10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x Quarterly report pursuant to Section 13 and 15 (d) of the Securities Exchange Act of 1934

For the quarterly period ended July 1, 2005

or

¨ Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the transition period from              to             

Commission file number 0-27248

Learning Tree International, Inc.

(Exact name of registrant as specified in its charter)

Delaware	95-3133814
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer identification No.)

6053 West Century Boulevard, Los Angeles,	CA 90045
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (310) 417-9700

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  x    No  ¨

The number of shares of common stock, $.0001 par value, outstanding as of July 29, 2005, is 16,759,635 shares.

Total number of pages 21

LEARNING TREE INTERNATIONAL, INC.

FORM 10-Q

TABLE OF CONTENTS

		Page
Part I—Financial Information		3
Item 1.	Unaudited Financial Statements:	3
	Condensed Consolidated Balance Sheets as of July 1, 2005 (unaudited) and October 1, 2004	3
	Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended July 1, 2005 and July 2, 2004	4
	Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended July 1, 2005 and July 2, 2004	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4.	Controls and Procedures	19
Part II—Other Information		20
Item 1.	Legal Proceedings	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Submission of Matters to a Vote of Security Holders	20
Item 5.	Other Information	20
Item 6.	Exhibits	20
Signatures		21

2

PART I - FINANCIAL INFORMATION

Item 1. UNAUDITED FINANCIAL STATEMENTS

LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	July 1, 2005		October 1, 2004
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	75,446	$	83,913
Trade accounts receivable, net		15,299		12,902
Prepaid income taxes		2,901		3,791
Prepaid expenses and other		5,515		4,337
Prepaid marketing expenses		720		814
Total current assets		99,881		105,757
Equipment, property and leasehold improvements, net		19,493		20,811
Long-term interest-bearing investments		8,772		8,929
Deferred income taxes		462		878
Other assets		1,269		1,059
Total assets	$	129,877	$	137,434
LIABILITIES
Current liabilities:
Trade accounts payable	$	9,062	$	12,570
Deferred revenue		45,361		46,847
Accrued liabilities		6,013		5,751
Income taxes payable		527		286
Total current liabilities		60,963		65,454
Deferred income taxes		675		550
Deferred facilities rent		2,013		2,887
Total liabilities		63,651		68,891
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Preferred Stock, $.0001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding		—		—
Common Stock, $.0001 par value, 75,000,000 shares authorized, 16,760,000 and 16,989,000 shares issued and outstanding, respectively		2		2
Additional paid-in capital		—		9
Cumulative foreign currency translation adjustment		226		626
Retained earnings		65,998		67,906
Total stockholders’ equity		66,226		68,543
Total liabilities and stockholders’ equity	$	129,877	$	137,434

See accompanying notes to unaudited condensed consolidated financial statements.

3

LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

	Three Months Ended						Nine Months Ended
	July 1, 2005			July 2, 2004			July 1, 2005			July 2, 2004
Revenues	$	40,474		$	39,139		$	115,100		$	114,735
Cost of revenues		20,406			18,518			57,674			55,400
Gross profit		20,068			20,621			57,426			59,335
Operating expenses:
Course development		2,028			2,066			5,843			6,141
Sales and marketing		11,421			12,791			32,657			36,672
General and administrative		5,959			5,921			18,956			17,732
		19,408			20,778			57,456			60,545
Income (loss) from operations		660			(157	)		(30	)		(1,210	)
Other income (expense):
Interest income		674			322			1,779			1,020
Foreign exchange		(43	)		(58	)		(127	)		524
Other		7			(4	)		120			218
		638			260			1,772			1,762
Income before income taxes		1,298			103			1,742			552
Provision for income taxes		432			37			580			196
Net income	$	866		$	66		$	1,162		$	356
Earnings per common share - basic	$	0.05		$	0.00		$	0.07		$	0.02
Earnings per common share - diluted	$	0.05		$	0.00		$	0.07		$	0.02
Weighted average shares outstanding - basic		16,834,000			17,022,000			16,910,000			17,056,000
Weighted average shares outstanding - diluted		16,834,000			17,031,000			16,913,000			17,088,000

See accompanying notes to unaudited condensed consolidated financial statements.

4

LEARNING TREE INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	For the Nine Months Ended
	July 1, 2005			July 2, 2004
Cash flows—operating activities:
Net income	$	1,162		$	356
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		4,974			4,941
Gain on liquidation of investment in Collegis, Inc		(126	)		(203	)
Unrealized foreign exchange gains		(40	)		(531	)
Losses on disposals of equipment and leasehold improvements		25			31
Loss related to subleasing		67			—
Change in operating assets and liabilities:
Trade accounts receivable		(2,557	)		(1,873	)
Prepaid marketing and other expenses		(1,223	)		2,359
Deferred facilities rent expenses		(309	)		(289	)
Income taxes		494			(728	)
Trade accounts payable and other liabilities		(2,366	)		(1,126	)
Deferred revenue		(1,093	)		(4,284	)
Net cash used in operating activities		(992	)		(1,347	)
Cash flows—investing activities:
Purchases of equipment, property and leasehold improvements, net of dispositions		(3,826	)		(4,980	)
Liquidation of investment in Collegis, Inc		—			1,203
Other, net		(243	)		(157	)
Net cash used in investing activities		(4,069	)		(3,934	)
Cash flows—financing activities:
Repurchases of common stock		(3,084	)		(2,582	)
Proceeds from exercise of stock options		—			445
Net cash used in financing activities		(3,084	)		(2,137	)
Effects of exchange rates on cash		(322	)		2,010
Net decrease in cash and cash equivalents		(8,467	)		(5,408	)
Cash and cash equivalents at the beginning of the period		83,913			86,711
Cash and cash equivalents at the end of the period	$	75,446		$	81,303

See accompanying notes to unaudited condensed consolidated financial statements.

5

LEARNING TREE INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Note 1. Operations and Significant Accounting Policies:

The accompanying unaudited condensed consolidated financial statements have been prepared by Learning Tree International, Inc. (“Learning Tree”) pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such regulations. The unaudited condensed consolidated financial statements reflect all adjustments and disclosures which are, in the opinion of management, necessary for a fair presentation, and all such adjustments are of a normal recurring nature. The unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended October 1, 2004 that are contained in Learning Tree’s 2004 Annual Report on Form 10-K. Learning Tree’s business is subject to substantial risk and fluctuations in earnings. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

In fiscal 2004, Learning Tree adopted a 52- or 53-week fiscal year, by changing its year-end date from September 30th to the Friday nearest the end of September. Thus, these unaudited condensed consolidated financial statements report Learning Tree’s financial position as of July 1, 2005 and October 1, 2004, and its results of operations for the three and nine months ended July 1, 2005 and July 2, 2004 and cash flows for the nine months ended July 1, 2005 and July 2, 2004, respectively.

Note 2. Computation of Basic and Diluted Earnings per Common Share:

Earnings per common share (basic) and earnings per common share assuming dilution (diluted) are computed using the weighted average number of shares of Common Stock outstanding during the period. Diluted earnings per common share are computed by including the dilutive effect, if any, of all outstanding options to purchase Common Stock using the treasury stock method. To calculate the number of diluted shares outstanding, 3,000 shares and 32,000 shares were added to the weighted average number of shares outstanding for the nine-month periods ended July 1, 2005 and July 2, 2004, respectively. For the third quarter of fiscal 2005 and 2004, approximately 1,878,000 and 1,629,000 stock options, respectively, were excluded from the calculation of diluted earnings per common share because they were antidilutive.

6

	Three Months Ended				Nine Months Ended
	July 1, 2005		July 2, 2004		July 1, 2005		July 2, 2004
Components of Basic and Diluted Earnings Per Share
Numerator:
Net income	$	866	$	66	$	1,162	$	356
Denominator:
Basic EPS weighted-average shares outstanding		16,834,000		17,022,000		16,910,000		17,056,000
Diluted effect of assumed conversion of stock options		0		9,000		3,000		32,000
Diluted EPS adjusted weighted-average shares outstanding		16,834,000		17,031,000		16,913,000		17,088,000
Earnings Per Share:
Basic	$	.05	$	.00	$	.07	$	.02
Diluted	$	.05	$	.00	$	.07	$	.02

Note 3. Repurchase of Company Stock:

During the third quarter of fiscal 2005, Learning Tree repurchased approximately 101,200 shares of its Common Stock on the open market at a total cost of $1.2 million bringing the total shares repurchased during fiscal 2005 to 229,250 at a total cost of $3.1 million. Learning Tree may make additional purchases through open-market transactions, but has no commitments to do so.

Note 4. Employee Stock Options:

Learning Tree uses the intrinsic value method under APB Opinion No. 25 “Accounting for Stock Issued to Employees,” in accounting for its stock option plans. The exercise price of all stock options granted under Learning Tree’s stock option plans was equal to their fair market value at the dates of the grants. Accordingly, during the first nine months of fiscal 2005 and 2004, compensation cost was not recognized for stock options granted to employees. Had compensation cost for all options been determined based upon the estimated fair value at the quoted market value of the Company’s Common Stock of the grant date (calculated using the Black-Scholes option-pricing model) in accordance with SFAS No. 123 “Accounting for Stock-Based Compensation,” the Company’s net income (loss) and earnings (loss) per common share would have been reduced to the pro forma amounts below:

	Three Months Ended						Nine Months Ended
	July 1, 2005			July 2, 2004			July 1, 2005			July 2, 2004
Net income, as reported	$	866		$	66		$	1,162		$	356
Less: stock-based employee compensation cost, at estimated fair value, net of tax		(66	)		(412	)		(828	)		(1,287	)
Pro forma net income (loss)	$	800		$	(346	)	$	334		$	(931	)
As reported:
Earnings per common share - basic	$	.05		$	.00		$	.07		$	.02
Earnings per common share - diluted	$	.05		$	.00		$	.07		$	.02
Pro forma:
Earnings (loss) per common share - basic	$	.05		$	(.02	)	$	.02		$	(.05	)
Earnings (loss) per common share - diluted	$	.05		$	(.02	)	$	.02		$	(.05	)

7

In January 2005, Learning Tree’s Board of Directors approved acceleration of vesting for all stock options that began on or before April 1, 2002. This action affected unvested options to purchase an aggregate of 373,025 shares of Common Stock at exercise prices per share of between $20.92 and $27.65, all of which were scheduled to vest by April 2006. No other terms for such stock options were modified. The Board of Directors took this action to reduce administrative and financial and accounting issues associated with monitoring the vesting of options with exercise prices which were significantly above Learning Tree’s current stock prices.

In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123 (revised 2004) (“SFAS 123R”), “Share-Based Payment”. SFAS 123R requires that the cost resulting from all share-based payment transactions, including employee stock options, be recognized in the financial statements using a fair-value-based method. The statement replaces SFAS 123, supersedes APB 25, and amends SFAS No. 95, “Statement of Cash Flows”. SFAS 123R also requires the excess tax benefit of stock options to be classified as an operating cash flow. In April 2005, the Securities and Exchange Commission deferred the adoption of SFAS 123R until the beginning of the first fiscal year that begins after June 15, 2005. Consistent with the amendment, Learning Tree will adopt SFAS 123R in the first quarter of fiscal 2006.

While Learning Tree continues to evaluate the effect of SFAS 123R on its financial statements, Learning Tree believes that the effect in fiscal 2006 will be somewhat less than its historical pro forma disclosure under SFAS 123 due to the effect of the acceleration of stock option vesting discussed above.

Note 5. UK Subleases:

Since 1999, Learning Tree has been subletting space in its UK education center to two subtenants. The first of these subleases expired in fiscal 2004 and the second sublease expired in the second quarter of 2005. A substantial amount of the vacant space has been since sublet, and a sublease is currently under negotiation for the remaining vacant space. Learning Tree anticipated that in order to rent all of the vacant space it would need to provide certain rent concessions. Learning Tree’s total provision at the end of the third quarter amounted to approximately $1.1 million, which represented the net present value of the estimated difference between the net sublease rentals for this space and the related costs over the sublease periods. The reduction in the provision during the third quarter of $0.135 million resulted from net effect of an upward adjustment of $0.126 million and the amortization of the existing provision in the amount of $0.261 million. Included in this provision is $0.3 million for the vacant space currently under negotiation with future subtenants.

Learning Tree’s progress towards subleasing has significantly reduced its earlier risk of having a substantial amount of space vacant for a significant length of time. Assuming the remaining sublease is finalized under the current negotiated terms, it is expected that additional provisions will not be needed. However, for this remaining sublease, the actual vacancy period, the actual sublease rental rate and the actual duration of the sublease may be different from the estimates Learning Tree used in computing its provision, and the sublease under negotiation may not be executed. Should the remaining sublease not be concluded, the ongoing vacancy cost will approximate $0.192 million per quarter. Accordingly, Learning Tree will make further provisions in future quarters, as necessary.

8

Note 6. Income Taxes:

The income tax provision used both in the third quarter and for the nine months of fiscal 2005 reflects a 33.3% effective annual tax rate, which approximates Learning Tree’s expected 2005 full year effective tax rate. This effective tax rate takes into consideration all projected permanent differences. Learning Tree is not currently aware of any events or additional transactions that would result in a significant change to its effective tax rate.

Note 7. Comprehensive Income:

Comprehensive income is recorded in accordance with SFAS No. 130, “Reporting Comprehensive Income.” SFAS No. 130 established a standard for reporting and displaying other comprehensive income and its components within financial statements. The foreign currency translation adjustment is the only component of Learning Tree’s other comprehensive income.

	Three Months Ended					Nine Months Ended
	July 1, 2005			July 2, 2004		July 1, 2005			July 2, 2004
Net income	$	866		$	66	$	1,162		$	356
Foreign currency translation adjustments		(1,019	)		121		(400	)		1,129
Total comprehensive income	$	(153	)	$	187	$	762		$	1,485

9

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Except for historical statements, the matters addressed in the discussion which follows are forward-looking statements. Please do not put undue reliance on these forward-looking statements, since they are based on key assumptions about future risks and uncertainties. Although Learning Tree believes that its assumptions are reasonable, inevitably some will prove to be incorrect. As a result, Learning Tree’s actual future results can be expected to differ from those in the discussion that follows, and those differences may be material. Learning Tree does not undertake any obligation to update forward-looking statements.

In order to help the reader assess the major risks in Learning Tree’s business, Learning Tree has identified many, but not all, of these risks in Exhibit 99.1, “Risk Factors” to Learning Tree’s Annual Report on Form 10-K (“Exhibit 99.1”). Please read that exhibit carefully. Some of the factors discussed in Exhibit 99.1 that could affect Learning Tree include risks associated with:

• The timely development, introduction, and customer acceptance of Learning Tree’s courses;

• Competition;

• International operations, including currency fluctuations;

• Changing economic and market conditions;

• Technology development and new technology introduction;

• Efficient delivery and scheduling of Learning Tree’s courses;

• Adverse weather conditions, strikes, acts of war or terrorism and other external events; and

• Attracting and retaining qualified personnel.

OVERVIEW

Nature of the Business. Learning Tree is a leading worldwide vendor-independent provider of training to managers and information technology (“IT”) professionals working in business and government organizations. Approximately two-thirds of Learning Tree participants come from Fortune 1000-level companies, their international equivalents and government organizations, and approximately one-third come from small and medium-size companies.

Learning Tree offers a broad, proprietary library of intensive instructor-led courses from two to five days in length, comprising 139 different course titles representing over 3,400 hours of training at July 1, 2005. Learning Tree courses focus on web development, operating systems, programming languages, databases, computer networks, computer and network security, object-oriented technology, project management, leadership and professional development, and other key business skills. At the end of the third quarter Learning Tree offered 30 management courses.

The actual number of course titles that Learning Tree will execute, and their delivery dates, are subject to the rate of new technological developments and perceived customer demand. In general, titles are retired when the profits they generate are not sufficient to justify the ongoing cost of marketing them and maintaining their content. Thus, Learning Tree may or may not develop more titles than it retires in any period. Course development costs may increase in the future if Learning Tree expands its course library.

10

Learning Tree has structured its business so that the majority of its course costs are variable and depend primarily upon the number of course events conducted. Because Learning Tree’s instructors typically work full-time or as consultants in business and industry, or in the case of management instructors as industry consultants and facilitators, and teach Learning Tree course events as needed, Learning Tree’s instructor-related costs are largely variable. However, Learning Tree’s expenses associated with its own education centers and course equipment are largely fixed.

Learning Tree adjusts its expenditures for sales and marketing depending on its strategic objectives, which generally include an assessment of Learning Tree’s expectations for influencing future customer demand, market conditions and other factors. However, if Learning Tree’s expectations regarding the results of its marketing efforts prove to be wrong, any significant revenue shortfall would have a material adverse effect on Learning Tree’s results of operations.

Recent Trends. Over the past 30 years, Learning Tree has set the highest standards of excellence in educating and training IT professionals and managers from government and commercial customers around the world. Throughout its history, Learning Tree has grown, adapted and evolved its course library based on its customer needs, while continuing to advance the state-of-the art in its industry.

Learning Tree continues its tradition of excellence today by improving its core strengths: its expert instructors, proprietary content library, state-of-the-art classrooms and worldwide course delivery systems. During its third quarter of 2005, Learning Tree maintained its record high levels in its course participants’ evaluations of the quality of Learning Tree’s instructors and courses.

Learning Tree’s customers have responded positively to its recent increase in the breadth and depth of its management course offerings. Learning Tree believes that technical and non-technical managers are becoming increasingly aware of the need for training in project management, personal effectiveness, and other key business skills. Learning Tree intends to meet this demand by continuing to develop additional management course titles, based on feedback from Learning Tree’s customers. In the third quarter of fiscal 2005, Learning Tree offered 30 titles in its management curriculum, representing 22% of Learning Tree’s entire course library, compared to 27 titles, which represented 18% in the third quarter of 2004.

11

RESULTS OF OPERATIONS

The following table summarizes Learning Tree’s consolidated statements of operations for the periods indicated expressed as percentages of revenues:

	Three Months Ended				Nine Months Ended
	July 1, 2005		July 2, 2004		July 1, 2005		July 2, 2004
Revenues	100.0	%	100.0	%	100.0	%	100.0	%
Cost of revenues	50.4		47.3		50.1		48.3
Gross profit	49.6		52.7		49.9		51.7
Operating expenses:
Course development	5.0		5.3		5.1		5.4
Sales and marketing	28.2		32.7		28.4		32.0
General and administrative	14.7		15.1		16.4		15.4
Total operating expenses	47.9		53.1		49.9		52.8
Income (loss) from operations	1.7		(0.4	)	0.0		(1.1	)
Other income, net	1.5		0.7		1.6		1.6
Income before provision for income taxes	3.2		0.3		1.6		0.5
Provision for income taxes	1.1		0.1		0.5		0.2
Net income	2.1	%	0.2	%	1.1	%	0.3	%

In the third quarter of fiscal 2005, Learning Tree’s revenues were $40.5 million compared to $39.1 million for the corresponding quarter of fiscal 2004. Income from operations for the third quarter of fiscal 2005 was $0.7 million compared to a loss of $0.2 million for the same quarter of 2004. Net income for the third quarter of fiscal 2005 was $0.9 million compared to $0.1 million for the same quarter of 2004.

For the first nine months of fiscal 2005, Learning Tree’s revenues increased to $115.1 million from $114.7 million for the corresponding period of 2004. Loss from operations for the nine months of fiscal 2005 was $0.03 million versus a loss of $1.2 million for the same period of fiscal 2004. Net income for the first nine months of 2005 was $1.2 million compared to $0.4 million for the prior year nine months.

Revenues. The increase in Learning Tree’s revenues in the third quarter and in the first nine months of fiscal 2005 compared to the same periods in 2004 primarily reflect the net effect of changes in the number of course participants, partially offset by decreased revenues per attendee and the effect of changes in foreign exchange rates.

During the third quarter of 2005, Learning Tree trained 23,947 course participants, a 7% increase from the 22,471 participants that were trained in the same quarter last year. For the first nine months of fiscal 2005, Learning Tree trained 65,310 course participants, a 1% decrease from the prior year’s 65,769 course participants.

12

In the third quarter of fiscal 2005 and the first nine months, Learning Tree’s average revenue per attendee was 3% lower and 1% higher, respectively, than in the comparable periods of the prior fiscal year. However, excluding a 2% and 3% effect of changes in foreign exchange rates in the third quarter and in the first nine months of 2005 respectively, Learning Tree’s average revenue per attendee declined 5% in the third quarter and declined 3% in the nine month period. Excluding the effect of changes in exchange rates, the decline in average revenue per attendee was primarily due to an increase in the proportion of two- and three-day on-site course events for the newer titles in Learning Tree’s Management Course curriculum, which typically have lower average revenue per attendee than Learning Tree’s longer four- and five-day IT course titles and its older Management course titles.

Cost of Revenues. Learning Tree’s cost of revenues primarily includes the costs of course instructors and their travel and living expenses, course materials and equipment, freight, classroom facilities and refreshments.

The cost of revenues for the third quarter of fiscal 2005 was $20.4 million versus $18.5 million for the third quarter of fiscal 2004. For the first nine months of fiscal 2005, the cost of revenues was $57.7 million as compared to $55.4 million for the corresponding period of fiscal 2004. This increase primarily reflects the effect of changes in foreign exchange rates and higher education center expense, partially offset by a decline in instructor related expenses and other direct course costs.

During the third quarter of fiscal 2005, Learning Tree presented 1,982 events compared to 1,722 events conducted during the same period in fiscal 2004. For the first nine months of 2005, Learning Tree presented 5,367 events compared to 5,156 events during the corresponding period of 2004.

The cost of revenues increased to 50.4% and 50.1% for the three and nine month periods in fiscal 2005 from 47.3% and 48.3% for the corresponding periods in 2004, respectively. Changes in foreign exchange rates did not materially affect the gross profit percentages, since foreign exchange rate changes increased Learning Tree’s cost of revenues by approximately the same percentage as they increased revenues in the third quarter and first nine months of fiscal 2005.

Excluding the effect of foreign exchange rates, the increase in the cost of revenues as a percentage of revenues in the third quarter of fiscal 2005 reflects a 12% decrease in average revenue per event partially offset by a 6% decrease in average cost per event compared to the third quarter of fiscal 2004. For the first nine months of 2005, also excluding the effect of foreign exchange rates, the cost of revenues as a percentage of revenues reflects a 7% decrease in average revenue per event, partially offset by the effect of a 3% decrease in average cost per event compared to the same period in fiscal 2004.

In the third quarter of fiscal 2005, the decrease in average revenue per event, excluding the effect of foreign exchange rates, resulted from the decrease in average revenue per attendee discussed above and a slight decrease in average attendees per event compared to the prior fiscal year. For the nine months of fiscal 2005, the decrease in average revenue per event reflects a decrease in average attendees per event and the decrease in average revenue per attendee as discussed above.

The decrease in the average cost per event in the quarter, excluding the effect of foreign exchange rates, primarily reflects the shorter average course duration this year compared to the same period in the prior fiscal year, largely as a result of an increased proportion of management courses. The decline in average cost per event was also affected somewhat by the increased number of events Learning Tree held in the third quarter compared to the prior year, as the fixed component of its cost of revenues was spread over a larger number of events. For the first nine months of fiscal 2005, the decrease in average cost per event is primarily the result of lower instructor-related fees, course mix and other cost savings.

13

Course Development Expenses. Learning Tree maintains a disciplined process to develop new courses and update its existing courses. The costs incurred in that process, principally for internal product development staff and for subject matter experts, are expensed when incurred and are included in course development expenses.

During the three and nine months of 2005, course development expenses were 5.0% and 5.1% of revenues as compared to 5.3% and 5.4% in the same period of the prior year. Course development expenses in the third quarter of fiscal 2005 were $2.0 million, compared with $2.1 million in the third quarter of the prior year. For the nine months of fiscal 2005, course development expenses decreased to $5.8 million from $6.1 million in fiscal 2004. The decrease in the first nine months of fiscal 2005 primarily reflects lower author-related expenses.

Learning Tree’s library of instructor-led courses numbered 139 titles at the end of the third quarter of fiscal 2005 compared with 149 titles at the end of the third quarter of fiscal 2004. During the third quarter, Learning Tree retired one course title and introduced two new titles: “Oracle 10g: Backup, Recovery and Server Tuning: Hands-On” and “PHP for Web Development: Hands-On.”

Sales and Marketing Expenses. Sales and marketing expenses include salaries, commissions and travel-related costs for sales and marketing personnel, the costs of designing, producing and distributing direct mail marketing and media advertisements, and the costs of information systems to support these activities.

Sales and marketing expenses for the third quarter of 2005 were 28.2% of revenues, compared to 32.7% for the same quarter in 2004. For the first nine months of fiscal 2005, sales and marketing expenses were 28.4% of revenues, down from 32.0% in the same period of last year. Sales and marketing expenses totaled $11.4 million in the third quarter of fiscal 2005 compared with $12.8 million in the third quarter of the prior year. For the nine month period of fiscal 2005, sales and marketing expenses decreased to $32.7 million from $36.7 million in 2004. These decreases primarily reflect a reduction in the number of catalogs mailed from the elevated quantities mailed in the third quarter of fiscal 2004, as well as a reduction in the costs of producing the catalogs and the increase in sales personnel. Learning Tree also spent less in the third quarter and the first nine months of fiscal 2005 compared to the comparable periods last year on marketing activities other than the major mailing campaigns. These decreases were partially offset by the effect of changes in foreign exchange rates.

General and Administrative Expenses. General and administrative expenses for the third quarter of 2005 were 14.7% versus 15.1% of revenues compared with the same quarter of the prior year. For the first nine months of fiscal 2005, general and administrative expenses increased to 16.4% of revenues from 15.4% of revenues in the same period of the prior year. General and administrative expenses in the third quarter of this year increased to $6.0 million compared to $5.9 million in the third quarter of fiscal 2004. The increases in Learning Tree’s general and administrative expenses primarily reflect the combined effect of the cost of Learning Tree’s efforts to comply with Section 404 of the Sarbanes-Oxley Act, offset by the reduction in other employee related expenses and changes in foreign exchange rates.

In the nine-month period this year, general and administrative expenses increased to $19 million, up from $17.8 million for the corresponding period of fiscal 2004. The increases in general and administrative expenses primarily reflects the provisions Learning Tree has made related to the UK education center, as well as the annual compensation increase and other employee related expenses and changes in the foreign exchange rates.

14

As required by Section 404 of the Sarbanes-Oxley Act, Learning Tree’s first report on its internal controls over financial reporting and its independent auditors’ related attestation report will be included in Learning Tree’s fiscal 2005 Form 10-K filing. Like most companies, the costs to comply with the Section 404 requirements are significant. Excluding internal costs for Learning Tree employees assigned to the project, external costs for this project for the third quarter in fiscal 2005 were approximately $0.5 million, and were primarily for fees paid to an outside consulting firm. On a year to date basis, such costs have totaled $0.675 million.

In past filings with the Securities and Exchange Commission, Learning Tree has discussed the status of its efforts to sublease the vacant space in its London Education Center. Learning Tree also discussed the financial provisions made for expected costs due to short-term vacancies of some floors and the differential between Learning Tree’s primary lease costs and the estimated income from any subleases. A substantial amount of the vacant space has been since sublet, and a sublease for the remaining vacant space is currently under negotiation. Learning Tree anticipated that in order to rent all of the vacant space it would need to provide certain rent concessions. Learning Tree’s total provision at the end of the third quarter amounted to approximately $1.1 million, which represented the net present value of the estimated difference between the net sublease rentals for this space and the related costs over the sublease periods. The reduction in the provision during the third quarter of $0.135 million resulted from net effect of an upward adjustment of $0.126 million and the amortization of the existing provision in the amount of $0.261 million. Included in this provision is $0.3 million for the vacant space currently under negotiation with future subtenants.

Learning Tree’s progress towards subleasing has significantly reduced its earlier risk of having a substantial amount of space vacant for a significant length of time. Assuming the remaining sublease is finalized under the current negotiated terms, it is expected that additional provisions will not be needed. However, for this remaining sublease, the actual vacancy period, the actual sublease rental rate and the actual duration of the sublease may be different from the estimates Learning Tree used in computing its provision, and the sublease under negotiation may not be executed. Should the remaining sublease not be concluded, the ongoing vacancy cost will approximate $0.192 million per quarter. Accordingly, Learning Tree will make further provisions in future quarters, as necessary.

Other Income. Other income is principally comprised of interest income and foreign currency transaction gains and losses. For the third quarter of 2005, other income increased to $0.6 million, up from $0.3 million in 2004. For the nine-month period, other income remained constant at $1.8 million in each year. These effects of changes in foreign exchange rates was less than $0.1 million decrease in each quarter and amounted to a decrease of $0.1 million and an increase of $0.5 million for the nine month periods in 2005 and 2004, respectively. The increase in interest income to $1.8 million in the nine months this year from $1 million in 2004 primarily reflects higher interest rates.

Learning Tree recorded foreign exchange losses of $0.043 million in the third quarter of fiscal 2005 compared to foreign exchange losses of $0.058 million in the third quarter of fiscal 2004. For the first nine months of fiscal 2005, Learning Tree recorded foreign exchange losses of $0.1 million compared to foreign exchange gains of $0.524 million in the corresponding period of fiscal 2004. These transaction gains and losses arose from cash balances, receivables and payables denominated in currencies other than the functional currencies of Learning Tree’s foreign subsidiaries.

15

FLUCTUATIONS IN QUARTERLY RESULTS

Historically, Learning Tree’s quarterly operating results have fluctuated, and that is expected to continue in the future. The fluctuations may be caused by many factors such as: (i) the frequency of course events; (ii) the number of weeks during which courses can be conducted in a quarter; (iii) the timing, timely delivery, frequency and size of, and response to Learning Tree’s direct mail marketing and advertising campaigns; (iv) the timing of the introduction of new course titles; (v) the mix between course events held at customer sites and course events held in Learning Tree’s education centers and hotels due to differing gross profit margins; (vi) competitive forces within markets served by Learning Tree; (vii) Learning Tree’s ability to attract customers and meet their expectations; (viii) currency fluctuations and other risks inherent in international operations; (ix) natural disasters, external strikes, acts of war or terrorism and other external factors; (x) the timing of national holidays; and (xi) general economic conditions and industry-specific slowdowns. Fluctuations in quarter-to-quarter results also occur as a result of differences in the timing of Learning Tree’s spending on the marketing of its courses. In addition, the timing of Learning Tree’s spending on the development of its courses and other areas may also result, to a lesser extent, in quarter-to-quarter fluctuations. See Exhibit 99.1, “Risk Factors” to Learning Tree’s Annual Report on Form 10-K.

LIQUIDITY AND CAPITAL RESOURCES

Learning Tree’s cash and cash equivalents decreased to $75.4 million at July 1, 2005 from $83.9 million at October 1, 2004. This decrease primarily reflects investments in course and office equipment, expenditures for leasehold improvements, repurchases of Learning Tree’s Common Stock, the use of cash in operations, and the effects of foreign exchange.

During the third quarter of fiscal 2005, Learning Tree repurchased an additional 101,200 shares of its Common Stock on the open market at a total cost of $1.2 million. During the nine months ended July 1, 2005, Learning Tree repurchased 229,250 shares of its Common Stock on the open market at a total cost of $3.1 million. Learning Tree may make additional purchases through open-market transactions, but has no commitments to do so.

Cash used in operations for the first nine months of fiscal 2005 was $0.992 million compared to cash used in operations of $1.3 million in the first nine months of fiscal 2004. This decrease primarily reflects the timing of cash receipts and payments. At July 1, 2005, Learning Tree had a net working capital balance of $38.9 million.

During the first nine months of fiscal 2005, Learning Tree invested $3.9 million in equipment and facilities compared to $5 million in the first nine months of fiscal 2004. Although Learning Tree expects to continue to invest in additional equipment in fiscal 2005, Learning Tree had no material future purchase obligations, capital commitments or debt as of July 1, 2005. In the future, Learning Tree may use cash for acquisitions or other strategic transactions. While Learning Tree has no current agreements in place or negotiations underway with respect to any acquisition or other strategic transaction, Learning Tree may, on occasion, evaluate acquisition or other strategic opportunities that appear to fit within its overall business strategy. Learning Tree believes its cash and cash equivalents and the cash provided by its operations will be sufficient to meet its cash requirements for the foreseeable future.

16

CRITICAL ACCOUNTING POLICIES

Management’s discussion and analysis of Learning Tree’s financial condition and results of operations is based upon Learning Tree’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Learning Tree’s significant accounting policies are more fully described in Note 1 of “Notes to Consolidated Financial Statements” to Learning Tree’s Annual Report on Form 10-K.

OUTLOOK FOR FISCAL 2005

Throughout this document, there have been various forward-looking statements. However, all of the statements in this section are forward-looking and are subject to various risks and uncertainties, including those detailed from time to time in Learning Tree’s filings with the Securities and Exchange Commission, including Learning Tree’s Annual Report on Form 10-K and the “Risk Factors” in Exhibit 99.1. Since economic and market conditions may change at any time, Learning Tree’s future revenues, plans and expenditures will vary from the observations below, and these differences may be material.

Recent Trends. Learning Tree’s customers continue to respond positively to its recent increase in the breadth and depth of its management course offerings. Learning Tree believes that technical and non-technical managers are becoming increasingly aware of the need for training in project management, personal effectiveness, and other key business skills. Learning Tree intends to meet this demand by continuing to develop additional management course titles, based on feedback from Learning Tree’s customers. In the third quarter of fiscal 2005, Learning Tree offered 30 titles in its management curriculum representing 22% of Learning Tree’s entire course library, compared to 27 titles, which represented 18% in the third quarter of fiscal 2004.

Effect of Foreign Exchange Rates. Approximately half of Learning Tree’s business is conducted in currencies other than U.S. dollars and fluctuations in foreign exchange rates will affect future revenues and expenses when translated into dollars. If the foreign exchange rates of July 29, 2005 remain stable through the remainder of fiscal 2005, Learning Tree’s revenues would be favorably affected by approximately 1% in both the fourth quarter and for its full fiscal year compared to the corresponding periods in 2004. Conversely, Learning Tree’s expenses would be unfavorably affected by similar percentages in these periods.

Fourth Quarter 2005 Revenues. A number of factors other than foreign exchange rates may influence Learning Tree’s revenues in its fourth quarter ending September 30, 2005. These include the following:

• At July 1, 2005, Learning Tree’s backlog of $35.2 million was about 3% higher than it had been on July 2, 2004. This July 1, 2005 backlog included a 1% favorable effect from changes in foreign exchange rates. Four weeks later, on July 29, 2005, Learning Tree’s overall backlog was 4% higher than it had been on July 30, 2004. And, on July 29, 2005, the sum of Learning Tree’s revenues for July courses plus its backlog for August and September courses was 1% lower than it had been at July 30, 2004. These July 29, 2005 backlogs included no material effect from changes in foreign exchange rates.

17

• Deferred revenues, which principally consist of the remaining value of pre-sold passport and voucher course seats, decreased from $46.8 million at April 1, 2005 to $45.4 million at July 1, 2005. However, almost all of this decrease is the result of changes in foreign exchange rates rather than any material changes in the sales or usage rates of passports and vouchers.

Based upon the above and other factors, Learning Tree believes that its revenues in the fourth quarter of fiscal 2005 will be approximately $38.0 million to $40.0 million, compared to $37.3 million in the same quarter of the prior year.

Fourth Quarter Gross Profit. Learning Tree expects its gross profit percentage to be between 49.5% and 51.5% compared to 51.2% in its fourth quarter of fiscal 2004.

Fourth Quarter Operating Expenses. Learning Tree expects its overall operating expenses for the fourth quarter of fiscal 2005 to be $19.0 million, approximately the same as in the same quarter a year earlier. Its fourth quarter operating expenses will reflect reduced marketing costs compared to the same period a year earlier, offset principally by the significant costs of compliance with Section 404 of the Sarbanes-Oxley Act. The reduction in its fourth quarter marketing cost is a combination of reduced quantities of catalogs mailed in the quarter and a reduction in the cost of producing Learning Tree’s catalogs.

The deadline for Learning Tree to comply with Section 404 of the Sarbanes-Oxley Act is September 30, 2005. While actual costs will depend largely on the results of future testing, Learning Tree currently believes that external costs will total approximately $0.450 million in the fourth quarter and $1.1 million for this fiscal year, which relate primarily for fees to outside consultants and the external auditors. This estimate for external costs excludes the cost of Learning Tree employees assigned to this project.

Fourth Quarter Interest Income. Interest income reflects changes in interest rates, as well as changes in Learning Tree’s cash balances. Learning Tree expects its fourth quarter interest income to be approximately the same as it was in the third quarter of fiscal 2005.

2005 Tax Rate. Learning Tree estimates that its effective tax rate in the fourth quarter and for the 2005 year will approximate 33.3%.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Learning Tree’s cash equivalents are diversified and consist primarily of investment grade securities of high-quality financial institutions and corporations. The fair value of Learning Tree’s portfolio of marketable securities would not be significantly impacted by either a 10 percent (approximately 20 basis points) increase or decrease in the rates of interest due primarily to the short-term nature of the portfolio. Learning Tree does not hold or issue derivative financial instruments.

Learning Tree’s consolidated financial statements are prepared in U.S. dollars, while the operations of its foreign subsidiaries are conducted in their respective local currencies. Consequently, changes in foreign exchange rates can result in foreign exchange translation losses both to its net income and reported comprehensive income. The impact of future foreign exchange rates on Learning Tree’s results of operations and comprehensive income cannot be accurately predicted. To date, Learning Tree has not

18

sought to hedge the risks associated with fluctuations in foreign exchange rates and therefore continues to be subject to such risks. In the future, Learning Tree may undertake such transactions. However, any hedging techniques implemented by Learning Tree might not be successful in eliminating or reducing the effects of currency fluctuations. See Exhibit 99.1, “Risk Factors”.

Item 4. CONTROLS AND PROCEDURES

Learning Tree maintains disclosure controls and procedures designed to ensure that information required to be disclosed by Learning Tree in the reports that it files or submits under the Securities Exchange Act of 1934 (“Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Learning Tree’s disclosure controls and procedures are designed to provide reasonable, not absolute, assurance of achieving their objectives. As of the end of the period covered by this report, Learning Tree carried out an evaluation of the effectiveness of the design and operation of Learning Tree’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-14 and 15d-14. The evaluation was conducted under the supervision of, and with the participation of, Learning Tree’s management, including Learning Tree’s Chief Executive Officer (“CEO”) and Principal Financial Officer (“PFO”). Based upon that evaluation, and subject to the limitations noted below, Learning Tree’s CEO and PFO concluded that Learning Tree’s disclosure controls and procedures are effective at the “reasonable assurance” level in alerting them, on a timely basis, to material information relating to Learning Tree (including its consolidated subsidiaries) that is required to be included in its periodic filings with the Securities and Exchange Commission.

