ ---------------------
     6/1/01-5/31/04                 $60.00                   $213,780.00             $17,815.00
 ------------------------ ---------------------------- ------------------------ ---------------------
 ------------------------ ---------------------------- ------------------------ ---------------------
     6/1/04-6/27/04                 $60.00                   $213,780.00             $16,033.41
                                                                                    ($593.83 per
                                                                                  diem x 27 days)
 ------------------------ ---------------------------- ------------------------ ---------------------
</TABLE>

                  Notwithstanding  the  above  schedule  of  Base  Rent  to  the
                  contrary, as long as Tenant is not in default, Tenant shall be
                  entitled  to (i) an  abatement  of 7 days of Base  Rent in the
                  amount of  $4,156.81  (the  "Abated Base Rent") for the period
                  commencing  on May 19,  2001 and  ending on May 25,  2001 (the
                  "Abatement Period").  The payment by Tenant of the Abated Base
                  Rent,  in the event of a default shall not limit or affect any
                  of Landlord's  other rights,  pursuant to this Lease or at law
                  or in  equity.  Only Base  Rent  shall be  abated  during  the
                  Abatement Period and all other Additional Rent and other costs
                  and charges  specified  in this Lease shall  remain as due and
                  payable pursuant to the provisions of this Lease.

         E.       "Tenant's Pro Rata Share": 0.8442%.

         F.       "Base Year" for Taxes: 2001 ; "Base Year" for Expenses: 2001.
<PAGE>

         G.       "Term":  A period of 36  months  and 27 days.  The Term  shall
                  commence on May 19, 2001 (the "Commencement Date") and, unless
                  terminated  early in accordance  with this Lease,  end on June
                  27, 2004 (the  "Termination  Date").  However,  if Landlord is
                  required to Substantially  Complete (defined in Section III.A)
                  any  Landlord  Work  (defined  in Section  I.O.)  prior to the
                  Commencement Date under the terms of a Work Letter (defined in
                  Section I.O):  (1) the date set forth in the prior sentence as
                  the  "Commencement  Date"  shall  instead  be  defined  as the
                  "Target  Commencement  Date" by which date  Landlord  will use
                  reasonable  efforts to  Substantially  Complete  the  Landlord
                  Work; and (2) the actual "Commencement Date" shall be the date
                  on which  the  Landlord  Work is  Substantially  Complete,  as
                  determined  by  Section  III.A.  In  such  circumstances,  the
                  Termination  Date will  instead be the last day of the Term as
                  determined based upon the actual Commencement Date. Landlord's
                  failure to  Substantially  Complete the  Landlord  Work by the
                  Target Commencement Date shall not be a default by Landlord or
                  otherwise  render Landlord liable for damages.  Promptly after
                  the  determination  of the  Commencement  Date,  Landlord  and
                  Tenant shall enter into a commencement letter agreement in the
                  form attached as Exhibit C.

         H.       Tenant allowance(s): None.

         I.       "Security Deposit":  $35,630.00.

         J.       "Guarantor(s)":  As of the date of this  Lease,  there  are no
                  Guarantor(s).

         K.       "Broker(s)":  GVA Beitler.

         L.       "Permitted Use":  General office use.

         M.       "Notice Addresses":

                  Tenant:

                  On and after the Commencement  Date,  notices shall be sent to
                  Tenant  at  the  Premises.  Prior  to the  Commencement  Date,
                  notices shall be sent to Tenant at the following address:

                  PLM Financial Services, Inc.
                  120 Montgomery Street
                  Suite 1350
                  San Francisco, CA  94104
                  Phone #:  ______________________
                  Fax #:  ________________________

Landlord:                                  With a copy to:

120 Montgomery Associates, LLC             Equity Office Properties Trust
c/o Equity Office Properties Trust         Two North Riverside Plaza
120 Montgomery Street                      Suite 2100
Suite 1280                                 Chicago, Illinois 60606
San Francisco, California  94104           Attention: Regional Counsel - San
Attention:  Building Manager                Francisco Region

         Rent     (defined  in  Section  IV.A) is payable to the order of Equity
                  Office   Properties  at  the  following   address:   EOPMC  of
                  California, Inc., as Agent for 120 Montgomery Associates, LLC,
                  File  73349,   P.O.  Box  60000,  San  Francisco,   California
                  94161-3349.

         N.       "Business  Day(s)"  are  Monday  through  Friday of each week,
                  exclusive of New Year's Day,  Memorial Day,  Independence Day,
                  Labor Day,  Thanksgiving  Day and Christmas Day  ("Holidays").
                  Landlord may designate additional Holidays,  provided that the
                  additional  Holidays are commonly  recognized  by other office
                  buildings in the area where the Building is located.

         O.       "Landlord  Work"  means the work,  if any,  that  Landlord  is
                  obligated  to perform in the  Premises  pursuant to a separate
                  work letter agreement (the "Work Letter"), if any, attached as
                  Exhibit D. If a Work  Letter is not  attached to this Lease or
                  if an  attached  Work  Letter  does not  require  Landlord  to
                  perform any work,  the  occurrence  of the  Commencement  Date
                  shall  not be  conditioned  upon  the  performance  of work by
                  Landlord  and,  accordingly,   Section  III.A.  shall  not  be
                  applicable to the determination of the Commencement Date.
<PAGE>
         P.       "Law(s)" means all  applicable  statutes,  codes,  ordinances,
                  orders, rules and regulations of any municipal or governmental
                  entity.

         Q.       "Normal Business Hours" for the Building are 6:00 A.M. to 6:00
                  P.M. on Business Days.

         R.       "Property"  means the  Building  and the  parcel(s) of land on
                  which  it  is  located  and,  at  Landlord's  discretion,  the
                  Building garage and other  improvements  serving the Building,
                  if any, and the parcel(s) of land on which they are located.

II.      Lease Grant.

         Landlord  leases the Premises to Tenant and Tenant  leases the Premises
from Landlord, together with the right in common with others to use any portions
of the Property  that are  designated  by Landlord for the common use of tenants
and others,  such as sidewalks,  unreserved  parking  areas,  common  corridors,
elevator foyers, restrooms, vending areas and lobby areas (the "Common Areas").

III.     Adjustment of Commencement Date; Possession.

         A.       The  Landlord  Work  shall  be  deemed  to  be  "Substantially
                  Complete"  on  the  date  that  all  Landlord  Work  has  been
                  performed, other than any details of construction,  mechanical
                  adjustment or any other similar matter,  the  noncompletion of
                  which does not  materially  interfere with Tenant's use of the
                  Premises.  However,  if Landlord is delayed in the performance
                  of the  Landlord  Work  as a  result  of any  Tenant  Delay(s)
                  (defined  below),  the  Landlord  Work  shall be  deemed to be
                  Substantially   Complete  on  the  date  that  Landlord  could
                  reasonably  have been expected to  Substantially  Complete the
                  Landlord  Work absent any Tenant Delay.  "Tenant  Delay" means
                  any  act or  omission  of  Tenant  or its  agents,  employees,
                  vendors or contractors  that actually  delays the  Substantial
                  Completion   of  the   Landlord   Work,   including,   without
                  limitation:  (1) Tenant's  failure to furnish  information  or
                  approvals  within any time  period  specified  in this  Lease,
                  including  the  failure to prepare or approve  preliminary  or
                  final plans by any applicable due date; (2) Tenant's selection
                  of  equipment  or  materials  that have long lead times  after
                  first being informed by Landlord that the selection may result
                  in a  delay;  (3)  changes  requested  or  made by  Tenant  to
                  previously approved plans and specifications;  (4) performance
                  of work in the  Premises by Tenant or  Tenant's  contractor(s)
                  during the  performance  of the Landlord  Work;  or (5) if the
                  performance of any portion of the Landlord Work depends on the
                  prior or simultaneous  performance of work by Tenant,  a delay
                  by Tenant or Tenant's  contractor(s) in the completion of such
                  work.

         B.       Subject to Landlord's obligation,  if any, to perform Landlord
                  Work and  Landlord's  obligations  under  Section  IX.B.,  the
                  Premises  are  accepted  by  Tenant in "as is"  condition  and
                  configuration.  By taking  possession of the Premises,  Tenant
                  agrees that the  Premises  are in good order and  satisfactory
                  condition, and that there are no representations or warranties
                  by Landlord  regarding  the  condition  of the Premises or the
                  Building.  If Landlord is delayed delivering possession of the
                  Premises  or any other  space due to the  holdover or unlawful
                  possession  of such  space by any  party,  Landlord  shall use
                  reasonable  efforts  to obtain  possession  of the  space.  If
                  Landlord is not required to  Substantially  Complete  Landlord
                  Work before the Commencement Date, the Commencement Date shall
                  be postponed  until the date Landlord  delivers  possession of
                  the Premises to Tenant free from  occupancy by any party,  and
                  the  Termination  Date,  at the  option  of  Landlord,  may be
                  postponed by an equal number of days.  If Landlord is required
                  to   Substantially   Complete   Landlord   Work   before   the
                  Commencement  Date, the Commencement Date and Termination Date
                  shall be determined by Section I.G.
<PAGE>
         C.       If  Tenant  takes   possession  of  the  Premises  before  the
                  Commencement  Date,  such  possession  shall be subject to the
                  terms and  conditions  of this Lease and Tenant shall pay Rent
                  (defined  in  Section  IV.A.)  to  Landlord  for  each  day of
                  possession before the Commencement Date.  However,  except for
                  the  cost  of  services  requested  by  Tenant  (e.g.  freight
                  elevator usage),  Tenant shall not be required to pay Rent for
                  any days of  possession  before the  Commencement  Date during
                  which Tenant, with the approval of Landlord,  is in possession
                  of  the   Premises   for  the  sole   purpose  of   performing
                  improvements  or  installing  furniture,  equipment  or  other
                  personal property.

IV.      Rent.

         A.       PAYMENTS.  As consideration  for this Lease,  Tenant shall pay
                  Landlord, without any setoff or deduction, the total amount of
                  Base Rent and  Additional  Rent due for the Term.  "Additional
                  Rent" means all sums  (exclusive  of Base Rent) that Tenant is
                  required to pay  Landlord.  Additional  Rent and Base Rent are
                  sometimes collectively referred to as "Rent". Tenant shall pay
                  and be  liable  for  all  rental,  sales  and use  taxes  (but
                  excluding  income taxes),  if any, imposed upon or measured by
                  Rent under  applicable  Law. Base Rent and  recurring  monthly
                  charges of Additional Rent shall be due and payable in advance
                  on the  first day of each  calendar  month  without  notice or
                  demand,  provided  that the  installment  of Base Rent for the
                  first full  calendar  month of the Term shall be payable  upon
                  the execution of this Lease by Tenant. All other items of Rent
                  shall be due and  payable by Tenant on or before 30 days after
                  billing by Landlord. All payments of Rent shall be by good and
                  sufficient check or by other means (such as automatic debit or
                  electronic transfer)  acceptable to Landlord.  If Tenant fails
                  to pay any item or installment of Rent when due,  Tenant shall
                  pay Landlord an administration fee equal to 5% of the past due
                  Rent, provided that Tenant shall be entitled to a grace period
                  of 5 days after  notice for the first 2 late  payments of Rent
                  in a given calendar year. If the Term commences on a day other
                  than the first day of a calendar  month or terminates on a day
                  other than the last day of a calendar month,  the monthly Base
                  Rent and Tenant's Pro Rata Share of any Tax Excess (defined in
                  Section  IV.B.) or Expense  Excess  (defined in Section IV.B.)
                  for the month shall be prorated based on the number of days in
                  such calendar  month.  Landlord's  acceptance of less than the
                  correct  amount  of Rent  shall be  considered  a  payment  on
                  account of the earliest Rent due. No  endorsement or statement
                  on a check or letter  accompanying a check or payment shall be
                  considered  an accord and  satisfaction,  and either party may
                  accept the check or payment without  prejudice to that party's
                  right  to  recover  the  balance  or  pursue  other  available
                  remedies.  Tenant's  covenant  to pay Rent is  independent  of
                  every other covenant in this Lease.