As required by Section 404 of the Sarbanes-Oxley Act, Learning Tree’s first report on its internal controls over financial reporting and its independent auditors’ related attestation report will be included in Learning Tree’s fiscal 2005 Form 10-K filing. In the process of documenting and reviewing its internal controls, Learning Tree continues to confirm and refine those controls. Since the most recent evaluation of Learning Tree’s internal control over financial reporting by Learning Tree’s CEO and PFO, there have been no significant changes in its internal control over financial reporting or in other factors that could materially affect, or are reasonably likely to materially affect, Learning Tree’s internal control over financial reporting.

Learning Tree’s management, including its CEO and PFO, does not expect that its disclosure controls and procedures will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Learning Tree have been detected. These inherent limitations include the reality that judgments and decisions can be wrong, although made in good faith in light of the information available at the time, and that breakdowns can result from inadvertent errors or mistakes or by management override of the controls. Additionally, controls can be disrupted and circumvented by the bad faith acts of one or more persons. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future circumstances. To maintain adequate and efficient controls, over time, Learning Tree’s CEO and PFO periodically review Learning Tree’s internal and disclosure controls with other members of Learning Tree’s management and update controls and systems as needed.

19

PART II – OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

None.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

LEARNING TREE PURCHASES OF EQUITY SECURITIES

Period	Total Number of Shares Purchased (a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
April 2, 2005 – April 29, 2005	—		—	—	—
April 30, 2005 – May 27, 2005	10,500	$	12.29	—	—
May 28, 2005 – July 1, 2005	90,700	$	12.30	—	—
Total	101,200	$	12.30	—	—

(a) None of the Learning Tree Common Stock repurchases were made pursuant to a publicly announced plan. All Learning Tree Common Stock repurchases were made in open-market transactions.

Item 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

Not Applicable.

Item 5. OTHER INFORMATION

Not Applicable.

Item 6. EXHIBITS

10.14	Employment Agreement dated July 20, 2005, between Learning Tree International, Inc. and LeMoyne T. Zacherl.
10.15	Learning Tree International, Ltd. - Facility lease agreement with Westinghouse Brake and Signal Holdings Limited.
10.16	Learning Tree International, Ltd. - Facility lease agreement with Bombardier Transportation UK Limited.
10.17	Learning Tree International, Inc. - Facility lease agreement with Metropolitan Life Insurance Company.
10.18	Learning Tree International USA, Inc. - Facility lease agreement with John Hancock Life Insurance Company (U.S.A.) a wholly owned subsidiary of Manulife Financial Corporation.
10.19	Learning Tree International AB - Facility lease agreement with Förvaltningsbolaget Marievik HB, a wholly owned subsidary of AMF Pension.
31.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
32.1	Section 1350 Certification of Chief Executive Officer and President (Principal Financial Officer)

20

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	LEARNING TREE INTERNATIONAL, INC.
Dated: August 9, 2005	By:	/s/ NICHOLAS R. SCHACHT
		Nicholas R. Schacht
		President
		(Principal Financial Officer and Duly Authorized Officer)

21

EX-10.14

EXHIBIT 10.14

EMPLOYMENT AGREEMENT

WHEREAS, in consideration for Learning Tree International’s employment and continued employment of LeMoyne T. Zacherl (hereinafter referred to as “Employee”), Learning Tree International (hereinafter referred to as “Company”) and Employee desire to enter into this Agreement to set forth the terms and conditions of such employment effective July 20, 2005.

NOW, THEREFORE, in consideration of the mutual promises set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. STATEMENT OF WORK: Employee is engaged as the Chief Financial Officer of the Company and agrees to perform the duties described in the attached “Job Description” and such duties as are needed for the proper functioning of the Company, as directed from time to time, at the Company’s main office and at other geographical locations serviced by the Company. The Company hereby employs Employee or continues his or her employment and Employee hereby accepts employment upon the terms and conditions stated herein.

Employee shall do his or her utmost to further enhance and develop the best interests and welfare of the Company. Employee shall perform no acts contrary to the best interests of the Company and the Company shall be entitled to all of the benefits, profits or other results arising from or incident to all work, services and advice of Employee.

Employee agrees to fully comply with the rules and procedures as may be promulgated by the Company in the Company’s sole and absolute discretion.

2. PAYMENT: As full consideration for the services rendered by Employee hereunder, the Company agrees to pay Employee the sum of $17,500.00 per month, payable in accordance with the Company’s payroll practices from time to time semi-monthly, subject to withholding and deductions in accordance with all applicable laws. Employee will also be entitled to Incentive Compensation when and as earned under the annual plan provided to him by the Company at the beginning of each fiscal year. For fiscal year 2006, the on-target incentive is set at $60,000.00. See the attached Compensation Summary for further details.

A. Said compensation is paid (i) for Employee’s advice and availability as advisor to the Company; (ii) for substantially full-time services at one of the corporate premises; and (iii) for the covenants described below.

B. The Employee Manual, as amended from time to time by the Company and delivered to Employee, is an integral part of the employment relationship, but does not form a contract or contract-based rights, nor does it serve to alter the at-will nature of Employee’s employment. Employee’s initials affixed below signify Employee’s receipt of the Employee Manual, Employee’s understanding that it is his or her responsibility to read the Employee Manual, and to comply fully with the terms set forth therein.

(Employee’s Initials)

3. COPYRIGHTS: Employee agrees that all writings produced by him or her while employed

1

under this Agreement, whether or not conceived or developed during Employee’s working hours and with respect to which the equipment, supplies, facilities or trade secret information of the Company were used, or that relate to the business of the Company, or that result from any work performed by Employee for the Company, are works done for hire and shall be the sole property of the Company and the Company shall have the exclusive right to copyright such writings in any country or countries. Employee further agrees to assign to the Company all interest in any such writings, whether copyrightable or not, which Employee develops or helps develop during his or her employment with the Company. Employee will supply the Company with a list of previously developed works owned by Employee.

4. PATENTS: Employee shall disclose promptly to the Company all ideas, inventions, discoveries, improvements, whether or not patentable, relative to the field of work set forth in the “Job Description”, or otherwise assigned to Employee, and conceived or first reduced to practice by Employee in connection with work under this Agreement with the Company. Employee agrees that all such ideas, inventions, discoveries and improvements including, but not limited to papers, books and publications, shall become the sole and absolute property of the Company and that Employee will at any time, at the request and expense of the Company, execute any and all documents, including, but not limited to, patent applications and assignments to protect the same against infringement by others, and do whatever is reasonably required to be done to insure that the Company shall obtain title to such ideas, inventions, discoveries and improvements. Such services will be without additional compensation if Employee is then employed by the Company and for reasonable compensation and subjected to his reasonable availability if he is not. If the Company cannot, after reasonable effort, secure Employee’s signature on any document or documents needed to apply for or prosecute any patent, copyright, or other right or protection relating to an Invention, whether because of his physical or mental incapacity or for any other reason whatsoever, Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as his agent and attorney-in-fact, to act for and in his behalf and in his name and stead for the purpose of executing and filing any such application or applications and taking all other lawfully permitted actions to further the prosecution and issuance of patents, copyrights, or similar protections thereon, with the same legal force and effect as if executed by him.

For purposes of this paragraph, an invention is based on the trade secrets of the Company if the invention incorporates any such secrets in principle or design, and if the invention was conceived or first actually reduced to practice during the period of Employee’s employment with the Company.

Employee also agrees that the Company shall have the right to keep any inventions covered by this Agreement as trade secrets and Employee agrees not to disclose any such invention to third parties, except as specifically authorized by the Company.

Employee further agrees to assign to the Company all rights in any other inventions made by Employee if the Company is required to grant those rights to the United States Government or any of its agencies. Moreover, Employee agrees to render assistance, advice and counsel to the Company at its request regarding any matter, dispute or controversy with which the Company may become involved and of which Employee has or may have reason to have knowledge, information or expertise. Such services will be without additional compensation if Employee is then employed by the Company and for reasonable compensation and subject to his reasonable availability otherwise.

2

5. SECRECY:

SECURITY CLEARANCE: As to any Company information made available to Employee during the course of his or her employment, Employee agrees to cooperate in establishing and maintaining any security clearance and to execute whatever forms and joint agreements are required by law. Employee agrees to provide and maintain a system of security controls in accordance with the requirements of the U.S. Government or as may be required by law.

NON-DISCLOSURE OF CONFIDENTIAL INFORMATION: Confidential and Proprietary Information (hereinafter Confidential Information) is defined to include, but is not limited to, Company books; records; compilations of information; processes; teaching methods and techniques; secret inventions and specifications; information about computer programs or systems; names; usages and requirements of past, present and prospective customers of the Company; processes or methods by which the Company promotes its services and products and obtains customers; customers’ buying habits and special needs; profits; sales; suppliers; personnel; pricing policies; operational methods; technical processes and other business affairs and methods, and plans for future developments and other information which is not readily available to the public. Confidential Information also includes, but is not limited to, any information and material relating to any customer, vendor, licensor, licensee or other party transacting business with the Company. Confidential Information is developed and will be developed by or for the Company at great expense.

Employee agrees, during the term of employment and forever thereafter, to keep confidential all information provided by the Company, excepting only such information as is already known to the public. Employee agrees not to release, use or disclose any Confidential Information or permit any person to examine and/or make copies of any documents which contain or are derived from Confidential Information, except with the prior written permission of the Company. Employee shall not make use of any Confidential Information for his or her own purposes or the benefit of anyone other than the Company.

Employee recognizes and acknowledges that the list of the Company’s customers, as it may exist from time to time, is a valuable, confidential, special, and unique asset of the Company’s business. Employee will not, during or after the term of his or her employment, use or disclose the list of the Company’s customers or any part thereof to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever.

RETURN OF PROPERTY: Employee agrees that upon request by the Company, and in any event upon termination of employment, Employee shall turn over to the Company all documents, papers or other material in Employee’s possession or under his or her control which may contain or be derived from Confidential Information, together with all documents, notes or other work product which is connected with or derived from Employee’s services to the Company whether or not such material is at the date hereof in Employee’s possession.

Employee agrees that he or she shall have no proprietary interest in any work product developed or used by Employee arising out of his or her employment by the Company. Employee shall, from time to time as may be requested by the Company, do all things which may be necessary to establish or document the Company’s ownership interest in any such work product, including, but not limited to execution of appropriate copyright applications or assignments.

6. EXCLUSIVITY: While an employee of the Company, Employee will use best efforts to promote the success of the Company’s business and shall not enter the employ of or serve as a consultant to, or in any way perform any services with or without compensation for, any other person,

3

enterprise, business, company, corporation, partnership, firm, association without the prior written consent of the Company and shall not own any interest (other than up to 1% of the voting securities of a publicly traded corporation) in any entity or individual that competes with the Company or that is a material supplier or vendor to the Company.

7. NON-COMPETITION: During the term of this Agreement and until the expiration of one year after the termination of the employment relationship (regardless of the reason the employment is terminated), Employee shall not, directly or indirectly, (1) enter into the employ of, assume an interest in (in any capacity) or render any services to, any person or entity engaged in any business competitive with the business of the Company within a 50 mile radius of any location where the Company is actively engaged, or proposes to engage in business on or prior to the termination of employment; or (2) engage in any such business on his or her own account.

Employee and Company agree and stipulate that the period of time and geographical area specified in the above paragraph are fair and reasonable in view of the nature of the business of the Company, and the Employee’s access to the Company’s Confidential Information and knowledge of the Company’s business. However, in the event that a court should decline to enforce these provisions, Employee and the Company agree that the provisions shall be deemed to be modified to restrict Employee’s competition with the Company to the maximum extent, in both time and geography, which the court shall find enforceable. In no event will the covenant be interpreted as more restrictive to Employee.

8. SOLICITING: Employee shall not, either during his or her employment with the Company, or for a period of two (2) years immediately thereafter, either directly or indirectly:

A. Make known to any person, firm or corporation, the names or addresses of any customers of the Company or any other information pertaining to them;

B. Call on, solicit, or attempt to take away or do business with any customers of the Company on whom Employee called or with whom Employee became acquainted during the term of his or her employment with the Company, either for Employee or for any other person, firm or corporation in competition with the Company; or

C. Hire, subcontract, employ, engage, contact or solicit, for the purpose of hiring, any person or entity who is an employee or subcontractor of the Company on the date of Employee’s termination of employment or at any time during the six (6) month period prior to the termination of Employee’s employment.

9. TRADE SECRETS: During the term of this Agreement, Employee will have access to and become acquainted with various trade secrets consisting of items such as books, records, compilations of information, processes, teaching methods and techniques, devices, secret inventions, and specifications, which are owned by the Company and are regularly used in the operation of the business of the Company, which the Company desires to protect and preserve as secrets for its own use. Employee shall not disclose any of the aforesaid secrets, directly or indirectly, or use them in any way, either during the term of this Agreement or at any time thereafter, except as required in the course of his or her employment with the Company. All files, records, documents, drawings, specifications, equipment, products and other items relating to the Company, whether prepared by Employee or otherwise coming into his or her possession, shall remain the exclusive property of the Company and shall not be removed from the premises of the Company under any circumstances whatsoever, without the prior written consent of Employee’s supervisor, specifically setting forth the documents involved, the person receiving the permission, and the location of the items and the period of time for which the permission is granted.

4

10. VIOLATION OF COVENANTS: Notwithstanding paragraph 13 of this Agreement, if Employee violates or threatens to violate any of the provisions of paragraphs 3 through 9 of this Agreement, the Company shall be entitled (without the need to post any bond) to a restraining order and/or an injunction to be issued by any court of competent jurisdiction, enjoining and restraining Employee, and each and every other person, partnership, corporation, association or other entity concerned therein, from continuing such violations or from rendering any services to any person, firm, corporation, association or other entity to whom such Confidential Information, in whole or in part, has been disclosed or is threatened to be disclosed. Employee recognizes that the violation or threatened violation of the provisions of paragraphs 3 through 9 of the Agreement may give rise to irreparable injury to the Company, which may not be adequately compensated by damages. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available to the Company for such breach or threatened breach, including the recovery of damages from Employee. These obligations shall survive the termination of Employee’s employment.

11. AT-WILL EMPLOYMENT: Employee’s employment with the Company is “at-will” and may be terminated at any time, with or without cause, for any or no reason, and with or without notice. In conjunction with this policy of at-will employment, Employee may also be disciplined, demoted or have his or her job responsibilities reassigned by the Company for any reason at the Company’s sole discretion. No individual within the Company can modify this “at-will” status, except in a written agreement signed by the Chief Executive Officer or Chief Administrative Officer of the Company. No oral or written modifications, express or implied, may alter or vary the terms of this Agreement. Any representations to the contrary are hereby disclaimed. Upon Employee’s termination of employment with the Company for any or no reason, and with or without notice, (a) Employee shall be deemed to have resigned from all offices and directorships then held with the Company or any affiliate and (b) the Company shall pay to Employee all amounts accrued and unpaid as of the date of termination in respect of (i) Employee’s salary for periods through such date, and (ii) PTO (“Paid Time Off”) pay to the extent consistent with the Company’s policies in effect from time to time, (c) if and only if the termination is by the Company and without “Cause,” then in lieu of any other severance, the following severance provisions will apply: (i) during the Employee’s first six months of employment, the Company will continue to pay Employee’s Base Salary for the following three months in accordance with its normal salary payment schedules; and (ii) after the first six months of employment, for each two full additional months of employment, the Company will continue to pay one additional month of Base Salary, up to a maximum of 6 months total. For example, if Employee has worked for the Company for one full year and is then terminated by the Company without “Cause,” then the Company will continue to pay Employee’s Base Salary for the following six months.

“Cause” shall exist if any one or more of the following should occur: Employee’s (a) material failure to perform his duties under, or material breach of, this Agreement which remains uncured for more than thirty (30) days (which shall be reduced to ten (10) days if (a) there is no reasonable expectation that a cure can be completed during such thirty day period or (b) the Company reasonably believes that such delay could be seriously detrimental to it) after a written warning (except in the case of a willful failure to perform his duties. Or a willful breach, which shall require no warning), (b) failure to comply with a reasonable direction of the Company’s Chief Executive Officer, which remains uncured for more than thirty (30) days (which shall be reduced to ten (10) days if (a) there is no reasonable expectation that a cure can be completed during such thirty day period or (b) the Company reasonably believes that such delay could be seriously detrimental to it) after a written warning, (c) breach of his fiduciary duty to the Company, or (d) indictment (or equivalent) for a felony or other serious crime. Employee agrees that the rights and entitlements set forth in this Section 11 are Employee’s exclusive rights and entitlements from the Company and any affiliated entity upon and as a result of the termination of Employee’s employment with the Company.

5

12. AUTHORSHIP AND OUTSIDE INCOME: Except as otherwise approved in writing by the Company, while employed under this Agreement, any income earned by Employee in any work of the type performed by the Company shall be deemed earned on behalf of the Company and shall be promptly remitted to the Company. Any articles or other works published by Employee shall be first approved by the Chief Executive Officer or Chief Administrative Officer of the Company, in writing, and may be published only if approved by the Company. Any approval given under this paragraph shall be deemed valid for only the specific event and time set forth in the approval.

13. ARBITRATION: Any and all disputes between Employee and the Company that arise out of Employee’s employment, including disputes involving the terms of this Agreement, shall be resolved through final and binding arbitration. This shall include, without limitation, disputes relating to this Agreement, Employee’s employment by the Company or the termination thereof, claims for breach of contract or breach of the covenant of good faith and fair dealing, and any claims of discrimination or other claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans With Disabilities Act, or any other federal, state or local law or regulation now in existence or hereinafter enacted and as amended from time to time concerning in any way the subject of Employee’s employment with the Company or his or her termination. The only claims not covered by this Agreement are claims for benefits under the workers’ compensation or unemployment insurance laws, which will be resolved pursuant to those laws. Notices of requests to arbitrate a covered claim must be made within the applicable statute of limitations. Binding arbitration will be conducted in Fairfax County, Virginia in accordance with the rules and regulations of the American Arbitration Association (“AAA”). Discovery may be carried out under the supervision of the arbitrator appointed pursuant to the rules of the AAA. Employee will be responsible for paying the same fee to initiate the arbitration that he or she would pay to file a civil lawsuit. The Company will pay any remaining cost of the arbitration filing and hearing fees, including the cost of the arbitrator; each side will bear its own attorneys’ fees, that is, the arbitrator will not have authority to award attorneys’ fees unless a statutory section at issue in the dispute authorizes the award of attorneys’ fees to the prevailing party, in which case the arbitrator has authority to make such award as permitted by the statute in question. Employee understands and agrees that the arbitration shall be instead of any civil litigation and that this means that he is waiving his right to a jury trial as to such claims. The parties further understand and agree that the arbitrator will issue a written decision and that the arbitrator’s decision shall be final and binding to the fullest extent permitted by law and enforceable by any court having jurisdiction.

This arbitration section does not in any way alter Employee’s at-will status.

14. WRITTEN PERMISSION: Any “written permission” required by this Agreement is only valid if signed by a Company officer.

15. WAIVER: The delay or failure of the Company to insist upon Employee’s punctual performance of any of the provisions of this Agreement, or the failure of the Company to exercise any right or remedy available to it under this Agreement, shall not constitute in any manner a waiver by the Company of any subsequent default or breach by Employee.

16. NOTICES: All notices, requests, demands or other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service, if served personally on the party to whom notice is being given, or on the third (3rd) day after mailing, if

6

mailed to the party to whom notice is to be given, by first class mail, postage prepaid, and properly addressed as follows:

LEARNING TREE INTERNATIONAL, INC.	6053 West Century Boulevard Los Angeles, CA 90045
With Copy To:	Peter Holbrook, Esq. McDermott, Will & Emery 18191 Von Karman Ave. Suite 500 Irvine, CA 92612-0187

Notice shall be given to Employee at the most recent address reflected in Employee’s employment records.

Any party may change its address for purposes of this paragraph by giving the other party a written notice of the new address.

17. GOVERNING LAW: This Agreement shall be construed in accordance with, and governed by, the laws of the state of Virginia.

18. ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement between the parties and supersedes all prior or contemporaneous agreement and statements between the parties, whether written or oral, with respect to the subject matter hereof, and may not be contradicted by evidence of any prior or contemporaneous statements or agreements between Employee and the Company concerning the subject matter hereof. The parties herein represent that no other Agreement, oral or otherwise, exists or binds any of the parties hereto. The parties hereto acknowledge that they have not executed this Agreement in reliance upon any other or further representation or promise of any party. No change, modification, waiver, or amendment of this Agreement shall be of any effect unless in writing signed by Employee and by the Chief Executive Officer or Chief Administrative Officer of the Company.

19. SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon and shall inure to the benefit of the successors or assigns of the Company.

20. ASSIGNMENT: This Agreement is not assignable by Employee.

21. SEVERABILITY: The provisions of this Agreement are severable. Should any provision be for any reason unenforceable, the remainder of the provisions shall remain in full force and effect. The provisions of this Agreement shall be interpreted, to the extent possible, to give full effect to the intent of the parties.

By signing below, I acknowledge that I have read this Agreement carefully, understand it, and will comply with the provisions set forth herein. I have had the opportunity to seek independent legal advice before signing this Agreement, and enter into this Agreement freely and voluntarily, based on my own judgment and not on any representations or promises other than those contained in this Agreement.

EMPLOYEE:	EMPLOYER:
LeMoyne T. Zacherl	Learning Tree International
	By:	Mary C. Adams
	Title:	Chief Administrative Officer
Date

7

CERTAIN TERMS FOR INCENTIVE COMPENSATION

1. Payment. Any Incentive earned will be paid within 90 days of the Company’s fiscal year end.

2. Effect of Termination. If you terminate your employment with the Company (including its subsidiaries) or are terminated for Cause, you will not receive any Incentive and must repay any Interim Loan under Section 3 within 30 days. If you are terminated by the Company without Cause, you will receive (as provided in Section 1) any unpaid Incentive with respect to a year prior to the year in which you depart, and a prorated (using the number of days before and after your departure) portion of your Incentive with respect to the entire fiscal year in which you leave (which will be calculated and paid after the end of that fiscal year).

3. Withholdings. The Company may deduct all taxes or withholdings required by law to be withheld with respect to any amounts paid.

4. No Transfers. You may not sell, pledge, assign, hypothecate, transfer or dispose of any of your rights to the Incentive. You may provide the Company with a written designation of a beneficiary who is to receive any Incentive due to you if you die. If you are married and your designated beneficiary is not your spouse, the Company may require spousal consent for such designation to be effective. You may change your beneficiary at any time by written notice.

5. No Right to Continued Employment. Your Incentive does not confer upon you any right with respect to continuing your employment relationship with the Company, nor does it change in any way your right or the Company’s right to terminate such employment relationship at any time, with or without cause.

6. Administration. Unless you provide written notice to the Company of any objections to a calculation within 30 days, the calculation shall be final and binding. The decisions, determinations and interpretations of the Company made in good faith shall be final and binding on you.

8

Date: June 17, 2005

Compensation Summary

LeMoyne T. Zacherl

Annual Base Salary:	$210,000.00 (payable semi-monthly)
Annual On-Target Incentive:	$60,000.00

The On-Target Incentive will be based on the Company’s performance in FY2006. FY2006 incentive compensation plans will be reviewed by the Board of Directors Compensation Committee prior to the start of FY2006. It is anticipated that the structure of the FY2006 incentive compensation plan will be similar to that applied in FY2005, which is:

a. 53% of the incentive is based on revenue performance.

b. 27% of the incentive is based on profitability.

c. 10% of the incentive is based on quality performance.

d. 10% of the incentive is based on successful completion of the Sarbanes-Oxley 404 project (this element will likely not be included in FY2006).

Total incentive is capped at three times the on-target level; in this case, at $180,000.

Stock Options: 50,000 Share Option Grant

As part of your compensation package, you will be granted an option to purchase 50,000 shares of Learning Tree International Common Stock under the terms of its Option Plan and Standard Terms and Conditions. You will earn the right to exercise twenty-five (25%) of your Option after each year commencing after the Vesting Anniversary Date and ending on the Vesting Anniversary Date during which you are employed by the Company. The exercise price of your Option will be determined (based on the then current market price) when our Stock Option Committee grants the Option.

9

EX-10.15

Exhibit 10.15

Dated 27 April 2005

LEARNING TREE INTERNATIONAL LIMITED (1)

TO

WESTINGHOUSE BRAKE AND SIGNAL

HOLDINGS LIMITED (2)

Counterpart

LEASE

OF

PART 4TH FLOOR, EUSTON HOUSE,

24 EVERSHOLT STREET, LONDON NW1

TERM	:	10 years
FROM	:	1 February 2005
BASIC RENT	:	£120,312 Basic
		Rent Amount (subject to review)

Contents

Clause	Page
1       Definitions and Interpretation	1
2       Demise and Rent	6
3       Tenant’s Covenants	7
4       Landlord’s Covenants	7
5       Forfeiture	7
6       Miscellaneous	8
7       Sections 24-28 Landlord and Tenant Act 1954	10
Schedule 1 The Property	11
Schedule 2 Part 1 - Rights granted in common	12
Schedule 3 Part 1 - Exceptions and Reservations	13
Part 2 - Title Matters	14
Schedule 4 Review of Basic Rent	15
Schedule 5 Insurance	17
1       Landlord’s Insurance Obligations	17
2       Tenant’s Insurance Obligations	17
3       Rent Cesser	17
4       Vitiation of Insurance	17
5       Determination	18
6       Arbitration	18
Schedule 6 Tenant’s Covenants	19
1       To pay Rent	19
2       To pay Outgoings	19
3       Repair and Decoration	19
4       Yielding up on Determination	20
5       Use	21
6       Alterations	21
7       Signs	21
8       Dealings with the Property	21
9       Legal Obligations and Necessary Consents	24
10     Conduits and Plant	25

11     Overloading and Damage	25
12     Rights and Easements	25
13     Regulations	25
14     Entry by Landlord	26
15     Costs	26
16     Loss of Guarantor	26
17     Title Matters	26
Schedule 7 Landlord’s Covenants	28
1       Quiet Enjoyment	28
2       Superior Lease	28
3       Provision of Services	28
Schedule 8 Services and Service Charge	29
1       Basic Services	29
2       Additional Services	29
3       Service Costs	29
4       Calculation and Payment of Service Charge	30
Schedule 9 Regulations	32
Annexures
Property Plan Site Plan Schedule of Condition

THIS LEASE made on 27 April 2005 BETWEEN:

(1) LEARNING TREE INTERNATIONAL LIMITED a company incorporated in England and Wales number 1392643 whose registered office is at Mole Business Park, Leatherhead, Surrey KT22 7AD (“the Landlord”).

(2) WESTINGHOUSE BRAKE AND SIGNAL HOLDINGS LIMITED a company incorporated in England and Wales number 16033 whose registered office is at Portland House, Stag Place, London, SW1E 5BF (“the Tenant”).

WITNESSES as follows:

1 Definitions and Interpretation

1.1 In this Lease unless the context otherwise requires the following expressions shall have the following meanings:

“Additional Services” means the services listed in paragraph 2 of schedule 8 as from time to time altered (if at all) under clause 6.9;

“Assignment” means the execution of a deed of transfer of the Lease or of any underlease granted under it in accordance with the provisions of paragraph 8.3 of schedule 6 whether or not that transfer is subsequently registered at H M Land Registry;

“Authority” means any statutory, public, local or other authority or any court of law or any government department or any of their duly authorised officers;

“Basic Rent” means up to but excluding the Rent Commencement Date a peppercorn (if demanded) and from and including that date £120,312 per annum as from time to time reviewed under schedule 4 or otherwise altered;

“Basic Services” means the Services listed in paragraph 1 of schedule 8 as from time to time altered (if at all) under clause 6.9;

“Building” means the building and external areas known as Euston House, 24 Eversholt Street, London NW1 shown for identification purposes only edged in blue on the Site Plan and any or every part of that building and everything attached to it or used for its benefit;

“Common Parts” means all parts of the Building from time to time provided for the common use of more than one of the tenants or occupiers of the Building and their visitors including without limitation any of the following which fall within this definition: vehicular and pedestrian accesses, passages, stairways, circulation areas, lifts, escalators, landscaped areas, loading bays, fire escapes, toilet facilities, storage areas, refuse collection and disposal areas;

“Conduits” means sewers, drains, pipes, wires, cables, ducts, gutters, fibres, and any other medium for the passage or transmission of soil, water, gas, electricity, air, smoke, light, information or other matters and includes where relevant ancillary equipment and structures;

“Connected Person” means any person, firm or company which is connected with the Tenant for the purposes of Section 839 Income and Corporation Taxes Act 1988;

“Consent” means an approval, permission, authority, licence or other relevant form of approval given by the Landlord in writing;

“Determination” means the end of the Term however that occurs;

“Enactment” means:

(a) any Act of Parliament; and

(b) any European Community or other supranational legislation or decree having the force of law in the United Kingdom,

and references (whether specific or general) to any Enactment include:

(i) any subordinate legislation made under it;

(ii) any provision which it has superseded or re-enacted (whether with or without modification; and

(iii) any provision superseding or re-enacting it (whether with or without modification);

“Environmental Damage” means any reduction in value of the Landlord’s interest in the Property or the Building or any damage to human health or the environment arising from the Property which would constitute ? breach of any Legal Obligation or give rise to a civil claim for damages;

“Estimated Service Charge” means the Landlord’s estimate of the Service Charge which will be payable by the Tenant during a Service Charge Period;

“Group Company” means any company of which the Tenant is a Subsidiary or which has the same Holding Company as the Tenant where Subsidiary and Holding Company have the meanings given to them by section 736 Companies Act 1985;

“Hazardous Material” means any substance known or reasonably believed to be harmful to human health or the environment and for that reason subject to statutory controls on production, use, storage or disposal;

“Insurance Charge” means the Percentage of the cost to the Landlord of effecting and maintaining the Insurance Policies including where relevant the cost of assessing any insured amounts and any sums payable to any Superior Landlord in respect of insurance maintained by it which shall include any expenses and valuation costs which the Superior Landlord is entitled to recover from the Landlord under the terms of the Superior Lease;

“Insurance Policies” means the insurance policy or policies maintained by the Landlord or any Superior Landlord in respect of the Building covering damage by Insured Risks, Loss of Rent, public liability and other matters;

“Insured Risks” means the risks of fire, storm, tempest, flood, lightning, explosion, terrorism and in peace time aircraft and articles dropped therefrom, malicious damage, impact, plant and machinery cover overflowing of tanks, bursting of pipes and such other risks as the Superior Landlord or Landlord shall from time to time insure (subject in all cases to any excesses exclusions and limitations imposed by the insurers or underwriters) except always such risks as cannot reasonably be insured by the Landlord or Superior Landlord on satisfactory terms or at a reasonable premium or as the Landlord or the Superior Landlord’s insurers or underwriters have refused to insure.

“Insurers” means the underwriters or insurance office with whom the Insurance Policies are effected;

“Interest Rate” means four percent above the base lending rate from time to time of The Royal Bank of Scotland plc or such other bank as the Landlord may from time to time nominate or if that base lending rate cannot be ascertained then four percent above such other rate as the Landlord may reasonably specify and where and whenever interest is payable at or by reference to the Interest Rate it shall be calculated on a daily basis and compounded on the Quarter Days;

“Landlord” includes the immediate reversioner to this Lease from time to time;

“Lease” means this underlease and includes where relevant any deed of variation, licence, Consent or other document supplemental to or associated with this Lease;

“Legal Obligation” means any obligation from time to time created by any Enactment or Authority which relates to the Building or its use and includes without limitation obligations imposed by any Necessary Consent;

“Lettable Area” means a part of the Building designed or intended for letting or exclusive occupation (except in connection with the management of the Building), the boundaries of any Lettable Area being determined in the same manner as the boundaries of the Property under schedule 1;

2

“Loss of Rent” means loss of all Basic Rent or other income from the Building due to damage or destruction by any of the Insured Risks for a minimum period of three years having regard to potential increases in that income as a result of lettings, rent reviews or other matters which may occur;

“Managing Agent” means any party from time to time appointed by the Landlord to manage the Building (who may be an employee of the Landlord);

“Necessary Consents” means planning permission and all other consents, licences, permissions and approvals whether of a public or private nature which shall be relevant in the context;

“Open Market Rent” means the best rent which might reasonably be expected to be paid (after the expiry of any rent free period or period of concessionary rent) by a willing tenant to a willing landlord for a letting of the whole of the Property in the open market with vacant possession and without a fine or premium for a term of ten years commencing on the relevant Review Date and upon the terms of this Lease (except as to the amount of the Basic Rent but including the provisions for rent review) and upon the assumptions that:

(a) there has been a reasonable period in which to negotiate the terms of the letting taking into account the nature of the Property and the state of the market;

(b) no account will be taken of any additional rent which might be offered by a prospective tenant with a special interest;

(c) all the covenants contained in this Lease have been complied with;

(d) if the Property or the Building or any access or essential services to them have been destroyed or damaged they have been fully restored;

(e) the Property complies with all Legal Obligations and may lawfully be used for the purpose permitted by this Lease and any other purpose within the same class as that purpose under the Town and Country Planning (Use Classes) Order 1987;

(f) the willing tenant is to receive whatever rent free period rental concessions or other inducements may at the time be usual on the grant of a new lease with vacant possession; and

(g) the Property is fitted out and equipped to the requirements of the willing tenant,

but disregarding:

(i) any effect on rent of the fact that the Tenant, any undertenant or any of their respective predecessors in title has been or is in occupation of the Property;

(ii) any goodwill attached to the Property by reason of the carrying on of the business of the Tenant any undertenant or their respective predecessors in title;

(iii) any effect on rent of any improvement to the Premises which

(A) was carried out by and at the expense of the Tenant or a permitted undertenant or any of their respective predecessors in title; and

(B) was not carried out pursuant to an obligation to the Landlord or its predecessors in title; and

(C) was carried out with Consent where required under this Lease; and

(D) was carried out and completed during the Term or during any period of occupation immediately before the start of the Term under a licence or agreement for lease; and

(E) cannot give rise to any liability on the part of the Landlord to pay compensation

3

(iv) any work carried out to the Property which diminishes the rental value of the Property at the relevant Review Date; and

(v) any actual or potential obligation on the Tenant or any undertenant to reinstate alterations or additions to the Property.

“Outgoings” means all rates, taxes, charges, duties, assessments, impositions and outgoings of any nature which are at any time during the Term payable either by the owner or occupier of property and includes charges for electricity, gas, water, sewerage, telecommunications and other services rendered to or consumed by the relevant property but excludes tax payable by the Landlord on the receipt of the Basic Rent or on any dealings with its reversion to this Lease and input Value Added Tax suffered by the Landlord in respect of the Building;

“Percentage” means a fair proportion as conclusively determined by the Landlord but which in the absence of special circumstances will be substantially the same as the proportion which the net internal area of the Property bears to the net internal area of all the Lettable Areas at the relevant time subject to adjustment under clause 6.7;

“Permitted Use” means use as offices within the meaning of Class B1(a) of the Town and Country Planning (Use Classes) Order 1987;

“Plant” means the plant, equipment and machinery from time to time in or on the Building including without limitation lifts, hoists, generators, and equipment for air-conditioning ventilation, heating, cooling, fire alarm, fire prevention or fire control communication and security;

“President” means the President from time to time of the Royal Institution of Chartered Surveyors or any person authorised at the relevant time to act on his behalf;

“Property” means that part of the Building described in schedule 1 and all additions and improvements made to it and references to the Property shall include reference to any part of it;

“Property Plan” means the attached plan marked as such;

“Quarter Days” means 25th March 24th June 29th September and 25th December in each year;

“Regulations” means the Regulations in schedule 9 and any others from time to time made by the Landlord in addition to or in substitution for those regulations which the Landlord considers appropriate having regard to the principles of good estate management;

“Rent” means all sums reserved as rent by this Lease;

“Rent Commencement Date” means 1 August 2006;

“Rent Restrictions” means any Enactment which restricts the right of the Landlord to review the Basic Rent or to recover any Rent under this Lease;

“Rent Review Surveyor” means the person appointed under paragraphs 3 or 6 of schedule 4 to determine the Basic Rent at a Review Date;

“Retained Property” means all parts of the Building except for the Property and the other Lettable Areas and includes without limitation the Common Parts, the Conduits, the foundations, roof, exterior and structure of the Building, the Plant (except where part of the Property or any Lettable Area) any external areas of the Building and any parts of the Building used for the management of the Building or the provision of services to it;

“Review Date” means 7 April 2009 and the same day and month in every fifth year after that date and the penultimate day of the Term and in addition any date on which any Rent Restrictions in force on a previous Review Date are repealed or modified so as to be less restrictive;

“Review Period” means the period commencing on a Review Date and expiring either on the day before the next Review Date or on Determination;

4

“Service Charge” means the Percentage of the Total Service Costs in any Service Charge Period;

“Service Charge Account Date” means 1 October in each year of the Term or such other date or dates in each year of the Term as the Landlord may by written notice to the Tenant stipulate and also the date of Determination;

“Service Charge Period” means the period commencing on 1 February 2005 and expiring on the first Service Charge Account Date and thereafter the period from and excluding one Service Charge Account Date up to and including the next Service Charge Account Date;

“Service Charge Statement” means the statement to be provided to the Tenant under paragraph 4.4 of schedule 8;

“Service Costs” means the costs set out in paragraph 3 of schedule 8;

“Services” means the Basic Services and the Additional Services;

“Sign” includes any sign, hoarding, showcase, signboard, bill, plate, fascia, poster or advertisement;

“Signboard” means a common signboard to be provided by the Landlord in the common entrance hall of the Building;

“Site Plan” means the attached plan marked as such;

“Superior Landlord” means any party having an interest in the Property in reversion to the Superior Lease;

“Superior Lease” means any lease under which the Landlord holds the Building and includes any leases in reversion to that Lease;

“Tenant” includes its successors in title;

“Term” means the term granted by this Lease;

“Total Service Costs” means the total of the Service Costs in any Service Charge Period;

“Title Matters” means the matters set out in Part 2 of schedule 3;

“Value Added Tax” means value added tax chargeable in accordance with the Value Added Tax Act 1994 and includes any future tax of a like nature and all references to an election by the Landlord to waive exemption under paragraph 2(1) of Schedule 10 to that Act shall be deemed to include any such election made by a company in the same VAT group as the Landlord.

1.2 In this I ease unless the context otherwise requires:

1.2.1  words importing any gender include every gender;

1.2.2  words importing persons include an individual, company, corporation, firm, partnership, unincorporated association or body of persons, and any state, or governmental or local division or agency of a state;

1.2.3  references to clauses, schedules and annexures are references to the relevant clause in or schedule or annexure to this Lease;

1.2.4  reference in any schedule to numbered paragraphs are references to the numbered paragraphs of that schedule;

1.2.5  references in this Lease to any specified provision of this Lease are to this Lease or that provision as in force for the time being and as amended from time to time;

1.2.6  references to any statute or statutory provision shall include (i) any subordinate legislation made under it, (ii) any provision which it has superseded or re-enacted (whether with or without modification) and (iii) any provision superseding or re-enacting it (whether with or without modifications);

5

1.2.7  where any obligation is undertaken by two or more persons jointly they shall be jointly and severally liable in respect of that obligation and a demand for payment served on one of them shall be deemed to be a demand made on all of them;

1.2.8  any obligation on any party not to do or omit to do anything shall include an obligation not to allow that thing to be done or omitted to be done by any undertenant of that party or by any employee servant agent invitee or licensee of that party or its undertenant;

1.2.9  where the Landlord or the Tenant covenant to do something they shall be deemed to fulfil that obligation if they procure that it is done;

1.2.10  any obligation on the Landlord or the Tenant under their respective obligations in this Lease shall continue notwithstanding determination insofar as it remains to be carried out;

1.2.11  any sum payable by one party to the other shall be exclusive of Value Added Tax which shall where it is chargeable be paid in addition to the sum in question at the time when the sum in question is due to be paid;

1.2.12  any relevant perpetuity period shall be eighty years from the date of this Lease;

1.2.13  the contents table and the descriptive headings to clauses are inserted for convenience only, have no legal effect and shall be ignored in interpreting this Lease; and

1.2.14  the words and phrases “other”, “including” and “in particular” shall not limit the generality of the words preceding or succeeding them or be construed as limiting the succeeding words to the same class as the preceding words.

1.3 If and whenever the Landlord is itself a lessee of the Property:

1.3.1  wherever Consent is required under this Lease the approval of the Superior Landlord shall also be required to the extent required under the Superior Lease;

1.3.2  any Consent shall be subject to the need for the approval of the Superior Landlord where appropriate;

1.3.3  nothing in this Lease or in any Consent shall imply that the Superior Landlord’s approval will not be unreasonably withheld;

1.3.4  the rights reserved by Part 1 of schedule 3 are also reserved to the Superior Landlord;

1.3.5  references to any right of (or covenant to permit) the Landlord to enter the Property shall extend to the Superior Landlord and to anyone authorised by it or otherwise entitled; and

1.3.6  this Lease shall take effect subject to the rights excepted and reserved by the Superior Lease (which are by virtue of this provision reserved to the Landlord as well as the Superior Landlord).

2 Demise and Rent

2.1 The Landlord demises the Property to the Tenant together with the rights set out in Schedule 2 except and reserving to the Landlord the rights set out in Part 1 of schedule 3 but subject to the Title Matters to hold them to the Tenant for a term of ten years starting on 1 February 2005 paying during the Term by way of Rent:

2.1.1  the Basic Rent, which shall be paid yearly and proportionately for any part of a year by equal quarterly installments in advance on the Quarter Days, the first payment to be made on the Rent Commencement Date in respect of the period from that date to the next Quarter Day; and

2.1.2  the Insurance Charge which shall be paid as stated in paragraph 2 of schedule 5; and

6

2.1.3  the Service Charge which shall be paid as stated in schedule 8; and

2.1.4  any other sums which may become due from the Tenant to the Landlord under the provisions of this Lease.

3 Tenant’s Covenants

The Tenant covenants with the Landlord to observe and perform the covenants set out in schedule 6 and those on its part contained in schedule 5.

4 Landlord’s Covenants

The Landlord covenants with the Tenant that, whilst the reversion immediately expectant upon this Lease is vested in it, it shall observe and perform the covenants set out in schedule 7 and those on its part contained in schedule 5.

5 Forfeiture

5.1 Without prejudice to any other rights of the Landlord if:

5.1.1 the whole or part of the Rent remains unpaid twenty-one days after becoming due (whether demanded or not); or

5.1.2 any of the Tenant’s covenants in this Lease are not performed or observed; or

5.1.3 the Tenant or any guarantor of the Tenant’s obligations under this Lease:

(a) proposes or enters into any composition or arrangement with its creditors generally or any class of its creditors; or

(b) being a company:

(i) is the subject of a petition presented or an order made or a resolution passed or analogous proceedings taken for appointing an administrator of or winding up such company (save for the purpose of and followed within four months by an amalgamation or reconstruction which does not involve or arise out of insolvency or give rise to a reduction in capital and which is on terms previously approved by the Landlord); or

(ii) an encumbrancer takes possession or exercises or attempts to exercise any power of sale or a receiver is appointed of the whole of the undertaking, assets or revenues of such company; or

(iii) stops payment or agrees to declare a moratorium or becomes or is deemed to be insolvent or unable to pay its debts within the meaning of section 123 Insolvency Act 1986; or

(iv) without the prior consent in writing of the Landlord, ceases to carry on its business in the normal course; or

(c) being an individual:

(i) is the subject of a bankruptcy petition or bankruptcy order; or

(ii) is the subject of an application or order or appointment under section 253 or section 273 or section 286 Insolvency Act 1986; or

(iii) is unable to pay or has no reasonable prospect of being able to pay his debts within the meaning of sections 267 and 268 Insolvency Act 1986; or

7

5.1.4  any event occurs or proceedings are taken with respect to the Tenant or any guarantor of the Tenant’s obligations under this Lease in any jurisdiction to which it is subject which has an effect equivalent or similar to any of the events mentioned in clause 5.1.3,

the Landlord may (and notwithstanding the waiver of any previous right of re-entry) re-enter the Property and this Lease shall then determine but without prejudice to any right of action of the Landlord in respect of any previous breach by the Tenant of this Lease.

5.2 The Landlord shall not exercise this right of re-entry without giving prior written notice of its intention to all mortgagees who have registered a notice of charge with the Landlord.

6 Miscellaneous

6.1 Except to the extent that compensation may be payable by law notwithstanding any agreement to the contrary neither the Tenant nor any undertenant or any occupier of the Property at any time shall be entitled to any compensation under any Enactment upon Determination or upon leaving the Property.

6.2 Except to the extent that the Landlord may be liable under its covenants in schedule 7 or by law notwithstanding any agreement to the contrary the Landlord shall not be liable in any way to the Tenant or any undertenant or any servant agent licensee or invitee of the Tenant or any undertenant by reason of:

6.2.1  any act neglect, default or omission of any of the tenants or owners or occupiers of any adjoining or neighbouring property (whether within the Building or not) or of any representative or employee of the Landlord (unless acting within the scope of the express authority of the Landlord); or

6.2.2  the obstruction by others of the Common Parts or the areas over which rights are granted by this Lease.

6.3 The Landlord shall be entitled to make alterations to the Common Parts or to alter renew or replace any Plant and to obstruct the Common Parts while doing so but shall in so doing ensure that reasonable access to the Property or reasonable alternative access to the Property is always available.

6.4 Nothing in this Lease shall imply or warrant that the Property may lawfully be used for the Permitted Use and the Tenant acknowledges and admits that no such representation or warranty has ever been made by or on behalf of the Landlord.

6.5 The Landlord and the Tenant shall not be liable to each other for breach of any covenant in this Lease to the extent that its performance or observance becomes impossible or illegal but subject to the other provisions of this Lease, the Term and the Tenant’s liability to pay the Rent shall not cease or be suspended for that reason.

6.6 The Landlord shall incur no liability to the Tenant or any undertenant or any predecessor in title of either of them by reason of any approval given to or inspection made of any drawings, plans, specifications or works prepared or carried out by or on behalf of any such party nor shall any such approval or inspection in any way relieve the Tenant from its obligations under this Lease.

6.7 If the Landlord reasonably so determines the Percentage shall be varied to such figures as the Landlord may reasonably specify in writing having regard to the previous method of calculation of such figures and to the fact that it is intended that if all Lettable Areas are let on leases similar to this Lease the Landlord shall be able to recover from its lessees the whole of the costs of insurance and the Total Service Costs.

6.8 In the interests of security the Landlord:

6.8.1  may require anyone entering or leaving the Building to identify themselves and the party in the Building whom they are visiting and to record this information and their arrival and departure times in a book or other form of record kept for the purpose;

8

6.8.2  may prevent anyone entering the Building for the purpose of visiting the Property unless that person has a key to the Property or is authorised by the Tenant or any other permitted occupier of the Property;

6.8.3  may require the Tenant or permitted occupier of the Property to escort any person visiting them from the security or reception desk to the Property (and back again when that person leaves); and

6.8.4  may prevent anyone removing any items from the Building unless that person is authorised to do so by the Landlord or any tenant or permitted occupier of the Building, and in this regard:

(a) the rights of access and egress granted in Schedule 2 are subject to this clause; and

(b) any authorisation required by this clause must be produced to the person requiring it or confirmed by a written or oral (or telephoned) statement from the person giving it.

6.9 The Landlord may add to vary or discontinue any of the Services where the Landlord considers it appropriate to do so having regard to the principles of good estate management.

6.10 The Tenant shall not be or become entitled to any easement, right, quasi-easement or quasi-right save as expressly set out (if at all) in Schedule 2 and any such amenity enjoyed by the Tenant shall be so enjoyed with the consent of the Landlord and not as of right.

6.11 This Lease does not pass to the Tenant the benefit of or the right to enforce any covenants which now benefit or which may in the future benefit the reversion to this Lease, and the Landlord shall be entitled in its sole discretion to waive, vary or release any such covenants.

6.12  Any notice, communication, demand or consent required or authorised to be given by this Lease shall be in writing:

6.12.1  any notice to be served on, or communication to be sent to, any party to this Lease shall be deemed to be properly served if sent by first class post, or delivered by hand during usual business hours to the registered office, or principal place of business of the relevant party, addressed to any director or the company secretary PROVIDED THAT for as long as Westinghouse Brake and Signal Holdings Limited are the tenant under the lease all notices, rent demands and other communications shall be sent to PO Box 79 Langley Park Langley Road Chippenham Wiltshire SN15 1JD;

6.12.2  any such notice or communication to be sent to any party to this Agreement shall be deemed to have been received when delivered, if delivered by hand, or two working days after posting if sent by first class post.

6.13  Any dispute arising between the Tenant or any undertenant and any owner or occupier (other than the Landlord) of adjacent property owned (whether freehold or leasehold) by the Landlord as to any right or privilege or any party or other wall or otherwise shall (except where it relates to a matter of law) be determined on behalf of the Tenant or any undertenant by the Landlord or someone appointed by him and any such decision shall bind the Tenant or any undertenant who shall pay the cost of obtaining it.

6.14  This Lease is a new tenancy for the purposes of the Landlord and Tenant (Covenants) Act 1995.

6.15  For the purposes of the Contracts (Rights of Third Parties) Act 1999 this Lease is only enforceable by the parties to it and (if applicable) their respective successors in title.

6.16  If the Landlord and the Tenant agree in writing that the Tenant may defer payment of any sums due under this Lease then for the purposes of this Lease (and of Section 17 Landlord and Tenant (Covenants) Act 1995) those sums shall be deemed to be due for payment on the deferred date so agreed, and not on the earlier date on which they would, but for that agreement, have fallen due.

6.17 Each of the provisions of this Lease is severable from the others. If at any time one or more of such provisions becomes illegal, invalid or unenforceable, then the validity and enforceability of the remaining provisions of this Lease shall not be affected.

9

6.18 No permission or consent required by the Tenant under the provisions of this Lease shall be effective or binding on the Landlord unless given by deed duly executed by or on behalf of the Landlord and any other relevant party.

7 Sections 24-28 Landlord and Tenant Act 1954

7.1 Pursuant to section 38A Landlord and Tenant Act 1954 the Landlord and the Tenant have agreed that the provisions of sections 24-28 (inclusive) of that Act shall be excluded in relation to this Lease.

7.2 The Tenant acknowledges that a duly executed notice in the form set out in Schedule 1 to the Regulatory Reform (Business Tenancies) (England Wales) Order 2003 (“2003 Order”) was served on it by the Landlord less than 14 days before the date of this Lease or if earlier, the date on which the Tenant became contractually bound to enter into this Lease, under and in accordance with Section 38A(3)(b) of the Act.

7.3 The Tenant has before entering into this Lease or if earlier, the date on which the Tenant became contractually bound to enter into this Lease, made a Statutory Declaration in the form set out in paragraph 8 of Schedule 2 to the 2003 Order under and in accordance with Section 38A(3)(b) of the Act.

IN WITNESS of which each party has duly executed this Lease as a deed on the date first above written.

10

Schedule 1

The Property

That Lettable Area on the fourth floor which is shown edged in red on the Property Plan and extends from the upper side of the floor slab immediately below that Lettable Area to the underside of the floor, or roof slab immediately above that Lettable Area excluding:

(a) the walls bounding that Lettable Area; and

(b) all load-bearing walls and pillars within that Lettable Area; and

(c) all structural floor slabs within that Lettable Area; and

(d) all Conduits and Plant within that Lettable Area which do not serve that Lettable Area exclusively; and

(e) all windows within that Lettable Area,

but including:

(i) the plaster and other finishes on the inner sides of the walls bounding that Lettable Area and on all faces of all load-bearing walls and pillars wholly within that Lettable Area; and

(ii) all ceilings and other finishes applied to the floor or roof slab immediately above that Lettable Area and to any floor slab within that Lettable Area; and

(iii) all floors floor screeds and other finishes applied to the floor slab immediately below that Lettable Area and to any floor slab within that Lettable Area; and

(iv) all doors of that Lettable Area together with the frames glass and furniture of them; and

(v) the whole of all non-load-bearing walls or partitions wholly within that Lettable Area; and

(vi) one half in thickness of all walls (if any) bounding that Lettable Area and indicated as party walls on the Property Plan; and

(vii) all Conduits and Plant within that Lettable Area and which serve that Lettable Area exclusively.

11

Schedule 2

Part 1 - Rights granted in common

The right, in common with the Landlord and all others for the time being authorised by the Landlord or otherwise entitled, for the Tenant and any permitted undertenant or permitted occupier of the Property:

(a) to connect to and use all Conduits and Plant from time to time serving the Property or provided for the benefit of the Property (but without any right of access to areas outside the Property for this purpose); and

(b) to pass and repass over the Common Parts and otherwise to use the Common Parts for the purposes which they are designed; and

(c) of support and protection for the Property from the remainder of the Building; and

(d) to display the name of the Tenant of the Property on the Signboard.

12

Schedule 3

Part 1 - Exceptions and Reservations

The rights for the Landlord and all others from time to time authorised by the Landlord or otherwise entitled and without any liability to pay compensation:

1 to carry out works to the Building or to any other property and to use them in whatever manner may be desired and to consent to others doing so whether or not in each case the access of light or air to the Property from time to time enjoyed by it shall be affected in any way (save for any rights specifically granted by Schedule 2) PROVIDED THAT the Tenant’s use and enjoyment of the Property shall not be materially adversely affected;

2 to connect to and use all Conduits and Plant within or forming part of the Property;

3 upon reasonable prior written notice to the Tenant (except in emergency when no notice need be given) to enter and remain on the Property with or without tools, appliances, scaffolding and materials for the purposes of:

(a) installing, inspecting, repairing, renewing, reinstalling, cleaning, maintaining, removing or connecting up to any Conduits or Plant; or

(b) inspecting, cleaning, altering, repairing, maintaining, renewing, demolishing or rebuilding any adjoining or adjacent property or any other things used in common; or

(c) inspecting the state and condition of the Property; or

(d) carrying out works under paragraphs 3.6 or 9.4 of schedule 6; or

(e) complying with the Landlord’s obligations under this Lease or with any other Legal Obligation of the Landlord,

the person entering causing as little damage and inconvenience as reasonably possible and making good at its expense any damage caused to the Property by such entry; and

4 to oversail the airspace of the Property with cranes (which are not themselves positioned on the Property) subject to the person exercising this right indemnifying the occupiers of the Property from time to time against death or injury to persons and damage to property which may result from that oversailing.

13

Part 2 - Title Matters

1 The entries on the Property and Charges Registers of Land Registry title number NGL771030 insofar as they relate to the Property;

2 The easements rights covenants and other matters contained or referred to in the Wayleave Agreement dated 20 March 2001 made between (1) The Prudential Assurance Company Limited (2) The Landlord and (3) Cable Camden Limited

3 All easements rights covenants and other matters affecting the Property including any unregistered interests which fall within section 11(4)(c) or Schedules 3 or 12 of the Land Registration Act 2002.

4 Any registered interests which fall within any of the paragraphs of Schedule 1 of the Land Registration Act 2002 and any interests which fall within section 11(4)(c) of the Land Registration Act 2002.

5 Such registered interests as may affect the Property to the extent and for so long as they are preserved by the transitional provisions of Schedule 12 of the Land Registration Act 2002.

14

Schedule 4

Review of Basic Rent

1 On each Review Date the Basic Rent shall be reviewed in accordance with this schedule and the Basic Rent payable in respect of each Review Period shall be the higher of the Basic Rent payable immediately before that Review Period (ignoring for this purpose any rent cesser under paragraph 3 of schedule 5 then current) and the Open Market Rent on the Review Date.

2 The Landlord and the Tenant shall seek to agree the amount of the Open Market Rent in respect of each Review Period but if they have not agreed it by the date three months before the relevant Review Date then either party may require the matter to be determined by the Rent Review Surveyor.

3 The Rent Review Surveyor shall be a professionally qualified chartered surveyor or valuer with not less than 10 years experience of rent reviews of property similar to the Property and in a similar location who shall be previously agreed upon between the Landlord and the Tenant or (in the absence of such agreement prior to the date three months before the relevant Review Date) nominated on the application of either the Landlord or the Tenant or both of them jointly by the President, and in the event of a sole application by the Landlord or the Tenant the party making such application shall on the date of the application provide a copy thereof to the other party.

4 The Rent Review Surveyor shall act as an expert and he shall:

(a) allow the parties a reasonable opportunity of making representations and counter-representations to him; and

(b) take those representations and counter-representations into account; and

(c) be entitled to require the parties to comply with a timetable established by him, and to disregard any representations made to him outside any time limits so established; and

(d) be entitled to take legal advice on any matter he may consider relevant to his appointment, the extent of his powers or duties or the review; and

(e) if required by either party give written reasons for his determination.

5 The Rent Review Surveyor’s award shall be binding on the parties and the costs of the reference to him and of his determination (including his own fees and legal and other expenses and the legal and other costs of the parties) shall lie in his award.

6 If the Rent Review Surveyor dies or becomes unwilling to act or becomes incapable of acting, the President may upon the application of either the Landlord or the Tenant or both of them jointly discharge him and appoint another Rent Review Surveyor to act in his place and in the same capacity and this shall be repeated as many times as the circumstances may require.

7 If for any reason the Open Market Rent is not agreed or determined until after the relevant Review Date the Tenant shall continue to pay the Basic Rent at the rate applicable immediately before that date and on the day 7 days after the day on which the Open Market Rent is agreed or determined, the Tenant shall pay the amount of any increase for the period from and including the relevant Review Date up to the Quarter Day following that agreement or determination together with interest on each part of that payment at four per cent below the Interest Rate for the period on and from the date on which that part would have been payable had the Open Market Rent been agreed before the Review Date up to the date on which payment is due.

8 Within twenty-eight days of the Open Market Rent being agreed or determined a memorandum recording the increased Basic Rent (or the fact that there is no increase) shall be executed by the parties and attached to this Lease and the Counterpart but that memorandum shall be regarded as evidential only and its absence shall not affect the liability of the Tenant to pay any increased Basic Rent.

9 Time is not of the essence in this schedule.

15

10 For the purpose of this schedule the Open Market Rent shall be deemed to have been determined on the date of the Rent Review Surveyor’s award.

16

Schedule 5

Insurance

1 Landlord’s Insurance Obligations

1.1 The Landlord shall:

1.1.1  pay promptly to the Superior Landlord all sums relating to insurance required under the Superior Lease;

1.1.2  request from the Superior Landlord whenever reasonably or properly requested by the Tenant and to the extent permitted under the Superior Lease evidence of the terms of the Insurance Policies effected by the Superior Landlord and of payment of the last premium and shall pass on to the Tenant the evidence obtained from the Superior Landlord; and

1.1.3  pass on to the Tenant copies of all relevant communications about insurance for the Building received from the Insurers or the Superior Landlord or from any person on their behalf.

2 Tenant’s Insurance Obligations

2.1 The Tenant shall pay the Insurance Charge to the Landlord on demand.

2.2 The Tenant shall pay to the Landlord on demand the Percentage of any normal excess which the Landlord is required to bear under any Insurance Policy.

2.3 The Tenant shall:

2.3.1  not do or fail to do anything which shall or may cause any of the Insurance Policies to be void or voidable or increase the premiums payable under them;

2.3.2  not insure or maintain insurance of the Building or the Property against any of the Insured Risks;

2.3.3  notify the Landlord of the incidence of any Insured Risk or any other matter which ought reasonably to be notified to the Insurers forthwith upon becoming aware of the same;

2.3.4  pay on demand the whole of any increase in any premium arising from a breach of paragraph 2.3.1;

   3.5 comply with all the conditions of the Insurance Policies and all requirements of the Insurers; and

2.3.6  notify the Landlord in writing of the value of any alterations, additions or improvements which the Tenant or any undertenant proposes to make before those works are commenced.

3 Rent Cesser

3.1 If the Building is damaged or destroyed by any of the Insured Risks such that the Property or the means of access to it is unfit for occupation and use or the Property incapable of reasonable access then (unless paragraph 4 applies) the Basic Rent and the Service Charge or a fair proportion of them according to the nature and extent of the damage in question shall be suspended until the earlier of:

3.1.1  the expiration of the period insured for Loss of Rent; and

3.1.2  the date on which the Property is again fit for occupation and use or capable of reasonable access.

4 Vitiation of Insurance

4.1 If the insurance money under any of the Insurance Policies is wholly or partly irrecoverable by reason of any act neglect or default of the Tenant or any undertenant or any predecessor in title of either of them or any employee, servant, agent, licensee or invitee of any of them or where the sum insured is

17

inadequate as a result of a breach by the Tenant of paragraph 2.3.6, then the Tenant will pay to the Landlord the irrecoverable amount or the amount of such shortfall as the case may be.

4.2 Payment under paragraph 4.1 shall be made on the later of the date of demand by the Landlord and the date on which such insurance money (or the relevant part of it) would have been claimable under the Insurance Policies had they not been wholly or partly vitiated.

4.3 In addition to any sum payable under paragraph 4.1 the Tenant shall pay interest at the Interest Rate on the relevant sum from the date on which that sum is due to the date of payment.

5 Determination

5.1 If the Building is destroyed or damaged by any of the Insured Risks such that the Property is unfit for occupation and use or incapable of reasonable access, and if the Property is not made fit for occupation and use or capable of reasonable access within three years after that destruction or damage occurs, then either the Landlord or the Tenant may by written notice to the other served at any time after that date (but before the Property is again fit for occupation and use) determine this Lease and if such notice is served:

5.1.1  this Lease shall forthwith determine but the Determination shall be without prejudice to any right of action of either party in respect of any previous breach of this Lease by the other or to any obligation of the Tenant under paragraphs 2.2 or 4 (and any sums payable under those paragraphs shall be paid on Determination if they have not already become payable); and

5.1.2  all moneys payable under the Insurance Policies or by the Tenant under paragraphs 2.2 or 4 shall be paid to and belong to the Landlord absolutely.

6 Arbitration

Any dispute under paragraphs 3, 4 or 5 shall be determined by a sole arbitrator to be agreed upon by the Landlord and the Tenant or in default of agreement to be nominated at the request of either of them or both of them jointly by the President and in either case in accordance with the Arbitration Act 1996.

18

Schedule 6

Tenant’s Covenants

1 To pay Rent

1.1 To pay the Rent at the times and in the manner required by this Lease to such address as the Landlord may from time to time require and without deduction or set-off whether legal or equitable.

1.2 To pay the Basic Rent by banker’s standing order or direct debit if required by the Landlord.

1.3 If the Basic Rent or any part of it is not paid in cleared funds on the date on which it is due or if any other part of the Rent is not paid within seven days after becoming due (whether or not demanded except where a demand is required by this Lease), the sum in question shall carry interest at the Interest Rate for the period from the date on which it became due until the date of actual payment and that interest shall be paid by the Tenant on demand.

1.4 If the Landlord refuses to accept Rent because an event referred to in clause 5.1 has occurred and the Landlord does not wish to waive its rights under that clause, then such unpaid Rent shall nevertheless bear interest under paragraph 1.3 until the date the Rent in question is accepted.

2 To pay Outgoings

2.1 To pay and discharge all Outgoings relating to the Property at the times when they become due.

2.2 If at any time the Property is not separately assessed for any Outgoings the Tenant shall pay to the Landlord on demand a fair proportion of any assessment which includes the Property.

2.3 Not without Consent (which shall not be unreasonably withheld or delayed) to make any claim for relief in respect of any Outgoings where to do so might prejudice the Superior Landlord and/or the Landlord’s own actual or potential entitlement to relief then or in the future.

2.4 Not without Consent (which shall not be unreasonably withheld or delayed) to agree with the relevant Authority any rating or other assessment in respect of the Property and to consult with (and have due regard to the representations of) the Landlord in the negotiations for any such assessment or any appeal against any such assessment.

3 Repair and Decoration

3.1 To repair and keep the Property in no worse state of repair and condition than evidenced by the attached photographic schedule of condition.

3.2 Without prejudice to the generality of the foregoing covenant:

3.2.1  as to the interior of the Property in the fifth year and in the last three months of the Term to have prepared and painted or otherwise decorated or treated (as the case may be) all surfaces and other portions fabrics and finishes (i) usually painted with two coats of reasonable quality paint or (ii) otherwise decorated or treated with quality materials and as may be necessary to have professionally treated in accordance with the good approved manner for preserving and protecting the same all other parts of the Property requiring treatment for preservation and protection and as necessary to clean make good and treat with suitable preservative any rough cast stucco work block panels or walls;

3.2.2  to carry out such painting decoration or other treatment in a proper and workmanlike manner to the reasonable satisfaction of the Landlord and in accordance with such reasonable directions in regard thereto as may from time to time be communicated to the Tenant by or on behalf of the Landlord.

3.3 Paragraphs 3.1 and 3.2 shall not apply to the extent that any lack of repair or decoration is caused by damage by an Insured Risk (unless paragraph 4 of schedule 5 applies).

19

3.4 To keep the Property in a clean and tidy condition.

3.5 To clean the inside glass of all windows comprised in the Property as often as shall be reasonably necessary but in any event at least once in every month.

3.6 If the Tenant is in breach of this paragraph 3 then in addition to any other rights which the Landlord may have:

3.6.1  the Landlord may serve on the Tenant written notice specifying the breach in question; and

3.6.2  the Tenant shall as soon as practicable after receipt of that notice and in any event within two months (or sooner in emergency) commence and proceed with all due speed to remedy the breach; and

3.6.3  if the Tenant fails to comply with paragraph 3.6.2 the Landlord may enter the Property and carry out the relevant work and all costs incurred by the Landlord in so doing shall be a debt from the Tenant to the Landlord which the Tenant shall pay on demand with interest on them at the Interest Rate from the date of demand to the date of payment.

3.7 The Tenant shall give written notice to the Landlord immediately on becoming aware of:

3.7.1  any damage to or destruction of the Building; or

3.7.2  any defect or want of repair in the Building (including without limitation any relevant defect within the meaning of section 4 Defective Premises Act 1972) which the Landlord is liable to repair under this Lease or which the Landlord is or may be liable to repair under common law or by virtue of any Enactment.

4 Yielding up on Determination

4.1 On Determination the Tenant shall yield up the Property to the Landlord with vacant possession in a state of repair condition and decoration which is consistent with the proper performance of the Tenant’s covenants in this Lease.

4.2 If on Determination the Tenant leaves any fixtures fittings or other items in the Property the Landlord may treat them as having been abandoned and may remove destroy or dispose of them as the Landlord wishes and the Tenant shall pay to the Landlord on demand the cost of this with interest at the Interest Rate from the date of demand to the date of payment and indemnify the Landlord against any and all resulting liability.

4.3 Immediately before Determination if and to the extent required by the Landlord the Tenant shall reinstate all alterations, additions or improvements made to the Property at any time during the Term (or pursuant to any agreement for lease made before the start of the Term) and where this involves the disconnection of Plant or Conduits, the Tenant shall ensure that the disconnection is carried out properly and safely and that the Plant and Conduits are suitably sealed off or capped and left in a safe condition so as not to interfere with the continued functioning of the Plant or use of the Conduits elsewhere in the Building.

4.4 The Tenant shall make good any damage caused in complying with paragraph 4.3 and shall carry out all relevant works (including the making good of damage) to the reasonable satisfaction of the Landlord.

4.5 If upon Determination the Property is not left in the state required by this paragraph 4 the Tenant shall pay to the Landlord on demand (in addition to any other sums payable as a result of that breach of covenant) a sum equal to the Rent which would have been payable under this Lease had there been no such Determination for the period from the date of Determination to the date upon which the Landlord has put (or might reasonably have put) the Property into the state in which it should have been left.

20

4.6 On Determination, whether by effluxion of time or otherwise, the Tenant shall, if the Landlord requires:

4.6.1  cooperate with the Landlord in applying to the Land Registry for any registered title to this Lease to be closed and merged in the immediate reversion to it; and

4.6.2  deliver to the Landlord a discharge in appropriate form of all charges registered or noted on any such registered title; and

4.6.3  enter into any documents reasonably required by the Landlord to effect that closure.

5 Use

5.1 The Tenant shall not use the Property for any purpose except the Permitted Use.

5.2 The Tenant shall not use the Property for any purpose or activity which is illegal, immoral, noisy, noxious, dangerous or offensive or which may be or become a nuisance to or cause damage or annoyance to the Landlord or any other person or which might be harmful to the Property or the Building.

5.3 The Tenant shall not use the Property for the purpose of residing or sleeping nor for any sale by auction, public exhibition, political meeting, shows, spectacle, or gambling or for any illegal or immoral purpose.

5.4 The Tenant shall not enter into any covenant in favour of any person (other than the Landlord) nor require a covenant from any person the effect of which is to restrict the use of the Property further than it is already restricted by this Lease.

6 Alterations

6.1 The Tenant shall make no alteration addition or improvement to the Property or the Building whether structural or otherwise except as expressly permitted under paragraph 6.2.

6.2 The Tenant may carry out alterations, additions or improvements to the Property which are wholly within the Property and which do not affect any part of the exterior or structure of the Building and which do not affect the electrical or mechanical equipment within the Building where:

6.2.1  the Tenant has submitted to the Landlord detailed plans and specifications showing the works; and

6.2.2  the Tenant has given to the Landlord such covenants relating to the carrying out of the works as the Landlord may reasonably require; and

6.2.3  the Tenant has if reasonably so required by the Landlord provided the Landlord with suitable security which will allow the Landlord to carry out and complete the works if the Tenant fails to do so; and

6.2.4  the Tenant has obtained Consent to the works (which shall not be unreasonably withheld).

7 Signs

7.1 Not to fix to or display or not permit to be affixed to or displayed on the Property any Signs save as is permitted in clause 7.2.

7.2 With Consent the Tenant may affix to or display in the lift lobby on the fourth floor of the Building on the exterior of the Property a Sign stating the name of the Tenant and the nature of its business as shall be reasonably necessary in connection with the use and occupation of the Property for the time being the position of the sign size and colour of such sign having been approved by the Landlord.

8 Dealings with the Property

8.1 Unless expressly permitted under paragraph 8.12 or by a Consent granted under paragraphs 8.2, 8.3 or 8.7 the Tenant shall not assign, underlet, charge, part with or share possession or occupation of all or any part of the Property nor hold the Property on trust for any other person.

21

8.2 The Landlord shall not unreasonably withhold Consent to a legal charge of the whole of the Property.

8.3 The Landlord shall not unreasonably withhold or delay Consent to an Assignment of the whole of the Property.

8.4 Without restricting the scope of Paragraph 8.3 the Landlord and the Tenant agree for the purposes of section 19(1A) of the Landlord and Tenant Act 1927 that the Landlord may withhold Consent unless the circumstances set out in Paragraph 8.5 exist and/or the conditions set out in Paragraph 8.6 are fulfilled, provided that if at any time before the execution of the deed of Assignment the circumstances set out in Paragraph 8.5 or any of them change the Landlord may revoke the Consent by written notice to the Tenant.

8.5 The circumstances referred to in Paragraph 8.4 above are that:

8.5.1  the prospective assignee is not a Group Company or a Connected Person; and

8.5.2  in the reasonable opinion of the Landlord the prospective assignee is of sufficient financial standing to enable it to comply with the Tenant’s covenants in this Lease for the remainder of the Term; or

8.5.3  the prospective assignee or prospective guarantor does not enjoy diplomatic or state immunity is not a local authority in England or a government department or a Minister of the Crown (in each case of the United Kingdom); and

8.5.4  there is no sum due to the Landlord by the Tenant under this Lease and the Tenant is not in any other material breach of the Tenant’s covenants in this Lease; and

8.5.5  the Landlord has received an undertaking from the Tenant’s solicitors in such form as the Landlord may reasonably require to pay to the Landlord on demand the reasonable legal and surveyors’ costs and disbursements (including input Value Added Tax) incurred by the Landlord and any Superior Landlord in considering the Tenant’s application and preparing negotiating and entering into any relevant documentation whether or not the application is withdrawn or the Consent is granted.

8.6 The conditions referred to in Paragraph 8.4 are that:

8.6.1  the Tenant (and any former Tenant who by virtue of there having been an “excluded Assignment” as defined in Section 11 of the Landlord and Tenant (Covenants) Act 1995 has not been released from the Tenant’s covenants in this Lease) shall enter into an authorised guarantee agreement within the meaning of the Landlord and Tenant (Covenants) Act 1995 with the Landlord in such terms as the Landlord may reasonably require; and

8.6.2  if the Landlord reasonably requires, a guarantor or guarantors acceptable to the Landlord acting reasonably has guaranteed to the Landlord the due performance of the prospective assignee’s obligations in such terms as the Landlord may reasonably require; and

8.6.3  the Landlord has received a direct covenant from the Assignee to observe and perform the tenant’s covenants of the Lease during the period when by virtue of the Landlord and Tenant (Covenants) Act 1995 the Assignee is bound by the tenant covenants of the Lease; and

8.6.4  the Landlord has given to the prospective assignee and to any prospective guarantor of the assignee’s obligations a notice in the form set out in Schedule 1 to the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 and the prospective assignee and any such guarantor has made a declaration in the form set out in paragraph 8 of Schedule 2 to that Order in accordance with Section 38A(3)(b) of the Landlord and Tenant Act 1954.

8.7 The Landlord shall not unreasonably withhold or delay Consent to an underletting of the whole of the Property where all of the following conditions are satisfied:

8.7.1  the prospective undertenant has covenanted with the Landlord that, until it assigns the underlease with Consent as required by the underlease and such Assignment is registered at HM Land Registry, it will observe and perform the Tenant’s covenants and obligations in this Lease (except

22

the covenant to pay Rent and in the case of an underletting of part insofar only as such covenants affect the underlet property); and

8.7.2  if the Landlord reasonably requires, a guarantor or guarantors acceptable to the Landlord has guaranteed the due performance by the undertenant of its above covenant in such terms as the Landlord may reasonably require; and

8.7.3  no fine or premium is taken for the grant of the underlease; and

8.7.4  the basic rent payable under the underlease is not less than the best rent reasonably obtainable for the underlease; and

8.7.5  any rent free period or other financial inducements given to the undertenant are no greater than is usual at the time in all the circumstances; and

8.7.6  the underlease prohibits any further underlettings and contains the same provisions as to Assignment as are contained in this Lease, but subject to additional conditions in the equivalent (in the underlease) of paragraph 8.6 that:

(a) the consent of the Landlord under this Lease has been obtained (such consent not to be unreasonably withheld or delayed); and

(b) the prospective assignee has covenanted with the Landlord under this Lease in the terms of paragraph 8.6.3; and

8.7.7  the form of the underlease has been approved in writing by the Landlord (approval not to be unreasonably withheld where the provisions of it are consistent with the provisions of this Lease and where the basic rent due under it is reviewable at the same times and on the same terms as the Basic Rent); and

8.7.8  the terms of any agreement between the Tenant and any third party which has the effect, directly or indirectly, of modifying the requirements of this Lease in relation to the proposed underletting have been disclosed to and approved by the Landlord before the relevant underlease or any agreement for its grant is entered into; and

8.7.9  any such underlease shall be excluded from the operation of sections 24-28 Landlord and Tenant Act 1954.

8.8 The Tenant shall:

8.8.1  enforce against any undertenant the provisions of any underlease and shall not waive them; and

8.8.2  operate the rent review provisions contained in any underlease so as to ensure that the rent is reviewed at the correct times and in accordance with those provisions; and

8.8.3  not accept a surrender of part only of the underlet property.

8.9  The Tenant shall not without Consent (which shall not be unreasonably withheld):

8.9.1  vary the terms of any underlease; or

8.9.2  agree any review of the rent under any underlease.

8.10  The Tenant shall not require or permit any rent reserved by any underlease to be commuted or to be paid more than one quarter in advance or to be reduced.

8.11  Any Consent granted under this paragraph 8 shall (unless it expressly states otherwise) only be valid if the dealing to which it relates is completed within two months after the date of the Consent.

8.12  The Tenant may (after giving not less than 21 days’ prior written notice to the Landlord containing all relevant information) share occupation of the Property with any Group Company on condition that the sharing shall not create any relationship of landlord and tenant and that on any occupier ceasing to be

23

a Group Company the occupation shall immediately cease or be otherwise documented in accordance with this paragraph 8.

8.13  Within fourteen days after any dealing with or transmission or devolution of the Property or any interest in it (whether or not specifically referred to in this paragraph 8) the Tenant shall give to the Landlord’s solicitors at that time notice in duplicate specifying the basic particulars of the matter in question and at the same time supply a certified copy of any instrument making or evidencing it, and pay those solicitors a registration fee of £25 or such higher sum as shall be reasonable at the time.

8.14  From time to time on demand during the Term the Tenant shall provide the Landlord with particulars of all derivative interests of or in the Property including particulars of rents rent reviews and service and maintenance charges payable in respect of them and copies of any relevant documents and the identity of the occupiers of the Property.

9 Legal Obligations and Necessary Consents

9.1 The Tenant shall comply with all Legal Obligations relating to the Property.

9.2 Where the Tenant receives from an Authority any formal notice relating to the Property or the Building (whether or not the notice is of a Legal Obligation) it shall immediately send a copy to the Landlord and if requested by the Landlord make or join in making such objections representations or appeals in respect of it as the Landlord may reasonably require (except those which are to the detriment of the business of the Tenant or any permitted occupier of the Property).

9.3 Where any Legal Obligation requires the carrying out of works to the Property the Tenant shall (if and to the extent required by this Lease) apply for Consent and any Necessary Consents to carry out the works and after obtaining them the Tenant shall carry out the works to the reasonable satisfaction of the Landlord.

9.4 Where the Legal Obligation requires the carrying out of works on the Property and the Retained Property the Landlord may carry out those works (and may refuse Consent to the Tenant to carry out the part of them which affects the Property) and the Tenant shall pay to the Landlord on demand the proportion of the cost of those works which relate to the Property and a fair proportion of any incidental fees and expenses.

9.5 Before doing anything at the Property which requires any Necessary Consents (and whether or not the Landlord shall have issued its Consent to that thing under the other provisions of this Lease) the Tenant shall:

9.5.1  obtain all Necessary Consents for the purpose; and

9.5.2  produce copies of all Necessary Consents to the Landlord; and

9.5.3  obtain the approval of the Landlord (which shall not be unreasonably withheld) to the Necessary Consents and the implementation of them,

provided that the Tenant shall not without Consent make or alter any application for any Necessary Consent.