         B.       EXPENSE  EXCESS AND TAX EXCESS.  Tenant shall pay Tenant's Pro
                  Rata Share of the amount,  if any, by which Expenses  (defined
                  in  Section  IV.C.)  for each  calendar  year  during the Term
                  exceed  Expenses for the Base Year (the "Expense  Excess") and
                  also the amount,  if any,  by which Taxes  (defined in Section
                  IV.D.) for each calendar year during the Term exceed Taxes for
                  the Base Year (the "Tax Excess").  If Expenses and/or Taxes in
                  any calendar year decrease below the amount of Expenses and/or
                  Taxes for the Base Year,  Tenant's  Pro Rata Share of Expenses
                  and/or Taxes, as the case may be, for that calendar year shall
                  be $0.  Landlord  shall  provide  Tenant  with  a  good  faith
                  estimate of the Expense  Excess and of the Tax Excess for each
                  calendar  year during the Term.  On or before the first day of
                  each month, Tenant shall pay to Landlord a monthly installment
                  equal to  one-twelfth of Tenant's Pro Rata Share of Landlord's
                  estimate of the Expense Excess and one-twelfth of Tenant's Pro
                  Rata  Share  of  Landlord's  estimate  of the Tax  Excess.  If
                  Landlord  determines  that  its  good  faith  estimate  of the
                  Expense  Excess  or of  the  Tax  Excess  was  incorrect  by a
                  material  amount,  Landlord may provide  Tenant with a revised
                  estimate. After its receipt of the revised estimate,  Tenant's
                  monthly payments shall be based upon the revised estimate.  If
                  Landlord  does not  provide  Tenant  with an  estimate  of the
                  Expense Excess or of the Tax Excess by January 1 of a calendar
                  year, Tenant shall continue to pay monthly  installments based
                  on the previous  year's  estimate(s)  until Landlord  provides
                  Tenant  with  the  new  estimate.  Upon  delivery  of the  new
                  estimate,  an adjustment shall be made for any month for which
                  Tenant paid monthly  installments based on the previous year's
                  estimate(s).  Tenant  shall  pay  Landlord  the  amount of any
                  underpayment within 30 days after receipt of the new estimate.
                  Any overpayment  shall be refunded to Tenant within 30 days or
                  credited  against  the  next  due  future   installment(s)  of
                  Additional Rent.
<PAGE>
                  As soon as is  practical  following  the end of each  calendar
                  year,  Landlord  shall furnish  Tenant with a statement of the
                  actual  Expenses  and Expense  Excess and the actual Taxes and
                  Tax  Excess  for the prior  calendar  year.  If the  estimated
                  Expense  Excess  and/or  estimated  Tax  Excess  for the prior
                  calendar  year is more than the actual  Expense  Excess and/or
                  actual Tax Excess,  as the case may be, for the prior calendar
                  year,  Landlord shall apply any  overpayment by Tenant against
                  Additional Rent due or next becoming due, provided if the Term
                  expires before the determination of the overpayment,  Landlord
                  shall refund any  overpayment to Tenant after first  deducting
                  the amount of Rent due. If the estimated Expense Excess and/or
                  estimated Tax Excess for the prior  calendar year is less than
                  the actual  Expense  Excess and/or  actual Tax Excess,  as the
                  case may be, for such prior year,  Tenant shall pay  Landlord,
                  within 30 days after its receipt of the  statement of Expenses
                  and/or Taxes, any underpayment for the prior calendar year.

         C.       EXPENSES  DEFINED.  "Expenses"  means all  costs and  expenses
                  incurred in each calendar year in connection  with  operating,
                  maintaining,  repairing,  and  managing  the  Building and the
                  Property, including, but not limited to:

               1.   Labor costs, including, wages, salaries, social security and
                    employment  taxes,  medical  and other  types of  insurance,
                    uniforms, training, and retirement and pension plans.

               2.   Management  fees,  the cost of equipping  and  maintaining a
                    management  office,  accounting  and  bookkeeping  services,
                    legal  fees  not   attributable  to  leasing  or  collection
                    activity,  and  other  administrative  costs.  Landlord,  by
                    itself or  through  an  affiliate,  shall  have the right to
                    directly  perform or provide any  services  under this Lease
                    (including management  services),  provided that the cost of
                    any such services  shall not exceed the cost that would have
                    been  incurred  had  Landlord  entered  into an  arms-length
                    contract for such  services with an  unaffiliated  entity of
                    comparable skill and experience.

               3.   The cost of  services,  including  amounts  paid to  service
                    providers  and  the  rental  and  purchase  cost  of  parts,
                    supplies, tools and equipment.

               4.   Premiums and  deductibles  paid by Landlord  for  insurance,
                    including workers compensation,  fire and extended coverage,
                    earthquake, general liability, rental loss, elevator, boiler
                    and other insurance customarily carried from time to time by
                    owners of comparable office buildings.

               5.   Electrical Costs (defined below) and charges for water, gas,
                    steam and  sewer,  but  excluding  those  charges  for which
                    Landlord is reimbursed by tenants. "Electrical Costs" means:
                    (a) charges  paid by  Landlord  for  electricity;  (b) costs
                    incurred in connection with an energy management program for
                    the Property; and (c) if and to the extent permitted by Law,
                    a fee for the  services  provided by Landlord in  connection
                    with the selection of utility  companies and the negotiation
                    and  administration  of contracts for electricity,  provided
                    that such fee shall not exceed 50% of any  savings  obtained
                    by Landlord.  Electrical Costs shall be adjusted as follows:
                    (i) amounts received by Landlord as reimbursement  for above
                    standard  electrical  consumption  shall  be  deducted  from
                    Electrical   Costs,   as  well  as  any   rebates  or  other
                    consideration received from any broker, producer or supplier
                    of  electricity,  if any, shall be deducted from  Electrical
                    Costs (provided that such rebates or other consideration may
                    be  included,  if  applicable,  in  the  calculation  of the
                    savings obtained by Landlord for purposes of determining the
                    fee  payable  to  Landlord);  (ii) the  cost of  electricity
                    incurred to provide  overtime  HVAC to specific  tenants (as
                    reasonably  estimated  by Landlord)  shall be deducted  from
                    Electrical Costs; and (iii) if Tenant is billed directly for
                    the cost of building standard electricity to the Premises as
                    a separate  charge in  addition  to Base  Rent,  the cost of
                    electricity  to  individual  tenant  spaces in the  Building
                    shall be deducted from Electrical Costs.
<PAGE>
               6.   The amortized cost of capital improvements (as distinguished
                    from  replacement  parts  or  components  installed  in  the
                    ordinary course of business) made to the Property which are:
                    (a) performed primarily to reduce operating expense costs or
                    otherwise improve the operating  efficiency of the Property;
                    or (b) required to comply with any Laws that are enacted, or
                    first  interpreted to apply to the Property,  after the date
                    of this  Lease.  The cost of capital  improvements  shall be
                    amortized by Landlord over the lesser of the Payback  Period
                    (defined  below) or 5 years.  The amortized  cost of capital
                    improvements  may, at Landlord's  option,  include actual or
                    imputed  interest at the rate that Landlord would reasonably
                    be  required  to pay to  finance  the  cost  of the  capital
                    improvement. "Payback Period" means the reasonably estimated
                    period of time that it takes for the cost savings  resulting
                    from a capital  improvement  to equal the total  cost of the
                    capital improvement.

               If   Landlord incurs Expenses for the Property  together with one
                    or more other buildings or properties, whether pursuant to a
                    reciprocal  easement  agreement,  common area  agreement  or
                    otherwise,  the shared costs and expenses shall be equitably
                    prorated and apportioned  between the Property and the other
                    buildings or  properties.  Expenses  shall not include:  the
                    cost of capital  improvements  (except as set forth  above);
                    depreciation;  interest  (except as  provided  above for the
                    amortization of capital improvements); principal payments of
                    mortgage and other non-operating debts of Landlord; the cost
                    of  repairs  or  other  work  to  the  extent   Landlord  is
                    reimbursed by insurance or condemnation  proceeds;  costs in
                    connection  with leasing  space in the  Building,  including
                    brokerage commissions;  lease concessions,  including rental
                    abatements and construction allowances,  granted to specific
                    tenants;   costs  incurred  in  connection  with  the  sale,
                    financing or  refinancing of the Building;  fines,  interest
                    and  penalties  incurred  due to the late  payment  of Taxes
                    (defined  in  Section  IV.D)  or  Expenses;   organizational
                    expenses  associated  with the creation and operation of the
                    entity  which  constitutes  Landlord;  or any  penalties  or
                    damages that  Landlord pays to Tenant under this Lease or to
                    other tenants in the Building under their respective leases.
                    If the  Building  is not at least 100%  occupied  during any
                    calendar year or if Landlord is not supplying services to at
                    least  100% of the  total  Rentable  Square  Footage  of the
                    Building at any time during a calendar year, Expenses shall,
                    at Landlord's  option,  be determined as if the Building had
                    been 100% occupied and Landlord had been supplying  services
                    to 100%  of the  Rentable  Square  Footage  of the  Building
                    during that  calendar  year. If Tenant pays for its Pro Rata
                    Share of Expenses  based on increases over a "Base Year" and
                    Expenses for a calendar  year are  determined as provided in
                    the prior sentence, Expenses for the Base Year shall also be
                    determined  as if the  Building  had been 100%  occupied and
                    Landlord had been supplying services to 100% of the Rentable
                    Square  Footage  of  the  Building.   The  extrapolation  of
                    Expenses   under  this   Section   shall  be   performed  by
                    appropriately  adjusting  the  cost of those  components  of
                    Expenses  that are  impacted by changes in the  occupancy of
                    the Building.
<PAGE>

               D.   TAXES DEFINED. "Taxes" shall mean: (1) all real estate taxes
                    and  other  assessments  on the  Building  and/or  Property,
                    including,  but not  limited  to,  assessments  for  special
                    improvement  districts and building  improvement  districts,
                    taxes   and   assessments    levied   in   substitution   or
                    supplementation  in whole or in part of any such  taxes  and
                    assessments  and the  Property's  share of any  real  estate
                    taxes  and   assessments   under  any  reciprocal   easement
                    agreement,  common area agreement or similar agreement as to
                    the Property;  (2) all personal  property taxes for property
                    that is owned by Landlord  and used in  connection  with the
                    operation,  maintenance and repair of the Property;  and (3)
                    all costs  and fees  incurred  in  connection  with  seeking
                    reductions in any tax liabilities  described in (1) and (2),
                    including,   without  limitation,   any  costs  incurred  by
                    Landlord   for   compliance,   review   and  appeal  of  tax
                    liabilities. Without limitation, Taxes shall not include any
                    income, capital levy, franchise, capital stock, gift, estate
                    or   inheritance   tax.  If  an  assessment  is  payable  in
                    installments, Taxes for the year shall include the amount of
                    the installment and any interest due and payable during that
                    year.  For all other real estate taxes,  Taxes for that year
                    shall,  at Landlord's  election,  include  either the amount
                    accrued,  assessed or otherwise  imposed for the year or the
                    amount  due  and  payable  for  that  year,   provided  that
                    Landlord's election shall be applied consistently throughout
                    the Term.  If a change in Taxes is obtained  for any year of
                    the Term during which Tenant paid Tenant's Pro Rata Share of
                    any  Tax   Excess,   then   Taxes  for  that  year  will  be
                    retroactively  adjusted and Landlord  shall  provide  Tenant
                    with a credit, if any, based on the adjustment. Likewise, if
                    a change is obtained for Taxes for the Base Year,  Taxes for
                    the Base Year shall be  restated  and the Tax Excess for all
                    subsequent  years  shall be  recomputed.  Tenant  shall  pay
                    Landlord  the amount of Tenant's  Pro Rata Share of any such
                    increase  in the Tax Excess  within 30 days  after  Tenant's
                    receipt of a statement from Landlord.

               E.   AUDIT  RIGHTS.  Tenant may,  within 90 days after  receiving
                    Landlord's  statement of  Expenses,  give  Landlord  written
                    notice  ("Review  Notice")  that  Tenant  intends  to review
                    Landlord's  records of the Expenses for that calendar  year.
                    Within a reasonable time after receipt of the Review Notice,
                    Landlord  shall make all  pertinent  records  available  for
                    inspection  that are  reasonably  necessary  for  Tenant  to
                    conduct its  review.  If any  records  are  maintained  at a
                    location  other than the office of the Building,  Tenant may
                    either inspect the records at such other location or pay for
                    the reasonable cost of copying and shipping the records.  If
                    Tenant retains an agent to review  Landlord's  records,  the
                    agent  must be with a  licensed  CPA firm.  Tenant  shall be
                    solely responsible for all costs, expenses and fees incurred
                    for the  audit.  Within 60 days after the  records  are made
                    available  to  Tenant,  Tenant  shall have the right to give
                    Landlord  written notice (an "Objection  Notice") stating in
                    reasonable  detail any objection to Landlord's  statement of
                    Expenses for that year.  If Tenant fails to give Landlord an
                    Objection  Notice  within  the 60 day  period  or  fails  to
                    provide  Landlord  with a Review  Notice  within  the 90 day
                    period  described  above,  Tenant  shall be  deemed  to have
                    approved  Landlord's  statement  of  Expenses  and  shall be
                    barred from  raising any claims  regarding  the Expenses for
                    that  year.  If  Tenant  provides  Landlord  with  a  timely
                    Objection Notice, Landlord and Tenant shall work together in
                    good  faith  to  resolve  any  issues   raised  in  Tenant's
                    Objection  Notice.  If Landlord  and Tenant  determine  that
                    Expenses  for the  calendar  year  are less  than  reported,
                    Landlord shall provide Tenant with a credit against the next
                    installment  of Rent in the  amount  of the  overpayment  by
                    Tenant.  Likewise,  if Landlord  and Tenant  determine  that
                    Expenses  for the calendar  year are greater than  reported,
                    Tenant  shall pay  Landlord  the amount of any  underpayment
                    within 30 days.  The  records  obtained  by Tenant  shall be
                    treated  as  confidential.  In  no  event  shall  Tenant  be
                    permitted  to examine  Landlord's  records or to dispute any
                    statement of Expenses  unless  Tenant has paid and continues
                    to pay all Rent when due.
<PAGE>
V.       Compliance with Laws; Use.

         The Premises  shall be used only for the Permitted Use and for no other
use whatsoever  except with the prior written consent of Landlord.  Tenant shall
not use or permit the use of the  Premises  for any  purpose  which is  illegal,
dangerous to persons or property or which,  in  Landlord's  reasonable  opinion,
unreasonably  disturbs any other tenants of the Building or interferes  with the
operation of the  Building.  Tenant shall  comply with all Laws,  including  the
Americans with  Disabilities  Act,  regarding the operation of Tenant's business
and the use, condition,  configuration and occupancy of the Premises.  Except to
the extent properly included in Expenses,  Landlord shall be responsible for the
cost  of  correcting   any  violations  of  Title  III  of  the  Americans  with
Disabilities  Act  (ADA)  with  respect  to the  Common  Areas of the  Building.
Notwithstanding  the  foregoing,  Landlord  shall have the right to contest  any
alleged violation in good faith,  including,  without  limitation,  the right to
apply for and obtain a waiver or  deferment of  compliance,  the right to assert
any and all  defenses  allowed  by Law and the  right to appeal  any  decisions,
judgments or rulings to the fullest extent permitted by Law. Landlord, after the
exhaustion  of any and all rights to appeal or contest,  will make all  repairs,
additions, alterations or improvements necessary to comply with the terms of any
final order or judgment.  Tenant,  within 10 days after  receipt,  shall provide
Landlord with copies of any notices it receives regarding a violation or alleged
violation of any Laws. Tenant shall comply with the rules and regulations of the
Building  attached as Exhibit B and such other  reasonable rules and regulations
adopted by  Landlord  from time to time.  Tenant  shall  also cause its  agents,
contractors, subcontractors, employees, customers, and subtenants to comply with
all rules and  regulations.  Landlord shall not knowingly  discriminate  against
Tenant in Landlord's enforcement of the rules and regulations. In the event of a
conflict between any rules and regulations enacted after the date hereof and the
lease, this Lease shall control.

VI.      Security Deposit.

         The Security  Deposit shall be delivered to Landlord upon the execution
of this  Lease by Tenant and shall be held by  Landlord  without  liability  for
interest  (unless  required by Law) as security for the  performance of Tenant's
obligations. The Security Deposit is not an advance payment of Rent or a measure
of Tenant's  liability for damages.  Landlord  may,  from time to time,  without
prejudice to any other remedy,  use all or a portion of the Security  Deposit to
satisfy past due Rent or to cure any uncured default by Tenant. If Landlord uses
the Security Deposit, Tenant shall on demand restore the Security Deposit to its
original  amount.  Landlord  shall return any unapplied  portion of the Security
Deposit  to  Tenant  within  45 days  after  the  later  to  occur  of:  (1) the
determination  of Tenant's  Pro Rata Share of any Tax Excess and Expense  Excess
for the final year of the Term; (2) the date Tenant surrenders possession of the
Premises to Landlord in accordance with this Lease; or (3) the Termination Date.
If Landlord  transfers  its  interest in the  Premises,  Landlord may assign the
Security Deposit to the transferee and, following the assignment, Landlord shall
have no further liability for the return of the Security Deposit. Landlord shall
not be required to keep the Security  Deposit  separate from its other accounts.
Tenant hereby waives the provisions of Section  1950.7 of the  California  Civil
Code, or any similar or successor Laws now or hereinafter in effect.

VII.     Services to be Furnished by Landlord.

          A.   Landlord  agrees to furnish  Tenant with the following  services:
               (1) Water  service  for use in the  lavatories  on each  floor on
               which the Premises are located;  (2) Heat and air conditioning in
               season during Normal Business Hours, at such  temperatures and in
               such  amounts  as are  standard  for  comparable  Class A  office
               buildings or as required by governmental authority.  Tenant, upon
               such advance notice as is reasonably required by Landlord,  shall
               have the right to receive  HVAC  service  during hours other than
               Normal  Business  Hours.  Tenant  shall pay Landlord the standard
               charge for the  additional  service as  reasonably  determined by
               Landlord  from time to time;  (3)  Maintenance  and repair of the
               Property as described in Section  IX.B.;  (4) Janitor  service on
               Business   Days.  If  Tenant's  use,   floor  covering  or  other
               improvements  require special  services in excess of the standard
               services for the Building,  Tenant shall pay the additional  cost
               attributable to the special services;  (5) Elevator service;  (6)
               Electricity to the Premises for general office use, in accordance
               with and  subject to the terms and  conditions  in Article X; and
               (7) such other  services as Landlord  reasonably  determines  are
               necessary or appropriate for the Property.
<PAGE>
          B.   Landlord's failure to furnish, or any interruption or termination
               of,  services due to the  application of Laws, the failure of any
               equipment,   the   performance   of  repairs,   improvements   or
               alterations,  or the  occurrence of any event or cause beyond the
               reasonable  control of Landlord (a "Service  Failure")  shall not
               render  Landlord  liable to  Tenant,  constitute  a  constructive
               eviction  of  Tenant,  give  rise to an  abatement  of Rent,  nor
               relieve  Tenant from the  obligation  to fulfill any  covenant or
               agreement. However, if the Premises, or a material portion of the
               Premises,  is made  untenantable  for a  period  in  excess  of 3
               consecutive  Business  Days as a result of the  Service  Failure,
               then Tenant, as its sole remedy,  shall be entitled to receive an
               abatement of Rent payable  hereunder  during the period beginning
               on the 4th  consecutive  Business Day of the Service  Failure and
               ending on the day the  service has been  restored.  If the entire
               Premises  has  not  been  rendered  untenantable  by the  Service
               Failure,  the amount of  abatement  that  Tenant is  entitled  to
               receive  shall  be  prorated  based  upon the  percentage  of the
               Premises  rendered  untenantable  and not used by  Tenant.  In no
               event,  however,  shall Landlord be liable to Tenant for any loss
               or damage,  including the theft of Tenant's  Property (defined in
               Article XV),  arising out of or in connection with the failure of
               any security services, personnel or equipment.

VIII.    Leasehold Improvements.

         All   improvements   to   the   Premises   (collectively,    "Leasehold
Improvements")  shall be owned by Landlord  and shall  remain upon the  Premises
without compensation to Tenant.  However,  Landlord, by written notice to Tenant
within 30 days prior to the Termination  Date, may require Tenant to remove,  at
Tenant's  expense:  (1) Cable (defined in Section IX.A)  installed by or for the
exclusive benefit of Tenant and located in the Premises or other portions of the
Building;  and (2) any Leasehold  Improvements  that are performed by or for the
benefit of Tenant and, in Landlord's  reasonable judgment,  are of a nature that
would  require  removal and repair  costs that are  materially  in excess of the
removal  and  repair  costs   associated  with  standard   office   improvements
(collectively referred to as "Required Removables").  Without limitation,  it is
agreed that Required  Removables  include  internal  stairways,  raised  floors,
personal  baths  and  showers,  vaults,  rolling  file  systems  and  structural
alterations and modifications of any type. The Required Removables designated by
Landlord shall be removed by Tenant before the Termination  Date,  provided that
upon prior written notice to Landlord,  Tenant may remain in the Premises for up
to 5 days  after the  Termination  Date for the sole  purpose  of  removing  the
Required Removables. Tenant's possession of the Premises shall be subject to all
of the terms and conditions of this Lease,  including the obligation to pay Rent
on a per diem basis at the rate in effect for the last month of the Term. Tenant
shall  repair  damage  caused  by  the   installation  or  removal  of  Required
Removables. If Tenant fails to remove any Required Removables or perform related
repairs  in a timely  manner,  Landlord,  at  Tenant's  expense,  may remove and
dispose of the Required  Removables  and perform the required  repairs.  Tenant,
within 30 days after  receipt of an invoice,  shall  reimburse  Landlord for the
reasonable costs incurred by Landlord. Notwithstanding the foregoing, Tenant, at
the time it  requests  approval  for a proposed  Alteration  (defined in Section
IX.C), may request in writing that Landlord advise Tenant whether the Alteration
or any portion of the  Alteration  will be designated  as a Required  Removable.
Within 10 days after receipt of Tenant's  request,  Landlord shall advise Tenant
in writing as to which portions of the Alteration, if any, will be considered to
be Required Removables.

IX.      Repairs and Alterations.

          A.   Tenant's Repair  Obligations.  Tenant shall, at its sole cost and
               expense,  promptly  perform  all  maintenance  and repairs to the
               Premises that are not  Landlord's  express  responsibility  under
               this Lease,  and shall keep the  Premises in good  condition  and
               repair,  reasonable  wear  and  tear  excepted.  Tenant's  repair
               obligations  include,  without limitation,  repairs to: (1) floor
               covering;  (2) interior  partitions;  (3) doors; (4) the interior
               side of demising walls;  (5)  electronic,  phone and data cabling
               and related equipment  (collectively,  "Cable") that is installed
               by or for the  exclusive  benefit  of Tenant  and  located in the
               Premises or other portions of the Building;  (6) supplemental air
               conditioning units,  private showers and kitchens,  including hot
               water heaters,  plumbing,  and similar  facilities serving Tenant
               exclusively;   and  (7)  Alterations   performed  by  contractors
               retained by Tenant,  including  related HVAC balancing.  All work
               shall be performed in  accordance  with the rules and  procedures
               described  in Section  IX.C.  below.  If Tenant fails to make any
               repairs to the  Premises  for more than 15 days after notice from
               Landlord  (although  notice  shall not be required if there is an
               emergency),  Landlord may make the repairs,  and Tenant shall pay
               the  reasonable  cost of the repairs to  Landlord  within 30 days
               after  receipt of an  invoice,  together  with an  administrative
               charge in an amount equal to 10% of the cost of the repairs.
<PAGE>
          B.   Landlord's Repair  Obligations.  Landlord shall keep and maintain
               in good repair and working  order and make repairs to and perform
               maintenance  upon: (1) structural  elements of the Building;  (2)
               mechanical (including HVAC),  electrical,  plumbing and fire/life
               safety systems serving the Building in general; (3) Common Areas;
               (4)  the  roof  of the  Building;  (5)  exterior  windows  of the
               Building; and (6) elevators serving the Building.  Landlord shall
               promptly make repairs  (considering the nature and urgency of the
               repair) for which Landlord is  responsible.  Tenant hereby waives
               any and all rights under and benefits of  subsection 1 of Section
               1932, and Sections 1941 and 1942 of the California Civil Code, or
               any similar or successor Laws now or hereinafter in effect.

          C.   Alterations.  Tenant  shall not make  alterations,  additions  or
               improvements to the Premises or install any Cable in the Premises
               or other  portions of the Building  (collectively  referred to as
               "Alterations")  without first  obtaining  the written  consent of
               Landlord  in  each   instance,   which   consent   shall  not  be
               unreasonably  withheld or delayed.  However,  Landlord's  consent
               shall not be required for any  Alteration  that  satisfies all of
               the  following  criteria (a "Cosmetic  Alteration"):  (1) is of a
               cosmetic nature such as painting, wallpapering,  hanging pictures
               and installing carpeting; (2) is not visible from the exterior of
               the  Premises  or  Building;  (3) will not affect the  systems or
               structure  of the  Building;  and (4) does not require work to be
               performed  inside the walls or above the ceiling of the Premises.
               However, even though consent is not required,  the performance of
               Cosmetic Alterations shall be subject to all the other provisions
               of this  Section  IX.C.  Prior to  starting  work,  Tenant  shall
               furnish  Landlord  with  plans  and   specifications   reasonably
               acceptable   to  Landlord;   names  of   contractors   reasonably
               acceptable  to Landlord  (provided  that  Landlord may  designate
               specific contractors with respect to Building systems); copies of
               contracts;   necessary   permits  and   approvals;   evidence  of
               contractor's and subcontractor's  insurance in amounts reasonably
               required by Landlord;  and any security for  performance  that is
               reasonably  required  by  Landlord.  Changes  to  the  plans  and
               specifications  must  also  be  submitted  to  Landlord  for  its
               approval.   Alterations  shall  be  constructed  in  a  good  and
               workmanlike  manner using materials of a quality that is at least
               equal  to the  quality  designated  by  Landlord  as the  minimum
               standard  for the  Building.  Landlord may  designate  reasonable
               rules,  regulations and procedures for the performance of work in
               the  Building  and, to the extent  reasonably  necessary to avoid
               disruption to the occupants of the Building, shall have the right
               to designate the time when  Alterations may be performed.  Tenant
               shall  reimburse  Landlord  within 30 days  after  receipt  of an
               invoice for sums paid by Landlord for third party  examination of
               Tenant's plans for non-Cosmetic Alterations.  In addition, within
               30 days after receipt of an invoice from  Landlord,  Tenant shall
               pay Landlord a fee for Landlord's  oversight and  coordination of
               any  non-Cosmetic  Alterations  equal  to 10% of the  cost of the
               non-Cosmetic Alterations.  Upon completion,  Tenant shall furnish
               "as-built"  plans (except for Cosmetic  Alterations),  completion
               affidavits,  full and final waivers of lien in  recordable  form,
               and  receipted  bills  covering all labor and  materials.  Tenant
               shall  assure  that the  Alterations  comply  with all  insurance
               requirements and Laws. Landlord's approval of an Alteration shall
               not be a representation by Landlord that the Alteration  complies
               with applicable Laws or will be adequate for Tenant's use.
<PAGE>

X.       Use of Electrical Services by Tenant.

          A.   Electricity  used by Tenant in the Premises  shall, at Landlord's
               option,  be paid for by Tenant either:  (1) through  inclusion in
               Expenses  (except as provided in Section X.B. for excess  usage);
               (2) by a separate  charge payable by Tenant to Landlord within 30
               days after billing by Landlord;  or (3) by separate charge billed
               by the applicable utility company and payable directly by Tenant.
               Electrical  service to the  Premises  may be  furnished by one or
               more companies providing electrical generation,  transmission and
               distribution services, and the cost of electricity may consist of
               several  different   components  or  separate  charges  for  such
               services,  such as  generation,  distribution  and stranded  cost
               charges.  Landlord  shall have the exclusive  right to select any
               company  providing   electrical  service  to  the  Premises,   to
               aggregate  the  electrical  service for the Property and Premises
               with other buildings,  to purchase  electricity  through a broker
               and/or  buyers  group and to change the  providers  and manner of
               purchasing  electricity.  Landlord shall be entitled to receive a
               fee (if permitted by Law) for the selection of utility  companies
               and  the   negotiation  and   administration   of  contracts  for
               electricity,  provided  that the  amount  of such fee  shall  not
               exceed 50% of any savings obtained by Landlord.