9.6 Where any Necessary Consent implemented by the Tenant or any undertenant or permitted occupier of the Property requires works to be carried out by a date subsequent to Determination, the Tenant shall ensure that those works are completed before Determination.

9.7 If the Tenant receives or is entitled to receive any statutory compensation in relation to the Lease (other than from the Landlord) and if Determination occurs otherwise than by effluxion of time, the Tenant shall upon Determination pay to the Landlord a fair proportion of that compensation.

9.8 If and when called upon to do so the Tenant shall produce to the Landlord all plans documents and other evidence which the Landlord may require in order to satisfy itself that this paragraph 9 has been complied with.

24

10 Conduits and Plant

10.1  The Tenant shall not use the Conduits or the Plant:

10.1.1  for any purpose other than that for which they are designed; or

10.1.2  so as to exceed the capacity for which they are designed (having regard where relevant to the fact that such use is to be shared with other occupiers of the Building).

10.2  The Tenant will keep clean and free from obstruction all Conduits in the Property.

11 Overloading and Damage

11.1  Not to impose or permit to be imposed (whether by using machinery or otherwise) on any part of the Property any load or weight greater than that which the same are designed or constructed to bear with due margin for safety nor by machinery or otherwise to cause or permit any undue vibration to or nuisance by noise or otherwise in the Property.

11.2  The Tenant shall not damage or obstruct any part of the Building or any accesses to it.

11.3  The Tenant shall not keep produce or use any Hazardous Material on the Property without Consent nor (whether or not Consent is given) cause any Environmental Damage.

11.4  Any request by the Tenant for Consent under paragraph 11.3 shall be in writing and shall be accompanied by:

11.4.1  all information required to demonstrate to the reasonable satisfaction of the Landlord that any such Hazardous Material is necessary to the business of the Tenant and will be kept produced or used in such manner as to comply with all Legal Obligations applicable to such Hazardous Material and to prevent Environmental Damage; and

11.4.2  all relevant information regarding compliance with any relevant Legal Obligations (such information to include without limitation copies of applications for Necessary Consents relating to any manufacturing processes waste treatments recycling storage or disposal practices).

11.5  The Tenant shall forthwith notify the Landlord in writing of any change in the facts and circumstances assumed or reported in any application for or granting of Consent or any Necessary Consent relating to any Hazardous Material kept produced or used on the Property.

11.6  The Tenant shall indemnify the Landlord against all losses claims or demands in respect of any Environmental Damage arising out of the use or occupation of the Property or the state of repair of the Property.

12 Rights and Easements

12.1  The Tenant shall not grant to any third party any rights of any nature over the Property (except as permitted under paragraph 8).

12.2  The Tenant shall preserve all easements and rights currently enjoyed by the Property and in particular (without limitation) will not obstruct any of the windows of the Property.

12.3  The Tenant shall not do or omit to do anything whereby any right of prescription may arise against the Landlord.

13 Regulations

The Tenant shall comply with the Regulations and shall procure that all occupiers of and visitors to the Property comply with them.

25

14 Entry by Landlord

14.1 Upon reasonable prior written notice (except in emergency when no notice need be given) the Tenant shall permit the Landlord and those authorised by it at all times to enter (and remain unobstructed on) the Property for the purpose of:

14.1.1  exercising the rights reserved by schedule 3; or

14.1.2  inspecting the Property for any purpose; or

14.1.3  making surveys or drawings of the Property; or

14.1.4  erecting a noticeboard stating that the Property is to let or for sale (which the Tenant shall not remove interfere with or obscure); or

14.1.5  complying with the Landlord’s obligations under this Lease or with any other Legal Obligation of the Landlord; or

14.1.6  carrying out works which are the responsibility of the Tenant under this Lease but which the Tenant has failed to do.

4.2 The Tenant shall keep the Landlord informed of the names addresses and telephone numbers of at least two persons who have keys to the Property.

15 Costs

15.1 The Tenant shall pay to the Landlord on demand on a full indemnity basis all reasonable and proper costs expenses losses and liabilities incurred by the Landlord as a result of or in connection with:

15.1.1  any breach by the Tenant of any of its covenants or obligations in this Lease and/or the enforcement or attempted enforcement of those covenants and obligations by the Landlord; and

15.1.2  any application for Consent under this Lease whether or not that Consent is refused or the application is withdrawn; and

15.1.3  the preparation and service of any notice under section 146 or 147 Law of Property Act 1925 notwithstanding that forfeiture may be avoided otherwise than by relief granted by the Court; and

15.1.4  the preparation and service of any notice under paragraph 3.6 or any schedule of dilapidations served during the Term or within three months after Determination; and

15.1.5  the closure or determination of the registered title to this Lease.

15.2 If any payment which falls to be made by the Tenant to the Landlord under this Lease by way of indemnity or on an indemnity basis (“initial indemnity payment”) is taxable in the Landlord’s hands the sum payable shall be increased so that after payment of tax on it the Landlord retains a net sum equal to the initial indemnity payment.

16 Loss of Guarantor

16.1 If any party who has guaranteed to the Landlord the Tenant’s obligations contained in this Lease dies or is the subject of any of the events referred to in clause 5.1.3 then within 14 days after the event the Tenant shall give notice of it to the Landlord and if so required by the Landlord at the expense of the Tenant the Tenant shall within twenty eight days after that event procure a further guarantee in the same terms from a party acceptable to the Landlord.

17 Title Matters

17.1 The Tenant shall observe and perform all covenants in respect of the Property and shall indemnify the Landlord against any costs expenses losses and liabilities incurred by the Landlord as a result of or

26

arising out of any breach by the Tenant of any covenant affecting the Property and contained in the Title Matters so far as they affect the Property and are still subsisting.

17.2 The Tenant shall observe and perform all the covenants on the part of the lessee contained in the Superior Lease (except the covenants to pay the rent reserved by it for repair and for insurance) in so far as they relate to or concern the Property.

27

Schedule 7

Landlord’s Covenants

1 Quiet Enjoyment

If the Tenant observes and performs the Tenant’s covenants and obligations in this Lease the Tenant may peaceably hold and enjoy the Property during the Term without any lawful interruption or disturbance from or by the Landlord or any person claiming through under or in trust for the Landlord.

2 Superior Lease

The Landlord shall pay the rent reserved by the Superior Lease as and when it falls due and will observe and perform its covenants in the Superior Lease (except insofar as the Tenant covenants so to do under this Lease) but this covenant shall be by way of indemnity only for the Tenant.

3 Provision of Services

3.1 The Landlord shall provide the Basic Services and such of the Additional Services as the Landlord from time to time reasonably considers appropriate.

3.2 Notwithstanding paragraph 3.1 the Landlord shall not be obliged to provide the Services where:

3.2.1  it is prevented from doing so by circumstances beyond its control including without limitation breakdown, damage, the need for inspection or repair, shortage of fuel, equipment or materials and inclement weather; or

3.2.2  the Service cannot reasonably be provided as a result of works of alteration inspection or repair or any other works being carried out at the Building,

but the Landlord shall restore the Service as soon as reasonably practicable.

3.3 Notwithstanding Paragraph 3.1 the Landlord shall not be liable for failure to provide the Services listed in Paragraph 1.1.1 of schedule 8 until a reasonable time after the relevant want of repair, decoration maintenance or renewal has been notified to it in writing.

28

Schedule 8

Services and Service Charge

1 Basic Services

1.1 The Basic Services are:

1.1.1  the repair decoration inspection testing maintenance and renewal of the Retained Property;

1.1.2  the cleaning of the Common Parts and the exterior of the Building including the exterior of all windows;

1.1.3  the provision of lighting to the Common Parts when required;

1.1.4  the provision of heating to the Building when required;

1.1.5  the provision of air-conditioning to the Building;

1.1.6  the provision of hot and cold water to any hot or cold taps in the Common Parts;

1.1.7  the provision of towels, soap and other requisites to any lavatories in the Common Parts;

1.1.8  the provision of all proper equipment to any kitchen in the Common Parts;

1.1.9  the provision and operation in the Common Parts of such fire prevention fire fighting and fire alarm equipment and signs as may be required by any Authority or by the Insurers;

1.1.10  the provision and operation of the Signboard;

1.1.11  the provision of refuse bins and the operation of a refuse collection service for the Building;

1.1.12  the provision and operation of a security patrol and/or security observation system and/or other security equipment for the Building;

1.1.13  the provision of lifts within the Building and for the inspection testing and maintenance of them.

2 Additional Services

2.1 The Additional Services are:

2.1.1  the provision and operation of any Plant not included within the Basic Services;

2.1.2  the provision either permanently or at times which the Landlord reasonably considers appropriate of pictures floral displays flags decorative lights and other decorations in the Common Parts;

2.1.3  the provision and maintenance of appropriate or useful Signs or notices in the Common Parts or visible from the Common Parts or from outside the Building;

2.1.4  the provision of any other services which the Landlord from time to time reasonably considers appropriate having regard to the principles of good estate management.

3 Service Costs

3.1 The Service Costs are all reasonable and proper costs and expenses incurred by the Landlord in the operation and management of the Building and the provision of services to it including without limitation:

3.1.1  the cost of providing the Services;

29

3.1.2  the cost of providing to the Retained Property any service which had it been provided to the Common Parts could have constituted one of the Services;

3.1.3  the cost of all fuel or other energy sources for the Plant and/or the Retained Property;

3.1.4  any costs which the Landlord may be required to pay to the Superior Landlord or other parties under the Title Matters (except for rent under any Superior Lease) or as a contribution to the cost of the Services or to the repair, decoration, inspecting, testing, maintenance or renewal of any areas or structures used in common with other parties;

3.1.5  the Outgoings and the rental value of the Retained Property and any other property used exclusively (or substantially so) in connection with the provision of the Services;

3.1.6  the cost of preparing submitting and settling any insurance claims relating to the Building;

3.1.7  the cost of employing or retaining the Managing Agents for the Building;

3.1.8  the cost of employing or retaining staff to provide the Services including all incidental expenditure relating to that employment which without limitation shall include expenditure on pensions insurance health welfare industrial training levies redundancy clothing tools machinery equipment and vehicles which in each case the Landlord considers are required for the proper performance by the staff in question of their duties;

3.1.9  the cost of complying with, making representations against or otherwise contesting the incidence of any Legal Obligation or prospective Legal Obligation which will or may affect the Building;

3.1.10  the cost of leasing any item required in connection with the Services;

3.1.11  the cost of enforcing the provisions in the Superior Lease against the Superior Landlord and the Regulations against occupiers of the Building;

3.1.12  the cost of calculating the Service Charge for each tenant and the preparation and issue of certificates accounts and audits in respect of the Service Charge;

3.1.13  all professional charges fees and expenses payable by the Landlord in respect of any of the Services or the Service Costs;

3.1.14  during any period for which the Landlord does not employ an independent Managing Agent to manage the Building a sum retainable by the Landlord equal to the charges which a firm of surveyors based in central London might reasonably be expected to make for managing the Building;

3.1.15  all Value Added Tax payable by the Landlord in respect of the Service Costs insofar as it is not recoverable by the Landlord as an input; and

3.1.16  the gross cost to the Landlord by way of interest commission banking charges commitment fees or otherwise of borrowing any necessary sums in respect of the Service Costs.

4 Calculation and Payment of Service Charge

4.1 The Landlord will notify the Tenant before or during any Service Charge Period of the Estimated Service Charge payable by the Tenant during that Service Charge Period.

4.2 The Tenant shall pay the Estimated Service Charge by four equal quarterly installments on the Quarter Days.

4.3 The Landlord may revise the Estimated Service Charge having regard to the anticipated Total Service Costs for the relevant Service Charge Period and the Tenant shall pay to the Landlord any additional Estimated Service Charge which may become due as a result within seven days of demand.

4.4 As soon as practicable after each Service Charge Account Date the Landlord will supply the Tenant with a Service Charge Statement showing:

4.4.1  the Total Service Costs for the Service Charge Period; and

30

4.4.2  the Service Charge for the Service Charge Period.

4.5  If the Service Charge exceeds the Estimated Service Charge the Tenant shall pay the excess to the Landlord within seven days of receipt of the Service Charge Statement.

4.6  If the Service Charge is less than the Estimated Service Charge then the shortfall shall be set off against any other moneys due from the Tenant to the Landlord under this Lease and any balance shall be credited against the next payment of Estimated Service Charge or (following Determination) paid to the Tenant.

4.7  For a period of one month after delivery of the Service Charge Statement the Landlord will make available any receipts or invoices evidencing expenditure of the Total Service Costs for inspection by the Tenant at the offices of the Landlord or the Managing Agent during normal business hours by appointment.

4.8  The Tenant, may, within one month after delivery of the Service Charge Statement, by written notice to the Landlord, challenge the Service Charge Certificate on the grounds that it contains an error or errors. Any such challenge shall give details of the alleged errors. The Tenant shall not be entitled to dispute the correctness of the Service Charge Statement except in respect of errors notified within that month.

4.9  If the Landlord whether by itself or through its Managing Agent receives any commission or other benefits for effecting or maintaining the Services it shall not be obliged to pass the benefit of them onto the Tenant.

31

Schedule 9

Regulations

1 Delivery and despatch of goods mail and other items to the Property and access for workmen and materials shall only take place through the service areas in the Common Parts and through the service entrances lifts stairs and corridors (if any).

2 All refuse shall be kept in suitable containers and shall be made available for collection by the Landlord at the times specified by the Landlord.

3 No sound from loudspeakers or other artificially generated noise which can be heard outside the Property shall be created within the Property.

4 The Tenant shall maintain to the reasonable satisfaction of the Landlord and to the satisfaction of the Insurers adequate fire prevention apparatus upon the Property and shall from time to time remove from the Property all waste and inflammable material as quickly as possible.

5 The Tenant shall not exhibit or place any articles of any kind outside the Property or transact any business except inside the Property.

6 The Tenant shall not light or maintain open fires in the Building.

7 The Property is to be locked or otherwise secured when not in use.

EXECUTED AND DELIVERED as a	)
DEED by WESTINGHOUSE BRAKE AND	)
SIGNAL HOLDINGS LIMITED acting by	)
	Director	/s/ N. W. R. Sm___
		N. W. R. Sm___
	Director	/s/ G. C. J. Campion
		G. C. J. Campion

32

Schedule 9

Regulations

1 Delivery and despatch of goods mail and other items to the Property and access for workmen and materials shall only take place through the service areas in the Common Parts and through the service entrances lifts stairs and corridors (if any).

2 All refuse shall be kept in suitable containers and shall be made available for collection by the Landlord at the times specified by the Landlord.

3 No sound from loudspeakers or other artificially generated noise which can be heard outside the Property shall be created within the Property.

4 The Tenant shall maintain to the reasonable satisfaction of the Landlord and to the satisfaction of the Insurers adequate fire prevention apparatus upon the Property and shall from time to time remove from the Property all waste and inflammable material as quickly as possible.

5 The Tenant shall not exhibit or place any articles of any kind outside the Property or transact any business except inside the Property.

6 The Tenant shall not light or maintain open fires in the Building.

7 The Property is to be locked or otherwise secured when not in use.

EXECUTED AND DELIVERED as a	)
DEED by LEARNING TREE INTERNATIONAL	)
LIMITED acting by:	)
	Director	/s/ R. Chappell
		R. Chappell
	Director/Secretary	/s/ R. Harvey
		R. Harvey

33

EX-10.16

Exhibit 10.16

Dated 27 April 2005

LEARNING TREE INTERNATIONAL LIMITED (1)

TO

BOMBARDIER TRANSPORTATION UK LIMITED (2)

Counterpart

LEASE

OF

PART 4TH FLOOR, EUSTON HOUSE,

24 EVERSHOLT STREET, LONDON NW1

TERM:	:	10 Years
FROM	:	27 April 2005
BASIC RENT	:	£181,521 Basic Rent Amount (subject to review)

Contents

Clause		Page
1	Definitions and Interpretation	1
2	Demise and Rent	6
3	Tenant’s Covenants	7
4	Landlord’s Covenants	7
5	Forfeiture	7
6	Miscellaneous	8
7	Sections 24-28 Landlord and Tenant Act 1954	10
Schedule 1 The Property		11
Schedule 2 Part 1 - Rights granted in common		12
Schedule 3 Part 1 - Exceptions and Reservations		13
Part 2 - Title Matters		14
Schedule 4 Review of Basic Rent		15
Schedule 5 Insurance		17
1	Landlord’s Insurance Obligations	17
2	Tenant’s Insurance Obligations	17
3	Rent Cesser	17
4	Vitiation of Insurance	17
5	Determination	18
6	Arbitration	18
Schedule 6 Tenant’s Covenants		19
1	To pay Rent	19
2	To pay Outgoings	19
3	Repair and Decoration	19
4	Yielding up on Determination	20
5	Use	21
6	Alterations	21
7	Signs	21
8	Dealings with the Property	22
9	Legal Obligations and Necessary Consents	24
10	Conduits and Plant	25

11	Overloading and Damage	25
12	Rights and Easements	26
13	Regulations	26
14	Entry by Landlord	26
15	Costs	26
16	Loss of Guarantor	27
17	Title Matters	27
Schedule 7 Landlord’s Covenants		28
1	Quiet Enjoyment	28
2	Superior Lease	28
3	Provision of Services	28
Schedule 8 Services and Service Charge		29
1	Basic Services	29
2	Additional Services	29
3	Service Costs	29
4	Calculation and Payment of Service Charge	30
Schedule 9 Regulations		32
Annexures
Property Plan Site Plan Schedule of Condition

THIS LEASE made on 27 April 2005 BETWEEN:

(1) LEARNING TREE INTERNATIONAL LIMITED a company incorporated in England and Wales number 1392643 whose registered office is at Mole Business Park, Leatherhead, Surrey KT22 7AD (“the Landlord”).

(2) BOMBARDIER TRANSPORTATION UK LIMITED a company incorporated in England and Wales number 02235994 whose registered office is at Litchurch Lane, Derby, Derbyshire DE24 8AD (“the Tenant”).

WITNESSES as follows:

1 Definitions and Interpretation

1.1 In this Lease unless the context otherwise requires the following expressions shall have the following meanings:

“Additional Services” means the services listed in paragraph 2 of schedule 8 as from time to time altered (if at all) under clause 6.9;

“Assignment” means the execution of a deed of transfer of the Lease or of any underlease granted under it in accordance with the provisions of paragraph 8.3 of schedule 6 whether or not that transfer is subsequently registered at H M Land Registry;

“Authority” means any statutory, public, local or other authority or any court of law or any government department or any of their duly authorised officers;

“Basic Rent” means up to but excluding the Rent Commencement Date a peppercorn (if demanded) and from and including that date one hundred and eighty one thousand five hundred and twenty one pounds (£181,521) per annum as from time to time reviewed under schedule 4 or otherwise altered;

“Basic Services” means the Services listed in paragraph 1 of schedule 8 as from time to time altered (if at all) under clause 6.9;

“Building” means the building and external areas known as Euston House, 24 Eversholt Street, London NW1 shown for identification purposes only edged in blue on the Site Plan and any or every part of that building and everything attached to it or used for its benefit;

“Common Parts” means all parts of the Building from time to time provided for the common use of more than one of the tenants or occupiers of the Building and their visitors including without limitation any of the following which fall within this definition: vehicular and pedestrian accesses, passages, stairways, circulation areas, lifts, escalators, landscaped areas, loading bays, fire escapes, toilet facilities, storage areas, refuse collection and disposal areas;

“Conduits” means sewers, drains, pipes, wires, cables, ducts, gutters, fibres, and any other medium for the passage or transmission of soil, water, gas, electricity, air, smoke, light, information or other matters and includes where relevant ancillary equipment and structures;

“Connected Person” means any person, firm or company which is connected with the Tenant for the purposes of Section 839 Income and Corporation Taxes Act 1988;

“Consent” means an approval, permission, authority, licence or other relevant form of approval given by the Landlord in writing;

“Determination” means the end of the Term however that occurs;

“Enactment” means:

(a) any Act of Parliament; and

(b) any European Community or other supranational legislation or decree having the force of law in the United Kingdom,

and references (whether specific or general) to any Enactment include:

(i) any subordinate legislation made under it;

(ii) any provision which it has superseded or re-enacted (whether with or without modification; and

(iii) any provision superseding or re-enacting it (whether with or without modification);

“Environment” means “the environment” as defined in the Environmental Protection Act 1990;

“Environmental Damage” means any reduction in value of the Landlord’s interest in the Property or the Building or any damage to human health or the environment arising from the Property which would constitute a breach of any Legal Obligation or give rise to a civil claim for damages;

“Estimated Service Charge” means the Landlord’s estimate of the Service Charge which will be payable by the Tenant during a Service Charge Period;

“Group Company” means any company of which the Tenant is a Subsidiary or which has the same Holding Company as the Tenant where Subsidiary and Holding Company have the meanings given to them by section 736 Companies Act 1985;

“Hazardous Material” means all and any material and/or substances which are harmful or potentially harmful to human health property or the Environment or which are otherwise toxic noxious dangerous or deleterious;

“Insurance Charge” means the Percentage of the cost to the Landlord of effecting and maintaining the Insurance Policies including where relevant the cost of assessing any insured amounts and any sums payable to any Superior Landlord in respect of insurance maintained by it which shall include any expenses and valuation costs which the Superior Landlord is entitled to recover from the Landlord under the terms of the Superior Lease;

“Insurance Policies” means the insurance policy or policies maintained by the Landlord or any Superior Landlord in respect of the Building covering damage by Insured Risks, Loss of Rent, public liability and other matters;

“Insured Risks” means the risks of fire, storm, tempest, flood, lightning, explosion, terrorism and in peace time aircraft and articles dropped therefrom, malicious damage, impact, plant and machinery cover overflowing of tanks, bursting of pipes and such other risks as the Superior Landlord or Landlord shall from time to time insure (subject in all cases to any excesses exclusions and limitations imposed by the insurers or underwriters) except always such risks as cannot reasonably be insured by the Landlord or Superior Landlord on satisfactory terms or at a reasonable premium or as the Landlord or the Superior Landlord’s insurers or underwriters have refused to insure.

“Insurers” means the underwriters or insurance office with whom the Insurance Policies are effected;

“Interest Rate” means three percent above the base lending rate from time to time of The Royal Bank of Scotland plc or such other bank as the Landlord may from time to time nominate or if that base lending rate cannot be ascertained then three percent above such other rate as the Landlord may reasonably specify and where and whenever interest is payable at or by reference to the Interest Rate it shall be calculated on a daily basis and compounded on the Quarter Days;

“Landlord” includes the immediate reversioner to this Lease from time to time;

“Lease” means this underlease and includes where relevant any deed of variation, licence, Consent or other document supplemental to or associated with this Lease;

“Legal Obligation” means any obligation from time to time created by any Enactment or Authority which relates to the Building or its use and includes without limitation obligations imposed by any Necessary Consent;

2

“Lettable Area” means a part of the Building designed or intended for letting or exclusive occupation (except in connection with the management of the Building), the boundaries of any Lettable Area being determined in the same manner as the boundaries of the Property under schedule 1;

“Loss of Rent” means loss of all Basic Rent or other income from the Building due to damage or destruction by any of the Insured Risks for a minimum period of three years having regard to potential increases in that income as a result of lettings, rent reviews or other matters which may occur;

“Managing Agent” means any party from time to time appointed by the Landlord to manage the Building (who may be an employee of the Landlord);

“Necessary Consents” means planning permission and all other consents, licences, permissions and approvals whether of a public or private nature which shall be relevant in the context;

“Open Market Rent” means the best rent which might reasonably be expected to be paid (after the expiry of any rent free period for fitting out purposes) by a willing tenant to a willing landlord for a letting of the whole of the Property in the open market with vacant possession and without a fine or premium for a term of ten years commencing on the relevant Review Date and upon the terms of this Lease (except as to the amount of the Basic Rent but including the provisions for rent review) and upon the assumptions that:

(a) there has been a reasonable period in which to negotiate the terms of the letting taking into account the nature of the Property and the state of the market;

(b) no account will be taken of any additional rent which might be offered by a prospective tenant with a special interest;

(c) all the covenants contained in this Lease have been complied with;

(d) if the Property or the Building or any access or essential services to them have been destroyed or damaged they have been fully restored;

(e) the Property complies with all Legal Obligations and may lawfully be used for the purpose permitted by this Lease and any other purpose within the same class as that purpose under the Town and Country Planning (Use Classes) Order 1987; and

(f) the Property is fit for immediate occupation and use,

but disregarding:

(i) any effect on rent of the fact that the Tenant, any undertenant or any of their respective predecessors in title has been or is in occupation of the Property;

(ii) any goodwill attached to the Property by reason of the carrying on of the business of the Tenant any undertenant or their respective predecessors in title;

(iii) any effect on rent of any improvement to the Premises which

(A) was carried out by and at the expense of the Tenant or a permitted undertenant or any of their respective predecessors in title; and

(B) was not carried out pursuant to an obligation to the Landlord or its predecessors in title; and

(C) was carried out with Consent where required under this Lease; and

(D) was carried out and completed during the Term or during any period of occupation immediately before the start of the Term under a licence or agreement for lease; and

(E) cannot give rise to any liability on the part of the Landlord to pay compensation

3

(iv) any work carried out to the Property which diminishes the rental value of the Property at the relevant Review Date; and

(v) any actual or potential obligation on the Tenant or any undertenant to reinstate alterations or additions to the Property.

“Outgoings” means all rates, taxes, charges, duties, assessments, impositions and outgoings of any nature which are at any time during the Term payable either by the owner or occupier of property and includes charges for electricity, gas, water, sewerage, telecommunications and other services rendered to or consumed by the relevant property but excludes tax payable by the Landlord on the receipt of the Basic Rent or on any dealings with its reversion to this Lease and input Value Added Tax suffered by the Landlord in respect of the Building;

“Percentage” means a fair proportion as conclusively determined by the Landlord but which in the absence of special circumstances will be substantially the same as the proportion which the net internal area of the Property bears to the net internal area of all the Lettable Areas at the relevant time subject to adjustment under clause 6.7;

“Permitted Use” means use as offices within the meaning of Class B1(a) of the Town and Country Planning (Use Classes) Order 1987;

“Plant” means the plant, equipment and machinery from time to time in or on the Building including without limitation lifts, hoists, generators, and equipment for air-conditioning ventilation, heating, cooling, fire alarm, fire prevention or fire control communication and security;

“President” means the President from time to time of the Royal Institution of Chartered Surveyors or any person authorised at the relevant time to act on his behalf;

“Property” means that part of the Building described in schedule 1 and all additions and improvements made to it and references to the Property shall include reference to any part of it;

“Property Plan” means the attached plan marked as such;

“Quarter Days” means 25th March 24th June 29th September and 25th December in each year;

“Regulations” means the Regulations in schedule 9 and any others from time to time made by the Landlord in addition to or in substitution for those regulations which the Landlord considers appropriate having regard to the principles of good estate management;

“Rent” means all sums reserved as rent by this Lease;

“Rent Commencement Date” means 27 October 2006;

“Rent Restrictions” means any Enactment which restricts the right of the Landlord to review the Basic Rent or to recover any Rent under this Lease;

“Rent Review Surveyor” means the person appointed under paragraphs 3 or 6 of schedule 4 to determine the Basic Rent at a Review Date;

“Retained Property” means all parts of the Building except for the Property and the other Lettable Areas and includes without limitation the Common Parts, the Conduits, the foundations, roof, exterior and structure of the Building, the Plant (except where part of the Property or any Lettable Area) any external areas of the Building and any parts of the Building used for the management of the Building or the provision of services to it;

“Review Date” means 7 April 2009 and the same day and month in every fifth year after that date and the penultimate day of the Term and in addition any date on which any Rent Restrictions in force on a previous Review Date are repealed or modified so as to be less restrictive;

“Review Period” means the period commencing on a Review Date and expiring either on the day before the next Review Date or on Determination;

4

“Service Charge” means the Percentage of the Total Service Costs in any Service Charge Period;

“Service Charge Account Date” means 1 October in each year of the Term or such other date or dates in each year of the Term as the Landlord may by written notice to the Tenant stipulate and also the date of Determination;

“Service Charge Period” means the period commencing on 27 April 2005 and expiring on the first Service Charge Account Date and thereafter the period from and excluding one Service Charge Account Date up to and including the next Service Charge Account Date;

“Service Charge Statement” means the statement to be provided to the Tenant under paragraph 4.4 of schedule 8;

“Service Costs” means the costs set out in paragraph 3 of schedule 8;

“Services” means the Basic Services and the Additional Services;

“Sign” includes any sign, hoarding, showcase, signboard, bill, plate, fascia, poster or advertisement;

“Signboard” means a common signboard to be provided by the Landlord in the common entrance hall of the Building;

“Site Plan” means the attached plan marked as such;

“Superior Landlord” means any party having an interest in the Property in reversion to the Superior Lease;

“Superior Lease” means any lease under which the Landlord holds the Building and includes any leases in reversion to that Lease;

“Tenant” includes its successors in title;

“Term” means the term granted by this Lease;

“Total Service Costs” means the total of the Service Costs in any Service Charge Period;

“Title Matters” means the matters set out in Part 2 of schedule 3;

“Value Added Tax” means value added tax chargeable in accordance with the Value Added Tax Act 1994 and includes any future tax of a like nature and all references to an election by the Landlord to waive exemption under paragraph 2(1) of Schedule 10 to that Act shall be deemed to include any such election made by a company in the same VAT group as the Landlord.

1.2 In this Lease unless the context otherwise requires:

1.2.1  words importing any gender include every gender;

1.2.2  words importing persons include an individual , company, corporation, firm, partnership, unincorporated association or body of persons, and any state, or governmental or local division or agency of a state;

1.2.3  references to clauses, schedules and annexures are references to the relevant clause in or schedule or annexure to this Lease;

1.2.4  reference in any schedule to numbered paragraphs are references to the numbered paragraphs of that schedule;

1.2.5  references in this Lease to any specified provision of this Lease are to this Lease or that provision as in force for the time being and as amended from time to time;

1.2.6  references to any statute or statutory provision shall include (i) any subordinate legislation made under it, (ii) any provision which it has superseded or re-enacted (whether with or without modification) and (iii) any provision superseding or re-enacting it (whether with or without modifications);

5

1.2.7  where any obligation is undertaken by two or more persons jointly they shall be jointly and severally liable in respect of that obligation and a demand for payment served on one of them shall be deemed to be a demand made on all of them;

1.2.8  any obligation on any party not to do or omit to do anything shall include an obligation not to allow that thing to be done or omitted to be done by any undertenant of that party or by any employee servant agent invitee or licensee of that party or its undertenant;

1.2.9  where the Landlord or the Tenant covenant to do something they shall be deemed to fulfil that obligation if they procure that it is done;

1.2.10  any obligation on the Landlord or the Tenant under their respective obligations in this Lease shall continue notwithstanding determination insofar as it remains to be carried out;

1.2.11  any sum payable by one party to the other shall be exclusive of Value Added Tax which shall where it is chargeable be paid in addition to the sum in question at the time when the sum in question is due to be paid;

1.2.12  any relevant perpetuity period shall be eighty years from the date of this Lease;

1.2.13  the contents table and the descriptive headings to clauses are inserted for convenience only, have no legal effect and shall be ignored in interpreting this Lease; and

1.2.14  the words and phrases “other”, “including” and “in particular” shall not limit the generality of the words preceding or succeeding them or be construed as limiting the succeeding words to the same class as the preceding words.

1.3 If and whenever the Landlord is itself a lessee of the Property:

1.3.1  wherever Consent is required under this Lease the approval of the Superior Landlord shall also be required to the extent required under the Superior Lease;

1.3.2  any Consent shall be subject to the need for the approval of the Superior Landlord where appropriate;

1.3.3  nothing in this Lease or in any Consent shall imply that the Superior Landlord’s approval will not be unreasonably withheld;

1.3.4  the rights reserved by Part 1 of schedule 3 are also reserved to the Superior Landlord;

1.3.5  references to any right of (or covenant to permit) the Landlord to enter the Property shall extend to the Superior Landlord and to anyone authorised by it or otherwise entitled; and

1.3.6  this Lease shall take effect subject to the rights excepted and reserved by the Superior Lease (which are by virtue of this provision reserved to the Landlord as well as the Superior Landlord).

2 Demise and Rent

2.1 The Landlord demises the Property to the Tenant together with the rights set out in Schedule 2 except and reserving to the Landlord the rights set out in Part 1 of schedule 3 but subject to the Title Matters to hold them to the Tenant for a term of ten years starting on 27 April 2005 paying during the Term by way of Rent:

2.1.1  the Basic Rent, which shall be paid yearly and proportionately for any part of a year by equal quarterly installments in advance on the Quarter Days, the first payment to be made on the Rent Commencement Date in respect of the period from that date to the next Quarter Day; and

2.1.2  the Insurance Charge which shall be paid as stated in paragraph 2 of schedule 5; and

6

2.1.3  the Service Charge which shall be paid as stated in schedule 8; and

2.1.4  any other sums which may become due from the Tenant to the Landlord under the provisions of this Lease.

3 Tenant’s Covenants

The Tenant covenants with the Landlord to observe and perform the covenants set out in schedule 6 and those on its part contained in schedule 5.

4 Landlord’s Covenants

The Landlord covenants with the Tenant that, whilst the reversion immediately expectant upon this Lease is vested in it, it shall observe and perform the covenants set out in schedule 7 and those on its part contained in schedule 5.

5 Forfeiture

5.1 Without prejudice to any other rights of the Landlord if:

5.1.1  the whole or part of the Rent remains unpaid twenty-one days after becoming due (whether demanded or not); or

5.1.2  any of the Tenant’s covenants in this Lease are not performed or observed; or

5.1.3  the Tenant or any guarantor of the Tenant’s obligations under this Lease:

(a) proposes or enters into any composition or arrangement with its creditors generally or any class of its creditors; or

(b) is the subject of any judgment or order made against it which is not complied with within seven days or is the subject of any execution, distress, sequestration or other process levied upon or enforced against any part of its undertaking, property, assets or revenues; or

(c) being a company:

(i) is the subject of a petition presented or an order made or a resolution passed or analogous proceedings taken for appointing an administrator of or winding up such company (save for the purpose of an amalgamation or reconstruction which does not involve or arise out of insolvency or give rise to a reduction in capital and which is on terms previously approved by the Landlord); or

(ii) an encumbrancer takes possession or exercises or attempts to exercise any power of sale or a receiver is appointed of the whole or any part of the undertaking, property, assets or revenues of such company; or

(iii) stops payment or agrees to declare a moratorium or becomes or is deemed to be insolvent or unable to pay its debts within the meaning of section 123 Insolvency Act 1986; or

(iv) without the prior consent in writing of the Landlord, ceases or threatens to cease to carry on its business in the normal course; or

(d) being an individual:

(i) is the subject of a bankruptcy petition or bankruptcy order; or

(ii) is the subject of an application or order or appointment under section 253 or section 273 or section 286 Insolvency Act 1986; or

7

(iii) is unable to pay or has no reasonable prospect of being able to pay his debts within the meaning of sections 267 and 268 Insolvency Act 1986; or

5.1.4  any event occurs or proceedings are taken with respect to the Tenant or any guarantor of the Tenant’s obligations under this Lease in any jurisdiction to which it is subject which has an effect equivalent or similar to any of the events mentioned in clause 5.1.3,

the Landlord may (and notwithstanding the waiver of any previous right of re-entry) re-enter the Property and this Lease shall then determine but without prejudice to any right of action of the Landlord in respect of any previous breach by the Tenant of this Lease.

5.2 The Landlord shall not exercise this right of re-entry without giving prior written notice of its intention to all mortgagees who have registered a notice of charge with the Landlord.

6 Miscellaneous

6.1 Except to the extent that compensation may be payable by law notwithstanding any agreement to the contrary neither the Tenant nor any undertenant or any occupier of the Property at any time shall be entitled to any compensation under any Enactment upon Determination or upon leaving the Property.

6.2 Except to the extent that the Landlord may be liable under its covenants in schedule 7 or by law notwithstanding any agreement to the contrary the Landlord shall not be liable in any way to the Tenant or any undertenant or any servant agent licensee or invitee of the Tenant or any undertenant by reason of:

6.2.1  any act neglect, default or omission of any of the tenants or owners or occupiers of any adjoining or neighbouring property (whether within the Building or not) or of any representative or employee of the Landlord (unless acting within the scope of the express authority of the Landlord); or

6.2.2  the defective working stoppage or breakage of or leakage or overflow from any Conduit or any of the Plant

6.2.3  the obstruction by others of the Common Parts or the areas over which rights are granted by this Lease.

6.3 The Landlord shall be entitled to make alterations to the Common Parts or to alter renew or replace any Plant and to obstruct the Common Parts while doing so but shall in so doing ensure that reasonable access to the Property or reasonable alternative access to the Property is always available and where those works materially adversely affect the Property or access to the Property, the Landlord shall where practicable and not in cases of emergency notify its proposals in advance to the Tenant whose representations (if any) shall be given due consideration.

6.4 Nothing in this Lease shall imply or warrant that the Property may lawfully be used for the Permitted Use and the Tenant acknowledges and admits that no such representation or warranty has ever been made by or on behalf of the Landlord.

6.5 The Landlord and the Tenant shall not be liable to each other for breach of any covenant in this Lease to the extent that its performance or observance becomes impossible or illegal but subject to the other provisions of this Lease, the Term and the Tenant’s liability to pay the Rent shall not cease or be suspended for that reason.

6.6 The Landlord shall incur no liability to the Tenant or any undertenant or any predecessor in title of either of them by reason of any approval given to or inspection made of any drawings, plans, specifications or works prepared or carried out by or on behalf of any such party nor shall any such approval or inspection in any way relieve the Tenant from its obligations under this Lease.

6.7 If the Landlord reasonably so determines the Percentage shall be varied to such figures as the Landlord may reasonably specify in writing having regard to the previous method of calculation of such figures and to the fact that it is intended that if all Lettable Areas are let on leases similar to this Lease the Landlord shall be able to recover from its lessees the whole of the costs of insurance and the Total Service Costs.

8

6.8 In the interests of security the Landlord:

6.8.1  may require anyone entering or leaving the Building to identify themselves and the party in the Building whom they are visiting and to record this information and their arrival and departure times in a book or other form of record kept for the purpose;

6.8.2  may prevent anyone entering the Building for the purpose of visiting the Property unless that person has a key to the Property or is authorised by the Tenant or any other permitted occupier of the Property;

6.8.3  may require the Tenant or permitted occupier of the Property to escort any person visiting them from the security or reception desk to the Property (and back again when that person leaves); and

6.8.4  may prevent anyone removing any items from the Building unless that person is authorised to do so by the Landlord or any tenant or permitted occupier of the Building, and in this regard:

(a) the rights of access and egress granted in Schedule 2 are subject to this clause; and

(b) any authorisation required by this clause must be produced to the person requiring it or confirmed by a written or oral (or telephoned) statement from the person giving it.