          B.   Tenant's use of electrical  service  shall not exceed,  either in
               voltage,  rated  capacity,  use beyond Normal  Business  Hours or
               overall load,  that which Landlord  determines to be standard for
               the Building.  If Tenant  requests  permission to consume  excess
               electrical  service,  Landlord  may  refuse  to  consent  or  may
               condition consent upon conditions that Landlord reasonably elects
               (including,  without  limitation,  the  installation  of  utility
               service  upgrades,  meters,  submeters,  air  handlers or cooling
               units),  and the  additional  usage (to the extent  permitted  by
               Law), installation and maintenance costs shall be paid by Tenant.
               Landlord  shall  have the right to  separately  meter  electrical
               usage for the Premises and to measure  electrical usage by survey
               or other commonly accepted methods.

XI.      Entry by Landlord.

         Landlord,  its agents,  contractors and  representatives  may enter the
Premises to inspect or show the Premises, to clean and make repairs, alterations
or additions to the Premises, and to conduct or facilitate repairs,  alterations
or additions to any portion of the Building,  including other tenants' premises.
Except in emergencies or to provide janitorial and other Building services after
Normal  Business  Hours,  Landlord  shall provide Tenant with  reasonable  prior
notice of entry into the  Premises,  which may be given  orally.  If  reasonably
necessary for the protection  and safety of Tenant and its  employees,  Landlord
shall have the right to  temporarily  close all or a portion of the  Premises to
perform  repairs,  alterations  and additions.  However,  except in emergencies,
Landlord will not close the Premises if the work can  reasonably be completed on
weekends and after Normal Business Hours. Entry by Landlord shall not constitute
constructive eviction or entitle Tenant to an abatement or reduction of Rent.

XII.     Assignment and Subletting.

          A.   Except  in  connection  with a  Permitted  Transfer  (defined  in
               Section  XII.E.  below),  Tenant  shall  not  assign,   sublease,
               transfer  or  encumber  any  interest  in this Lease or allow any
               third party to use any portion of the Premises  (collectively  or
               individually,  a "Transfer") without the prior written consent of
               Landlord,  which  consent shall not be  unreasonably  withheld if
               Landlord does not elect to exercise its termination  rights under
               Section  XII.B  below.  Without  limitation,  it is  agreed  that
               Landlord's consent shall not be considered  unreasonably withheld
               if: (1) the proposed  transferee's  financial  condition does not
               meet the criteria Landlord uses to select Building tenants having
               similar  leasehold  obligations;  (2) the  proposed  transferee's
               business  is  not  suitable  for  the  Building  considering  the
               business of the other  tenants and the  Building's  prestige,  or
               would result in a violation of another tenant's  rights;  (3) the
               proposed  transferee is a governmental  agency or occupant of the
               Building  or  Property;  (4)  Tenant  is  in  default  after  the
               expiration  of the notice and cure periods in this Lease;  or (5)
               any  portion of the  Building  or Premises  would  likely  become
               subject to additional or different  Laws as a consequence  of the
               proposed  Transfer.  Tenant  shall  not be  entitled  to  receive
               monetary  damages based upon a claim that  Landlord  unreasonably
               withheld its consent to a proposed  Transfer  and  Tenant's  sole
               remedy shall be an action to enforce any such  provision  through
               specific  performance  or  declaratory  judgment.  Tenant  hereby
               waives the provisions of Section 1995.310 of the California Civil
               Code, or any similar or successor  Laws,  now or  hereinafter  in
               effect, and all other remedies,  including,  without  limitation,
               any right at law or equity to  terminate  this Lease,  on its own
               behalf and, to the extent permitted under all applicable Laws, on
               behalf of the  proposed  transferee.  Any  attempted  Transfer in
               violation of this Article shall, at Landlord's  option,  be void.
               Consent by Landlord to one or more Transfer(s)  shall not operate
               as a waiver  of  Landlord's  rights  to  approve  any  subsequent
               Transfers.  In no event shall any Transfer or Permitted  Transfer
               release or relieve Tenant from any obligation under this Lease.
<PAGE>

          B.   As part of its  request  for  Landlord's  consent to a  Transfer,
               Tenant shall provide  Landlord with financial  statements for the
               proposed transferee,  a complete copy of the proposed assignment,
               sublease  and  other   contractual   documents   and  such  other
               information as Landlord may reasonably  request.  Landlord shall,
               by written  notice to Tenant within 30 days of its receipt of the
               required  information and  documentation,  either: (1) consent to
               the Transfer by the  execution  of a consent  agreement in a form
               reasonably designated by Landlord or reasonably refuse to consent
               to  the  Transfer  in  writing;  or (2)  exercise  its  right  to
               terminate  this Lease with respect to the portion of the Premises
               that  Tenant  is  proposing   to  assign  or  sublet.   Any  such
               termination shall be effective on the proposed  effective date of
               the Transfer for which Tenant requested consent. Tenant shall pay
               Landlord  a review fee of $750.00  for  Landlord's  review of any
               Permitted Transfer or requested Transfer,  provided if Landlord's
               actual  reasonable  costs  and  expenses  (including   reasonable
               attorney's fees) exceed $750.00,  Tenant shall reimburse Landlord
               for its actual  reasonable  costs and expenses in lieu of a fixed
               review fee.

          C.   Tenant shall pay Landlord 65% of all rent and other consideration
               which Tenant receives as a result of a Transfer that is in excess
               of the Rent  payable to Landlord  for the portion of the Premises
               and Term covered by the  Transfer.  Tenant shall pay Landlord for
               Landlord's  share of any  excess  within 30 days  after  Tenant's
               receipt of such excess consideration.  Tenant may deduct from the
               excess all reasonable and customary expenses directly incurred by
               Tenant attributable to the Transfer (other than Landlord's review
               fee),  including  brokerage  fees,  legal  fees and  construction
               costs.  If Tenant is in  Monetary  Default  (defined  in  Section
               XIX.A. below), Landlord may require that all sublease payments be
               made  directly to Landlord,  in which case Tenant shall receive a
               credit against Rent in the amount of any payments  received (less
               Landlord's share of any excess).

          D.   Except as provided below with respect to a Permitted Transfer, if
               Tenant is a corporation,  limited liability company, partnership,
               or similar  entity,  and if the entity  which owns or  controls a
               majority of the voting  shares/rights at any time changes for any
               reason  (including but not limited to a merger,  consolidation or
               reorganization),  such  change  of  ownership  or  control  shall
               constitute a Transfer.  The foregoing  shall not apply so long as
               Tenant  is an  entity  whose  outstanding  stock is  listed  on a
               recognized  security  exchange,  or if at least 80% of its voting
               stock is owned by another entity, the voting stock of which is so
               listed.
<PAGE>

          E.   Notwithstanding  anything to the contrary  contained herein or in
               Section XIII.D., Tenant may assign its entire interest under this
               Lease or  sublet  the  Premises  to a wholly  owned  corporation,
               partnership  or other legal entity or  affiliate,  subsidiary  or
               parent  of  Tenant or to any  successor  to  Tenant by  purchase,
               merger,    consolidation    or    reorganization    (hereinafter,
               collectively,  referred to as "Permitted  Transfer")  without the
               consent of Landlord, provided: (i) Tenant is not in default under
               this Lease;  (ii) if such  proposed  transferee is a successor to
               Tenant by purchase, merger, consolidation or reorganization,  the
               continuing or surviving entity shall own all or substantially all
               of the assets of Tenant  and shall  have a net worth  which is at
               least equal to the  greater of Tenant's  net worth at the date of
               this  Lease or  Tenant's  net worth at the date of the  Transfer;
               (iii) such  proposed  transferee  operates  the  business  in the
               Premises for the Permitted Use and no other purpose;  and (iv) in
               no event shall any Permitted  Transfer  release or relieve Tenant
               from any of its obligations  under this Lease.  Tenant shall give
               Landlord  written  notice at least 30 days prior to the effective
               date of such  Permitted  Transfer.  As used herein:  (a) "parent"
               shall mean a company  which owns a majority  of  Tenant's  voting
               equity;  (b)  "subsidiary"  shall mean an entity  wholly owned by
               Tenant or at least 51% of whose voting equity is owned by Tenant;
               and (c) "affiliate" shall mean an entity controlled,  controlling
               or  under  common  control  with  Tenant.   Notwithstanding   the
               foregoing,  sale of the  shares  of equity  of any  affiliate  or
               subsidiary to which this Lease has been  assigned or  transferred
               other than to another  parent,  subsidiary  or  affiliate  of the
               original  Tenant  named  hereunder  shall  be  deemed  to  be  an
               assignment requiring the consent of Landlord hereunder.

XIII.    Liens.

         Tenant shall not permit mechanic's or other liens to be placed upon the
Property, Premises or Tenant's leasehold interest in connection with any work or
service done or  purportedly  done by or for benefit of Tenant.  If a lien is so
placed,  Tenant  shall,  within 10 days of notice from Landlord of the filing of
the lien,  fully  discharge the lien by settling the claim which resulted in the
lien or by bonding or  insuring  over the lien in the manner  prescribed  by the
applicable lien Law. If Tenant fails to discharge the lien, then, in addition to
any other right or remedy of Landlord, Landlord may bond or insure over the lien
or otherwise  discharge the lien. Tenant shall reimburse Landlord for any amount
paid by  Landlord  to bond or  insure  over  the  lien or  discharge  the  lien,
including, without limitation,  reasonable attorneys' fees (if and to the extent
permitted by Law) within 30 days after receipt of an invoice from Landlord.

XIV.     Indemnity and Waiver of Claims.

          A.   Except  to  the  extent  caused  by  the  negligence  or  willful
               misconduct of Landlord or any Landlord  Related Parties  (defined
               below),  Tenant shall  indemnify,  defend and hold Landlord,  its
               trustees, members, principals, beneficiaries, partners, officers,
               directors, employees,  Mortgagee(s) (defined in Article XXVI) and
               agents ("Landlord Related Parties") harmless against and from all
               liabilities,  obligations,  damages, penalties,  claims, actions,
               costs,  charges  and  expenses,  including,  without  limitation,
               reasonable attorneys' fees and other professional fees (if and to
               the extent permitted by Law), which may be imposed upon, incurred
               by or asserted  against  Landlord or any of the Landlord  Related
               Parties and arising  out of or in  connection  with any damage or
               injury  occurring  in the  Premises  or  any  acts  or  omissions
               (including  violations  of Law) of  Tenant,  the  Tenant  Related
               Parties   (defined   below)  or  any  of  Tenant's   transferees,
               contractors or licensees.

          B.   Except  to  the  extent  caused  by  the  negligence  or  willful
               misconduct  of  Tenant or any  Tenant  Related  Parties  (defined
               below),  Landlord shall  indemnify,  defend and hold Tenant,  its
               trustees, members, principals, beneficiaries, partners, officers,
               directors,   employees  and  agents  ("Tenant  Related  Parties")
               harmless against and from all liabilities,  obligations, damages,
               penalties,   claims,   actions,   costs,  charges  and  expenses,
               including,  without  limitation,  reasonable  attorneys' fees and
               other  professional fees (if and to the extent permitted by Law),
               which may be imposed upon, incurred by or asserted against Tenant
               or any of the Tenant  Related  Parties  and  arising out of or in
               connection  with the acts or omissions  (including  violations of
               Law)  of  Landlord,  the  Landlord  Related  Parties  or  any  of
               Landlord's contractors.

          C.   Landlord and the  Landlord  Related  Parties  shall not be liable
               for, and Tenant waives, all claims for loss or damage to Tenant's
               business  or loss,  theft or damage to  Tenant's  Property or the
               property  of any person  claiming  by,  through  or under  Tenant
               resulting  from:  (1) wind or  weather;  (2) the  failure  of any
               sprinkler,  heating or air-conditioning  equipment,  any electric
               wiring or any gas,  water or steam  pipes;  (3) the backing up of
               any sewer pipe or downspout; (4) the bursting, leaking or running
               of any tank, water closet,  drain or other pipe; (5) water,  snow
               or ice  upon  or  coming  through  the  roof,  skylight,  stairs,
               doorways,  windows,  walks or any  other  place  upon or near the
               Building;  (6)  any  act or  omission  of any  party  other  than
               Landlord  or  Landlord  Related  Parties;  and (7) any causes not
               reasonably  within the control of  Landlord.  Tenant shall insure
               itself against such losses under Article XV below.
<PAGE>

XV.      Insurance.

         Tenant  shall carry and  maintain the  following  insurance  ("Tenant's
Insurance"),  at its sole cost and expense:  (1)  Commercial  General  Liability
Insurance  applicable  to the Premises and its  appurtenances  providing,  on an
occurrence basis, a minimum combined single limit of $2,000,000.00; (2) All Risk
Property/Business   Interruption  Insurance,  including  flood  and  earthquake,
written  at  replacement  cost  value and with a  replacement  cost  endorsement
covering all of Tenant's trade fixtures, equipment, furniture and other personal
property within the Premises ("Tenant's  Property");  (3) Workers'  Compensation
Insurance  as  required  by the state in which the  Premises  is located  and in
amounts as may be required by applicable  statute;  and (4) Employers  Liability
Coverage of at least  $1,000,000.00  per occurrence.  Any company writing any of
Tenant's  Insurance shall have an A.M. Best rating of not less than A-VIII.  All
Commercial  General  Liability  Insurance  policies shall name Tenant as a named
insured and Landlord (or any  successor),  Equity  Office  Properties  Trust,  a
Maryland real estate  investment  trust, EOP Operating  Limited  Partnership,  a
Delaware  limited  partnership,   and  their  respective  members,   principals,
beneficiaries,  partners, officers, directors,  employees, and agents, and other
designees  of  Landlord as the  interest  of such  designees  shall  appear,  as
additional   insureds.   All  policies  of  Tenant's   Insurance  shall  contain
endorsements  that the insurer(s) shall give Landlord and its designees at least
30 days' advance  written  notice of any change,  cancellation,  termination  or
lapse  of  insurance.  Tenant  shall  provide  Landlord  with a  certificate  of
insurance  evidencing  Tenant's  Insurance  prior to the earlier to occur of the
Commencement Date or the date Tenant is provided with possession of the Premises
for any reason,  and upon  renewals at least 15 days prior to the  expiration of
the  insurance  coverage.  So long  as the  same is  available  at  commercially
reasonable rates,  Landlord shall maintain so called All Risk property insurance
on the Building at replacement cost value, as reasonably  estimated by Landlord.
Except as specifically  provided to the contrary,  the limits of either party's'
insurance shall not limit such party's liability under this Lease.

XVI.     Subrogation.

         Notwithstanding  anything in this Lease to the  contrary,  Landlord and
Tenant hereby waive and shall cause their respective insurance carriers to waive
any and all rights of recovery,  claim,  action or causes of action  against the
other  and  their  respective  trustees,  principals,  beneficiaries,  partners,
officers,  directors,  agents,  and  employees,  for any loss or damage that may
occur to Landlord or Tenant or any party  claiming by, through or under Landlord
or Tenant, as the case may be, with respect to Tenant's Property,  the Building,
the Premises,  any additions or improvements to the Building or Premises, or any
contents thereof, including all rights of recovery, claims, actions or causes of
action arising out of the negligence of Landlord or any Landlord Related Parties
or the negligence of Tenant or any Tenant Related Parties,  which loss or damage
is (or would have been,  had the insurance  required by this Lease been carried)
covered by insurance.

XVII.    Casualty Damage.

          A.   If all or any part of the  Premises  is  damaged by fire or other
               casualty,  Tenant shall  immediately  notify Landlord in writing.
               During any  period of time that all or a material  portion of the
               Premises is rendered  untenantable as a result of a fire or other
               casualty,  the Rent shall abate for the  portion of the  Premises
               that is untenantable and not used by Tenant.  Landlord shall have
               the right to terminate  this Lease if: (1) the Building  shall be
               damaged so that, in Landlord's  reasonable judgment,  substantial
               alteration or  reconstruction  of the Building  shall be required
               (whether or not the Premises has been  damaged);  (2) Landlord is
               not permitted by Law to rebuild the Building in substantially the
               same  form  as  existed  before  the  fire or  casualty;  (3) the
               Premises  have been  materially  damaged and there is less than 2
               years of the Term remaining on the date of the casualty;  (4) any
               Mortgagee  requires that the insurance proceeds be applied to the
               payment of the mortgage debt; or (5) a material uninsured loss to
               the Building occurs. Landlord may exercise its right to terminate
               this Lease by  notifying  Tenant in writing  within 90 days after
               the date of the casualty.  If Landlord  does not  terminate  this
               Lease,  Landlord  shall  commence  and  proceed  with  reasonable
               diligence to repair and restore the  Building  and the  Leasehold
               Improvements  (excluding any  Alterations  that were performed by
               Tenant in violation of this  Lease).  However,  in no event shall
               Landlord be required  to spend more than the  insurance  proceeds
               received by Landlord.  Landlord  shall not be liable for any loss
               or damage  to  Tenant's  Property  or to the  business  of Tenant
               resulting in any way from the fire or other  casualty or from the
               repair and restoration of the damage.  Landlord and Tenant hereby
               waive the provisions of any Law relating to the matters addressed
               in this  Article,  and agree  that  their  respective  rights for
               damage  to  or   destruction  of  the  Premises  shall  be  those
               specifically provided in this Lease.
<PAGE>

          B.   If all or any portion of the Premises shall be made  untenantable
               by  fire or  other  casualty,  Landlord  shall,  with  reasonable
               promptness,  cause an architect or general contractor selected by
               Landlord to provide  Landlord and Tenant with a written  estimate
               of the amount of time  required  to  substantially  complete  the
               repair and  restoration  of the  Premises  and make the  Premises
               tenantable  again,  using standard  working methods  ("Completion
               Estimate").   If  the  Completion  Estimate  indicates  that  the
               Premises cannot be made tenantable  within 270 days from the date
               the  repair  and  restoration  is  started,  then  regardless  of
               anything in Section  XVII.A above to the  contrary,  either party
               shall have the right to  terminate  this Lease by giving  written
               notice to the other of such election within 10 days after receipt
               of the Completion Estimate.  Tenant,  however, shall not have the
               right to terminate  this Lease if the fire or casualty was caused
               by the  negligence or  intentional  misconduct of Tenant,  Tenant
               Related  Parties or any of Tenant's  transferees,  contractors or
               licensees.

          C.   The  provisions  of this  Lease,  including  this  Article  XVII,
               constitute an express  agreement between Landlord and Tenant with
               respect to any and all damage to, or  destruction  of, all or any
               part of the Premises or the  Property,  and any Laws,  including,
               without   limitation,   Sections   1932(2)  and  1933(4)  of  the
               California  Civil Code, with respect to any rights or obligations
               concerning  damage or  destruction  in the  absence of an express
               agreement  between  the  parties,  and  any  other  Laws  now  or
               hereinafter in effect, shall have no application to this Lease or
               any damage or  destruction  to all or any part of the Premises or
               the Property.

XVIII.   Condemnation.

         Either party may terminate this Lease if the whole or any material part
of the Premises shall be taken or condemned for any public or  quasi-public  use
under Law, by eminent  domain or private  purchase in lieu thereof (a "Taking").
Landlord  shall also have the right to terminate this Lease if there is a Taking
of any portion of the  Building or Property  which would leave the  remainder of
the Building  unsuitable for use as an office building in a manner comparable to
the  Building's  use  prior to the  Taking.  In order to  exercise  its right to
terminate  the Lease,  Landlord  or  Tenant,  as the case may be,  must  provide
written notice of termination to the other within 45 days after the  terminating
party  first  receives  notice  of the  Taking.  Any such  termination  shall be
effective as of the date the  physical  taking of the Premises or the portion of
the Building or Property occurs.  If this Lease is not terminated,  the Rentable
Square Footage of the Building,  the Rentable Square Footage of the Premises and
Tenant's Pro Rata Share shall,  if applicable,  be  appropriately  adjusted.  In
addition,  Rent for any  portion of the  Premises  taken or  condemned  shall be
abated  during the  unexpired  Term of this Lease  effective  when the  physical
taking of the portion of the Premises  occurs.  All  compensation  awarded for a
Taking,  or sale  proceeds,  shall be the  property  of  Landlord,  any right to
receive  compensation  or proceeds being  expressly  waived by Tenant.  However,
Tenant  may file a  separate  claim at its sole cost and  expense  for  Tenant's
Property and Tenant's reasonable relocation expenses, provided the filing of the
claim does not  diminish  the award  which  would  otherwise  be  receivable  by
Landlord.  Tenant  hereby  waives  any and all  rights it might  otherwise  have
pursuant to Section 1265.130 of the California Code of Civil  Procedure,  or any
similar or successor Laws.

XIX.     Events of Default.

         Tenant  shall be  considered  to be in  default  of this Lease upon the
occurrence of any of the following events of default:
<PAGE>

          A.   Tenant's  failure to pay when due all or any portion of the Rent,
               if the  failure  continues  for 3 days  after  written  notice to
               Tenant ("Monetary Default").

          B.   Tenant's  failure (other than a Monetary  Default) to comply with
               any term,  provision or covenant of this Lease, if the failure is
               not cured within 10 days after written notice to Tenant. However,
               if Tenant's  failure to comply cannot  reasonably be cured within
               10 days,  Tenant shall be allowed  additional time (not to exceed
               60 days) as is  reasonably  necessary to cure the failure so long
               as: (1) Tenant  commences to cure the failure within 10 days, and
               (2) Tenant  diligently  pursues a course of action that will cure
               the failure and bring Tenant back into compliance with the Lease.
               However,  if  Tenant's  failure  to comply  creates  a  hazardous
               condition,  the failure must be cured  immediately upon notice to
               Tenant.  In addition,  if Landlord provides Tenant with notice of
               Tenant's failure to comply with any particular term, provision or
               covenant of the Lease on 3 occasions  during any 12 month period,
               Tenant's subsequent violation of such term, provision or covenant
               shall, at Landlord's  option, be an incurable event of default by
               Tenant.

          C.   Tenant or any Guarantor  becomes  insolvent,  makes a transfer in
               fraud of  creditors  or makes an  assignment  for the  benefit of
               creditors,  or admits in writing its  inability  to pay its debts
               when due.

          D.   The leasehold estate is taken by process or operation of Law.

          E    In the case of any ground floor or retail Tenant, Tenant does not
               take  possession of, or abandons or vacates all or any portion of
               the Premises.

          F.   Tenant is in default  beyond any notice and cure period under any
               other  lease  or  agreement  with  Landlord,  including,  without
               limitation, any lease or agreement for parking.

XX.      Remedies.

          A.   Upon the  occurrence of any event or events of default under this
               Lease,  whether  enumerated in Article XIX or not, Landlord shall
               have  the  option  to  pursue  any one or  more of the  following
               remedies  without  any  notice  (except as  expressly  prescribed
               herein) or demand whatsoever (and without limiting the generality
               of the foregoing,  Tenant hereby  specifically  waives notice and
               demand for  payment of Rent or other  obligations  and waives any
               and  all  other  notices  or  demand   requirements   imposed  by
               applicable law):

               1.   Terminate this Lease and Tenant's right to possession of the
                    Premises and recover  from Tenant an award of damages  equal
                    to the sum of the following:

                           (a)      The Worth at the Time of Award of the unpaid
                                    Rent which had been earned at the time of
                                    termination;

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

                           (c)      The Worth at the Time of Award of the amount
                                    by which the unpaid  Rent for the balance of
                                    the Term after the time of award exceeds the
                                    amount  of  such   Rent  loss  that   Tenant
                                    affirmatively  proves  could  be  reasonably
                                    avoided;

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

                           (e)      All such other  amounts in addition to or in
                                    lieu of the  foregoing  as may be  permitted
                                    from time to time under applicable law.

                           The  "Worth  at the  Time of  Award"  of the  amounts
                           referred  to in  parts  (a) and (b)  above,  shall be
                           computed by allowing  interest at the lesser of a per
                           annum rate equal to: (i) the  greatest per annum rate
                           of  interest   permitted  from  time  to  time  under
                           applicable  law,  or (ii) the  Prime  Rate  plus five
                           percent (5%). For purposes  hereof,  the "Prime Rate"
                           shall  be  the  per  annum   interest  rate  publicly
                           announced  as its prime or base  rate by a  federally
                           insured  bank  selected  by  Landlord in the State of
                           California.  The  "Worth at the Time of Award" of the
                           amount  referred  to in part  (c),  above,  shall  be
                           computed by  discounting  such amount at the discount
                           rate of the Federal  Reserve Bank of San Francisco at
                           the time of award plus one percent (1%);

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

                  3.       Notwithstanding  Landlord's  exercise  of the  remedy
                           described  in  California  Civil  Code ss.  1951.4 in
                           respect  of an event or  events of  default,  at such
                           time thereafter as Landlord may elect in writing,  to
                           terminate this Lease and Tenant's right to possession
                           of the  Premises  and  recover an award of damages as
                           provided above in Paragraph XX.A.1.