6.9 The Landlord may add to vary or discontinue any of the Services where the Landlord considers it appropriate to do so having regard to the principles of good estate management and the Landlord shall where it is practicable to do so notify the Tenant in advance of any addition or variation or discontinuance of any of the Services and any representations made by the Tenant (if any) shall be given due consideration.

6.10 The Tenant shall not be or become entitled to any easement, right, quasi-easement or quasi-right save as expressly set out (if at all) in Schedule 2 and any such amenity enjoyed by the Tenant shall be so enjoyed with the consent of the Landlord and not as of right.

6.11 This Lease does not pass to the Tenant the benefit of or the right to enforce any covenants which now benefit or which may in the future benefit the reversion to this Lease, and the Landlord shall be entitled in its sole discretion to waive, vary or release any such covenants.

6.12 Any notice, communication, demand or consent required or authorised to be given by this Lease shall be in writing:

6.12.1  any notice to be served on, or communication to be sent to, any party to this Lease shall be deemed to be properly served if sent by first class post, or delivered by hand during usual business hours to the registered office, or principal place of business of the relevant party, addressed to any director or the company secretary;

6.12.2  any such notice or communication to be sent to any party to this Agreement shall be deemed to have been received when delivered, if delivered by hand, or two working days after posting if sent by first class post.

6.13 Any dispute arising between the Tenant or any undertenant and any owner or occupier (other than the Landlord) of adjacent property owned (whether freehold or leasehold) by the Landlord as to any right or privilege or any party or other wall or otherwise shall (except where it relates to a matter of law) be determined on behalf of the Tenant or any undertenant by the Landlord or someone appointed by him acting reasonably and in consultation with the Tenant whose representations shall be given due consideration and any such decision shall bind the Tenant or any undertenant who shall pay the cost of obtaining it. If requested to do so by the Tenant and at the Tenant’s cost, the Landlord shall use its reasonable endeavours to procure that such costs are fairly apportioned between the Tenant and the other party to the dispute.

6.14 This Lease is a new tenancy for the purposes of the Landlord and Tenant (Covenants) Act 1995.

6.15 For the purposes of the Contracts (Rights of Third Parties) Act 1999 this Lease is only enforceable by the parties to it and (if applicable) their respective successors in title.

9

6.16  If the Landlord and the Tenant agree in writing that the Tenant may defer payment of any sums due under this Lease then for the purposes of this Lease (and of Section 17 Landlord and Tenant (Covenants) Act 1995) those sums shall be deemed to be due for payment on the deferred date so agreed, and not on the earlier date on which they would, but for that agreement, have fallen due.

6.17  Each of the provisions of this Lease is severable from the others. If at any time one or more of such provisions becomes illegal, invalid or unenforceable, then the validity and enforceability of the remaining provisions of this Lease shall not be affected.

6.18  No permission or consent required by the Tenant under the provisions of this Lease shall be effective or binding on the Landlord unless given by deed duly executed by or on behalf of the Landlord and any other relevant party.

7 Sections 24-28 Landlord and Tenant Act 1954

7.1  The parties have agreed under Section 38A(1) of the Landlord and Tenant Act 1954 (the “Act”) that the provisions of sections 24 - 28 of that Act shall be excluded in relation to the tenancy created by this Lease.

7.2  The Tenant acknowledges that a duly executed notice in the form set out in Schedule 1 to the Regulatory Reform (Business Tenancies) (England Wales) Order 2003 (“2003 Order”) was served on it by the Landlord less than 14 days before the date of this Lease or if earlier, the date on which the Tenant became contractually bound to enter into this Lease, under and in accordance with Section 38A(3)(b) of the Act.

7.3  The Tenant has before entering into this Lease or if earlier, the date on which the Tenant became contractually bound to enter into this Lease, made a Statutory Declaration in the form set out in paragraph 8 of Schedule 2 to the 2003 Order under and in accordance with Section 38A(3)(b) of the Act.

IN WITNESS of which each party has duly executed this Lease as a deed on the date first above written.

10

Schedule 1

The Property

That Lettable Area on the fourth floor which is shown edged in red on the Property Plan and extends from the upper side of the floor slab immediately below that Lettable Area to the underside of the floor, or roof slab immediately above that Lettable Area excluding:

(a) the walls bounding that Lettable Area; and

(b) all load-bearing walls and pillars within that Lettable Area; and

(c) all structural floor slabs within that Lettable Area; and

(d) all Conduits and Plant within that Lettable Area which do not serve that Lettable Area exclusively; and

(e) all windows within that Lettable Area,

but including:

(i) the plaster and other finishes on the inner sides of the walls bounding that Lettable Area and on all faces of all load-bearing walls and pillars wholly within that Lettable Area; and

(ii) all ceilings and other finishes applied to the floor or roof slab immediately above that Lettable Area and to any floor slab within that Lettable Area; and

(iii) all floors floor screeds and other finishes applied to the floor slab immediately below that Lettable Area and to any floor slab within that Lettable Area; and

(iv) all doors of that Lettable Area together with the frames glass and furniture of them; and

(v) the whole of all non-load-bearing walls or partitions wholly within that Lettable Area; and

(vi) one half in thickness of all walls (if any) bounding that Lettable Area and indicated as party walls on the Property Plan; and

(vii) all Conduits and Plant within that Lettable Area and which serve that Lettable Area exclusively.

11

Schedule 2

Part 1 - Rights granted in common

The right, in common with the Landlord and all others for the time being authorised by the Landlord or otherwise entitled, for the Tenant and any permitted undertenant or permitted occupier of the Property:

(a) to connect to and use all Conduits and Plant from time to time serving the Property or provided for the benefit of the Property (but without any right of access to areas outside the Property for this purpose); and

(b) to pass and repass over the Common Parts and otherwise to use the Common Parts for the purposes which they are designed; and

(c) of support and protection for the Property from the remainder of the Building; and

(d) to display the name of the Tenant of the Property on the Signboard.

12

Schedule 3

Part 1 - Exceptions and Reservations

The rights for the Landlord and all others from time to time authorised by the Landlord or otherwise entitled and without any liability to pay compensation:

1 to carry out works to the Building or to any other property and to use them in whatever manner may be desired and to consent to others doing so whether or not in each case the access of light or air to the Property or any other amenity from time to time enjoyed by it shall be affected in any way (save for any rights specifically granted by Schedule 2);

2 to connect to and use all Conduits and Plant within or forming part of the Property;

3 upon reasonable prior written notice to the Tenant (except in emergency when no notice need be given) to enter and remain on the Property with or without tools, appliances, scaffolding and materials for the purposes of:

(a) installing, inspecting, repairing, renewing, reinstalling, cleaning, maintaining, removing or connecting up to any Conduits or Plant; or

(b) inspecting, cleaning, altering, repairing, maintaining, renewing, demolishing or rebuilding any adjoining or adjacent property or any other things used in common; or

(c) inspecting the state and condition of the Property; or

(d) carrying out works under paragraphs 3.6 or 9.4 of schedule 6; or

(e) complying with the Landlord’s obligations under this Lease or with any other Legal Obligation of the Landlord,

the person entering causing as little damage and inconvenience as reasonably possible and making good at its expense any damage caused to the Property by such entry; and

4 to oversail the airspace of the Property with cranes (which are not themselves positioned on the Property) subject to the person exercising this right indemnifying the occupiers of the Property from time to time against death and/or injury to persons and damage to property, which may result from that oversailing.

13

Part 2 - Title Matters

1 The entries on the Property and Charges Registers of Land Registry title number NGL771030 insofar as they relate to the Property;

2 The easements rights covenants and other matters contained or referred to in the Wayleave Agreement dated 20 March 2001 made between (1) The Prudential Assurance Company Limited (2) The Landlord and (3) Cable Camden Limited

3 All easements rights covenants and other matters affecting the Property including any unregistered interests which fall within section 11(4)(c) or Schedules 3 or 12 of the Land Registration Act 2002.

4 Any registered interests which fall within any of the paragraphs of Schedule 1 of the Land Registration Act 2002 and any interests which fall within section 11(4)(c) of the Land Registration Act 2002.

5 Such registered interests as may affect the Property to the extent and for so long as they are preserved by the transitional provisions of Schedule 12 of the Land Registration Act 2002.

14

Schedule 4

Review of Basic Rent

1 On each Review Date the Basic Rent shall be reviewed in accordance with this schedule and the Basic Rent payable in respect of each Review Period shall be the higher of the Basic Rent payable immediately before that Review Period (ignoring for this purpose any rent cesser under paragraph 3 of schedule 5 then current) and the Open Market Rent on the Review Date.

2 The Landlord and the Tenant shall seek to agree the amount of the Open Market Rent in respect of each Review Period but if they have not agreed it by the date three months before the relevant Review Date then either party may require the matter to be determined by the Rent Review Surveyor.

3 The Rent Review Surveyor shall be a professionally qualified chartered surveyor or valuer with not less than 10 years experience of rent reviews of property similar to the Property and in a similar location who shall be previously agreed upon between the Landlord and the Tenant or (in the absence of such agreement prior to the date three months before the relevant Review Date) nominated on the application of either the Landlord or the Tenant or both of them jointly by the President, and in the event of a sole application by the Landlord or the Tenant the party making such application shall on the date of the application provide a copy thereof to the other party.

4 The Rent Review Surveyor shall act as an expert and shall:

(a) allow the parties a reasonable opportunity of making representations and counter-representations to him; and

(b) take those representations and counter-representations into account; and

(c) be entitled to require the parties to comply with a timetable established by him, and to disregard any representations made to him outside any time limits so established; and

(d) be entitled to take legal advice on any matter he may consider relevant to his appointment, the extent of his powers or duties or the review; and

(e) if required by either party give written reasons for his determination.

5 The Rent Review Surveyor’s award shall be binding on the parties and the costs of the reference to him and of his determination (including his own fees and legal and other expenses and the legal and other costs of the parties) shall lie in his award.

6 If the Rent Review Surveyor dies or becomes unwilling to act or becomes incapable of acting, the President may upon the application of either the Landlord or the Tenant or both of them jointly discharge him and appoint another Rent Review Surveyor to act in his place and in the same capacity and this shall be repeated as many times as the circumstances may require.

7 If for any reason the Open Market Rent is not agreed or determined until after the relevant Review Date the Tenant shall continue to pay the Basic Rent at the rate applicable immediately before that date and on the day 7 days after the day on which the Open Market Rent is agreed or determined, the Tenant shall pay the amount of any increase for the period from and including the relevant Review Date up to the Quarter Day following that agreement or determination together with interest on each part of that payment at three per cent below the Interest Rate for the period on and from the date on which that part would have been payable had the Open Market Rent been agreed before the Review Date up to the date on which payment is due.

8 Within twenty-eight days of the Open Market Rent being agreed or determined a memorandum recording the increased Basic Rent (or the fact that there is no increase) shall be executed by the parties and attached to this Lease and the Counterpart but that memorandum shall be regarded as evidential only and its absence shall not affect the liability of the Tenant to pay any increased Basic Rent.

9 Time is not of the essence in this schedule.

15

10 For the purpose of this schedule the Open Market Rent shall be deemed to have been determined on the date of the Rent Review Surveyor’s award.

16

Schedule 5

Insurance

1 Landlord’s Insurance Obligations

1.1 The Landlord shall:

1.1.1  pay promptly to the Superior Landlord all sums relating to insurance required under the Superior Lease;

1.1.2  request from the Superior Landlord whenever reasonably or properly requested by the Tenant and to the extent permitted under the Superior Lease evidence of the terms of the Insurance Policies effected by the Superior Landlord and of payment of the last premium and shall pass on to the Tenant the evidence obtained from the Superior Landlord; and

1.1.3  pass on to the Tenant copies of all relevant communications about insurance for the Building received from the Insurers or the Superior Landlord or from any person on their behalf.

2 Tenant’s Insurance Obligations

2.1 The Tenant shall pay the Insurance Charge to the Landlord on demand.

2.2 The Tenant shall pay to the Landlord on demand the Percentage of any normal excess which the Landlord is required to bear under any Insurance Policy.

2.3 The Tenant shall:

2.3.1  not do or fail to do anything which shall or may cause any of the Insurance Policies to be void or voidable or increase the premiums payable under them;

2.3.2  not insure or maintain insurance of the Building or the Property against any of the Insured Risks;

2.3.3  notify the Landlord of the incidence of any Insured Risk or any other matter which ought reasonably to be notified to the Insurers forthwith upon becoming aware of the same;

2.3.4  pay on demand the whole of any increase in any premium arising from a breach of paragraph 2.3.1;

2.3.5  comply with all the conditions of the Insurance Policies and all requirements of the Insurers of which it has been notified in advance in writing; and

2.3.6  notify the Landlord in writing of the value of any alterations, additions or improvements which the Tenant or any undertenant proposes to make before those works are commenced.

3 Rent Cesser

3.1 If the Building is damaged or destroyed by any of the Insured Risks such that the Property or the means of access to it is unfit for occupation and use or the Property incapable of reasonable access then (unless paragraph 4 applies) the Basic Rent and the Service Charge or a fair proportion of them according to the nature and extent of the damage in question shall be suspended until the earlier of:

3.1.1  the expiration of the period insured for Loss of Rent; and

3.1.2  the date on which the Property is again fit for occupation and use or capable of reasonable access.

4 Vitiation of Insurance

4.1 If the insurance money under any of the Insurance Policies is wholly or partly irrecoverable by reason of any act neglect or default of the Tenant or any undertenant or any employee, servant, agent,

17

licensee or invitee of any of them or where the sum insured is inadequate as a result of a breach by the Tenant of paragraph 2.3.6, then the Tenant will pay to the Landlord the irrecoverable amount or the amount of such shortfall as the case may be.

4.2 Payment under paragraph 4.1 shall be made on the later of the date of demand by the Landlord and the date on which such insurance money (or the relevant part of it) would have been claimable under the Insurance Policies had they not been wholly or partly vitiated.

4.3 In addition to any sum payable under paragraph 4.1 the Tenant shall pay interest at the Interest Rate on the relevant sum from the date on which that sum is due to the date of payment.

5 Determination

5.1 If the Building is destroyed or damaged by any of the Insured Risks such that the Property is unfit for occupation and use or incapable of reasonable access, and if the Property is not made fit for occupation and use or capable of reasonable access within three years after that destruction or damage occurs, then either the Landlord or the Tenant may by written notice to the other served at any time after that date (but before the Property is again fit for occupation and use) determine this Lease and if such notice is served:

5.1.1  this Lease shall forthwith determine but the Determination shall be without prejudice to any right of action of either party in respect of any previous breach of this Lease by the other or to any obligation of the Tenant under paragraphs 2.2 or 4 (and any sums payable under those paragraphs shall be paid on Determination if they have not already become payable); and

5.1.2  all moneys payable under the Insurance Policies or by the Tenant under paragraphs 2.2 or 4 shall be paid to and belong to the Landlord absolutely.

6 Arbitration

Any dispute under paragraphs 3, 4 or 5 shall be determined by a sole arbitrator to be agreed upon by the Landlord and the Tenant or in default of agreement to be nominated at the request of either of them or both of them jointly by the President and in either case in accordance with the Arbitration Act 1996.

18

Schedule 6

Tenant’s Covenants

1 To pay Rent

1.1 To pay the Rent at the times and in the manner required by this Lease to such address as the Landlord may from time to time require and without deduction or set-off whether legal or equitable.

1.2 To pay the Basic Rent by banker’s standing order BACS or direct debit if required by the Landlord.

1.3 If the Basic Rent or any part of it is not paid in cleared funds on the date on which it is due or if any other part of the Rent is not paid within seven days after becoming due (whether or not demanded except where a demand is required by this Lease), the sum in question shall carry interest at the Interest Rate for the period from the date on which it became due until the date of actual payment and that interest shall be paid by the Tenant on demand.

1.4 If the Landlord refuses to accept Rent because an event referred to in clause 5.1 has occurred and the Landlord does not wish to waive its rights under that clause, then such unpaid Rent shall nevertheless bear interest under paragraph 1.3 until the date the Rent in question is accepted.

2 To pay Outgoings

2.1 To pay and discharge all Outgoings relating to the Property at the times when they become due.

2.2 If at any time the Property is not separately assessed for any Outgoings the Tenant shall pay to the Landlord on demand a fair proportion of any assessment which includes the Property.

2.3 Not without Consent (which shall not be unreasonably withheld or delayed) to make any claim for relief in respect of any Outgoings where to do so might prejudice the Superior Landlord and/or the Landlord’s own actual or potential entitlement to relief then or in the future.

2.4 Not without Consent (which shall not be unreasonably withheld or delayed) to agree with the relevant Authority any rating or other assessment in respect of the Property and to consult with (and have due regard to the representations of) the Landlord in the negotiations for any such assessment or any appeal against any such assessment.

3 Repair and Decoration

3.1 To repair and keep the Property in no worse state of repair and condition than evidenced by the attached photographic schedule of condition.

3.2 Without prejudice to the generality of the foregoing covenant:

3.2.1  as to the interior of the Property in the fifth year of the Term to have prepared and painted or otherwise decorated or treated (as the case may be) all surfaces and other portions fabrics and finishes (i) usually painted with two coats of reasonable quality paint or (ii) otherwise decorated or treated with quality materials and as may be necessary to have professionally treated in accordance with the good approved manner for preserving and protecting the same all other parts of the Property requiring treatment for preservation and protection and as necessary to clean make good and treat with suitable preservative any rough cast stucco work block panels or walls;

3.2.2  to carry out such painting decoration or other treatment in a proper and workmanlike manner to the reasonable satisfaction of the Landlord and in accordance with such reasonable directions in regard thereto as may from time to time be communicated to the Tenant by or on behalf of the Landlord.

3.3 Paragraphs 3.1 and 3.2 shall not apply to the extent that any lack of repair or decoration is caused by damage by an Insured Risk (unless paragraph 4 of schedule 5 applies).

19

3.4 To keep the Property in a clean and tidy condition.

3.5 To clean the inside of the glass of all windows comprised in the Property as often as shall be reasonably necessary but in any event at least once in every quarter.

3.6 If the Tenant is in breach of this paragraph 3 then in addition to any other rights which the Landlord may have:

3.6.1  the Landlord may serve on the Tenant written notice specifying the breach in question; and

3.6.2  the Tenant shall as soon as practicable after receipt of that notice and in any event within two months (or sooner in emergency) commence end proceed with all due speed to remedy the breach; and

3.6.3  if the Tenant fails to comply with paragraph 3.6.2 the Landlord may enter the Property and carry out the relevant work and all costs incurred by the Landlord in so doing shall be a debt from the Tenant to the Landlord which the Tenant shall pay on demand with interest on them at the Interest Rate from the date of demand to the date of payment.

3.7 The Tenant shall give written notice to the Landlord immediately on becoming aware of:

3.7.1  any damage to or destruction of the Building; or

3.7.2  any defect or want of repair in the Building (including without limitation any relevant defect within the meaning of section 4 Defective Premises Act 1972) which the Landlord is liable to repair under this Lease or which the Landlord is or may be liable to repair under common law or by virtue of any Enactment.

4 Yielding up on Determination

4.1 On Determination the Tenant shall yield up the Property to the Landlord with vacant possession in a state of repair condition and decoration which is consistent with the proper performance of the Tenant’s covenants in this Lease, but for the avoidance of doubt, in no worse state of repair and/or condition than that which is evidenced by the attached agreed Schedule of Condition.

4.2 If on Determination the Tenant leaves any fixtures fittings or other items in the Property the Landlord may treat them as having been abandoned and may remove destroy or dispose of them as the Landlord wishes and the Tenant shall pay to the Landlord on demand the cost of this with interest at the Interest Rate from the date of demand to the date of payment and indemnify the Landlord against any and all resulting liability.

4.3 Immediately before Determination if and to the extent required by the Landlord the Tenant shall reinstate all alterations, additions or improvements made to the Property at any time during the Term (or pursuant to any agreement for lease made before the start of the Term) and where this involves the disconnection of Plant or Conduits, the Tenant shall ensure that the disconnection is carried out properly and safely and that the Plant and Conduits are suitably sealed off or capped and left in a safe condition so as not to interfere with the continued functioning of the Plant or use of the Conduits elsewhere in the Building.

4.4 The Tenant shall make good any damage caused in complying with paragraph 4.3 and shall carry out all relevant works (including the making good of damage) to the reasonable satisfaction of the Landlord.

4.5 If upon Determination the Property is not left in the state required by this paragraph 4 the Tenant shall pay to the Landlord on demand (in addition to any other sums payable as a result of that breach of covenant) a sum equal to the Rent which would have been payable under this Lease had there been no such Determination for the period from the date of Determination to the date upon which the Landlord has put (or might reasonably have put) the Property into the state in which it should have been left.

4.6 On Determination, whether by effluxion of time or otherwise, the Tenant shall, if the Landlord requires:

4.6.1  cooperate with the Landlord in applying to the Land Registry for any registered title to this Lease to be closed and merged in the immediate reversion to it; and

20

4.6.2  deliver to the Landlord a discharge in appropriate form of all charges registered or noted on any such registered title; and

4.6.3  enter into any documents reasonably required by the Landlord to effect that closure.

5 Use

5.1 The Tenant shall not use the Property for any purpose except the Permitted Use.

5.2 The Tenant shall not use the Property for any purpose or activity which is illegal, immoral, noisy, noxious, dangerous or offensive or which may be or become a nuisance to or cause damage or annoyance to the Landlord or any other person or which might be harmful to the Property or the Building.

5.3 The Tenant shall not use the Property for the purpose of residing or sleeping nor for any sale by auction, public exhibition, political meeting, shows, spectacle, or gambling or for any illegal or immoral purpose.

5.4 The Tenant shall not enter into any covenant in favour of any person (other than the Landlord) nor require a covenant from any person the effect of which is to restrict the use of the Property further than it is already restricted by this Lease.

6 Alterations

6.1 The Tenant shall make no alteration addition or improvement to the Property or the Building whether structural or otherwise except as expressly permitted under paragraph 6.2 and 6.3.

6.2 The Tenant may carry out alterations, additions or improvements to the Property which are wholly within the Property and which do not affect any part of the exterior or structure of the Building and which do not affect the electrical or mechanical equipment within the Building where:

6.2.1  the Tenant has submitted to the Landlord detailed plans and specifications showing the works; and

6.2.2  the Tenant has given to the Landlord such covenants relating to the carrying out of the works as the Landlord may reasonably require; and

6.2.3  the Tenant has if reasonably so required by the Landlord provided the Landlord with reasonable security which will allow the Landlord to carry out and complete the works if the Tenant fails to do so; and

6.2.4  the Tenant has obtained Consent to the works (which shall not be unreasonably withheld).

6.3 Notwithstanding paragraph 6.2 the alteration, addition or improvement of any internal demountable partitions within the Property shall be permitted where those partitions do not adversely affect the electrical or mechanical equipment within the Building and subject to the Tenant complying with the Tenant obligations set out in paragraphs 6.2.1 to 6.2.4 (mutatis mutandis).

7 Signs

7.1 Not to fix to or display or not permit to be affixed to or displayed on the Property any Signs save as is permitted in clause 7.2.

7.2 With Consent (which shall not be unreasonably withheld or delayed) the Tenant may affix to or display in the lift lobby on the fourth floor of the Building on the exterior of the Property a Sign stating the name of the Tenant and the nature of its business as shall be reasonably necessary in connection with the use and occupation of the Property for the time being the position of the sign size and colour of such sign having been approved by the Landlord.

21

8 Dealings with the Property

8.1 Unless expressly permitted under paragraph 8.12 or by a Consent granted under paragraphs 8.2, 8.3 or 8.7 the Tenant shall not assign, underlet, charge, part with or share possession or occupation of all or any part of the Property nor hold the Property on trust for any other person.

8.2 The Landlord shall not unreasonably withhold Consent to a legal charge of the whole of the Property.

8.3 The Landlord shall not unreasonably withhold or delay Consent to an Assignment of the whole of the Property.

8.4 Without restricting the scope of Paragraph 8.3 the Landlord and the Tenant agree for the purposes of section 19(1 A) of the Landlord and Tenant Act 1927 that the Landlord may withhold Consent unless the circumstances set out in Paragraph 8.5 exist and/or the conditions set out in Paragraph 8.6 are fulfilled, provided that if at any time before the execution of the deed of Assignment the circumstances set out in Paragraph 8.5 or any of them change the Landlord may revoke the Consent by written notice to the Tenant.

8.5 The circumstances referred to in Paragraph 8.4 above are that:

8.5.1  the prospective assignee is not a Group Company or a Connected Person; and

8.5.2  in the reasonable opinion of the Landlord the prospective assignee is of sufficient financial standing to enable it to comply with the Tenant’s covenants in this Lease for the remainder of the Term; or

8.5.3  the prospective assignee or prospective guarantor does not enjoy diplomatic or state immunity and is not a local authority in England or a government department or a Minister of the Crown (in each case of the United Kingdom); and

8.5.4  there is no sum due to the Landlord by the Tenant under this Lease and the Tenant is not in any other material breach of the Tenant’s covenants in this Lease; and

8.5.5  the Landlord has received an undertaking from the Tenant’s solicitors in such form as the Landlord may reasonably require to pay to the Landlord on demand the reasonable legal and surveyors’ costs and disbursements (including input Value Added Tax) incurred by the Landlord and any Superior Landlord in considering the Tenant’s application and preparing negotiating and entering into any relevant documentation whether or not the application is withdrawn or the Consent is granted.

8.6 The conditions referred to in Paragraph 8.4 are that:

8.6.1  the Tenant (and any former Tenant who by virtue of there having been an “excluded Assignment” as defined in Section 11 of the Landlord and Tenant (Covenants) Act 1995 has not been released from the Tenant’s covenants in this Lease) shall enter into an authorised guarantee agreement within the meaning of the Landlord and Tenant (Covenants) Act 1995 with the Landlord in such terms as the Landlord may reasonably require; and

8.6.2  if the Landlord reasonably requires, a guarantor or guarantors acceptable to the Landlord acting reasonably has guaranteed to the Landlord the due performance of the prospective assignee’s obligations in such terms as the Landlord may reasonably require; and

8.6.3  the Landlord has received a direct covenant from the Assignee to observe and perform the tenant’s covenants of the Lease during the period when by virtue of the Landlord and Tenant (Covenants) Act 1995 the Assignee is bound by the tenant covenants of the Lease; and

8.6.4  the Landlord has given to the prospective assignee and to any prospective guarantor of the assignee’s obligations a notice in the form set out in Schedule 1 to the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 and the prospective assignee and any such guarantor has made a declaration in the form set out in paragraph 8 of Schedule 2 to that Order in accordance with Section 38A(3)(b) of the Landlord and Tenant Act 1954.

22

8.7 The Landlord shall not unreasonably withhold or delay Consent to an underletting of the whole of the Property where all of the following conditions are satisfied:

8.7.1  the prospective undertenant has covenanted with the Landlord that, until it assigns the underlease with Consent as required by the underlease and such Assignment is registered at HM Land Registry, it will observe and perform the Tenant’s covenants and obligations in this Lease (except the covenant to pay Rent and in the case of an underletting of part insofar only as such covenants affect the underlet property); and

8.7.2  if the Landlord reasonably requires, a guarantor or guarantors acceptable to the Landlord has guaranteed the due performance by the undertenant of its above covenant in such terms as the Landlord may reasonably require; and

8.7.3  no fine or premium is taken for the grant of the underlease; and

8.7.4  the basic rent payable under the underlease is not less than the best rent reasonably obtainable for the underlease; and

8.7.5  any rent free period or other financial inducements given to the undertenant are no greater than is usual at the time in all the circumstances; and

8.7.6  the underlease prohibits any further underlettings and contains the same provisions as to Assignment as are contained in this Lease, but subject to additional conditions in the equivalent (in the underlease) of paragraph 8.6 that:

(a) the consent of the Landlord under this Lease has been obtained (such consent not to be unreasonably withheld or delayed); and

(b) the prospective assignee has covenanted with the Landlord under this Lease in the terms of paragraph 8.6.3; and

8.7.7  the form of the underlease has been approved in writing by the Landlord (approval not to be unreasonably withheld or delayed where the provisions of it are consistent with the provisions of this Lease and where the basic rent due under it is reviewable at the same times and on the same terms as the Basic Rent); and

8.7.8  the terms of any agreement between the Tenant and any third party which has the effect, of modifying the requirements of this Lease in relation to the proposed underletting have been disclosed to and approved by the Landlord (such approval not to be unreasonably withheld or delayed) before the relevant underlease or any agreement for its grant is entered into; and

8.7.9  any such underlease shall be excluded from the operation of sections 24-28 Landlord and Tenant Act 1954.

8.8 The Tenant shall:

8.8.1  enforce against any undertenant the provisions of any underlease and shall not waive them; and

8.8.2  operate the rent review provisions contained in any underlease so as to ensure that the rent is reviewed at the correct times and in accordance with those provisions; and

8.8.3  not accept a surrender of part only of the underlet property.

8.9 The Tenant shall not without Consent (which shall not be unreasonably withheld or delayed):

8.9.1  vary the terms of any underlease; or

8.9.2  accept a surrender of all or part of the underlet property; or

8.9.3 agree any review of the rent under any underlease.

23

8.10  The Tenant shall not require or permit any rent reserved by any underlease to be commuted or to be paid more than one quarter in advance or to be reduced.

8.11  Any Consent granted under this paragraph 8 shall (unless it expressly states otherwise) only be valid if the dealing to which it relates is completed within three months after the date of the Consent.

8.12  The Tenant may (after giving not less than 21 days’ prior written notice to the Landlord containing all relevant information) share occupation of the Property with any Group Company on condition that the sharing shall not create any relationship of landlord and tenant and that on any occupier ceasing to be a Group Company the occupation shall immediately cease or be otherwise documented in accordance with this paragraph 8.

8.13  Within fourteen days after any dealing with or transmission or devolution of the Property or any interest in it (whether or not specifically referred to in this paragraph 8) the Tenant shall give to the Landlord’s solicitors at that time notice in duplicate specifying the basic particulars of the matter in question and at the same time supply a certified copy of any instrument making or evidencing it, and pay those solicitors a registration fee of £25 or such higher sum as shall be reasonable at the time.

8.14  From time to time on demand during the Term the Tenant shall provide the Landlord with particulars of all derivative interests of or in the Property including particulars of rents rent reviews and service and maintenance charges payable in respect of them and copies of any relevant documents and the identity of the occupiers of the Property.

9 Legal Obligations and Necessary Consents

9.1 The Tenant shall comply with all Legal Obligations relating to the Property.

9.2 Where the Tenant receives from an Authority any formal notice relating to the Property or the Building (whether or not the notice is of a Legal Obligation) it shall immediately send a copy to the Landlord and if requested by the Landlord make or join in making such objections representations or appeals in respect of it as the Landlord may reasonably require (except those which are to the detriment of the business of the Tenant or any permitted occupier of the Property).

9.3 Where any Legal Obligation requires the carrying out of works to the Property the Tenant shall (if and to the extent required by this Lease) apply for Consent and any Necessary Consents to carry out the works and after obtaining them the Tenant shall carry out the works to the reasonable satisfaction of the Landlord.

9.4 Where the Legal Obligation requires the carrying out of works on the Property and the Retained Property the Landlord may carry out those works (and may refuse Consent to the Tenant to carry out the part of them which affects the Property) and the Tenant shall pay to the Landlord on demand the proportion of the reasonable cost incurred by the Landlord of those works which relate to the Property and a fair proportion of any incidental fees and expenses.

9.5 Before doing anything at the Property which requires any Necessary Consents (and whether or not the Landlord shall have issued its Consent to that thing under the other provisions of this Lease) the Tenant shall:

9.5.1  obtain all Necessary Consents for the purpose; and

9.5.2  produce copies of all Necessary Consents to the Landlord; and

9.5.3  obtain the approval of the Landlord (which shall not be unreasonably withheld or delayed) to the Necessary Consents and the implementation of them, provided that the Tenant shall not without Consent make or alter any application for any Necessary Consent.

9.6 Where any Necessary Consent implemented by the Tenant or any undertenant or permitted occupier of the Property requires works to be carried out by a date subsequent to Determination, the Tenant shall ensure that those works are completed before Determination.

24

9.7 If the Tenant receives or is entitled to receive any statutory compensation in relation to the Lease (other than from the Landlord) and if Determination occurs otherwise than by effluxion of time, the Tenant shall upon Determination pay to the Landlord a fair proportion of that compensation.

9.8 If and when called upon to do so the Tenant shall produce to the Landlord all plans documents and other evidence which the Landlord may require in order to satisfy itself that this paragraph 9 has been complied with.

10 Conduits and Plant

10.1  The Tenant shall not use the Conduits or the Plant:

10.1.1  for any purpose other than that for which they are designed; or

10.1.2  so as to exceed the capacity for which they are designed (having regard where relevant to the fact that such use is to be shared with other occupiers of the Building).

10.2  The Tenant will keep clean and free from obstruction all Conduits in the Property.

11 Overloading and Damage

11.1  Not to impose or permit to be imposed (whether by using machinery or otherwise) on any part of the Property any load or weight greater than that which is designed or constructed to bear with due margin for safety nor by machinery or otherwise to cause or permit any undue vibration to or nuisance by noise or otherwise in the Property.

11.2  The Tenant shall not damage or obstruct any part of the Building or any accesses to it.

11.3  The Tenant shall not keep produce or use any Hazardous Material on the Property without Consent nor (whether or not Consent is given) cause any Environmental Damage.

11.4  Any request by the Tenant for Consent under paragraph 11.3 shall be in writing and shall be accompanied by:

11.4.1  all information required to demonstrate to the reasonable satisfaction of the Landlord that any such Hazardous Material is necessary to the business of the Tenant and will be kept produced or used in such manner as to comply with all Legal Obligations applicable to such Hazardous Material and to prevent Environmental Damage; and

11.4.2  all relevant information regarding compliance with any relevant Legal Obligations (such information to include without limitation copies of applications for Necessary Consents relating to any manufacturing processes waste treatments recycling storage or disposal practices).

11.5  The Tenant shall forthwith notify the Landlord in writing of any change in the facts and circumstances assumed or reported in any application for or granting of Consent or any Necessary Consent relating to any Hazardous Material kept produced or used on the Property.

11.6  The Tenant shall pay and make good to the Landlord and keep the Landlord fully and effectually indemnified against all loss costs claims demands liability damage actions and expenses whatsoever incurred or sustained by the Landlord directly or indirectly as a consequence or in connection with any breach non-performance or non-observance of any of the covenants and conditions on the part of the Tenant contained or implied in this Lease or the use of the Property or the exercise of the rights granted by this Lease or arising by virtue of the presence in on over or under the Property of any Hazardous Material whether now or hereafter during the Term or the existence or condition of any article in or about the Property or the execution or omission of any works upon the Property including all costs and expenses incurred by the Landlord in connection with any steps which the Landlord may (at its absolute discretion but without being in any way obliged so to do) take to remedy any breach of covenant or condition by the Tenant AND such indemnity shall be without prejudice to any rights or remedies of the Landlord under this Lease in respect of any breach non-performance or non-observance of any covenant or condition.

25

12 Rights and Easements

12.1 The Tenant shall not grant to any third party any rights of any nature over the Property (except as permitted under paragraph 8).

12.2 The Tenant shall preserve all easements and rights currently enjoyed by the Property and in particular (without limitation) will not obstruct any of the windows of the Property.

12.3 The Tenant shall not do or omit to do anything whereby any right of prescription may arise against the Landlord.

13 Regulations

The Tenant shall comply with the Regulations and shall procure that all occupiers of and visitors to the Property comply with them.

14 Entry by Landlord

14.1 Upon reasonable prior written notice (except in emergency when no notice need be given) the Tenant shall permit the Landlord and those authorised by it at all times to enter (and remain unobstructed on) the Property for the purpose of:

14.1.1  exercising the rights reserved by schedule 3; or

14.1.2  inspecting the Property for any purpose; or

14.1.3  making surveys or drawings of the Property; or

14.1.4  erecting a noticeboard stating that the Property is to let or for sale (which the Tenant shall not remove interfere with or obscure); or

14.1.5  complying with the Landlord’s obligations under this Lease or with any other Legal Obligation of the Landlord; or

14.1.6  carrying out works which are the responsibility of the Tenant under this Lease but which the Tenant has failed to do.

14.2 The Tenant shall keep the Landlord informed of the names addresses and telephone numbers of atleast two persons who have keys to the Property.

15 Costs

15.1 The Tenant shall pay to the Landlord on demand on a full indemnity basis all reasonable costs expenses losses and liabilities incurred by the Landlord as a result of or in connection with:

15.1.1  any breach by the Tenant of any of its covenants or obligations in this Lease and/or the enforcement or attempted enforcement of those covenants and obligations by the Landlord; and

15.1.2  any application for Consent under this Lease whether or not that Consent is refused or the application is withdrawn; and

15.1.3  the preparation and service of any notice under section 146 or 147 Law of Property Act 1925 notwithstanding that forfeiture may be avoided otherwise than by relief granted by the Court; and

15.1.4  the preparation and service of any notice under paragraph 3.6 or any schedule of dilapidations served during the Term or within three months after Determination ; and

15.1.5  the closure or determination of the registered title to this Lease.

15.2 If any payment which falls to be made by the Tenant to the Landlord under this Lease by way of indemnity or on an indemnity basis (“initial indemnity payment”) is taxable in the Landlord’s hands the

26

sum payable shall be increased so that after payment of tax on it the Landlord retains a net sum equal to the initial indemnity payment.

16 Loss of Guarantor

If any party who has guaranteed to the Landlord the Tenant’s obligations contained in this Lease dies or is the subject of any of the events referred to in clause 5.1.3 then within 14 days after the event the Tenant shall give notice of it to the Landlord and if so required by the Landlord at the expense of the Tenant the Tenant shall within twenty eight days after that event procure a further guarantee in the same terms from a party acceptable to the Landlord whose agreement shall not be unreasonably withheld or delayed.

17 Title Matters

17.1 The Tenant shall observe and perform all covenants in respect of the Property and shall indemnify the Landlord against any costs expenses losses and liabilities incurred by the Landlord as a result of or arising out of any breach by the Tenant of any covenant affecting the Property and contained in the Title Matters so far as they affect the Property and are still subsisting.

17.2 The Tenant shall not do or omit any act or thing in respect of the Property which would or might cause the Landlord to be in material breach of the covenants on the Landlord’s part or the conditions contained in the Superior Lease.

27

Schedule 7

Landlord’s Covenants

1 Quiet Enjoyment

If the Tenant observes and performs the Tenant’s covenants and obligations in this Lease the Tenant may peaceably hold and enjoy the Property during the Term without any lawful interruption or disturbance from or by the Landlord or any person claiming through under or in trust for the Landlord.

2 Superior Lease

The Landlord shall pay the rent reserved by the Superior Lease as and when it falls due and will observe and perform its covenants in the Superior Lease (except insofar as the Tenant covenants so to do under this Lease) but this covenant shall be by way of indemnity only for the Tenant.

3 Provision of Services

3.1 The Landlord shall provide the Basic Services and such of the Additional Services as the Landlord from time to time reasonably considers appropriate in a reasonably economic manner and in accordance with the principles of good estate management.