         B.       The subsequent  acceptance of Rent hereunder by Landlord shall
                  not be deemed to be a waiver of any preceding breach by Tenant
                  of any term,  covenant or condition of this Lease,  other than
                  the failure of Tenant to pay the particular  Rent so accepted,
                  regardless of Landlord's knowledge of such preceding breach at
                  the time of  acceptance of such Rent. No waiver by Landlord of
                  any breach hereof shall be effective  unless such waiver is in
                  writing and signed by Landlord.

         C.       TENANT HEREBY  WAIVES ANY AND ALL RIGHTS  CONFERRED BY SECTION
                  3275 OF THE CIVIL CODE OF CALIFORNIA  AND BY SECTIONS 1174 (c)
                  AND 1179 OF THE CODE OF CIVIL  PROCEDURE OF CALIFORNIA AND ANY
                  AND ALL  OTHER  LAWS AND  RULES  OF LAW  FROM  TIME TO TIME IN
                  EFFECT DURING THE LEASE TERM  PROVIDING THAT TENANT SHALL HAVE
                  ANY RIGHT TO REDEEM, REINSTATE OR RESTORE THIS LEASE FOLLOWING
                  ITS  TERMINATION  BY REASON OF TENANT'S  BREACH.  LANDLORD AND
                  TENANT  HEREBY  WAIVE  ANY  RIGHT  TO A  TRIAL  BY JURY IN ANY
                  EVICTION  OR  FORCIBLE  ENTRY AND  DETAINER  ACTION OR SIMILAR
                  PROCEEDING  BASED UPON,  OR RELATED TO THE  SUBJECT  MATTER OF
                  THIS LEASE.

         D.       No  right or  remedy  herein  conferred  upon or  reserved  to
                  Landlord  is intended  to be  exclusive  of any other right or
                  remedy,   and  each  and  every  right  and  remedy  shall  be
                  cumulative  and in addition to any other right or remedy given
                  hereunder   or  now  or  hereafter   existing  by   agreement,
                  applicable  law or in equity.  In addition  to other  remedies
                  provided in this Lease,  Landlord  shall be  entitled,  to the
                  extent permitted by applicable law, to injunctive  relief,  or
                  to a decree  compelling  performance  of any of the covenants,
                  agreements,  conditions or provisions of this Lease, or to any
                  other  remedy  allowed  to  Landlord  at  law  or  in  equity.
                  Forbearance by Landlord to enforce one or more of the remedies
                  herein  provided  upon an event of default shall not be deemed
                  or construed to constitute a waiver of such default.

         E.       This  Article XX shall be  enforceable  to the maximum  extent
                  such  enforcement is not prohibited by applicable law, and the
                  unenforceability  of any  portion  thereof  shall not  thereby
                  render unenforceable any other portion.
<PAGE>

XXI.     Limitation of Liability.

         NOTWITHSTANDING  ANYTHING TO THE CONTRARY  CONTAINED IN THIS LEASE, THE
LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) TO TENANT SHALL BE LIMITED
TO THE  INTEREST  OF  LANDLORD  IN THE  PROPERTY.  TENANT  SHALL LOOK  SOLELY TO
LANDLORD'S  INTEREST IN THE  PROPERTY  FOR THE RECOVERY OF ANY JUDGMENT OR AWARD
AGAINST  LANDLORD.  NEITHER  LANDLORD  NOR ANY LANDLORD  RELATED  PARTY SHALL BE
PERSONALLY  LIABLE FOR ANY  JUDGMENT OR  DEFICIENCY.  BEFORE  FILING SUIT FOR AN
ALLEGED  DEFAULT BY LANDLORD,  TENANT SHALL GIVE  LANDLORD AND THE  MORTGAGEE(S)
(DEFINED IN ARTICLE  XXVI BELOW) WHOM TENANT HAS BEEN  NOTIFIED  HOLD  MORTGAGES
(DEFINED IN ARTICLE XXVI BELOW) ON THE  PROPERTY,  BUILDING OR PREMISES,  NOTICE
AND REASONABLE TIME TO CURE THE ALLEGED DEFAULT.

XXII.    No Waiver.

         Either  party's  failure  to  declare  a default  immediately  upon its
occurrence,  or delay in taking  action  for a default  shall not  constitute  a
waiver of the  default,  nor shall it  constitute  an estoppel.  Either  party's
failure to enforce its rights for a default shall not constitute a waiver of its
rights regarding any subsequent default. Receipt by Landlord of Tenant's keys to
the Premises shall not constitute an acceptance or surrender of the Premises.

XXIII.  Quiet Enjoyment.

         Tenant shall,  and may  peacefully  have,  hold and enjoy the Premises,
subject  to the terms of this  Lease,  provided  Tenant  pays the Rent and fully
performs  all of its  covenants  and  agreements.  This  covenant  and all other
covenants of Landlord  shall be binding upon  Landlord and its  successors  only
during its or their respective  periods of ownership of the Building,  and shall
not be a personal covenant of Landlord or the Landlord Related Parties.

XXIV. Relocation.

         Landlord,  at its expense,  at any time before or during the Term,  may
relocate Tenant from the Premises to reasonably  comparable  space  ("Relocation
Space") within the Building or adjacent  buildings  within the same project upon
60  days'  prior  written  notice  to  Tenant.  From and  after  the date of the
relocation, "Premises" shall refer to the Relocation Space into which Tenant has
been moved and the Base Rent and Tenant's Pro Rata Share shall be adjusted based
on the rentable  square  footage of the  Relocation  Space.  Landlord  shall pay
Tenant's  reasonable  costs for moving  Tenant's  furniture  and  equipment  and
printing and  distributing  notices to Tenant's  customers of Tenant's change of
address and one month's supply of stationery showing the new address.

XXV.     Holding Over.

         Except for any  permitted  occupancy by Tenant under  Article  VIII, if
Tenant fails to surrender the Premises at the expiration or earlier  termination
of this Lease,  occupancy of the Premises  after the  termination  or expiration
shall be that of a tenancy at  sufferance.  Tenant's  occupancy  of the Premises
during the  holdover  shall be subject to all the terms and  provisions  of this
Lease and Tenant shall pay an amount (on a per month basis without reduction for
partial months during the holdover) equal to 150% of the greater of: (1) the sum
of the Base Rent and Additional  Rent due for the period  immediately  preceding
the holdover; or (2) the fair market gross rental for the Premises as reasonably
determined  by  Landlord.  No holdover by Tenant or payment by Tenant  after the
expiration or early  termination  of this Lease shall be construed to extend the
Term or prevent  Landlord from immediate  recovery of possession of the Premises
by summary  proceedings or otherwise.  In addition to the payment of the amounts
provided above, if Landlord is unable to deliver possession of the Premises to a
new tenant, or to perform improvements for a new tenant, as a result of Tenant's
holdover and Tenant fails to vacate the Premises  within 15 days after  Landlord
notifies  Tenant of  Landlord's  inability  to  deliver  possession,  or perform
improvements,  Tenant shall be liable to Landlord  for all  damages,  including,
without  limitation,  consequential  damages,  that  Landlord  suffers  from the
holdover.
<PAGE>
XXVI.    Subordination to Mortgages; Estoppel Certificate.

         Tenant accepts this Lease subject and  subordinate to any  mortgage(s),
deed(s) of trust,  ground lease(s) or other lien(s) now or subsequently  arising
upon the Premises, the Building or the Property, and to renewals, modifications,
refinancings and extensions thereof (collectively  referred to as a "Mortgage").
The  party  having  the  benefit  of  a  Mortgage  shall  be  referred  to  as a
"Mortgagee".  This  clause  shall be  self-operative,  but upon  request  from a
Mortgagee,   Tenant  shall  execute  a  commercially  reasonable   subordination
agreement in favor of the Mortgagee.  In lieu of having the Mortgage be superior
to this Lease, a Mortgagee  shall have the right at any time to subordinate  its
Mortgage to this Lease. If requested by a successor-in-interest to all or a part
of Landlord's interest in the Lease, Tenant shall, without charge, attorn to the
successor-in-interest.  Landlord  and Tenant  shall  each,  within 10 days after
receipt of a written  request  from the other,  execute  and deliver an estoppel
certificate to those parties as are reasonably requested by the other (including
a Mortgagee or prospective purchaser).  The estoppel certificate shall include a
statement  certifying that this Lease is unmodified (except as identified in the
estoppel  certificate)  and in full force and  effect,  describing  the dates to
which Rent and other charges have been paid,  representing that, to such party's
actual  knowledge,  there is no default  (or  stating  the nature of the alleged
default)  and  indicating  other  matters  with  respect  to the Lease  that may
reasonably be requested.  Notwithstanding the foregoing, upon written request by
Tenant,  Landlord  will use  reasonable  efforts  to  obtain  a  non-disturbance
subordination and attornment agreement from Landlord's then current Mortgagee on
such Mortgagee's then current standard form of agreement.  "Reasonable  efforts"
of Landlord shall not require  Landlord to incur any cost,  expense or liability
to obtain such  agreement,  it being agreed that Tenant shall be responsible for
any fee or review  costs  charged by the  Mortgagee.  Upon  request of Landlord,
Tenant will execute the Mortgagee's form of  non-disturbance,  subordination and
attornment  agreement  and  return the same to  Landlord  for  execution  by the
Mortgagee,  Landlord's  failure to obtain a  non-disturbance,  subordination and
attornment agreement for Tenant shall have no effect on the rights,  obligations
and  liabilities  of  Landlord  and Tenant or be  considered  to be a default by
Landlord hereunder.

XXVII.   Attorneys' Fees.

         If either party institutes a suit against the other for violation of or
to  enforce  any  covenant  or  condition  of this  Lease,  or if  either  party
intervenes  in any suit in which the other is a party to enforce or protect  its
interest or rights,  the prevailing  party shall be entitled to all of its costs
and expenses, including, without limitation, reasonable attorneys' fees.

XXVIII. Notice.

         If  a  demand,  request,  approval,  consent  or  notice  (collectively
referred to as a "notice")  shall or may be given to either  party by the other,
the notice shall be in writing and  delivered by hand or sent by  registered  or
certified mail with return receipt  requested,  or sent by overnight or same day
courier  service  at the  party's  respective  Notice  Address(es)  set forth in
Article I,  except that if Tenant has  vacated  the  Premises  (or if the Notice
Address  for Tenant is other than the  Premises,  and  Tenant has  vacated  such
address)  without  providing  Landlord a new Notice Address,  Landlord may serve
notice in any manner  described in this Article or in any other manner permitted
by Law.  Each  notice  shall be  deemed to have  been  received  or given on the
earlier to occur of actual  delivery  or the date on which  delivery is refused,
or, if Tenant has vacated the  Premises  or the other  Notice  Address of Tenant
without providing a new Notice Address,  3 days after notice is deposited in the
U.S. mail or with a courier service in the manner described above.  Either party
may, at any time,  change its Notice  Address by giving the other party  written
notice of the new address in the manner described in this Article.

XXIX. Excepted Rights.

         This  Lease does not grant any rights to light or air over or about the
Building.  Landlord  excepts and reserves  exclusively to itself the use of: (1)
roofs, (2) telephone,  electrical and janitorial  closets,  (3) equipment rooms,
Building  risers or similar areas that are used by Landlord for the provision of
Building  services,  (4) rights to the land and improvements  below the floor of
the Premises,  (5) the improvements  and air rights above the Premises,  (6) the
improvements and air rights outside the demising walls of the Premises,  and (7)
the areas within the Premises  used for the  installation  of utility  lines and
other installations serving occupants of the Building. Landlord has the right to
change the Building's name or address.  Landlord also has the right to make such
other  changes to the  Property  and  Building  as Landlord  deems  appropriate,
provided  the  changes  do not  materially  affect  Tenant's  ability to use the
Premises for the Permitted Use.  Landlord shall also have the right (but not the
obligation) to temporarily close the Building if Landlord reasonably  determines
that there is an imminent  danger of  significant  damage to the  Building or of
personal  injury to Landlord's  employees or the occupants of the Building.  The
circumstances  under which  Landlord may  temporarily  close the Building  shall
include,  without  limitation,  electrical  interruptions,  hurricanes and civil
disturbances.  A closure  of the  Building  under such  circumstances  shall not
constitute  a  constructive  eviction  nor  entitle  Tenant to an  abatement  or
reduction of Rent.
<PAGE>

XXX. Surrender of Premises.

         At the  expiration  or earlier  termination  of this Lease or  Tenant's
right of possession,  Tenant shall remove Tenant's  Property (defined in Article
XV) from the Premises,  and quit and  surrender the Premises to Landlord,  broom
clean,  and in good  order,  condition  and repair,  ordinary  wear and tear and
damage by  condemnation or other casualty for which Landlord is required to make
repairs hereunder excepted. Tenant shall also be required to remove the Required
Removables  in  accordance  with Article  VIII. If Tenant fails to remove any of
Tenant's  Property  within 2 days  after  the  termination  of this  Lease or of
Tenant's right to possession, Landlord, at Tenant's sole cost and expense, shall
be entitled (but not obligated) to remove and store Tenant's Property.  Landlord
shall not be responsible for the value,  preservation or safekeeping of Tenant's
Property.  Tenant  shall pay  Landlord,  upon  demand,  the expenses and storage
charges incurred for Tenant's Property.  In addition,  if Tenant fails to remove
Tenant's  Property  from the Premises or storage,  as the case may be, within 30
days  after  written  notice,  Landlord  may deem  all or any  part of  Tenant's
Property to be abandoned,  and title to Tenant's  Property shall be deemed to be
immediately vested in Landlord.

XXXI. Miscellaneous.

         A.       This Lease and the rights and obligations of the parties shall
                  be interpreted,  construed and enforced in accordance with the
                  Laws of the State of California and Landlord and Tenant hereby
                  irrevocably  consent to the  jurisdiction  and proper venue of
                  such state.  If any term or  provision  of this Lease shall to
                  any extent be invalid or unenforceable,  the remainder of this
                  Lease shall not be affected,  and each provision of this Lease
                  shall be valid and enforced to the fullest extent permitted by
                  Law.  The  headings and titles to the Articles and Sections of
                  this Lease are for  convenience  only and shall have no effect
                  on the interpretation of any part of the Lease.

         B.       Tenant shall not record this Lease or any  memorandum  without
                  Landlord's prior written consent.

         C.       Landlord and Tenant hereby waive any right to trial by jury in
                  any proceeding based upon a breach of this Lease.

         D.       Whenever a period of time is  prescribed  for the taking of an
                  action  by  Landlord  or  Tenant,  the  period of time for the
                  performance  of such action shall be extended by the number of
                  days that the performance is actually  delayed due to strikes,
                  acts of God,  shortages  of labor  or  materials,  war,  civil
                  disturbances and other causes beyond the reasonable control of
                  the performing  party ("Force  Majeure").  However,  events of
                  Force  Majeure  shall not  extend  any  period of time for the
                  payment of Rent or other sums  payable by either  party or any
                  period of time for the written  exercise of an option or right
                  by either party.

         E.       Landlord shall have the right to transfer and assign, in whole
                  or in part, all of its rights and obligations under this Lease
                  and in the Building  and/or Property  referred to herein,  and
                  upon such transfer Landlord shall be released from any further
                  obligations hereunder, and Tenant agrees to look solely to the
                  successor in interest of Landlord for the  performance of such
                  obligations.

         F.       Tenant  represents  that it has dealt  directly  with and only
                  with the  Broker as a broker in  connection  with this  Lease.
                  Tenant  shall  indemnify  and hold  Landlord  and the Landlord
                  Related Parties  harmless from all claims of any other brokers
                  claiming to have  represented  Tenant in connection  with this
                  Lease.  Landlord  agrees to indemnify  and hold Tenant and the
                  Tenant Related Parties harmless from all claims of any brokers
                  claiming to have represented  Landlord in connection with this
                  Lease.
<PAGE>

         G.       Tenant  covenants,  warrants  and  represents  that:  (1) each
                  individual  executing,  attesting and/or delivering this Lease
                  on  behalf  of  Tenant  is  authorized  to do so on  behalf of
                  Tenant;  (2) this Lease is binding upon Tenant; and (3) Tenant
                  is duly  organized  and  legally  existing in the state of its
                  organization  and is  qualified to do business in the State of
                  California.  If there is more than one Tenant, or if Tenant is
                  comprised  of more than one party or entity,  the  obligations
                  imposed upon Tenant shall be joint and several  obligations of
                  all the parties and entities. Notices, payments and agreements
                  given or made by, with or to any one person or entity shall be
                  deemed to have been given or made by, with and to all of them.

         H.       Time is of the essence  with  respect to Tenant's  exercise of
                  any expansion,  renewal or extension rights granted to Tenant.
                  This Lease shall create only the  relationship of landlord and
                  tenant  between  the  parties,  and not a  partnership,  joint
                  venture  or  any  other  relationship.   This  Lease  and  the
                  covenants and conditions in this Lease shall inure only to the
                  benefit of and be binding  only upon  Landlord  and Tenant and
                  their permitted successors and assigns.

         I.       The  expiration  of the  Term,  whether  by  lapse  of time or
                  otherwise,  shall not relieve either party of any  obligations
                  which  accrued  prior to or which may continue to accrue after
                  the  expiration or early  termination  of this Lease.  Without
                  limiting  the scope of the prior  sentence,  it is agreed that
                  Tenant's  obligations under Sections IV.A,  IV.B.,  VIII, XIV,
                  XX,  XXV  and  XXX  shall  survive  the  expiration  or  early
                  termination of this Lease.

         J.       Landlord  has  delivered  a copy of this  Lease to Tenant  for
                  Tenant's  review  only,  and  the  delivery  of  it  does  not
                  constitute  an offer to Tenant or an option.  This Lease shall
                  not be  effective  against any party  hereto until an original
                  copy of this Lease has been signed by such party.

         K.       All understandings and agreements  previously made between the
                  parties are  superseded  by this Lease,  and neither  party is
                  relying upon any  warranty,  statement or  representation  not
                  contained in this Lease.  This Lease may be modified only by a
                  written agreement signed by Landlord and Tenant.

         L.       Tenant,  within 15 days after request,  shall provide Landlord
                  with a current financial  statement and such other information
                  as  Landlord  may  reasonably  request  in order  to  create a
                  "business profile" of Tenant and determine Tenant's ability to
                  fulfill its obligations under this Lease.  Landlord,  however,
                  shall not require  Tenant to provide such  information  unless
                  Landlord is requested to produce the information in connection
                  with a  proposed  financing  or  sale  of the  Building.  Upon
                  written  request  by  Tenant,  Landlord  shall  enter  into  a
                  commercially reasonable confidentiality agreement covering any
                  confidential information that is disclosed by Tenant.

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

XXXII. Entire Agreement.

         This Lease and the following  exhibits and  attachments  constitute the
entire  agreement  between the parties and  supersede all prior  agreements  and
understandings related to the Premises,  including all lease proposals,  letters
of intent and other  documents:  Exhibit A (Outline and  Location of  Premises),
Exhibit B (Rules and Regulations),  Exhibit C (Commencement  Letter),  Exhibit D
(Work Letter Agreement) and Exhibit E (Asbestos Notification).

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

                                    LANDLORD:

          120 MONTGOMERY ASSOCIATES, LLC, a California limited liability company

          By:      Cornerstone  Holdings,  LLC,  a  Delaware  limited  liability
                   company, its managing member

                   By:      EOP  Operating  Limited   Partnership,   a  Delaware
                            limited partnership, its sole member

                   By:      Equity Office  Properties Trust, a Maryland
                            real estate  investment  trust, its general
                            partner

                                                By:     _______________________

                                                Name:   _______________________

                                                Title:  _______________________



                                     TENANT:

                    PLM FINANCIAL SERVICES, INC a Delaware corporation

                                         By:       _____________________________

                                         Name:     _____________________________

                                         Title:    _____________________________


                                         By:       _____________________________

                                         Name:     _____________________________

                                         Title:    _____________________________


<PAGE>

                                       A-1

                                    EXHIBIT A

                        OUTLINE AND LOCATION OF PREMISES

         This  Exhibit is  attached  to and made a part of the Lease dated as of
the _____ day of _____________,  2001, by and between 120 MONTGOMERY ASSOCIATES,
LLC, a California  limited  liability  company  ("Landlord")  and PLM  FINANCIAL
SERVICES,  INC.,  a Delaware  corporation  ("Tenant")  for space in the Building
located at 120 Montgomery Street, San Francisco, California.

<PAGE>

                                       B-3

                                    EXHIBIT B

                         BUILDING RULES AND REGULATIONS

         The following rules and regulations shall apply,  where applicable,  to
the Premises,  the Building,  the parking  garage (if any), the Property and the
appurtenances. Capitalized terms have the same meaning as defined in the Lease.

1.       Sidewalks,  doorways,  vestibules,  halls,  stairways and other similar
         areas  shall not be  obstructed  by  Tenant  or used by Tenant  for any
         purpose  other than  ingress  and egress to and from the  Premises.  No
         rubbish, litter, trash, or material shall be placed, emptied, or thrown
         in those areas.  At no time shall Tenant permit  Tenant's  employees to
         loiter in Common Areas or elsewhere about the Building or Property.

2.       Plumbing  fixtures and  appliances  shall be used only for the purposes
         for which designed, and no sweepings, rubbish, rags or other unsuitable
         material  shall be  thrown or placed  in the  fixtures  or  appliances.
         Damage  resulting  to fixtures  or  appliances  by Tenant,  its agents,
         employees or invitees,  shall be paid for by Tenant, and Landlord shall
         not be responsible for the damage.

3.       No signs,  advertisements  or  notices  shall be  painted or affixed to
         windows,  doors or other parts of the  Building,  except  those of such
         color,  size, style and in such places as are first approved in writing
         by  Landlord.  All  tenant  identification  and  suite  numbers  at the
         entrance to the Premises  shall be  installed by Landlord,  at Tenant's
         cost and expense, using the standard graphics for the Building.  Except
         in  connection  with  the  hanging  of  lightweight  pictures  and wall
         decorations,  no nails, hooks or screws shall be inserted into any part
         of  the  Premises  or  Building  except  by  the  Building  maintenance
         personnel.

4.       Landlord  will  provide and maintain in the first floor (main lobby) of
         the Building an alphabetical  directory board or other directory device
         listing  tenants,  and no other  directory  shall be  permitted  unless
         previously consented to by Landlord in writing.

5.       Tenant  shall not  place any  lock(s)  on any door in the  Premises  or
         Building  without  Landlord's  prior written consent and Landlord shall
         have the  right to  retain  at all  times  and to use keys to all locks
         within and into the Premises.  A reasonable number of keys to the locks
         on the entry doors in the  Premises  shall be  furnished by Landlord to
         Tenant at Tenant's cost, and Tenant shall not make any duplicate  keys.
         All keys shall be  returned  to  Landlord  at the  expiration  or early
         termination of this Lease.

6.       All   contractors,   contractor's   representatives   and  installation
         technicians  performing  work  in the  Building  shall  be  subject  to
         Landlord's  prior  approval  and  shall  be  required  to  comply  with
         Landlord's standard rules, regulations,  policies and procedures, which
         may be revised from time to time.

7.       Movement in or out of the Building of furniture or office equipment, or
         dispatch or receipt by Tenant of merchandise or materials requiring the
         use of elevators,  stairways,  lobby areas or loading dock areas, shall
         be  restricted  to hours  designated  by Landlord.  Tenant shall obtain
         Landlord's  prior  approval  by  providing  a  detailed  listing of the
         activity.  If approved by  Landlord,  the  activity  shall be under the
         supervision  of  Landlord  and  performed  in the  manner  required  by
         Landlord. Tenant shall assume all risk for damage to articles moved and
         injury  to any  persons  resulting  from the  activity.  If  equipment,
         property,  or personnel of Landlord or of any other party is damaged or
         injured as a result of or in connection with the activity, Tenant shall
         be solely liable for any resulting damage or loss.

8.       Landlord shall have the right to approve the weight,  size, or location
         of heavy equipment or articles in and about the Premises. Damage to the
         Building by the  installation,  maintenance,  operation,  existence  or
         removal  of  Tenant's  Property  shall be  repaired  at  Tenant's  sole
         expense.

9.       Corridor doors, when not in use, shall be kept closed.
<PAGE>

10.      Tenant shall not:  (1) make or permit any  improper,  objectionable  or
         unpleasant noises or odors in the Building,  or otherwise  interfere in
         any way with other tenants or persons  having  business with them;  (2)
         solicit  business or  distribute,  or cause to be  distributed,  in any
         portion of the  Building,  handbills,  promotional  materials  or other
         advertising;  or (3) conduct or permit other activities in the Building
         that might, in Landlord's sole opinion, constitute a nuisance.

11.      No  animals,  except  those  assisting  handicapped  persons,  shall be
         brought into the Building or kept in or about the Premises.

12.      No inflammable,  explosive or dangerous  fluids or substances  shall be
         used or kept by Tenant in the Premises, Building or about the Property.
         Tenant shall not, without Landlord's prior written consent, use, store,
         install,  spill,  remove,  release or dispose  of,  within or about the
         Premises or any other portion of the Property, any  asbestos-containing
         materials or any solid,  liquid or gaseous material now or subsequently
         considered toxic or hazardous under the provisions of 42 U.S.C. Section
         9601 et seq. or any other applicable environmental Law which may now or
         later be in effect. Tenant shall comply with all Laws pertaining to and
         governing the use of these materials by Tenant, and shall remain solely
         liable for the costs of abatement and removal.

13.      Tenant  shall not use or occupy the  Premises  in any manner or for any
         purpose  which  might  injure the  reputation  or impair the present or
         future value of the Premises or the Building.  Tenant shall not use, or
         permit any part of the Premises to be used,  for  lodging,  sleeping or
         for any illegal purpose.