3.2 Notwithstanding paragraph 3.1 the Landlord shall not be obliged to provide the Services where:

3.2.1  it is prevented from doing so by circumstances beyond its control including without limitation breakdown, damage, shortage of fuel, equipment or materials and inclement weather; or

3.2.2  the Service cannot reasonably be provided as a result of works of alteration inspection or repair or any other works being carried out at the Building or

3.2.3  any Rent is in arrear, but in the circumstances set out in paragraphs 3.2.1 or 3.2.2 the Landlord shall restore the Service as soon as reasonably practicable and provided further that (except in emergency in any part of the Building or failure of supply by the statutory undertaker) the Landlord shall endeavour to give at least five working days notice of shut down of the electrical supply.

3.3 Notwithstanding Paragraph 3.1 the Landlord shall not be liable for failure to provide the Services listed in Paragraph 1.1.1 of schedule 8 until a reasonable time after the relevant want of repair, decoration maintenance or renewal has been notified to it in writing.

28

Schedule 8

Services and Service Charge

1 Basic Services

1.1 The Basic Services are:

1.1.1  the repair decoration inspection testing maintenance and renewal of the Retained Property;

1.1.2  the cleaning of the Common Parts and the exterior of the Building including the exterior of all windows as reasonably required;

1.1.3  the provision of lighting to the Common Parts when required;

1.1.4  the provision of heating to the Building when required;

1.1.5  the provision of air-conditioning to the Building;

1.1.6  the provision of hot and cold water to any hot or cold taps in the Common Parts;

1.1.7  the provision of towels, soap and other requisites to any lavatories in the Common Parts;

1.1.8  the provision of all proper equipment to any kitchen in the Common Parts;

1.1.9  the provision and operation in the Common Parts of such fire prevention fire fighting and fire alarm equipment and signs as may be required by any Authority or by the Insurers;

1.1.10  the provision and operation of the Signboard;

1.1.11  the provision of refuse bins and the operation of a refuse collection service for the Building;

1.1.12  the provision and operation of a security patrol and/or security observation system and/or other security equipment for the Building;

1.1.13  the provision of lifts within the Building and for the inspection testing and maintenance of them.

2 Additional Services

2.1 The Additional Services are:

2.1.1  the provision and operation of any Plant not included within the Basic Services;

2.1.2  the provision either permanently or at times which the Landlord reasonably considers appropriate of pictures floral displays flags decorative lights and other decorations in the Common Parts;

2.1.3  the provision and maintenance of appropriate or useful Signs or notices in the Common Parts or visible from the Common Parts or from outside the Building;

2.1.4  the provision of any other services which the Landlord from time to time reasonably considers appropriate having regard to the principles of good estate management.

3 Service Costs

3.1 The Service Costs are all costs and expenses incurred by the Landlord in the operation and management of the Building and the provision of services to it including without limitation:

3.1.1  the cost of providing the Services;

29

3.1.2  the cost of providing to the Retained Property any service which had it been provided to the Common Parts could have constituted one of the Services;

3.1.3  the cost of all fuel or other energy sources for the Plant and/or the Retained Property;

3.1.4  any costs which the Landlord may be required to pay to the Superior Landlord or other parties under the Title Matters (except for rent under any Superior Lease) or as a contribution to the cost of the Services or to the repair, decoration, inspecting, testing, maintenance or renewal of any areas or structures used in common with other parties;

3.1.5  the Outgoings and the rental value of the Retained Property and any other property used exclusively (or substantially so) in connection with the provision of the Services;

3.1.6  the cost of preparing submitting and settling any insurance claims relating to the Building;

3.1.7  the cost of employing or retaining the Managing Agents for the Building;

3.1.8  the cost of employing or retaining staff to provide the Services including all incidental expenditure relating to that employment which without limitation shall include expenditure on pensions insurance health welfare industrial training levies redundancy clothing tools machinery equipment and vehicles which in each case the Landlord considers are required for the proper performance by the staff in question of their duties;

3.1.9  the cost of complying with, making representations against or otherwise contesting the incidence of any Legal Obligation or prospective Legal Obligation which will or may affect the Building;

3.1.10  the cost of leasing any item required in connection with the Services;

3.1.11  the cost of enforcing the provisions in the Superior Lease against the Superior Landlord and the Regulations against occupiers of the Building;

3.1.12  the cost of calculating the Service Charge for each tenant and the preparation and issue of certificates accounts and audits in respect of the Service Charge;

3.1.13  all professional charges fees and expenses payable by the Landlord in respect of any of the Services or the Service Costs;

3.1.14  during any period for which the Landlord does not employ an independent Managing Agent to manage the Building a sum retainable by the Landlord equal to the charges which a firm of surveyors based in central London might reasonably be expected to make for managing the Building;

3.1.15  all Value Added Tax payable by the Landlord in respect of the Service Costs insofar as it is not recoverable by the Landlord as an input; and

3.1.16  the gross cost to the Landlord by way of interest commission banking charges commitment fees or otherwise of borrowing any necessary sums in respect of the Service Costs.

4 Calculation and Payment of Service Charge

4.1 The Landlord will notify the Tenant before or during any Service Charge Period of the Estimated Service Charge payable by the Tenant during that Service Charge Period.

4.2 The Tenant shall pay the Estimated Service Charge by four equal quarterly installments on the Quarter Days.

4.3 The Landlord may revise the Estimated Service Charge having regard to the anticipated Total Service Costs for the relevant Service Charge Period and the Tenant shall pay to the Landlord any additional Estimated Service Charge which may become due as a result within seven days of demand.

30

4.4 As soon as practicable after each Service Charge Account Date the Landlord will supply the Tenant with a Service Charge Statement showing:

4.4.1  the Total Service Costs for the Service Charge Period; and

4.4.2  the Service Charge for the Service Charge Period.

4.5 If the Service Charge exceeds the Estimated Service Charge the Tenant shall pay the excess to the Landlord within seven days of receipt of the Service Charge Statement.

4.6 If the Service Charge is less than the Estimated Service Charge then the shortfall shall be set off against any other moneys due from the Tenant to the Landlord under this Lease and any balance shall be credited against the next payment of Estimated Service Charge or (following Determination) paid to the Tenant.

4.7 For a period of one month after delivery of the Service Charge Statement the Landlord will make available any receipts or invoices evidencing expenditure of the Total Service Costs for inspection by the Tenant at the offices of the Landlord or the Managing Agent during normal business hours by appointment.

4.8 The Tenant, may, within one month after delivery of the Service Charge Statement, by written notice to the Landlord, challenge the Service Charge Certificate on the grounds that it contains an error or errors. Any such challenge shall give details of the alleged errors. The Tenant shall not be entitled to dispute the correctness of the Service Charge Statement except in respect of errors notified within that month.

4.9 If the Landlord whether by itself or through its Managing Agent receives any commission or other benefits for effecting or maintaining the Services it shall not be obliged to pass the benefit of them onto the Tenant.

31

Schedule 9

Regulations

1 Delivery and despatch of goods mail and other items to the Property and access for workmen and materials shall only take place through the service areas in the Common Parts and through the service entrances lifts stairs and corridors (if any).

2 All refuse shall be kept in suitable containers and shall be made available for collection by the Landlord at the times specified by the Landlord.

3 No sound from loudspeakers or other artificially generated noise which can be heard outside the Property shall be created within the Property.

4 The Tenant shall maintain to the reasonable satisfaction of the Landlord and to the satisfaction of the Insurers adequate fire prevention apparatus upon the Property and shall from time to time remove from the Property all waste and inflammable material as quickly as possible.

5 The Tenant shall not exhibit or place any articles of any kind outside the Property or transact any business except inside the Property.

6 The Tenant shall not light or maintain open fires in the Building.

7 The Property is to be locked or otherwise secured when not in use.

EXECUTED AND DELIVERED as a	)
DEED by BOMBARDIER TRANSPORTATION	)
UK LIMITED acting by:	)
	Director	/s/ Illegible
	Director/Secretary	/s/ Illegible

32

Schedule 9

Regulations

1 Delivery and despatch of goods mail and other items to the Property and access for workmen and materials shall only take place through the service areas in the Common Parts and through the service entrances lifts stairs and corridors (if any).

2 All refuse shall be kept in suitable containers and shall be made available for collection by the Landlord at the times specified by the Landlord.

3 No sound from loudspeakers or other artificially generated noise which can be heard outside the Property shall be created within the Property.

4 The Tenant shall maintain to the reasonable satisfaction of the Landlord and to the satisfaction of the Insurers adequate fire prevention apparatus upon the Property and shall from time to time remove from the Property all waste and inflammable material as quickly as possible.

5 The Tenant shall not exhibit or place any articles of any kind outside the Property or transact any business except inside the Property.

6 The Tenant shall not light or maintain open fires in the Building.

7 The Property is to be locked or otherwise secured when not in use.

EXECUTED AND DELIVERED as a	)
DEED by LEARNING TREE INTERNATIONAL	)
LIMITED acting by:	)
	Director	/s/ R. Chappell
		R. Chappell
	Director/Secretary	/s/ R. Harvey
		R. Harvey

32

EX-10.17

EXHIBIT 10.17

OFFICE LEASE

BETWEEN

METROPOLITAN LIFE INSURANCE COMPANY (LANDLORD)

AND

LEARNING TREE INTERNATIONAL, INC. (TENANT)

CONTINENTAL GRAND PLAZA II

El Segundo, California

TABLE OF CONTENTS

		PAGE
ARTICLE ONE - BASIC LEASE PROVISIONS		1
1.01	BASIC LEASE PROVISIONS	1
1.02	ENUMERATION OF EXHIBITS	2
1.03	DEFINITIONS	2
ARTICLE TWO - PREMISES, TERM, FAILURE TO GIVE POSSESSION		5
2.01	LEASE OF PREMISES	5
2.02	TERM	5
2.03	FAILURE TO GIVE POSSESSION	5
2.04	AREA OF PREMISES	5
2.05	CONDITION OF PREMISES	5
ARTICLE THREE - RENT		5
ARTICLE FOUR - RENT ADJUSTMENTS AND PAYMENTS		5
4.01	RENT ADJUSTMENTS	6
4.02	STATEMENT OF LANDLORD	6
4.03	BOOKS AND RECORDS	6
4.04	PARTIAL OCCUPANCY	7
4.05	TENANT OR LEASE SPECIFIC TAXES	7
ARTICLE FIVE - SECURITY DEPOSIT		5
ARTICLE SIX - SERVICES		5
6.01	LANDLORD’S GENERAL SERVICES	7
6.02	TELEPHONE SERVICES	8
6.03	DELAYS IN FURNISHING SERVICES	9
6.04	CHOICE OF SERVICE PROVIDER	9
ARTICLE SEVEN - POSSESSION, USE AND CONDITION OF PREMISES		5
7.01	POSSESSION AND USE OF PREMISES	9
7.02	LANDLORD ACCESS TO PREMISES; APPROVALS	10
7.03	QUIET ENJOYMENT	10
ARTICLE EIGHT - MAINTENANCE		5
8.01	LANDLORD’S MAINTENANCE	11
8.02	TENANT MAINTENANCE	11
ARTICLE NINE - ALTERATIONS AND IMPROVEMENTS		5
9.01	TENANT ALTERATIONS	11
9.02	LIENS	12
ARTICLE TEN - ASSIGNMENT AND SUBLETTING		5
10.01	ASSIGNMENT AND SUBLETTING	12
10.02	RECAPTURE	13
10.03	EXCESS RENT	13
10.04	TENANT LIABILITY	13
10.05	ASSUMPTION AND ATTORNMENT	13
ARTICLE ELEVEN - DEFAULT AND REMEDIES		5
11.01	EVENTS OF DEFAULT	13
11.02	LANDLORD’S REMEDIES	14
11.03	ATTORNEY’S FEES	15
11.04	BANKRUPTCY	15
11.05	LANDLORD’S DEFAULT	15
ARTICLE TWELVE - SURRENDER OF PREMISES		5
12.01	IN GENERAL	16
12.02	LANDLORD’S RIGHTS	16
ARTICLE THIRTEEN - HOLDING OVER		5
ARTICLE FOURTEEN - DAMAGE BY FIRE OR OTHER CASUALTY		5
14.01	SUBSTANTIAL UNTENANTABILITY	16
14.02	INSUBSTANTIAL UNTENANTABILITY	17
14.03	RENT ABATEMENT	17
14.04	WAIVER OF STATUTORY REMEDIES	17

i

ARTICLE FIFTEEN - EMINENT DOMAIN		17
15.01	TAKING OF WHOLE OR SUBSTANTIAL PART	17
15.02	TAKING OF PART	17
15.03	COMPENSATION	17
ARTICLE SIXTEEN - INSURANCE		17
16.01	TENANT’S INSURANCE	17
16.02	FORM OF POLICIES	18
16.03	LANDLORD’S INSURANCE	18
16.04	WAIVER OF SUBROGATION	18
16.05	NOTICE OF CASUALTY	18
ARTICLE SEVENTEEN - WAIVER OF CLAIMS AND INDEMNITY		18
17.01	WAIVER OF CLAIMS	18
17.02	INDEMNITY BY TENANT	19
17.03	WAIVER OF CONSEQUENTIAL DAMAGES	19
ARTICLE EIGHTEEN - RULES AND REGULATIONS		19
18.01	RULES	19
18.02	ENFORCEMENT	19
ARTICLE NINETEEN - LANDLORD’S RESERVED RIGHTS		19
ARTICLE TWENTY - ESTOPPEL CERTIFICATE		19
20.01	IN GENERAL	19
20.02	ENFORCEMENT	20
ARTICLE TWENTY-ONE - RELOCATION OF TENANT		19
ARTICLE TWENTY-TWO - REAL ESTATE BROKERS		19
ARTICLE TWENTY-THREE - MORTGAGEE PROTECTION		19
23.01	SUBORDINATION AND ATTORNMENT	20
23.02	MORTGAGEE PROTECTION	20
ARTICLE TWENTY-FOUR - NOTICES		19
ARTICLE TWENTY-FIVE - PARKING		19
ARTICLE TWENTY-SIX - MISCELLANEOUS		19
26.01	LATE CHARGES	21
26.02	NO JURY TRIAL; VENUE; JURISDICTION	22
26.03	DEFAULT UNDER OTHER LEASE	22
26.04	OPTION	22
26.05	TENANT AUTHORITY	22
26.06	ENTIRE AGREEMENT	22
26.07	MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE	22
26.08	EXCULPATION	22
26.09	ACCORD AND SATISFACTION	22
26.10	LANDLORD’S OBLIGATIONS ON SALE OF BUILDING	22
26.11	BINDING EFFECT	22
26.12	CAPTIONS	22
26.13	TIME; APPLICABLE LAW	23
26.14	ABANDONMENT	23
26.15	LANDLORD’S RIGHT TO PERFORM TENANT’S DUTIES	23
26.16	SECURITY SYSTEM	23
26.17	NO LIGHT, AIR OR VIEW EASEMENTS	23
26.18	RECORDATION	23
26.19	SURVIVAL	23

ii

OFFICE LEASE

ARTICLE ONE

BASIC LEASE PROVISIONS

1.01 BASIC LEASE PROVISIONS - In the event of any conflict between these Basic Lease Provisions and any other Lease provision, such other Lease provision shall control.

(1) BUILDING AND ADDRESS:

400 North Continental Boulevard

El Segundo, California 90245

(2) LANDLORD AND ADDRESS:

Metropolitan Life Insurance Company,

a New York corporation

Notices to Landlord shall be addressed:

Metropolitan Life Insurance Company

c/o CB Richard Ellis, Inc.

400 North Continental Boulevard, Suite 140

El Segundo, California 90245

Attention: Property Manager

with copies to the following:

Metropolitan Life Insurance Company

333 South Hope Street, Suite 3650

Los Angeles, CA 90071

Attention: Director, EIM

and

Metropolitan Life Insurance Company

400 South El Camino Real, 8^th Floor

San Mateo, CA 94402

Attention: Associate General Counsel

(3) TENANT AND CURRENT ADDRESS:

(a) Name: Learning Tree International, Inc.

(b) State of formation and type of entity: a Delaware corporation

(c) Federal Tax Identification Number:                         

Tenant shall promptly notify Landlord of any change in the foregoing items.

Notices to Tenant shall be addressed:

Prior to Commencement Date:

Learning Tree International, Inc.

6053 W. Century Blvd.

Los Angeles, CA 90045

Attention: CAO

After Commencement Date:

Learning Tree International, Inc.

400 North Continental Boulevard, Suite 200

El Segundo, CA 90245

Attention: CAO

(4) DATE OF LEASE: as of May 20, 2005

(5) LEASE TERM: Sixty six (66) months

(6) PROJECTED COMMENCEMENT DATE: June 1, 2005

(7) PROJECTED EXPIRATION DATE: November 30, 2010

(8) MONTHLY BASE RENT:

Period from/to	Monthly		Monthly Rate/SF of Rentable Area
Months 1 – 6	$	0.00	$	0.00
Months 7 – 12	$	61,873.20	$	1.80
Months 13 – 24	$	63,591.90	$	1.85
Months 25 – 36	$	64,966.86	$	1.89
Months 37 – 48	$	66,685.56	$	1.94
Months 49 – 66	$	68,404.26	$	1.99

(9) RENTABLE AREA OF THE PROJECT: 238,388 square feet

(10) RENTABLE AREA OF THE PREMISES: 34,374 square feet, comprised of 24,485 square feet on Floor 2 and 9,889 square feet on Floor 1

1

jka v14-Continental_Grand-Learning_Tree-Lease

(11) USABLE AREA OF THE PREMISES: 29,534 square feet, comprised of 20,750 square feet on Floor 2 and 8,784 square feet on Floor 1

(12) SECURITY DEPOSIT: Sixty-Eight Thousand Four Hundred Four and 26/100 Dollars ($68,404.26)

(13) OPERATING EXPENSES BASE YEAR: The calendar year 2005.

(14) TAXES BASE YEAR: The calendar year 2005.

(15) SUITE NUMBER OF PREMISES: 150 and 200

(16) TENANT’S SHARE: 14.42%

(17) TENANT’S USE OF PREMISES: General office uses and business technology training.

(18) PARKING SPACES:

Starting on the Commencement Date and continuing during the Term, Tenant shall have the use of parking stalls of the number and type described below, for which the monthly charge shall be the prevailing rates as described in Article Twenty-Five, which as of the date of this Lease are agreed to be the amounts set forth below, and it is understood and agreed such rates are subject to increase from time to time as provided in Article Twenty-Five.

115 unassigned spaces at $60.00 per month per parking space

    5 reserved spaces at $100.00 per month per parking space

Notwithstanding anything to the contrary contained herein, Tenant shall not be responsible for parking charges through and including Month 48 of the Term. Beginning Month 49 through the remainder of the Term, Tenant shall pay the Parking Rent as defined herein subject to the terms and conditions contained herein.

(20) BROKERS:

Landlord’s Broker:         CB Richard Ellis, Inc.

Tenant’s Broker:             CB Richard Ellis, Inc.

1.02 ENUMERATION OF EXHIBITS

The Exhibits and Rider(s) set forth below and attached to this Lease are incorporated in this Lease by this reference:

EXHIBIT A	Plan of Premises
EXHIBIT B	Workletter Agreement
EXHIBIT C	Rules and Regulations
EXHIBIT D	Fair Market Rental Rate
EXHIBIT E	Offer Space
EXHIBIT F	Signage
EXHIBIT G	Form of Subordination, Non-Disturbance and Attornment Agreement
RIDER 1	Commencement Date Agreement
RIDER 2	Additional Provisions

1.03 DEFINITIONS

For purposes hereof, the following terms shall have the following meanings:

ADJUSTMENT YEAR: The applicable calendar year or any portion thereof after the Operating Expenses Base Year and Taxes Base Year for which a Rent Adjustment computation is being made.

AFFILIATE: Any Person (as defined below) which is currently owned or controlled by, owns or controls, or is under common ownership or control with Tenant. For purposes of this definition, the word “control,” as used above means, with respect to a Person that is a corporation, the right to exercise, directly or indirectly, more than fifty percent (50%) of the voting rights attributable to the shares of the controlled corporation and, with respect to a Person that is not a corporation, the possession, directly or indirectly, of the power at all times to direct or cause the direction of the management and policies of the controlled Person. The word Person means an individual, partnership, trust, corporation, firm or other entity.

BASE YEAR. Collectively refers to the Operating Expenses Base Year and Taxes Base Year.

BUILDING: The office building located at the address specified in Section 1.01.

COMMENCEMENT DATE: The date specified in Section 1.01 as the Projected Commencement Date, unless changed by operation of Article Two.

COMMON AREAS: All areas of the Project made available by Landlord from time to time for the general common use or benefit of the tenants of the Building or Project, and their employees and invitees, or the public, as such areas currently exist and as they may be changed from time to time.

DECORATION: Tenant Alterations which do not require a building permit and which do not involve any of the structural elements of the Building, or any of the Building’s systems, including its electrical, mechanical, plumbing, security, heating, ventilating, air-conditioning, communication, and fire and life safety systems.

DEFAULT RATE: Ten percent (10%).

DELIVERY DATE: The date for Landlord’s delivery to Tenant of possession of the Premises, if different from the Commencement Date, as provided for in Rider 2.

ELECTRICITY USE EXPENSES: The separate category of Operating Expenses defined in the definition of Operating Expenses below in this Section 1.03.

2

jka v14-Continental_Grand-Learning_Tree-Lease

ENVIRONMENTAL LAWS: All Laws governing the use, storage, disposal or generation of any Hazardous Material, or pertaining to environmental conditions on, under or about the Premises or any part of the Project, including the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.), and the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section 6901 et seq.).

EXPIRATION DATE: The date specified in Section 1.01 unless changed by operation of Article Two.

FORCE MAJEURE: Any accident, casualty, act of God, war or civil commotion, strike or labor troubles, or any cause whatsoever beyond the reasonable control of Landlord, including water shortages, energy shortages or governmental preemption in connection with an act of God, a national emergency, or by reason of Law, or by reason of the conditions of supply and demand which have been or are affected by act of God, war or other emergency.

GENERAL EXPENSES: The separate category of Operating Expenses defined in the definition of Operating Expenses below in this Section 1.03.

HAZARDOUS MATERIAL: Such substances, material and wastes which are or become regulated under any Environmental Law; or which are classified as hazardous or toxic under any Environmental Law; and explosives and firearms, radioactive material, asbestos, and polychlorinated biphenyls.

INDEMNITEES: Collectively, Landlord, any Mortgagee or ground lessor of the Property, the property manager and the leasing manager for the Property and their respective directors, officers, agents and employees.

LAND: The parcel(s) of real estate on which the Building and Project are located.

LANDLORD WORK: The construction or installation of improvements to the Premises, to be furnished by Landlord, if any, specifically described in the Workletter, if any.

LAWS OR LAW: All laws, ordinances, rules, regulations, other requirements, orders, rulings or decisions adopted or made by any governmental body, agency, department or judicial authority having jurisdiction over the Property, the Premises or Tenant’s activities at the Premises and any covenants, conditions or restrictions of record which affect the Property.

LEASE: This instrument and all exhibits and riders attached hereto, as may be amended from time to time.

LEASE YEAR: The twelve month period beginning on the first day of the first month following the Commencement Date (unless the Commencement Date is the first day of a calendar month in which case beginning on the Commencement Date), and each subsequent twelve month, or shorter, period until the Expiration Date.

MONTHLY BASE RENT: The monthly rent specified in Section 1.01, subject to the provisions of Section 2.04.

MORTGAGEE: Any holder of a mortgage, deed of trust or other security instrument encumbering the Property.

NATIONAL HOLIDAYS: New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day and other holidays recognized by the Landlord and the janitorial and other unions servicing the Building in accordance with their contracts.

OPERATING EXPENSES: All Taxes, costs, expenses and disbursements of every kind and nature which Landlord shall pay or become obligated to pay in connection with the ownership, management, operation, maintenance, replacement and repair of the Property (including the amortized portion of any capital expenditure or improvement (“Capital Expenditure”) which is either (i) required due to law (including due to governmental authority or regulation) enacted, or required due to an interpretation of law by governmental authorities made, subsequent to the date of this Lease or (2) intended by Landlord to reduce Operating Expenses, together with interest thereon, and the cost of changing utility service providers). Such amortization shall be in accordance with GAAP and include interest at the prime rate as determined by Bank of America plus two percent (2%) as of the date of installation of the capital improvement; adjusted however, if necessary, so that Operating Expenses for any Capital Expenditure under subsection (2) above shall not exceed the excess of the amount Landlord reasonably estimates all Operating Expenses affected by such Capital Expenditure would have been had such Capital Expenditure not been made, over the actual amount of such affected Operating Expenses. If any Operating Expense, though paid in one year, relates to more than one calendar year, at the option of Landlord such expense may be proportionately allocated among such related calendar years. Operating Expenses shall for all purposes be calculated and payable in two separate categories as follows: (1) charges for electricity consumption (“Electricity Use Expenses”) and all other Operating Expenses (“General Expenses”); (2) all references to Operating Expenses (including, for example, Operating Expenses Base Year and Tenant’s Share of Operating Expenses) shall mean Electricity Use Expenses and General Expenses as separate categories, and an increase in one such category shall not be offset by a decrease in another category; and (3) no expense shall be double counted. Operating Expenses shall not include, (i) costs of alterations of the premises of tenants of the Project, (ii) costs of capital improvements to the Project (except for amortized portion of capital improvements installed for the purpose of reducing or controlling Operating Expenses or complying with applicable Laws), (iii) depreciation charges, (iv) interest and principal payments on loans (except for loans for capital expenditures or improvements which Landlord is allowed to include in Operating Expenses as provided above), (v) ground rental payments, (vi) real estate brokerage and leasing commissions, (vii) advertising and marketing expenses, (viii) costs of Landlord reimbursed by insurance proceeds, (ix) expenses incurred in negotiating leases of other tenants in the Project or enforcing lease obligations of other tenants in the Project ; (x) Landlord’s or Landlord’s property manager’s corporate general overhead or corporate general administrative expenses; (xi) expenses in connection with services or other benefits which are not offered to Tenant but which are provided to another tenant or occupant of the Project; (xii) costs incurred due to violation by Landlord or any tenant of the terms and conditions of this Lease or any lease in excess of the costs which would be includable in Operating Expenses if Landlord or such tenant had complied with the respective lease; (xiii) overhead and profit increment paid to subsidiaries or affiliates of Landlord for services on or to the Real Property, to the extent only that the charges for such service exceed competitive charges of comparable services in Class A, high-rise, multi-tenant office properties of comparable quality if such services were not so rendered by such subsidiary or affiliate; (xiv) Landlord’s general corporate overhead and general and administrative expenses; (xv) compensation paid to clerks, attendants or other persons in commercial concessions (subject to the exclusions below) operated by Landlord for the purpose of producing a profit from such concession to the extent such compensation is offset by revenue from operation of such concessions. (As used herein, commercial concession does not mean or include any service Landlord provides generally to tenants or occupants pursuant to terms of lease agreements, such as after-hours HVAC, additional electricity or parking facilities. Further, commercial concession does not mean or include any concession for the purpose of providing an amenity, convenience or service to occupants of the Project, such as a newsstand, lobby shop, convenience store or food and/or beverage service.); (xvi) advertising and marketing expenses; (xvii) management fees in excess of one and one-half percent (1.5%) of rents of the Building; (xviii) any fines, penalties, attorneys’ fees or litigation costs incurred due to violations by Landlord or its employees, agents or contractors of any Law and any other costs of such violation in excess of the costs which would be includable in Operating Expenses if Landlord had complied with such Law; (xix) costs arising from Hazardous Materials which

3

jka v14-Continental_Grand-Learning_Tree-Lease

were installed by Landlord, its agents, officers and employees and which, at the time of installation, Landlord knew or should have known were in fact Hazardous Materials; (xx) costs arising from Landlord’s charitable or political contributions; (xxi) expenses incurred in enforcing lease obligations of other tenants in the Building or in negotiations or disputes with existing or prospective tenants or occupants; (xxii) real estate brokerage and leasing commissions and (xxiii) expenses incurred by Landlord in connection with any financing, sale or syndication of the Building.

OPERATING EXPENSES BASE YEAR: The calendar year designated in Section 1.01.

PREMISES: The space located in the Building at the Suite Number listed in Section 1.01 and depicted on Exhibit A attached hereto.

PROJECT OR PROPERTY: The Building is part of an office project known as “Continental Grand Plaza II”. The Project consists of (a) the Building and Common Areas of the Building whose present address is set forth above in El Segundo, California with an aggregate of 238,388 square feet of Rentable Area of the Project; (b) associated parking facilities, landscaping and other improvements; (c) the Land on which the foregoing are located and any associated interests in real property; and (d) the personal property, fixtures, machinery, equipment, systems and apparatus located in or used in conjunction with any of the foregoing. The Project may also be referred to as the Property.

REAL PROPERTY: The Property excluding any personal property.

RENT: Collectively, Monthly Base Rent, Rent Adjustments and Rent Adjustment Deposits, and all other charges, payments, late fees or other amounts required to be paid by Tenant under this Lease.

RENT ADJUSTMENT: Any amounts owed by Tenant for payment of Operating Expenses or Taxes. The Rent Adjustments shall be determined and paid as provided in Article Four.

RENT ADJUSTMENT DEPOSIT: An amount equal to Landlord’s estimate of the Rent Adjustment attributable to each month of the applicable Adjustment Year. On or before the beginning of each Adjustment Year or with Landlord’s Statement (defined in Article Four), Landlord may estimate and notify Tenant in writing of its estimate of the excess, if any, of Operating Expenses over those for the Operating Expenses Base Year and of Taxes over those for the Taxes Base Year. Prior to the first determination by Landlord of the amount of Operating Expenses for the Operating Expenses Base Year and of Taxes for the Taxes Base Year, Landlord may estimate such amounts in the foregoing calculation. Landlord shall have the right from time to time during any Adjustment Year to provide a new or revised estimate of Operating Expenses and to notify Tenant in writing thereof, of corresponding adjustments in Tenant’s Rent Adjustment Deposit payable over the remainder of such year, and of the amount or revised amount due allocable to months preceding such change. The last estimate by Landlord shall remain in effect as the applicable Rent Adjustment Deposit unless and until Landlord notifies Tenant in writing of a change.

RENTABLE AREA OF THE PREMISES: The amount of square footage set forth in Section 1.01, subject to the provisions of Section 2.04.

RENTABLE AREA OF THE PROJECT: The amount of square footage set forth in Section 1.01, which represents the sum of the rentable area of all space intended for occupancy in the Project is subject to the provisions of Section 2.04.

SECURITY DEPOSIT: The funds specified in Section 1.01, if any, deposited by Tenant with Landlord as security for Tenant’s performance of its obligations under this Lease.

STANDARD OPERATING HOURS: Monday through Friday from 8 A.M. to 6 P.M. and on Saturdays from 9 A.M. to 1 P.M., excluding National Holidays.

SUBSTANTIALLY COMPLETE: The completion of the Landlord Work or Tenant Work, as the case may be, except for minor insubstantial details of construction, decoration or mechanical adjustments which remain to be done.

TAXES: All federal, state and local governmental taxes, assessments and charges of every kind or nature, whether general, special, ordinary or extraordinary, which Landlord shall pay or become obligated to pay because of or in connection with the ownership, leasing, management, control or operation of the Property or any of its components (including any personal property used in connection therewith), which may also include any rental or similar taxes levied in lieu of or in addition to general real and/or personal property taxes. For purposes hereof, Taxes for any year shall be Taxes which are assessed for any period of such year, whether or not such Taxes are billed and payable in a subsequent calendar year. There shall be included in Taxes for any year the amount of all fees, costs and expenses (including reasonable attorneys’ fees) paid by Landlord during such year in seeking or obtaining any refund or reduction of Taxes. Taxes for any year shall be reduced by the net amount of any tax refund received by Landlord attributable to such year. If a special assessment payable in installments is levied against any part of the Property, Taxes for any year shall include only the installment of such assessment and any interest payable or paid during such year. Taxes shall not include any federal or state inheritance, general income, gift or estate taxes, except that if a change occurs in the method of taxation resulting in whole or in part in the substitution of any such taxes, or any other assessment, for any Taxes as above defined, such substituted taxes or assessments shall be included in the Taxes. Taxes shall not include income, inheritance or estate taxes or any interest, penalties or other charges due to Landlord’s failure to pay Taxes prior to delinquency.

TAXES BASE YEAR: The calendar year set forth in Section 1.01.

TENANT ADDITIONS: Collectively, Landlord Work, Tenant Work and Tenant Alterations.

TENANT ALTERATIONS: Any alterations, improvements, additions, installations or construction in or to the Premises or any Real Property systems serving the Premises done or caused to be done by Tenant after the date hereof (excluding Landlord Work or Tenant Work); and any supplementary air-conditioning systems installed by Landlord or by Tenant at Landlord’s request pursuant to Section 6.01(b).

TENANT DELAY: As defined in the Workletter, if applicable.

TENANT WORK: All work installed or furnished to the Premises by Tenant pursuant to Rider 2, if any.

TENANT’S SHARE: The percentage specified in Section 1.01 which represents the ratio of the Rentable Area of the Premises to the Rentable Area of the Project, subject to the provisions of Section 2.04.

USABLE AREA OF THE PREMISES: The amount of square footage set forth in Section 1.01, subject to the provisions of Section 2.04.

4

jka v14-Continental_Grand-Learning_Tree-Lease

TERM: The term of this Lease commencing on the Commencement Date and expiring on the Expiration Date.

TERMINATION DATE: The Expiration Date or such earlier date as this Lease terminates or Tenant’s right to possession of the Premises terminates.

WORKLETTER: The Agreement regarding the manner of completion of Landlord Work, if any, and Tenant Work, if any, set forth on Exhibit B attached hereto.

ARTICLE TWO

PREMISES, TERM, FAILURE TO GIVE POSSESSION

2.01 LEASE OF PREMISES

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Premises for the Term and upon the terms, covenants and conditions provided in this Lease. In the event Landlord delivers possession of the Premises to Tenant prior to the Commencement Date, Tenant shall be subject to all of the terms, covenants and conditions of this Lease (except with respect to the payment of Rent) as of the date of such possession.

2.02 TERM

(a) The Commencement Date shall be the date Landlord delivers the Premises to Tenant in accordance with Section 2 of the Workletter; provided, however, that in the event such delivery occurs prior to the Projected Commencement Date, the Commencement Date shall be the earlier to occur of (i) the Projected Commencement Date, or (ii) the date Tenant first accepts possession of, or otherwise occupies for any purpose, all or any part of the Premises. In the event the Commencement Date differs from the Projected Commencement Date, the Expiration Date shall be hereby changed from the Projected Expiration Date by the identical difference.

(b) Within thirty (30) days following the Commencement Date, Landlord, through its property manager, and Tenant shall enter into an agreement (which is attached hereto as Rider 1) confirming the Commencement Date and the Expiration Date, and the length of the Term shall be as specified in Section 1.01(5). If Tenant fails to enter into such agreement, then the Commencement Date and the Expiration Date shall be the dates designated by Landlord in such agreement.

2.03 FAILURE TO GIVE POSSESSION

If the Landlord shall be unable to deliver possession of the Premises on the Projected Commencement Date by reason of the following: (i) the holding over or retention of possession of any tenant, tenants or occupants, or (ii) for any other reason, then Landlord shall not be subject to any liability for the failure to give possession on said date. Under such circumstances the rent reserved and covenanted to be paid herein shall not commence until the Premises are made available to Tenant by Landlord, and no such failure to give possession on the Projected Commencement Date shall affect the validity of this Lease or the obligations of the Tenant hereunder. Tenant shall have the option at any time after eight (8) months after the Projected Commencement Date and before such delivery of the Premises to terminate this Lease by notice to Landlord to that effect, in which event neither party shall have any liability to the other as a result of such delays or termination.

2.04 AREA OF PREMISES

Landlord and Tenant agree that for all purposes of this Lease the Rentable Area of the Premises, the Usable Area of the Premises and the Rentable Area of the Project as set forth in Article One are controlling, and are not subject to revision after the date of this Lease except as otherwise provided herein. In the event that the demising walls of the Premises are to be built or modified after the date of execution of the Lease (either upon Tenant’s initial occupancy or any subsequent change in the Premises pursuant to other provisions of this Lease), then when such demising walls are substantially complete, Landlord shall have the right to verify or correct such square footage and accordingly adjust other amounts hereunder based upon such square footage.

2.05 CONDITION OF PREMISES

Subject to the provisions of the immediately following paragraph, Tenant shall notify Landlord in writing within sixty (60) days of the date Tenant takes possession of the Premises of any defects in the Premises claimed by Tenant.

Except for defects stated in such 60-day notice and Latent Defects (defined below) of which Tenant gives Landlord notice within eighteen (18) months after Tenant takes possession of the Premises, Tenant shall be conclusively deemed to have accepted the Premises “AS IS” in the condition existing on the date Tenant first takes possession, and to have waived all claims relating to the condition of the Premises. Landlord shall proceed diligently to correct the defects stated in such notice unless Landlord disputes the existence of any such defects. In the event of any dispute as to the existence of any such defects, the decision of Landlord’s architect shall be final and binding on the parties. No agreement of Landlord to alter, remodel, decorate, clean or improve the Premises or the Building and no representation regarding the condition of the Premises or the Building has been made by or on behalf of Landlord to Tenant, except as may be specifically stated in this Lease or in the Work Letter. For purposes of this Lease, “Latent Defects” shall mean defects which were not readily apparent when the sixty (60) day notice was due. No agreement of Landlord to alter, remodel, decorate, clean or improve the Premises or the Real Property and no representation regarding the condition of the Premises or the Real Property has been made by or on behalf of Landlord to Tenant, except as may be specifically stated in this Lease or in the Workletter.

ARTICLE THREE

RENT

Tenant agrees to pay to Landlord at the first office specified in Section 1.01, or to such other persons, or at such other places designated by Landlord, without any prior demand therefor in immediately available funds and without any deduction or offset whatsoever, Rent, including Monthly Base Rent and Rent Adjustments in accordance with Article Four, during the Term. Monthly Base Rent shall be paid monthly in advance on the first day of each month of the Term, except that the first installment of Monthly Base Rent shall be paid by Tenant to Landlord concurrently with the execution of this Lease. Monthly Base Rent shall be prorated for partial months within the Term. Unpaid Rent shall bear interest at the Default Rate from the date due until paid. Tenant’s covenant to pay Rent shall be independent of every other covenant in this Lease.

5

jka v14-Continental_Grand-Learning_Tree-Lease

ARTICLE FOUR

RENT ADJUSTMENTS AND PAYMENTS

4.01 RENT ADJUSTMENTS

Tenant shall pay to Landlord Rent Adjustments with respect to each Adjustment Year as follows:

(i) The Rent Adjustment Deposit representing Tenant’s Share of Operating Expenses for the applicable Adjustment Year in excess of Operating Expenses for the Operating Expenses Base Year, monthly during the Term with the payment of Monthly Base Rent;

(ii) The Rent Adjustment Deposit representing Tenant’s Share of Taxes for the applicable Adjustment Year in excess of Taxes for the Taxes Base Year, monthly during the Term with the payment of Monthly Base Rent; and

(iii) Any Rent Adjustments due in excess of the Rent Adjustment Deposits in accordance with Section 4.02. Rent Adjustments due from Tenant to Landlord for any Adjustment Year shall be Tenant’s Share of Operating Expenses for such year in excess of Operating Expenses for the Operating Expenses Base Year and Tenant’s Share of Taxes for such year in excess of Taxes for the Taxes Base Year.