14.      Tenant shall not take any action which would violate  Landlord's  labor
         contracts  or  which  would  cause a work  stoppage,  picketing,  labor
         disruption  or  dispute,  or  interfere  with  Landlord's  or any other
         tenant's or  occupant's  business or with the rights and  privileges of
         any person lawfully in the Building ("Labor Disruption").  Tenant shall
         take the actions necessary to resolve the Labor  Disruption,  and shall
         have  pickets  removed  and,  at the request of  Landlord,  immediately
         terminate  any  work  in the  Premises  that  gave  rise  to the  Labor
         Disruption,  until Landlord  gives its written  consent for the work to
         resume.  Tenant shall have no claim for damages against Landlord or any
         of the Landlord Related Parties, nor shall the Commencement Date of the
         Term be extended as a result of the above actions.

15.      Tenant shall not install, operate or maintain in the Premises or in any
         other area of the Building,  electrical  equipment  that would overload
         the  electrical  system  beyond its capacity for proper,  efficient and
         safe  operation  as  determined  solely by  Landlord.  Tenant shall not
         furnish  cooling  or  heating  to  the  Premises,   including,  without
         limitation,  the use of  electronic  or gas  heating  devices,  without
         Landlord's  prior written  consent.  Tenant shall not use more than its
         proportionate  share of  telephone  lines and  other  telecommunication
         facilities available to service the Building.

16.      Tenant  shall not  operate  or permit  to be  operated  a coin or token
         operated  vending  machine  or  similar  device   (including,   without
         limitation, telephones, lockers, toilets, scales, amusement devices and
         machines for sale of  beverages,  foods,  candy,  cigarettes  and other
         goods),   except  for  machines  for  the  exclusive  use  of  Tenant's
         employees, and then only if the operation does not violate the lease of
         any other tenant in the Building.

17.      Bicycles and other vehicles are not permitted inside the Building or on
         the  walkways  outside  the  Building,  except in areas  designated  by
         Landlord.

18.      Landlord  may from time to time adopt  systems and  procedures  for the
         security and safety of the  Building,  its  occupants,  entry,  use and
         contents.  Tenant,  its  agents,  employees,  contractors,  guests  and
         invitees shall comply with Landlord's systems and procedures.

19.      Landlord  shall have the right to  prohibit  the use of the name of the
         Building  or any other  publicity  by Tenant  that in  Landlord's  sole
         opinion may impair the reputation of the Building or its  desirability.
         Upon  written  notice from  Landlord,  Tenant  shall  refrain  from and
         discontinue such publicity immediately.

20.      Tenant shall not canvass, solicit or peddle in or about the Building or
         the Property.
<PAGE>

21.      Neither  Tenant  nor its  agents,  employees,  contractors,  guests  or
         invitees shall smoke or permit smoking in the Common Areas,  unless the
         Common Areas have been declared a designated  smoking area by Landlord,
         nor shall the above  parties  allow smoke from the  Premises to emanate
         into the Common Areas or any other part of the Building. Landlord shall
         have the right to designate the Building  (including the Premises) as a
         non-smoking building.

22.      Landlord shall have the right to designate and approve  standard window
         coverings  for the Premises  and to establish  rules to assure that the
         Building presents a uniform exterior  appearance.  Tenant shall ensure,
         to the extent reasonably practicable,  that window coverings are closed
         on windows in the Premises while they are exposed to the direct rays of
         the sun.

23.      Deliveries to and from the Premises shall be made only at the times, in
         the areas and through the entrances  and exits  designated by Landlord.
         Tenant  shall not make  deliveries  to or from the Premises in a manner
         that might  interfere  with the use by any other tenant of its premises
         or of the  Common  Areas,  any  pedestrian  use,  or any use  which  is
         inconsistent with good business practice.

24.      The work of cleaning  personnel  shall not be hindered by Tenant  after
         5:30 P.M.,  and cleaning  work may be done at any time when the offices
         are vacant.  Windows,  doors and  fixtures  may be cleaned at any time.
         Tenant shall provide adequate waste and rubbish  receptacles to prevent
         unreasonable hardship to the cleaning service.
<PAGE>

                                       C-1

                                    EXHIBIT C

                               COMMENCEMENT LETTER

                                    (EXAMPLE)

Date              ______________________

Tenant            PLM FINANCIAL SERVICES, INC.
Address           ______________________

Re:      Commencement  Letter with respect to that certain Lease dated as of the
         _____  day  of   __________,   2001,  by  and  between  120  MONTGOMERY
         ASSOCIATES,  LLC, a California limited liability company,  as Landlord,
         and PLM FINANCIAL SERVICES,  INC., a Delaware  corporation,  as Tenant,
         for  3,563  rentable  square  feet on the 13th  floor  of the  Building
         located at 120 Montgomery Street, San Francisco, California.

Dear     __________________:

         In accordance  with the terms and  conditions  of the above  referenced
Lease, Tenant accepts possession of the Premises and agrees:

         1.       The Commencement Date of the Lease is _______________________;

         2.       The Termination Date of the Lease is ________________________.

         Please  acknowledge  your acceptance of possession and agreement to the
terms set forth above by signing all 3 counterparts of this Commencement  Letter
in the  space  provided  and  returning  2  fully  executed  counterparts  to my
attention.

Sincerely,

-----------------------------------
Property Manager

Agreed and Accepted:


         Tenant:           PLM FINANCIAL SERVICES, INC.

         By:               ______________________
         Name:             ______________________
         Title:            ______________________
         Date:             ______________________

<PAGE>
                                       D-2

                                    EXHIBIT D

                                   WORK LETTER

         This  Exhibit is  attached  to and made a part of the Lease dated as of
the _____ day of _____________,  2001, by and between 120 MONTGOMERY ASSOCIATES,
LLC, a California  limited  liability  company  ("Landlord")  and PLM  FINANCIAL
SERVICES,  INC.,  a Delaware  corporation  ("Tenant")  for space in the Building
located at 120 Montgomery Street, San Francisco, California.

As used in this Workletter, the "Premises" shall be deemed to mean the Premises,
as initially defined in the attached Lease.

1.       Landlord,  at its sole  cost and  expense  (subject  to the  terms  and
         provisions  of  Section  2 below)  shall  perform  improvements  to the
         Premises in accordance  with the following  work list (the  "Worklist")
         using  Building   standard   methods,   materials  and  finishes.   The
         improvements  to be  performed  in  accordance  with the  Worklist  are
         hereinafter  referred to as the "Landlord  Work".  Landlord shall enter
         into a direct contract for the Landlord Work with a general  contractor
         selected by  Landlord.  In addition,  Landlord  shall have the right to
         select and/or approve of any subcontractors used in connection with the
         Landlord Work.

                                    WORK LIST

(a)      Landlord  shall  paint  Premises  with  building  standard  methods and
         materials;  and (b)  Landlord  shall  steam  clean  the  carpet  in the
         Premises with building standard methods.

2.       All other work and upgrades,  subject to Landlord's approval,  shall be
         at Tenant's sole cost and expense,  plus any applicable  state sales or
         use tax thereon,  payable upon demand as Additional Rent.  Tenant shall
         be  responsible  for any Tenant  Delay in  completion  of the  Premises
         resulting from any such other work and upgrades  requested or performed
         by Tenant.

3.       Landlord's  supervision  or performance of any work for or on behalf of
         Tenant shall not be deemed to be a representation by Landlord that such
         work complies with applicable insurance  requirements,  building codes,
         ordinances,  laws or regulations or that the  improvements  constructed
         will be adequate for Tenant's use.

4.       This Exhibit  shall not be deemed  applicable to any  additional  space
         added to the Premises at any time or from time to time,  whether by any
         options under the Lease or otherwise, or to any portion of the original
         Premises or any  additions to the Premises in the event of a renewal or
         extension  of the  original  Term of the Lease,  whether by any options
         under the Lease or otherwise, unless expressly so provided in the Lease
         or any amendment or supplement to the Lease.

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

                                    LANDLORD:

         120 MONTGOMERY ASSOCIATES, LLC, a California limited liability company

         By:      Cornerstone  Holdings,  LLC,  a  Delaware  limited  liability
                  company, its managing member

         By:      EOP  Operating  Limited   Partnership,   a  Delaware
                  limited partnership, its sole member

                            By:      Equity Office  Properties Trust, a Maryland
                                     real estate  investment  trust, its general
                                     partner

                                     By:     _______________________

                                     Name:   _______________________

                                     Title:  _______________________



                                     TENANT:

                    PLM FINANCIAL SERVICES, INC., a Delaware corporation
                             By:      _____________________________
                             Name:    _____________________________
                             Title:   _____________________________


                             By:      _____________________________
                             Name: _____________________________
                             Title: _____________________________
<PAGE>

                                       F-2

                                    EXHIBIT E

                              ASBESTOS NOTIFICATION

         This  Exhibit is  attached  to and made a part of the Lease dated as of
the _____ day of _____________,  2001, by and between 120 MONTGOMERY ASSOCIATES,
LLC, a California  limited  liability  company  ("Landlord")  and PLM  FINANCIAL
SERVICES,  INC., a Delaware  ("Tenant") for space in the Building located at 120
Montgomery Street, San Francisco, California.

In accordance with  California law (Health & Safety Code Section 25915),  we are
writing  to  provide   you  with   information   concerning   the   presence  of
asbestos-containing construction materials ("ACM") in your building. This notice
describes  the location of these  materials  and  requests  your  assistance  in
following proper handling  procedures and in reporting any  deterioration in the
condition of these materials that you may notice.

In 1987,  Versar  Inc.,  a  professional  asbestos  consultant,  was retained to
determine  whether ACM was present in the Building.  the survey was completed in
May 1987 and concluded that asbestos was present in fireproofing  sprayed on the
structural  steel,  and in some  of the  floor  and  ceiling  tiles,  acoustical
plaster, pipe insulation, cooling tower panels, and equipment insulation located
in the Building.

The  Versar  Study  concluded  that  sprayed-on  structural  steel  fireproofing
containing  some asbestos was present on the first floor of the  Building.  Some
ACM was also present in insulation around pipes and ducts and on the exterior of
equipment in the  mechanical  areas of the Building.  Outside of the  mechanical
equipment areas,  most pipes and ducts are concealed within shafts,  wet columns
and sub-ceilings.  Only insulated water pipes and the insulated fire system pipe
are found  outside of shafts and only the latter is  accessible  to the  general
Building population. Finally, some of the floor tiles contain asbestos and there
may be some ceiling  tiles and some plaster and lath on core ceilings that might
be considered ACM. The removal of ACM identified on the 1st, 16th, 21st, 5th and
7th floors has been completed.

Because any  alterations in the Building could disturb ACM and possibly  release
asbestos  fibers into the air, the  inhalation  of which could  present a health
hazard, we must require that you contact the Building Management Office at (415)
981-5127,  for detailed asbestos handling  procedures and to obtain our approval
prior to beginning such projects.  This includes  major  alterations,  but might
also  include  such  activities  as  drilling  holes,   installing   electrical,
telecommunication  or computer lines, sanding floors, or removing ceiling tiles.
In many cases, such activities will not affect asbestos materials,  but you must
check with us in advance, just in case. In addition, please contact the Building
Management Office if you notice any deterioration in the condition of the ACM.

It is common  knowledge  that  exposure to  asbestos  may cause  development  of
certain diseases, including cancer and lung disease. However, because we are not
physicians, scientists or industrial hygienists, we have no special knowledge of
the health impact of exposure to the asbestos  located in the  Building.  If you
have any concerns about the health effects of asbestos exposure,  we urge you to
contact the State or Federal Occupational Safety and Health Administration,  the
California  State  Department  of Health  Services or the San  Francisco  County
Department of Health Services for more information.

The results of all of our existing asbestos surveys, test results and monitoring
data,  including  descriptions of the laboratory  testing methods employed,  are
available for your review and  photocopying in the Building  Management  Office,
Suite 1280, during regular working hours upon request.  If you would like to see
these  materials,  please make an appointment with the building manager at (415)
981-5127,  at least two working  days in advance.  Because we are not experts in
the area of asbestos  testing and  abatement,  we make no  warranties  as to the
contents of the consultants'  reports or the methods employed by the consultants
or the accuracy of the survey or test results or any other matters.

Please  be aware  that you will be  responsible  for  complying  with all  legal
requirements  for notifying  your own  employees,  contractors,  subtenants  and
agents, if any, of the information contained in this notice.
<PAGE>

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

                                    LANDLORD:

          120 MONTGOMERY ASSOCIATES, LLC, a California limited liability company

          By:      Cornerstone  Holdings,  LLC,  a  Delaware  limited  liability
                   company, its managing member

          By:      EOP  Operating  Limited   Partnership,   a  Delaware
                   limited partnership, its sole member

          By:      Equity Office  Properties Trust, a Maryland

                   real estate  investment  trust, its general
                   partner

                                                 By:     _______________________

                                                 Name:   _______________________

                                                 Title:  _______________________



                                     TENANT:

                    PLM FINANCIAL SERVICES, INC., a Delaware corporation

                       By:      _____________________________
                       Name:    _____________________________
                       Title:   _____________________________


                       By:      _____________________________
                       Name:    _____________________________
                       Title:   _____________________________




</TEXT>
</DOCUMENT>