Notwithstanding the foregoing, (a) Tenant’s Share of Operating Expenses for 2006 in excess of Operating Expenses for the Operating Expenses Base Year, and (b) Tenant’s Share of Taxes for 2006 in excess of Taxes for the Taxes Base Year, shall each be multiplied by a fraction, the numerator of which shall be the number of days in 2006 from and after the first anniversary of the Commencement Date, and the denominator of which shall be 365.

4.02 STATEMENT OF LANDLORD

Within one hundred and twenty (120) days after the expiration of the Operating Expenses Base Year and the Taxes Base Year and each Adjustment Year thereafter, Landlord will furnish Tenant a statement (“Landlord’s Statement”) showing the following:

(i) Operating Expenses and Taxes for the Operating Expenses Base Year and Taxes Base Year and thereafter for the last Adjustment Year;

(ii) The amount of Rent Adjustments due Landlord for the last Adjustment Year, less credit for Rent Adjustment Deposits paid, if any; and

(iii) Any change in the Rent Adjustment Deposit due monthly in the current Adjustment Year, including the amount or revised amount due for months preceding any such change pursuant to Landlord’s Statement.

Tenant shall pay to Landlord within sixty (60) days after receipt of such statement any amounts for Rent Adjustments then due in accordance with Landlord’s Statement. Any amounts due from Landlord to Tenant pursuant to this Section shall be credited to the Rent Adjustment Deposit next coming due, or refunded to Tenant within sixty (60) days of completion of such statement if the Term has already expired provided Tenant is not in default hereunder. No interest or penalties shall accrue on any amounts which Landlord is obligated to credit or refund to Tenant by reason of this Section 4.02. Landlord’s failure to deliver Landlord’s Statement or to compute the amount of the Rent Adjustments shall not constitute a waiver by Landlord of its right to deliver such items nor constitute a waiver or release of Tenant’s obligations to pay such amounts. The Rent Adjustment Deposit shall be credited against Rent Adjustments due for the applicable Adjustment Year. During the last complete calendar year or during any partial calendar year in which the Lease terminates, Landlord may include in the Rent Adjustment Deposit its estimate of Rent Adjustments which may not be finally determined until after the termination of this Lease. Tenant’s obligation to pay Rent Adjustments survives the expiration or termination of the Lease. Notwithstanding the foregoing, in no event shall the sum of Monthly Base Rent and the Rent Adjustments be less than the Monthly Base Rent payable.

4.03 BOOKS AND RECORDS

Landlord shall maintain books and records showing Operating Expenses and Taxes in accordance with generally accepted accounting principles, consistently applied. The Tenant or its representative (which representative shall be a certified public accountant licensed to do business in the state in which the Property is located and whose primary business is certified public accounting) shall have the right, for a period of one (1) year following the date upon which Landlord’s Statement is delivered to Tenant, to examine the Landlord’s books and records with respect to the items in the foregoing statement of Operating Expenses and Taxes during normal business hours, upon written notice, delivered at least three (3) business days in advance. If Tenant does not object in writing to Landlord’s Statement within one (1) year of Tenant’s receipt thereof, specifying the nature of the item in dispute and the reasons therefor, then Landlord’s Statement shall be considered final and accepted by Tenant. Any amount due to the Landlord as shown on Landlord’s Statement, whether or not disputed by Tenant as provided herein shall be paid by Tenant when due as provided above, without prejudice to any such written exception.

If after such examination by Tenant, Tenant disputes any item or amount of any item reflected on Landlord’s Statement, Tenant shall promptly provide written notice thereof to Landlord, and Landlord and Tenant shall thereafter work in good faith to resolve such dispute. If such dispute is not resolved within sixty (60) calendar days after Landlord’s receipt of notice thereof, an audit shall be performed at Landlord’s principal accounting offices by a national or California certified public accounting firm whose primary business is certified public accounting and who is selected by Tenant and approved by Landlord, which approval shall not be unreasonably withheld or delayed. There shall be no more than one (1) audit of Operating Expenses for any twelve (12) month period. An audit for any Adjustment Year must be commenced within one (1) year after Landlord’s delivery of the Landlord’s Statement, or the right to audit Operating Expenses shall be deemed waived. Tenant agrees to diligently pursue and complete (or abandon) any audit commenced by Tenant and, further, that its failure to either commence an audit with respect to any Landlord’s Statement within such one (1) year period or to commence litigation with respect to such Landlord’s Statement’s audit results within six (6) months after such audit commencement shall conclusively constitute its waiver of all objections it may have with respect to any aspect such Landlord’s Statement. Tenant shall provide Landlord a copy of such audit, whether such audit shows an overstatement or understatement of Operating Expenses. All costs and expenses of the audit shall be paid by Tenant unless the audit shows that Landlord overstated Operating Expenses for the Expense Stop calendar year by more than five percent (5%), in which case Landlord shall pay the non-contingency fee costs and expenses of the audit up to a maximum of Seven Thousand Five Hundred Dollars ($7,500.00). After determination of the amount of Operating Expenses for the entire period under audit (after review and resolution of all questions and objections of Landlord with respect to such audit), Landlord shall refund to Tenant any amount so determined to be an overcharge of Tenant’s share of Operating Expenses and Tenant shall pay any amount so determined to be an underpayment of Tenant’s share of Operating Expenses within thirty (30) days after such determination. Tenant shall keep any information gained from such audit confidential and shall not disclose it to any other party except where Tenant is legally required to do so. The exercise by Tenant of its audit rights hereunder shall not relieve Tenant of its obligation to pay, prior to any request for inspection and examination of Landlord’s books and records or any audit, all sums due hereunder without limitation, the disputed Operating Expenses.

6

jka v14-Continental_Grand-Learning_Tree-Lease

4.04 PARTIAL OCCUPANCY

For purposes of determining Rent Adjustments, if the Building is less than 95% occupied during all or a portion of any year during the Term, Landlord shall make appropriate adjustments to the Operating Expenses for such year employing sound accounting and management principles consistently applied, to determine the amount of Operating Expenses that would have been paid or incurred by Landlord had the Building been 95% occupied, and the amount so determined shall be deemed to have been the amount includable in Operating Expenses for such year. In the event that the Real Property is not fully assessed for all or a portion of any year during the Term, then Taxes shall be adjusted to an amount which would have been payable in such year if the Real Property had been fully assessed. In the event any other tenant in the Building provides itself with a service of a type which Landlord would supply under the Lease without an additional or separate charge to Tenant, then Operating Expenses shall be deemed to include the cost Landlord would have incurred had Landlord provided such service to such other tenant.

4.05 TENANT OR LEASE SPECIFIC TAXES

In addition to Monthly Base Rent, Rent Adjustments, Rent Adjustment Deposits and other charges to be paid by Tenant, Tenant shall pay to Landlord, upon demand, any and all taxes payable by Landlord (other than federal or state inheritance, general income, gift or estate taxes) whether or not now customary or within the contemplation of the parties hereto: (a) upon, allocable to, or measured by the Rent payable hereunder, including any gross receipts tax or excise tax levied by any governmental or taxing body with respect to the receipt of such rent; or (b) upon or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion thereof; or (c) upon the measured value of Tenant’s personal property located in the Premises or in any storeroom or any other place in the Premises or the Property, or the areas used in connection with the operation of the Property, it being the intention of Landlord and Tenant that, to the extent possible, such personal property taxes shall be billed to and paid directly by Tenant; or (d) resulting from Landlord Work if any, Tenant Work or Tenant Alterations to the Premises, whether title thereto is in Landlord or Tenant; or (e) upon this transaction. Taxes paid by Tenant pursuant to this Section 4.05 shall not be included in any computation of Taxes payable pursuant to Sections 4.01 and 4.02.

ARTICLE FIVE

SECURITY DEPOSIT

(a) Tenant shall pay Landlord, concurrently with execution of this Lease, in immediately available funds the amount of the Security Deposit specified in Section 1.01 as security (“Security”) for the full and faithful performance by Tenant of each and every term, provision, covenant, and condition of this Lease. If Tenant fails timely to perform any of the terms, provisions, covenants and conditions of this Lease or any other document executed by Tenant in connection with this Lease, including, but not limited to, the payment of any Rent or the repair of damage to the Premises caused by Tenant (excluding normal wear and tear) then Landlord may use, apply, or retain the whole or any part of the Security for the payment of any such Rent not paid when due, for the cost of repairing such damage, for the cost of cleaning the Premises, for the payment of any other sum which Landlord may expend or may be required to expend by reason of Tenant’s failure to perform, and otherwise for compensation of Landlord for any other loss or damage to Landlord occasioned by Tenant’s failure to perform, including, but not limited to, any loss of future Rent and any damage or deficiency in the reletting of the Premises (whether such loss, damages or deficiency accrue before or after summary proceedings or other reentry by Landlord) and the amount of the unpaid past Rent, future Rent loss, and all other losses, costs and damages, that Landlord would be entitled to recover if Landlord were to pursue recovery under Section 11.02(b) or (c) of this Lease. If Landlord so uses, applies or retains all or part of the Security, Tenant shall within five (5) business days after demand pay or deliver to Landlord in immediately available funds the sum necessary to replace the amount used, applied or retained. If Tenant shall fully and faithfully comply with all of Tenant’s terms, provisions, covenants and conditions of this Lease, the Security (except any amount retained for application by Landlord as provided herein) shall be returned or paid over to Tenant no later than thirty (30) days after the latest of: (i) the Termination Date; (ii) the removal of Tenant from the Premises; (iii) the surrender of the Premises by Tenant to Landlord in accordance with this Lease; or (iv) the date Rent Adjustments owed pursuant to this Lease have been computed by Landlord and paid by Tenant. Provided, however, in no event shall any such return be construed as an admission by Landlord that Tenant has performed all of its obligations hereunder.

(b) The Security shall not be deemed an advance rent deposit or an advance payment of any kind, or a measure of Landlord’s damages with respect to Tenant’s failure to perform, nor shall any action or inaction of Landlord with respect to it be a waiver of, or bar or defense to, enforcement of any right or remedy of Landlord. Landlord shall not be required to keep the Security separate from its general funds and shall not have any fiduciary or other duties concerning the Security except as set forth in this Section. Tenant shall not be entitled to any interest on the Security. In the event of any sale, lease or transfer of Landlord’s interest in the Building, Landlord shall have the right to transfer the Security, or balance thereof, to the vendee, transferee or lessee and any such transfer shall release Landlord from all liability for the return of the Security. Tenant thereafter shall look solely to such vendee, transferee or lessee for the return or payment of the Security. Tenant shall not assign or encumber or attempt to assign or encumber the Security or any interest in it and Landlord shall not be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance, and regardless of one or more assignments of this Lease, Landlord may return the Security to the original Tenant without liability to any assignee. Tenant hereby waives any and all rights of Tenant under the provisions of Section 1950.7 of the California Civil Code or other Law, now or hereafter enacted, regarding security deposits.

(c) If Tenant fails timely to perform any obligation under this Article Five, such breach shall constitute a Default by Tenant under this Lease without any right to or requirement of any further notice or cure period under any other Article of this Lease, except such notice and cure period expressly provided under this Article Five.

ARTICLE SIX

SERVICES

6.01 LANDLORD’S GENERAL SERVICES

(a) So long as the Lease is in full force and effect, Landlord shall furnish or cause to be furnished to the Premises the utilities and services described below, subject to the conditions and in accordance with the standards set forth below:

(1) Landlord shall provide automatic elevator facilities without card access during Standard Operating Hours. Elevator facilities will be available by card access only after Standard Operating Hours. Tenant shall have access to the Premises seven (7) days per week, twenty-four (24) hours per day, and if the Premises does not have a separate door directly from the Premises to outside the Building, then Tenant shall have such access to the Premises through a common entrance to the Building and its Common Areas, subject to such reasonable measures and systems for access control and/or tenant identification as exist from time to time at the Building, including, for example only, keys or card-keys for entry. The Building provides for controlled card access to tenant floors during non-Standard Operating Hours using an access card reader located in the elevators.

7

jka v14-Continental_Grand-Learning_Tree-Lease

(2) Landlord shall ventilate the Premises during Standard Operating Hours and shall furnish heat or air conditioning comparable to other Class A building in the El Segundo, California when in the reasonable judgment of Landlord it is required for the comfortable occupancy of the Premises during Standard Operating Hours, subject to any requirements or standards relating to, among other things, energy conservation, imposed or established by governmental agencies. Upon request, Landlord shall make available at Tenant’s expense heat or air conditioning for use at all other times, provided that such request is made no later than 2:00 P.M. on the date of such service or by 2:00 P.M. on the date preceding a National Holiday or weekend and provided further that the minimum use of such additional heat or air conditioning and the cost thereof shall be determined by Landlord based on Landlord’s actual costs of such additional hear and air conditioning service and confirmed in writing to Tenant as the same may change from time to time.

(3) Landlord shall furnish electric current to the Premises at all times. Tenant’s use of electric current shall at no time exceed the capacity of the feeders to the Building or the risers or wiring installation therein. Tenant shall not install or use or permit the installation or use of any computer or electronic data processing equipment in the Premises other than personal computers without the prior written consent of Landlord.

(4) Landlord shall furnish water for drinking, cleaning and lavatory purposes only in the Common Areas of the Building, as well as hot and cold water in the kitchen areas of the Premises.

(5) Provided that the Premises are used exclusively as offices and are kept reasonably in order by Tenant, Landlord shall provide janitorial services in the Premises five (5) days per week, excluding National Holidays; however, in no event materially less than such services then being provided in comparable office buildings in the El Segundo market. If the Premises are not used exclusively as offices and education classroom facilities (provided Section 1.01 permits such use), Tenant or persons approved by Landlord shall keep the Premises clean and in order to the satisfaction of Landlord, but at Tenant’s sole expense. No persons other than Tenant and those persons approved by Landlord shall be permitted to enter the Premises for the purpose of keeping the Premises clean and in order. Tenant shall pay to Landlord the cost of removal of any of Tenant’s refuse and rubbish, to the extent that such refuse and rubbish removed by Landlord exceeds the refuse and rubbish usually attendant upon the use of premises as offices.

(6) Landlord shall replace, as necessary, the light bulbs in the Building standard lighting fixtures installed by Landlord. Tenant shall replace, as necessary, all bulbs and fluorescent tubes in non-Building standard lighting fixtures, if any, installed in the Premises. If Tenant shall fail to make any such replacement within five (5) days after written notice from Landlord, Landlord may make such replacement and charge the cost of labor and materials involved therein to Tenant, as additional rent.

(b) In addition to any after-hours use of the Building’s heating, ventilation or air conditioning systems under Section 6.01(a)(2) above, Landlord may impose a reasonable charge upon Tenant for all utilities and services used by Tenant or at the Premises which involves (1) any substantial recurrent use of the Premises at any time other than Standard Operating Hours, (2) any use beyond that which Landlord is required to furnish under Section 6.01(a) above, (3) any special cooling or ventilating needs created in certain areas of the Premises by special telephone equipment, computers or other similar equipment or uses by Tenant, or (4) any use of electrical service in the Premises (including, without limitation, all lighting) in excess of seven (7) watts per square foot of Usable Area of the Premises per hour during Standard Operating Hours. At any time and from time to time during the term of this Lease, Landlord may in its sole discretion install meters or other similar devices in the Premises or the Building for the purpose of measuring the electricity or other utilities supplied to the Premises. If such meter or other device shows at any time that utilities have been supplied to the Premises for which Landlord may impose a charge as provided in this Section 6.01(b), then the cost of such meter or similar device and the cost of installation thereof shall be borne by Tenant and Tenant shall reimburse Landlord for such costs within ten (10) days of receipt of Landlord’s invoice thereof.

(c) Tenant agrees to cooperate fully with Landlord and to abide by all reasonable regulations and requirements which Landlord may prescribe for the use of the above-described utilities and services to be provided by Landlord. Any failure to pay any excess costs as described above shall constitute a breach of the obligation to pay Rent under this Lease and shall entitle Landlord to the rights granted herein, at law or in equity as a result of such a breach.

(d) Notwithstanding anything to the contrary above, Landlord reserves the right from time to time to make reasonable modifications to the above standards for utilities and services.

6.02 TELEPHONE SERVICES

All telegraph, telephone, and communication connections which Tenant may desire shall be subject to Landlord’s prior written approval, in Landlord’s sole discretion, and the location of all wires and the work in connection therewith shall be performed by contractors approved by Landlord and shall be subject to the direction of Landlord, except that such approval is not required as to Tenant’s telephone equipment (including cabling) within the Premises and from the Premises in a route designated by Landlord to any telephone cabinet or panel provided (as existing or as installed as part of Landlord’s Work, if any) on Tenant’s floor for Tenant’s connection to the telephone cable serving the Building, so long as Tenant’s equipment does not require connections different than or additional to those to the telephone cabinet or panel provided. Except to the extent of such cabling within the Premises or from the Premises to such telephone cabinet or panel, Landlord reserves the right to designate and control the entity or entities providing telephone or other communication cable installation, removal, repair and maintenance in the Building (so long as such providers’ charges are at then market rates) and to restrict and control access to telephone cabinets or panels; notwithstanding the foregoing, Tenant may use any entity for such services with Landlord’s prior approval, which approval may not be unreasonably withheld, conditioned or delayed (“Tenant’s Communications Provider”). In the event Landlord designates a particular vendor or vendors to provide such cable installation, removal, repair and maintenance for the Building and Tenant does not use Tenant’s Communications Provider, Tenant agrees to abide by and participate in such program. Tenant shall be responsible for and shall pay all costs incurred in connection with the installation of telephone cables and communication wiring in the Premises, including any hook-up, access and maintenance fees related to the installation of such wires and cables in the Premises and the commencement of service therein, and the maintenance thereafter of such wire and cables; and there shall be included in Operating Expenses for the Building all installation, removal, hook-up or maintenance costs incurred by Landlord in connection with telephone cables and communication wiring serving the Building which are not allocable to any individual users of such service but are allocable to the Building generally. If Tenant fails to maintain all telephone cables and communication wiring in the Premises and such failure affects or interferes with the operation or maintenance of any other telephone cables or communication wiring serving the Building, if upon notice to Tenant (which may be verbal if Landlord believes an emergency situation exists) Tenant fails to act immediately to perform such repairs, restorations or alterations necessary in order to eliminate any such interference, then Landlord may by verbal notice require Tenant to shut down the equipment, wiring or cables believed to be causing the interference, and if not so shut down, then

8

jka v14-Continental_Grand-Learning_Tree-Lease

upon further verbal notice Landlord (or any vendor hired by Landlord) may enter into and upon the Premises forthwith and perform such repairs, restorations or alterations as Landlord deems necessary in order to eliminate any such interference (and Landlord may recover from Tenant all of Landlord’s costs in connection therewith). No later than the Termination Date, Tenant agrees to remove all telephone cables and communication wiring installed by Tenant for and during Tenant’s occupancy, which Landlord shall request Tenant to remove. Except for Landlord’s gross negligence, Tenant agrees that neither Landlord nor any of its agents or employees shall be liable to Tenant, or any of Tenant’s employees, agents, customers or invitees or anyone claiming through, by or under Tenant, for any damages, injuries, losses, expenses, claims or causes of action because of any interruption, diminution, delay or discontinuance at any time for any reason in the furnishing of any telephone or other communication service to the Premises and the Building.

6.03 DELAYS IN FURNISHING SERVICES

In the event of any failure to furnish or delay in furnishing the services, including any utilities, to be supplied by Landlord, Landlord shall use good faith efforts to have service promptly resumed. Where the cause of any such failure, stoppage or interruption of such utilities or services is within the system or control of a utility company or public or quasi-public entity outside Landlord’s control, notification to such utility or entity of such failure, stoppage or interruption and request to remedy the same shall constitute “good faith efforts” by Landlord to have service promptly resumed. Should any equipment or machinery furnished by Landlord break down or for any cause cease to function properly, Landlord shall use reasonable diligence to repair same promptly, but Tenant shall have no claim for abatement of Rent or damages on account of any interruption of service occasioned thereby or resulting therefrom. Tenant agrees that Landlord shall not be in breach of this Lease nor be liable to Tenant for damages or otherwise, for any failure to furnish, or a delay in furnishing, or a change in the quantity or character of any service when such failure, delay or change is occasioned, in whole or in part, by repairs, improvements or mechanical breakdowns by the act or default of Tenant or other parties or by an event of Force Majeure. No such failure, delay or change shall be deemed to be an eviction or disturbance of Tenant’s use and possession of the Premises, or relieve Tenant from paying Rent or from performing any other obligations of Tenant under this Lease, without any deduction or offset. Failure to any extent to make available, or any slowdown, stoppage, or interruption of, the specified utility services resulting from any cause, including changes in service provider or Landlord’s compliance with any voluntary or similar governmental or business guidelines now or hereafter published or any requirements now or hereafter established by any governmental agency, board, or bureau having jurisdiction over the operation of the Property, shall not render Landlord liable in any respect for damages to either persons, property, or business, nor be construed as an eviction of Tenant or work an abatement of Rent, nor relieve Tenant of Tenant’s obligations for fulfillment of any covenant or agreement hereof. Notwithstanding the foregoing, in the event and to the extent that Tenant is unable to occupy the Premises for more than five (5) consecutive business days in any Lease Year (the “Eligibility Period”) as a result of Landlord’s (or its agent’s) failure to provide access or services which Landlord is obligated to provide, but excluding any period occupancy is prevented to the extent caused by any of the following: (i) caused by any act or omission of Tenant, any assignee, any subtenant or any other occupant of the Premises, or (ii) where Tenant or any assignee requests Landlord to make a decoration, alteration, improvement or addition, or (iii) caused by Force Majeure, or (iv) caused by a matter located outside of the Property and beyond the control of Landlord, then Monthly Base Rent and Rent Adjustments shall abate in the proportion in which the area of the Premises which is unusable and unused bears to the total area of the Premises on a per diem basis from the expiration of the Eligibility Period until the earlier of restoration of the applicable service or access or Tenant’s re-occupancy or use of the affected portion of the Premises.

6.04 CHOICE OF SERVICE PROVIDER

Tenant acknowledges that Landlord may, at Landlord’s sole option, to the extent permitted by applicable law and except as otherwise provided under Section 6.02 of this Lease, elect to change, from time to time, the company or companies which provide services (including electrical service, gas service, water, telephone and technical services) to the Property, the Premises and/or its occupants. Except if Landlord believes an emergency situation exists, Landlord shall provide Tenant at least twenty-four (24) hours prior notice (x) of any work by Landlord on any such equipment or machinery if an interruption of utilities or service to Tenant is scheduled as part of such work or (y) if Landlord schedules an interruption of utilities or service supplied by Landlord which are not directly obtained by Tenant. Notwithstanding anything to the contrary set forth in this Lease, Tenant acknowledges that Landlord has not and does not make any representations or warranties concerning the identity or identities of the company or companies which provide services to the Property and the Premises or its occupants and Tenant acknowledges that the choice of service providers and matters concerning the engagement and termination thereof shall be solely that of Landlord. The foregoing provision is not intended to modify, amend, change or otherwise derogate any provision of this Lease concerning the nature or type of service to be provided or any specific information concerning the amount thereof to be provided. Tenant agrees to cooperate with Landlord and each of its service providers in connection with any change in service or provider.

ARTICLE SEVEN

POSSESSION, USE AND CONDITION OF PREMISES

7.01 POSSESSION AND USE OF PREMISES

(a) Tenant shall occupy and use the Premises only for the uses specified in Section 1.01 to conduct Tenant’s business. Tenant shall not occupy or use the Premises (or permit the use or occupancy of the Premises) for any purpose or in any manner which: (1) is unlawful or in violation of any Law or Environmental Law; (2) may be dangerous to persons or property or which may increase the cost of, or invalidate, any policy of insurance carried on the Building or covering its operations; (3) is contrary to or prohibited by the terms and conditions of this Lease or the rules and regulations of the Building set forth in Article Eighteen; or (4) would tend to create or continue a nuisance.

(b) Tenant shall comply with all Environmental Laws pertaining to occupancy and use of the Premises by Tenant and concerning the proper use storage, handling and disposal of any Hazardous Material introduced to the Premises, the Building or the Property by Tenant or Tenant’s Agents (defined below). For purposes hereof, “Tenant’s Agents” shall mean any assignees, or any subtenants, or other occupants of the Premises permitted or suffered by Tenant or assignees or subtenants, or any employees, servants, agents, contractors, licensees, customers, visitors or invitees of any of them. Landlord shall comply with all Environmental Laws applicable to the Property other than those to be complied with by Tenant or Tenant’s Agents pursuant to the preceding sentences. Tenant and Tenant’s Agents shall not introduce, use, generate, store, handle or dispose of any Hazardous Material in, on, or about the Property without the prior written consent of Landlord, which may be withheld in Landlord’s sole discretion, except that such consent shall not be required to the extent of Hazardous Material packaged and contained in office products for consumer use in general business offices in quantities for ordinary day-to-day use provided such use does not give rise to, or pose a risk of, exposure to or release of Hazardous Material. In the event that Tenant is notified of any investigation or violation of any Environmental Law arising from activities of Tenant or Tenant’s Agents at the Premises, Tenant shall immediately deliver to Landlord a copy of such notice. In such event or in the event Landlord reasonably believes that there exists a violation of Environmental Law by Tenant or Tenant’s Agents, Landlord may conduct such tests and studies relating to compliance by Tenant with Environmental Laws or the alleged presence of Hazardous Materials upon the Premises as Landlord deems desirable, all of which shall be completed at Tenant’s expense. Landlord’s inspection and testing rights are for Landlord’s own protection only, and Landlord has not, and shall not be deemed to have

9

jka v14-Continental_Grand-Learning_Tree-Lease

assumed any responsibility to Tenant or any other party for compliance with Environmental Laws, as a result of the exercise, or non-exercise of such rights. Tenant hereby indemnifies, and agrees to defend, protect and hold harmless, the Indemnitees from any and all loss, claim, demand, action, expense, liability and cost (including attorneys’ fees and expenses) arising out of or in any way related to the presence of any Hazardous Material introduced to the Premises or the Property during the Lease Term by Tenant or other occupants of the Premises, or their employees, servants, agents, contractors, customers or invitees. In case of any action or proceeding brought against the Indemnitees by reason of any such claim, upon notice from Landlord, Tenant covenants to defend such action or proceeding by counsel chosen by Landlord, in Landlord’s sole discretion. Landlord reserves the right to settle, compromise or dispose of any and all actions, claims and demands related to the foregoing indemnity. If any Hazardous Material is released, discharged or disposed of on or about the Property and such release, discharge or disposal is not caused by Tenant or other occupants of the Premises, or their employees, servants, agents, contractors customers or invitees, such release, discharge or disposal shall be deemed casualty damage under Article Fourteen to the extent that the Premises are affected thereby; in such case, Landlord and Tenant shall have the obligations and rights respecting such casualty damage provided under such Article.

(c) Landlord and Tenant acknowledge that the Americans With Disabilities Act of 1990 (42 U.S.C. §12101 et seq.) and regulations and guidelines promulgated thereunder, as all of the same may be amended and supplemented from time to time (collectively referred to herein as the “ADA”) establish requirements for business operations, accessibility and barrier removal, and that such requirements may or may not apply to the Premises, the Building and the Project depending on, among other things: (1) whether Tenant’s business is deemed a “public accommodation” or “commercial facility”, (2) whether such requirements are “readily achievable”, and (3) whether a given alteration affects a “primary function area” or triggers “path of travel” requirements. The parties hereby agree that: (a) Landlord shall be responsible for ADA Title III compliance in the Common Areas, except as provided below, (b) Tenant shall be responsible for ADA Title III compliance in the Premises, (c) Landlord may perform, or require that Tenant perform, and Tenant shall be responsible for the cost of, ADA Title III “path of travel” requirements triggered by or arising from any change in Tenant’s use of the Premises from that described in Section 1.01(17) above, and (d) Landlord may perform and Tenant shall be responsible for a portion of the cost of, ADA Title III compliance in the Common Areas or “path of travel” requirements necessitated or triggered by or arising from (i) any aspect of Tenant Alterations (provided, however, that unless (ii) below is applicable, Tenant shall not be responsible under this clause (d) for more than the lesser of 25% of the cost of such requirements or $10,000 for each Tenant Alteration), or (ii) the Building being deemed to be a “public accommodation” instead of a “commercial facility” as a result of Tenant’s use of the Premises (provided, however, that Tenant shall not be responsible under this clause (d) for more than 50% of the cost of such requirements). Tenant shall be solely responsible for requirements under Title I of the ADA relating to Tenant’s employees.

(d) Landlord and Tenant agree to cooperate and use commercially reasonable efforts to participate in traffic management programs generally applicable to businesses located in or about the Building and Tenant shall encourage and support van and car pooling by, and staggered and flexible working hours for, its office workers and service employees to the extent reasonably permitted by the requirements of Tenant’s business. Neither this Section or any other provision of this Lease is intended to or shall create any rights or benefits in any other person, firm, company, governmental entity or the public.

(e) Tenant agrees to cooperate with Landlord and to comply with any and all guidelines or controls concerning energy management imposed upon Landlord by federal or state governmental organizations or by any energy conservation association to which Landlord is a party or which is applicable to the Building.

(f) Tenant shall comply with all recorded covenants, conditions and restrictions now or hereafter affecting the Project (collectively, the “Underlying Documents”). Tenant agrees that Landlord may, without Tenant’s prior consent, modify the terms of the Underlying Documents without affecting Tenant’s obligations to comply with the terms thereto, so long as such modifications do not materially, adversely affect Tenant’s rights or materially increase or affect Tenant’s obligations thereunder.

7.02 LANDLORD ACCESS TO PREMISES; APPROVALS

(a) Tenant shall permit Landlord to erect, use and maintain pipes, ducts, wiring and conduits in and through the Premises, so long as Tenant’s use, layout or design of the Premises is not materially affected or altered. Landlord or Landlord’s agents shall have the right to enter upon the Premises in the event of an emergency, or to inspect the Premises, to perform janitorial and other services, to conduct safety and other testing in the Premises and to make such repairs, alterations, improvements or additions to the Premises or the Building or other parts of the Property as Landlord may deem necessary or desirable (including all alterations, improvements and additions in connection with a change in service provider or providers). Janitorial and cleaning services shall be performed after Standard Operating Hours. Any entry or work by Landlord may be during Standard Operating Hours and Landlord shall use reasonable efforts to ensure that any entry or work shall not materially interfere with Tenant’s access to or occupancy of the Premises.

(b) If Tenant shall not be personally present to permit an entry into the Premises when for any reason an entry therein shall be necessary or permissible, Landlord (or Landlord’s agents), after attempting to notify Tenant (unless Landlord believes an emergency situation exists), may enter the Premises without rendering Landlord or its agents liable therefor, and without relieving Tenant of any obligations under this Lease.

(c) On not less than twenty-four (24) hours advance notice given during Standard Operating Hours, Landlord may enter the Premises for the purpose of conducting such inspections, tests and studies as Landlord may deem desirable or necessary to confirm Tenant’s compliance with all Laws and Environmental Laws or for other purposes necessary in Landlord’s reasonable judgment to ensure the sound condition of the Property and the systems serving the Property. Landlord’s rights under this Section 7.02(c) are for Landlord’s own protection only, and Landlord has not, and shall not be deemed to have assumed, any responsibility to Tenant or any other party, as a result of the exercise or non-exercise of such rights, for compliance with Laws or Environmental Laws or for the accuracy or sufficiency of any item or the quality or suitability of any item for its intended use.

(d) Landlord may do any of the foregoing, or undertake any of the inspection or work described in the preceding paragraphs without such action constituting an actual or constructive eviction of Tenant, in whole or in part, or giving rise to an abatement of Rent by reason of loss or interruption of business of the Tenant, or otherwise.

(e) The review, approval or consent of Landlord with respect to any item required or permitted under this Lease is for Landlord’s own protection only, and Landlord has not, and shall not be deemed to have assumed, any responsibility to Tenant or any other party, as a result of the exercise or non-exercise of such rights, for compliance with Laws or Environmental Laws or for the accuracy or sufficiency of any item or the quality or suitability of any item for its intended use.

7.03 QUIET ENJOYMENT

Landlord covenants, in lieu of any implied covenant of quiet possession or quiet enjoyment, that so long as Tenant is in compliance with the covenants and conditions set forth in this Lease, Tenant shall have the right to quiet enjoyment of the Premises without hindrance or interference from Landlord or those claiming through Landlord, and subject to the covenants and conditions set forth in the Lease and to the rights of any Mortgagee or ground lessor.

10

jka v14-Continental_Grand-Learning_Tree-Lease

ARTICLE EIGHT

MAINTENANCE

8.01 LANDLORD’S MAINTENANCE

Subject to the provisions of Article Fourteen, Landlord shall maintain and make necessary repairs to the foundations, roofs, exterior walls, and the structural elements of the Building, the electrical, plumbing, heating, ventilating, air-conditioning, mechanical, communication, security and the fire and life safety systems of the Building and those corridors, washrooms and lobbies in the Common Areas of the Building, except that: (a) Landlord shall not be responsible for the maintenance or repair of any floor or wall coverings in the Premises or any of such systems which are located within the Premises and are supplemental or special to the Building’s standard systems; and (b) the cost of performing any of said maintenance or repairs whether to the Premises or to the Building caused by the negligence of Tenant, its employees, agents, servants, licensees, subtenants, contractors or invitees, shall be paid by Tenant, subject to the waivers set forth in Section 16.04. Landlord shall not be liable to Tenant for any expense, injury, loss or damage resulting from work done in or upon, or in connection with the use of any adjacent or nearby building, land, street or alley.

8.02 TENANT MAINTENANCE

Subject to the provisions of Article Fourteen, Tenant, at its expense, shall keep and maintain the Premises and all Tenant Additions in good order, condition and repair, normal wear and tear excepted, and in accordance with all Laws and Environmental Laws. Tenant shall not permit waste and shall promptly and adequately repair all damages to the Premises and replace or repair all damaged or broken glass in the interior of the Premises, fixtures or appurtenances. Any repairs or maintenance shall be completed with materials of similar quality to the original materials, all such work to be completed under the supervision of Landlord. Any such repairs or maintenance shall be performed only by contractors or mechanics approved by Landlord, which approval shall not be unreasonably withheld, and whose work will not cause or threaten to cause disharmony or interference with Landlord or other tenants in the Building and their respective agents and contractors performing work in or about the Building. If Tenant fails to perform any of its obligations set forth in this Section 8.02, Landlord may, in its reasonable discretion and upon 24 hours prior notice to Tenant (except without notice in the case of emergencies), perform the same, and Tenant shall pay to Landlord any costs or expenses incurred by Landlord upon demand.

ARTICLE NINE

ALTERATIONS AND IMPROVEMENTS

9.01 TENANT ALTERATIONS

(a) The following provisions shall apply to the completion of any Tenant Alterations:

(1) Tenant shall not, except as provided herein, without the prior written consent of Landlord, which consent shall not be unreasonably withheld, make or cause to be made any Tenant Alterations in or to the Premises or any Property systems serving the Premises. Prior to making any Tenant Alterations, Tenant shall give Landlord ten (10) days prior written notice (or such earlier notice as would be necessary pursuant to applicable Law) to permit Landlord sufficient time to post appropriate notices of non-responsibility. Subject to all other requirements of this Article Nine, Tenant may undertake Decoration work without Landlord’s prior written consent. Tenant shall furnish Landlord with the names and addresses of all contractors and subcontractors and copies of all contracts. All Tenant Alterations shall be completed at such time and in such manner as Landlord may from time to time designate, and only by contractors or mechanics approved by Landlord, which approval shall not be unreasonably withheld, provided, however, that Landlord may, in its reasonable discretion, specify the engineers and contractors to perform all work relating to the Building’s structural elements or the Building’s systems (including the mechanical, heating, plumbing, security, ventilating, air-conditioning, electrical, communication and the fire and life safety systems in the Building), so long as such engineers and contractor are duly licensed and perform such work at then market rates. The contractors, mechanics and engineers who may be used are further limited to those whose work will not cause or threaten to cause disharmony or interference with Landlord or other tenants in the Building and their respective agents and contractors performing work in or about the Building. Landlord may further condition its consent upon Tenant furnishing to Landlord and Landlord approving prior to the commencement of any work or delivery of materials to the Premises related to the Tenant Alterations such of the following as specified by Landlord: architectural plans and specifications, opinions from Landlord’s engineers stating that the Tenant Alterations will not in any way adversely affect the Building’s systems, necessary permits and licenses, certificates of insurance, and such other documents in such form reasonably requested by Landlord. Landlord may, in the exercise of reasonable judgment, request that Tenant provide Landlord with appropriate evidence of Tenant’s ability to complete and pay for the completion of the Tenant Alterations such as a performance bond or letter of credit where the cost of such Tenant Alterations exceed Fifty Thousand Dollars ($50,000.00). Upon completion of the Tenant Alterations, other than Decorations, Tenant shall deliver to Landlord an as-built mylar and digitized (if available) set of plans and specifications for the Tenant Alterations.

(2) Tenant shall pay the cost of all Tenant Alterations and the cost of decorating the Premises and any work to the Property occasioned thereby. In connection with completion of any Tenant Alterations, other than Decorations, Tenant shall pay Landlord a construction fee not exceeding five percent (5%) of the cost of Tenant Alterations. Upon completion of Tenant Alterations, Tenant shall furnish Landlord with contractors’ affidavits and full and final waivers of lien and receipted bills covering all labor and materials expended and used in connection therewith and such other documentation reasonably requested by Landlord or Mortgagee.

(3) Tenant agrees to complete all Tenant Alterations (i) in accordance with all Laws, Environmental Laws, all requirements of applicable insurance companies and in accordance with Landlord’s standard construction rules and regulations, and (ii) in a good and workmanlike manner with the use of good grades of materials. Tenant shall notify Landlord immediately if Tenant receives any notice of violation of any Law in connection with completion of any Tenant Alterations and shall immediately take such steps as are necessary to remedy such violation. In no event shall such supervision or right to supervise by Landlord nor shall any approvals given by Landlord under this Lease constitute any warranty by Landlord to Tenant of the adequacy of the design, workmanship or quality of such work or materials for Tenant’s intended use or of compliance with the requirements of Section 9.01(a)(3)(i) and (ii) above or impose any liability upon Landlord in connection with the performance of such work.

(b) All Tenant Additions to the Premises whether installed by Landlord or Tenant, shall without compensation or credit to Tenant, become part of the Premises and the property of Landlord at the time of their installation and shall remain in the Premises, unless pursuant to Article Twelve, Tenant may remove them or is required to remove them at Landlord’s request.

11

jka v14-Continental_Grand-Learning_Tree-Lease

9.02 LIENS

Tenant shall not permit any lien or claim for lien of any mechanic, laborer or supplier or any other lien to be filed against the Building, the Land, the Premises, or any other part of the Property arising out of work performed, or alleged to have been performed by, or at the direction of, or on behalf of Tenant. If any such lien or claim for lien is filed, Tenant shall within ten (10) days of receiving notice of such lien or claim (a) have such lien or claim for lien released of record or (b) deliver to Landlord a bond in form, content, amount, and issued by surety, satisfactory to Landlord, indemnifying, protecting, defending and holding harmless the Indemnitees against all costs and liabilities resulting from such lien or claim for lien and the foreclosure or attempted foreclosure thereof. If Tenant fails to take any of the above actions, Landlord, in addition to its rights and remedies under Article Eleven, without investigating the validity of such lien or claim for lien, may pay or discharge the same and Tenant shall, as payment of additional Rent hereunder, reimburse Landlord upon demand for the amount so paid by Landlord, including Landlord’s expenses and attorneys’ fees.

ARTICLE TEN

ASSIGNMENT AND SUBLETTING

10.01 ASSIGNMENT AND SUBLETTING

(a) Without the prior written consent of Landlord, which shall not be unreasonably withheld or delayed, Tenant may not sublease, assign, mortgage, pledge, hypothecate or otherwise transfer or permit the transfer of this Lease or the encumbering of Tenant’s interest therein in whole or in part, by operation of Law or otherwise or permit the use or occupancy of the Premises, or any part thereof, by anyone other than Tenant, provided, however, Landlord shall not unreasonably withhold its consent to a subletting or assignment under this Section 10.01. Tenant agrees that the provisions governing sublease and assignment set forth in this Article Ten shall be deemed to be reasonable. If Tenant desires to enter into any sublease of the Premises or assignment of this Lease, Tenant shall deliver written notice thereof to Landlord (“Tenant’s Notice”), together with the identity of the proposed subtenant or assignee and the proposed principal terms thereof and financial and other information sufficient for Landlord to make an informed judgment with respect to such proposed subtenant or assignee at least thirty (30) days prior to the commencement date of the term of the proposed sublease or assignment. If Tenant proposes to sublease less than all of the Rentable Area of the Premises, the space proposed to be sublet and the space retained by Tenant must each be a marketable unit as reasonably determined by Landlord and otherwise in compliance with all Laws. Landlord shall notify Tenant in writing of its approval or disapproval of the proposed sublease or assignment or its decision to exercise its rights under Section 10.02 within fifteen (15) days after receipt of Tenant’s Notice (and all required information). In no event may Tenant sublease any portion of the Premises or assign the Lease to any other tenant of the Building. Tenant shall submit for Landlord’s approval (which approval shall not be unreasonably withheld) any advertising which Tenant or its agents intend to use with respect to the space proposed to be sublet.

(b) With respect to Landlord’s consent to an assignment or sublease, Landlord may take into consideration any factors which Landlord may deem relevant, and the reasons for which Landlord’s denial shall be deemed to be reasonable shall include, without limitation, the following:

(i) the business reputation or creditworthiness of any proposed subtenant or assignee is not reasonably acceptable to Landlord; or

(ii) in Landlord’s reasonable judgment the proposed assignee or subtenant would diminish the value or reputation of the Building or Landlord; or

(iii) any proposed assignee’s or subtenant’s use of the Premises would violate Section 7.01 of the Lease or would violate the provisions of any other leases of tenants in the Project;

(iv) the proposed assignee or subtenant is either a governmental agency or similar operation, or a medical related practice; or

(v) the proposed subtenant or assignee is a bona fide prospective tenant of Landlord in the Project as demonstrated by a written proposal dated within ninety (90) days prior to the date of Tenant’s request; or

(vi) the proposed subtenant or assignee would materially increase the estimated pedestrian and vehicular traffic to and from the Premises and the Building.

In no event shall Landlord be obligated to consider a consent to any proposed assignment of the Lease which would assign less than the entire Premises. In the event Landlord wrongfully withholds its consent to any proposed sublease of the Premises or assignment of the Lease, Tenant’s sole and exclusive remedy therefor shall be to seek specific performance of Landlord’s obligations to consent to such sublease or assignment.

(c) Any sublease or assignment shall be expressly subject to the terms and conditions of this Lease. Any subtenant or assignee shall execute such documents as Landlord may reasonably require to evidence such subtenant or assignee’s assumption of the obligations and liabilities of Tenant under this Lease. Any subtenant or assignee shall execute such documents as Landlord may reasonably require to evidence the terms of Landlord’s consent to the sublease or assignment, including agreement to the effect set forth in Section 10.01(e) and Section 10.05 below. Landlord’s approval of a sublease, assignment, hypothecation, transfer or third party use or occupancy shall not constitute a waiver of Tenant’s obligation to obtain Landlord’s consent to further assignments or subleases, hypothecations, transfers or third party use or occupancy.

(d) For purposes of this Article Ten, an assignment shall be deemed to include a change in the majority control of Tenant, resulting from any transfer, sale or assignment of shares of stock of Tenant occurring by operation of Law or otherwise if Tenant is a corporation whose shares of stock are not traded publicly. Notwithstanding any provision of this Section to the contrary, an assignment for purposes of this Article does not include any transfer of control of the stock or membership interests of Tenant through (i) any public offering of shares of stock in Tenant in accordance with applicable State and Federal law, rules, regulations and orders if thereafter the stock shall be listed and publicly traded through the New York Stock Exchange, American Stock Exchange or Pacific Stock Exchange, or listed and publicly traded through the NASDAQ national market and its price listed at least daily in the Wall Street Journal; or (ii) public sale of such stock effected through such Exchanges or the NASDAQ national market. If Tenant is a partnership, any change in the partners of Tenant shall be deemed to be an assignment.

(e) Notwithstanding anything to the contrary contained in this Article Ten and provided there is no uncured default under this Lease, Tenant shall have the right, without the prior written consent of Landlord, to assign this Lease to an Affiliate or to sublease the Premises or any part thereof to an Affiliate, but (i) no later than fifteen (15) days prior to the effective date of the assignment or sublease, the assignee shall execute documents satisfactory to Landlord to evidence such assignee’s assumption of the obligations and liabilities of Tenant under this Lease, unless Landlord modifies or waives such

12

jka v14-Continental_Grand-Learning_Tree-Lease

requirement in the case of any assignment which occurs by operation of law (and without a written assignment) as a consequence of merger, consolidation or non-bankruptcy reorganization, and the subtenant shall execute documents satisfactory to Landlord to evidence that the sublease is subject to the terms and conditions of this Lease and that the subtenant shall perform and be bound by all the terms and conditions of this Lease (except payment of Monthly Base Rent and Rent Adjustments hereunder and other obligations which the sublease expressly provides are to be performed by Tenant as the sublessor) to the extent applicable to the space and period covered by the sublease; (ii) within ten (10) days after the effective date of such assignment or sublease, give notice to Landlord which notice shall include the full name and address of the assignee or subtenant, and a copy of all agreements executed between Tenant and the assignee or subtenant with respect to the Premises or part thereof, as may be the case; and (iii) within fifteen (15) days after Landlord’s written request, provide such reasonable documents or information which Landlord reasonably requests for the purpose of substantiating whether or not the assignment or sublease is to an Affiliate.

(f) With respect to any sublease to an Affiliate pursuant to Subsection (e) above, Tenant hereby irrevocably assigns to Landlord, effective upon any such sublease, all rent and other payments due from subtenant under the sublease, provided however, that Tenant shall have a license to collect such rent and other payments until the occurrence of a default by Tenant under any of the provisions of the Lease, and notice to Tenant of such default shall not be a prerequisite to Landlord’s right to collect subrent. At any time at Landlord’s option, Landlord shall have the right to give notice to the subtenant of such assignment. Landlord shall credit Tenant with any rent received by Landlord under such assignment but the acceptance of any payment on account of rent from the subtenant as the result of any such default shall in no manner whatsoever serve to release Tenant from any liability under the terms, covenants, conditions, provisions or agreement under the Lease. No such payment of rent or any other payment by the subtenant directly to Landlord and/or acceptance of such payment(s) by Landlord, regardless of the circumstances or reasons therefor, shall in any manner whatsoever be deemed an attornment by the subtenant to Landlord in the absence of a specific written agreement signed by Landlord to such an effect. For purposes of this Subsection, any use or occupancy by an Affiliate (unless it is an assignee) without a formal sublease shall for the purposes of this Subsection be deemed to be a sublease at the same rental rate as provided in the Lease.

10.02 INTENTIONALLY OMITTED

10.03 EXCESS RENT

Tenant shall pay Landlord on the first day of each month during the term of the sublease or assignment, fifty percent (50%) of the amount by which the sum of all rent and other consideration (direct or indirect) due from the subtenant or assignee for such month exceeds: (i) that portion of the Monthly Base Rent and Rent Adjustments due under this Lease for said month which is allocable to the space sublet or assigned; and (ii) the following costs and expenses for the subletting or assignment of such space: (1) brokerage commissions and attorneys’ fees and expenses; (2) the actual costs paid in making any improvements or substitutions in the Premises required by any sublease or assignment; and (3) “free rent” periods, costs of any inducements or concessions given to subtenant or assignee, moving costs, and other amounts in respect of such subtenant’s or assignee’s other leases or occupancy arrangements. All such costs and expenses shall be amortized over the term of the sublease or assignment pursuant to sound accounting principles. This Section 10.03 shall not apply to an assignment of this Lease to an Affiliate of Tenant or to a sublease of all or a portion of the Premises to an Affiliate of Tenant.

10.04 TENANT LIABILITY

In the event of any sublease or assignment, whether or not with Landlord’s consent, Tenant shall not be released or discharged from any liability, whether past, present or future, under this Lease, including any liability arising from the exercise of any renewal or expansion option, to the extent such exercise is expressly permitted by Landlord. Tenant’s liability shall remain primary, and in the event of default by any subtenant, assignee or successor of Tenant in performance or observance of any of the covenants or conditions of this Lease, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against said subtenant, assignee or successor. After any assignment, Landlord may consent to subsequent assignments or subletting of this Lease, or amendments or modifications of this Lease with assignees of Tenant, without notifying Tenant, or any successor of Tenant, and without obtaining its or their consent thereto, and such action shall not relieve Tenant or any successor of Tenant of liability under this Lease. If Landlord grants consent to such sublease or assignment, Tenant shall pay all reasonable attorneys’ fees and expenses up to $1,000.00 incurred by Landlord with respect to such assignment or sublease. In addition, if Tenant has any options to extend the term of this Lease or to add other space to the Premises, such options shall not be available to any subtenant or assignee, directly or indirectly without Landlord’s express written consent, which may be withheld in Landlord’s sole discretion.

10.05 ASSUMPTION AND ATTORNMENT

If Tenant shall assign this Lease as permitted herein, the assignee shall expressly assume all of the obligations of Tenant hereunder in a written instrument satisfactory to Landlord and furnish it to Landlord not later than fifteen (15) days prior to the effective date of the assignment. If Tenant shall sublease the Premises as permitted herein, Tenant shall, at Landlord’s option, within fifteen (15) days following any request by Landlord, obtain and furnish to Landlord a written agreement satisfactory to Landlord to the effect that (a) the subtenant will attorn to Landlord and will pay all subrent directly to Landlord in the event of any termination of this Lease for any reason, including rejection or deemed rejection in any bankruptcy proceeding, and (b) that in the event of any default by Tenant under this Lease, subtenant will pay all subrent directly to Landlord.

ARTICLE ELEVEN

DEFAULT AND REMEDIES

11.01 EVENTS OF DEFAULT

The occurrence or existence of any one or more of the following shall constitute a “Default” by Tenant under this Lease:

(i) Tenant fails to pay any installment or other payment of Rent including Rent Adjustment Deposits or Rent Adjustments within three (3) days after the date when due;

(ii) Tenant fails to observe or perform any of the other covenants, conditions or provisions of this Lease or the Workletter and fails to cure such default within fifteen (15) days after written notice thereof to Tenant, unless the default involves a hazardous condition, which shall be cured forthwith or unless the failure to perform is a Default for which this Lease specifies there is no cure or grace period;

(iii) the interest of Tenant in this Lease is levied upon under execution or other legal process;

(iv) a petition is filed by or against Tenant to declare Tenant bankrupt or seeking a plan of reorganization or arrangement under any Chapter of the Bankruptcy Act, or any amendment, replacement or substitution therefor, or to delay payment of, reduce or modify Tenant’s debts, which in the case of an involuntary action is not discharged within sixty (60) days;

13

jka v14-Continental_Grand-Learning_Tree-Lease

(v) Tenant is declared insolvent by Law or any assignment of Tenant’s property is made for the benefit of creditors;

(vi) a receiver is appointed for Tenant or Tenant’s property, which appointment is not discharged within thirty (30) days;

(vii) any action taken by or against Tenant to reorganize or modify Tenant’s capital structure in a materially adverse way which in the case of an involuntary action is not discharged within thirty (30) days;

(viii) upon the dissolution of Tenant;

(ix) [intentionally omitted];

(x) any abandonment (as such term is defined by California Civil Code Section 1951.3) of the Premises by Tenant;

(xi) any warranty, representation or statement made or furnished by Tenant to Landlord in connection with inducing Landlord to enter into this Lease is determined to have been false or misleading in any material respect when made or furnished; or

(xii) Tenant makes or attempts any sublease, assignment, mortgage, pledge, hypothecation or other transfer, or permit any transfer of this Lease or encumbering of Tenant’s interest, or permit the use or occupancy of the Premises or any part thereof in violation of Article Ten.

11.02 LANDLORD’S REMEDIES

(a) A Default shall constitute a breach of the Lease for which Landlord shall have the rights and remedies set forth in this Section 11.02 and all other rights and remedies set forth in this Lease or now or hereafter allowed by Law, whether legal or equitable, and all rights and remedies of Landlord shall be cumulative and none shall exclude any other right or remedy.

(b) With respect to a Default, at any time Landlord may terminate Tenant’s right to possession as allowed by Law by written notice to Tenant stating such election. Upon the termination of Tenant’s right to possession pursuant to this Section 11.02, Tenant’s right to possession shall terminate and this Lease shall terminate, and Tenant shall remain liable as hereinafter provided. Upon such termination, Landlord shall have the right, subject to applicable Law, to re-enter the Premises and dispossess Tenant and the legal representatives of Tenant and all other occupants of the Premises by unlawful detainer or other summary proceedings, or otherwise as permitted by Law, regain possession of the Premises and remove their property (including their trade fixtures, personal property and those Tenant Additions which Tenant is required or permitted to remove under Article Twelve), but Landlord shall not be obligated to effect such removal, and such property may, at Landlord’s option, be stored elsewhere, sold or otherwise dealt with as permitted by Law, at the risk of, expense of and for the account of Tenant, and the proceeds of any sale shall be applied pursuant to Law. Landlord shall in no event be responsible for the value, preservation or safekeeping of any such property. Tenant hereby waives all claims for damages that may be caused by Landlord’s removing or storing Tenant’s personal property pursuant to this Section or Section 12.01, and Tenant hereby indemnifies, and agrees to defend, protect and hold harmless, the Indemnitees from any and all loss, claims, demands, actions, expenses, liability and cost (including attorneys’ fees and expenses) arising out of or in any way related to such removal or storage. Upon such written termination of Tenant’s right to possession and this Lease, Landlord shall have the right to recover damages for Tenant’s Default as provided herein or by Law, including the following damages provided by California Civil Code Section 1951.2:

(1) the worth at the time of award of the unpaid Rent which had been earned at the time of termination;

(2) 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 proves could reasonably have been avoided;

(3) the worth at the time of award of the amount by which the unpaid Rent for the balance of the term of this Lease after the time of award exceeds the amount of such Rent loss that Tenant proves could be reasonably avoided; and

(4) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom. The word “rent” as used in this Section 11.02 shall have the same meaning as the defined term Rent in this Lease. The “worth at the time of award” of the amount referred to in clauses (1) and (2) above is computed by allowing interest at the Default Rate. The worth at the time of award of the amount referred to in clause (3) above is 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%). For the purpose of determining unpaid Rent under clause (3) above, the monthly Rent reserved in this Lease shall be deemed to be the sum of the Monthly Base Rent, monthly storage space rent (if any), and the amounts last payable by Tenant as Rent Adjustments for the calendar year in which Landlord terminated this Lease as provided hereinabove.

(c) Even if Tenant is in Default and/or has abandoned the Premises, this Lease shall continue in effect for so long as Landlord does not terminate Tenant’s right to possession by written notice as provided in Section 11.02(b) above, and Landlord may enforce all its rights and remedies under this Lease, including the right to recover Rent as it becomes due under this Lease. In such event, Landlord shall have all of the rights and remedies of a landlord under California Civil Code Section 1951.4 (lessor may continue Lease in effect after Tenant’s Default and abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations), or any successor statute. During such time as Tenant is in Default, if Landlord has not terminated this Lease by written notice and if Tenant requests Landlord’s consent to an assignment of this Lease or a sublease of the Premises, subject to Landlord’s option to recapture pursuant to Section 10.02, Landlord shall not unreasonably withhold its consent to such assignment or sublease. Tenant acknowledges and agrees that the provisions of Article Ten shall be deemed to constitute reasonable limitations of Tenant’s right to assign or sublet. Tenant acknowledges and agrees that in the absence of written notice pursuant to Section 11.02(b) above terminating Tenant’s right to possession, no other act of Landlord shall constitute a termination of Tenant’s right to possession or an acceptance of Tenant’s surrender of the Premises, including acts of maintenance or preservation or efforts to relet the Premises or the appointment of a receiver upon initiative of Landlord to protect Landlord’s interest under this Lease or the withholding of consent to a subletting or assignment, or terminating a subletting or assignment, if in accordance with other provisions of this Lease.

14

jka v14-Continental_Grand-Learning_Tree-Lease

(d) In the event that Landlord seeks an injunction with respect to a breach or threatened breach by Tenant of any of the covenants, conditions or provisions of this Lease, Tenant agrees to pay the premium for any bond required in connection with such injunction, only if it is determined by the appropriate court of law that Landlord is entitled to such injection.

(e) Tenant hereby waives any and all rights to relief from forfeiture, redemption or reinstatement granted by Law (including California Civil Code of Procedure Sections 1174 and 1179) in the event of Tenant being evicted or dispossessed for any cause or in the event of Landlord obtaining possession of the Premises by reason of Tenant’s Default or otherwise.

(f) When this Lease requires giving or service of a notice of Default or of a failure of Tenant to observe or perform any covenant, condition or provision of this Lease which will constitute a Default unless Tenant so observes or performs within any applicable cure period, and so long as the notice given or served provides Tenant the longer of any applicable cure period required by this Lease or by statute, then the giving of any equivalent or similar statutory notice, including any equivalent or similar notices required by California Code of Civil Procedure Section 1161 or any similar or successor statute, shall replace and suffice as any notice required under this Lease. When a statute requires service of a notice in a particular manner, service of that notice (or a similar notice required by this Lease) in the manner required by Article Twenty-four shall replace and satisfy the statutory service–of–notice procedures, except that any notice of unlawful detainer required by California Code of Civil Procedure Section 1161 or any similar or successor statute shall be served as required by Code of Civil Procedure Section 1162 or any similar or successor statute, and for purposes of Code of Civil Procedure Section 1162 or any similar or successor statute, Tenant’s “place of residence” and “usual place of business” shall mean the address specified by Tenant for notice pursuant to Section 1.01 of this Lease, as changed by Tenant pursuant to Article Twenty-four of this Lease.

(g) The voluntary or other surrender or termination of this Lease, or a mutual termination or cancellation thereof, shall not work a merger and shall terminate all or any existing assignments, subleases, subtenancies or occupancies permitted by Tenant, except if and as otherwise specified in writing by Landlord.

(h) No delay or omission in the exercise of any right or remedy of Landlord upon any default by Tenant, and no exercise by Landlord of its rights pursuant to Section 26.15 to perform any duty which Tenant fails timely to perform, shall impair any right or remedy or be construed as a waiver. No provision of this Lease shall be deemed waived by Landlord unless such waiver is in a writing signed by Landlord. The waiver by Landlord of any breach of any provision of this Lease shall not be deemed a waiver of any subsequent breach of the same or any other provision of this Lease.

11.03 ATTORNEY’S FEES

In the event any party brings any suit or other proceeding with respect to the subject matter or enforcement of this Lease, the prevailing party (as determined by the court, agency or other authority before which such suit or proceeding is commenced) shall, in addition to such other relief as may be awarded, be entitled to recover attorneys’ fees, expenses and costs of investigation as actually incurred, including court costs, expert witness fees, costs and expenses of investigation, and all attorneys’ fees, costs and expenses in any such suit or proceeding (including in any action or participation in or in connection with any case or proceeding under the Bankruptcy Code, 11 United States Code Sections 101 et seq., or any successor statutes, in establishing or enforcing the right to indemnification, in appellate proceedings, or in connection with the enforcement or collection of any judgment obtained in any such suit or proceeding).

11.04 BANKRUPTCY

The following provisions shall apply in the event of the bankruptcy or insolvency of Tenant:

(a) In connection with any proceeding under Chapter 7 of the Bankruptcy Code where the trustee of Tenant elects to assume this Lease for the purposes of assigning it, such election or assignment, may only be made upon compliance with the provisions of (b) and (c) below, which conditions Landlord and Tenant acknowledge to be commercially reasonable. In the event the trustee elects to reject this Lease then Landlord shall immediately be entitled to possession of the Premises without further obligation to Tenant or the trustee.

(b) Any election to assume this Lease under Chapter 11 or 13 of the Bankruptcy Code by Tenant as debtor-in-possession or by Tenant’s trustee (the “Electing Party”) must provide for:

The Electing Party to cure or provide to Landlord adequate assurance that it will cure all monetary defaults under this Lease within fifteen (15) days from the date of assumption and it will cure all nonmonetary defaults under this Lease within thirty (30) days from the date of assumption. Landlord and Tenant acknowledge such condition to be commercially reasonable.

(c) If the Electing Party has assumed this Lease or elects to assign Tenant’s interest under this Lease to any other person, such interest may be assigned only if the intended assignee has provided adequate assurance of future performance (as herein defined), of all of the obligations imposed on Tenant under this Lease.

For the purposes hereof, “adequate assurance of future performance” means that Landlord has ascertained that each of the following conditions has been satisfied:

(i) The assignee has submitted a current financial statement, certified by its chief financial officer, which shows a net worth and working capital in amounts sufficient to assure the future performance by the assignee of Tenant’s obligations under this Lease; and

(ii) Landlord has obtained consents or waivers from any third parties which may be required under a lease, mortgage, financing arrangement, or other agreement by which Landlord is bound, to enable Landlord to permit such assignment.

(d) Landlord’s acceptance of Rent or any other payment from any trustee, receiver, assignee, person, or other entity will not be deemed to have waived, or waive, the requirement of Landlord’s consent, Landlord’s right to terminate this Lease for any transfer of Tenant’s interest under this Lease without such consent, or Landlord’s claim for any amount of Rent due from Tenant.

11.05 LANDLORD’S DEFAULT

Landlord shall be in default hereunder in the event Landlord has not begun and pursued with reasonable diligence the cure of any failure of Landlord to meet its obligations hereunder within thirty (30) days after the receipt by Landlord of written notice from Tenant of the alleged failure to perform. In no event shall Tenant have the right to terminate or rescind this Lease as a result of Landlord’s default as to any covenant or agreement contained in this Lease. Tenant hereby waives such remedies of termination and rescission and hereby agrees that Tenant’s remedies for default hereunder and for breach of any promise or inducement shall be limited to a suit for damages and/or injunction. In addition, Tenant hereby covenants that, prior to the exercise of any such remedies, it will give the Mortgagee notice and a reasonable time to cure any default by Landlord.

15

jka v14-Continental_Grand-Learning_Tree-Lease

ARTICLE TWELVE

SURRENDER OF PREMISES

12.01 IN GENERAL

Upon the Termination Date, Tenant shall surrender and vacate the Premises immediately and deliver possession thereof to Landlord in a clean, good and tenantable condition, ordinary wear and tear, and damage caused by Landlord excepted. Tenant shall deliver to Landlord all keys to the Premises. Tenant shall remove from the Premises all movable personal property of Tenant and Tenant’s trade fixtures, including, subject to Section 6.02, cabling for any of the foregoing. Tenant shall be entitled to remove such Tenant Additions which at the time of their installation Landlord and Tenant agreed may be removed by Tenant. Tenant shall also remove such other Tenant Additions as required by Landlord, including any Tenant Additions containing Hazardous Material. Tenant immediately shall repair all damage resulting from removal of any of Tenant’s property, furnishings or Tenant Additions, shall close all floor, ceiling and roof openings and shall restore the Premises to a tenantable condition as reasonably determined by Landlord. If any of the Tenant Additions which were installed by Tenant involved the lowering of ceilings, raising of floors or the installation of specialized wall or floor coverings or lights, then Tenant shall also be obligated to return such surfaces to their condition prior to the commencement of this Lease. Tenant shall also be required to close any staircases or other openings between floors. Notwithstanding any provision to the contrary contained herein, if so requested by Tenant in writing (and prominently in all capital or bold lettering which also states that such request is pursuant to Section 12.01 of the Lease) at the time Tenant requests approval of any Tenant Alterations (or at the time of Tenant’s notice to Landlord with respect to those Tenant Alterations not requiring Landlord’s approval) or Tenant Work, Landlord shall advise Tenant at the time of Landlord’s approval of such Tenant Alteration(s) (or reasonably promptly after Tenant’s inquiry with respect to those Tenant Alterations not requiring Landlord’s approval) or Tenant Work as to whether Landlord will require that such Tenant Alteration(s) or Tenant Work be removed by Tenant from the Premises, provided however, regardless whether or not Landlord gives Tenant notice of required removal at the time of approval, in any event, Landlord may require removal of any Tenant Alterations or Tenant Work containing Hazardous Material and all Tenant’s trade fixtures, and, subject to Section 6.04, cabling installed for Tenant’s personal property or trade fixtures. In the event possession of the Premises is not delivered to Landlord when required hereunder, or if Tenant shall fail to remove those items described above, Landlord may (but shall not be obligated to), at Tenant’s expense, remove any of such property and store, sell or otherwise deal with such property as provided in Section 11.02(b), including the waiver and indemnity obligations provided in that Section, and undertake, at Tenant’s expense, such restoration work as Landlord deems necessary or advisable.

12.02 LANDLORD’S RIGHTS

All property which may be removed from the Premises by Landlord shall be conclusively presumed to have been abandoned by Tenant and Landlord may deal with such property as provided in Section 11.02(b), including the waiver and indemnity obligations provided in that Section. Tenant shall also reimburse Landlord for all costs and expenses incurred by Landlord in removing any of Tenant Additions and in restoring the Premises to the condition required by this Lease at the Termination Date.

ARTICLE THIRTEEN

HOLDING OVER

Tenant shall pay Landlord (i) one hundred ten percent (110%) of the monthly Rent payable for the month immediately preceding the holding over (including increases for Rent Adjustments which Landlord may reasonably estimate) during the first three (3) months or any portion thereof of any holding over and, (ii) one hundred fifty percent (150%) of the monthly Rent payable for the month immediately preceding the holding over (including increases for Rent Adjustments which Landlord may reasonably estimate) for each month or portion thereof thereafter that Tenant retains possession of the Premises, or any portion thereof, after the Termination Date (without reduction for any partial month that Tenant retains possession). Tenant shall also pay all damages sustained by Landlord by reason of such retention of possession. The provisions of this Article shall not constitute a waiver by Landlord of any re-entry rights of Landlord and Tenant’s continued occupancy of the Premises shall be as a tenancy in sufferance.

ARTICLE FOURTEEN

DAMAGE BY FIRE OR OTHER CASUALTY

14.01 SUBSTANTIAL UNTENANTABILITY

(a) If any fire or other casualty (whether insured or uninsured) renders all or a substantial portion of the Premises or the Building untenantable, Landlord shall, with reasonable promptness after the occurrence of such damage, estimate the length of time that will be required to substantially complete the repair and restoration and shall by notice advise Tenant of such estimate (“Landlord’s Notice”). If Landlord estimates that the amount of time required to substantially complete such repair and restoration will exceed two hundred seventy (270) days from the date such damage occurred, then Landlord, or Tenant if all or a substantial portion of the Premises is rendered untenantable, shall have the right to terminate this Lease as of the date of such damage upon giving written notice to the other at any time within twenty (20) days after delivery of Landlord’s Notice, provided that if Landlord so chooses, Landlord’s Notice may also constitute such notice of termination. Further, in the event that the Building is damaged or destroyed to the extent of more than twenty-five percent (25%) of its replacement cost or to any extent if no insurance proceeds or insufficient insurance proceeds are receivable by Landlord, Landlord may elect by written notice to Tenant given within thirty (30) days after the occurrence of the casualty to terminate this Lease in lieu of so restoring the Premises and Building, in which event this Lease shall terminate as of the date of such damage.

(b) Unless this Lease is terminated as provided in the preceding subparagraph, Landlord shall proceed with reasonable promptness to repair and restore the Premises to its condition as existed prior to such casualty, subject to reasonable delays for insurance adjustments and Force Majeure delays, and also subject to zoning Laws and building codes then in effect. Landlord shall have no liability to Tenant, and Tenant shall not be entitled to terminate this Lease if such repairs and restoration are not in fact completed within the time period estimated by Landlord so long as Landlord shall proceed with reasonable diligence to complete such repairs and restoration.

(c) Tenant acknowledges that Landlord shall be entitled to the full proceeds of any insurance coverage, whether carried by Landlord or Tenant, for damages to the Premises, except for those proceeds of Tenant’s insurance of its own personal property and equipment which would be removable by Tenant at the Termination Date. All such insurance proceeds shall be payable to Landlord whether or not the Premises are to be repaired and restored, provided, however, if this Lease is not terminated and the parties proceed to repair and restore Tenant Additions at Tenant’s cost, to the extent Landlord received proceeds of Tenant’s insurance covering Tenant Additions, such proceeds shall be applied to reimburse Tenant for its cost of repairing and restoring Tenant Additions.

16

jka v14-Continental_Grand-Learning_Tree-Lease

(d) Notwithstanding anything to the contrary herein set forth: (i) Landlord shall have no duty pursuant to this Section to repair or restore any portion of any Tenant Additions or to expend for any repair or restoration of the Premises or Building amounts in excess of insurance proceeds paid to Landlord and available for repair or restoration; and (ii) Tenant shall not have the right to terminate this Lease pursuant to this Section if any damage or destruction was caused by the act or neglect of Tenant, its agent or employees. Whether or not the Lease is terminated pursuant to this Article Fourteen, in no event shall Tenant be entitled to any compensation or damages for loss of the use of the whole or any part of the Premises or for any inconvenience or annoyance occasioned by any such damage, destruction, rebuilding or restoration of the Premises or the Building or access thereto.

(e) Any repair or restoration of the Premises performed by Tenant shall be in accordance with the provisions of Article Nine hereof.

14.02 INSUBSTANTIAL UNTENANTABILITY

If the Premises or the Building is damaged by a casualty but neither is rendered substantially untenantable and Landlord estimates that the time to substantially complete the repair or restoration will not exceed one hundred eighty (180) days from the date such damage occurred, then Landlord shall proceed to repair and restore the Building or the Premises other than Tenant Additions, with reasonable promptness, unless such damage is to the Premises and occurs during the last six (6) months of the Term, in which event either Tenant or Landlord shall have the right to terminate this Lease as of the date of such casualty by giving written notice thereof to the other within twenty (20) days after the date of such casualty. Notwithstanding the foregoing, Landlord’s obligation to repair shall be limited in accordance with the provisions of Section 14.01 above.

14.03 RENT ABATEMENT

Except for the negligence or willful act of Tenant or its agents, employees, contractors or invitees, if all or any part of the Premises are rendered untenantable by fire or other casualty and this Lease is not terminated, Monthly Base Rent and Rent Adjustments shall abate for that part of the Premises which is untenantable on a per diem basis from the date of the casualty until Landlord has Substantially Completed the repair and restoration work in the Premises which it is required to perform, provided, that as a result of such casualty, Tenant does not occupy the portion of the Premises which is untenantable during such period.

14.04 WAIVER OF STATUTORY REMEDIES

The provisions of this Lease, including this Article Fourteen, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, the Premises or the Property or any part of either, and any Law, including Sections 1932(2), 1933(4), 1941 and 1942 of the California Civil Code, with respect to any rights or obligations concerning damage or destruction shall have no application to this Lease or to any damage to or destruction of all or any part of the Premises or the Property or any part of either, and are hereby waived.

ARTICLE FIFTEEN

EMINENT DOMAIN

15.01 TAKING OF WHOLE OR SUBSTANTIAL PART

In the event the whole or any substantial part of the Building or of the Premises is taken or condemned by any competent authority for any public use or purpose (including a deed given in lieu of condemnation) and is thereby rendered untenantable, this Lease shall terminate as of the date title vests in such authority, and Monthly Base Rent and Rent Adjustments shall be apportioned as of the Termination Date. Notwithstanding anything to the contrary herein set forth, in the event the taking is temporary (for less than the remaining term of the Lease), Landlord may elect either (i) to terminate this Lease or (ii) permit Tenant to receive the entire award attributable to the Premises in which case Tenant shall continue to pay Rent and this Lease shall not terminate.

15.02 TAKING OF PART

In the event a part of the Building or the Premises is taken or condemned by any competent authority (or a deed is delivered in lieu of condemnation) and this Lease is not terminated, the Lease shall be amended to reduce or increase, as the case may be, the Monthly Base Rent and Tenant’s Share to reflect the Rentable Area of the Premises or Building, as the case may be, remaining after any such taking or condemnation. Landlord, upon receipt and to the extent of the award in condemnation (or proceeds of sale) shall make necessary repairs and restorations to the Premises (exclusive of Tenant Additions) and to the Building to the extent necessary to constitute the portion of the Building not so taken or condemned as a complete architectural and economically efficient unit. Notwithstanding the foregoing, if as a result of any taking, or a governmental order that the grade of any street or alley adjacent to the Building is to be changed and such taking or change of grade makes it necessary or desirable to substantially remodel or restore the Building or prevents the economical operation of the Building, Landlord shall have the right to terminate this Lease upon ninety (90) days prior written notice to Tenant.

15.03 COMPENSATION

Landlord shall be entitled to receive the entire award (or sale proceeds) from any such taking, condemnation or sale without any payment to Tenant, and Tenant hereby assigns to Landlord Tenant’s interest, if any, in such award; provided, however, Tenant shall have the right separately to pursue against the condemning authority a separate award in respect of the loss, if any, to Tenant Additions paid for by Tenant without any credit or allowance from Landlord so long as there is no diminution of Landlord’s award as a result.

ARTICLE SIXTEEN

INSURANCE

16.01 TENANT’S INSURANCE

Tenant, at Tenant’s expense, agrees to maintain in force, with a company or companies acceptable to Landlord, during the Term: (a) Commercial General Liability Insurance on a primary basis and without any right of contribution from any insurance carried by Landlord covering the Premises on an occurrence basis against all claims for personal injury, bodily injury, death and property damage, including contractual liability covering the indemnification provisions in this Lease. Such insurance shall be for such limits that are reasonably required by Landlord from time to time but not less than a combined single limit of Five Million Dollars ($5,000,000.00); (b) Workers’ Compensation and Employers’ Liability Insurance to the extent required by and in accordance with the Laws of the State of California; (c) “All Risks” property insurance in an amount adequate to cover the full replacement cost of all Tenant Additions, equipment, installations, fixtures and contents of the Premises in the event of loss; and (d) business interruption or loss of income insurance in an amount equal to the Monthly Base Rent for a period of at least one year commencing with the date of loss (and the proceeds of such insurance shall be paid to Landlord to the extent of any abatement of Rent under the Lease).

17

jka v14-Continental_Grand-Learning_Tree-Lease

16.02 FORM OF POLICIES

Each policy referred to in 16.01 shall satisfy the following requirements. Each policy shall (i) name Landlord and the Indemnitees as additional insureds (except Workers’ Compensation and Employers’ Liability Insurance), (ii) be issued by one or more responsible insurance companies licensed to do business in the State of California reasonably satisfactory to Landlord, (iii) where applicable, provide for deductible amounts satisfactory to Landlord and not permit co-insurance, (iv) shall provide that such insurance may not be canceled or amended without thirty (30) days’ prior written notice to the Landlord, and (v) each policy of “All-Risks” property insurance shall provide that the policy shall not be invalidated should the insured waive in writing prior to a loss, any or all rights of recovery against any other party for losses covered by such policies. Tenant shall deliver to Landlord, certificates of insurance and at Landlord’s request, copies of all policies and renewals thereof to be maintained by Tenant hereunder, not less than ten (10) days prior to the Commencement Date and not less than ten (10) days prior to the expiration date of each policy.

16.03 LANDLORD’S INSURANCE

Landlord agrees to purchase and keep in full force and effect during the Term hereof, including any extensions or renewals thereof, insurance under policies issued by insurers of recognized responsibility, qualified to do business in the State of California on the Building in amounts not less than the greater of eighty (80%) percent of the then full replacement cost (without depreciation) of the Building (above foundations and excluding Tenant Additions) or an amount sufficient to prevent Landlord from becoming a co-insurer under the terms of the applicable policies, against fire and such other risks as may be included in standard forms of all risk coverage insurance reasonably available from time to time. Landlord agrees to maintain in force during the Term, Commercial General Liability Insurance covering the Building on an occurrence basis against all claims for personal injury, bodily injury, death and property damage. Such insurance shall be for a combined single limit of Five Million Dollars ($5,000,000.00). Neither Landlord’s obligation to carry such insurance nor the carrying of such insurance shall be deemed to be an indemnity by Landlord with respect to any claim, liability, loss, cost or expense due, in whole or in part, to Tenant’s negligent acts or omissions or willful misconduct. Without obligation to do so, Landlord may, in its sole discretion from time to time, carry insurance in amounts greater and/or for coverage additional to the coverage and amounts set forth above.

16.04 WAIVER OF SUBROGATION

(a) Landlord agrees that, if obtainable at no, or minimal, additional cost, and so long as the same is permitted under the laws of the State of California, it will include in its “All Risks” policies appropriate clauses pursuant to which the insurance companies (i) waive all right of subrogation against Tenant with respect to losses payable under such policies and/or (ii) agree that such policies shall not be invalidated should the insured waive in writing prior to a loss any or all right of recovery against any party for losses covered by such policies.

(b) Tenant agrees to include, if obtainable at no, or minimal, additional cost, and so long as the same is permitted under the laws of the State of California, in its “All Risks” insurance policy or policies on Tenant Additions, whether or not removable, and on Tenant’s furniture, furnishings, fixtures and other property removable by Tenant under the provisions of this Lease appropriate clauses pursuant to which the insurance company or companies (i) waive the right of subrogation against Landlord and/or any tenant of space in the Building with respect to losses payable under such policy or policies and/or (ii) agree that such policy or policies shall not be invalidated should the insured waive in writing prior to a loss any or all right of recovery against any party for losses covered by such policy or policies. If Tenant is unable to obtain in such policy or policies either of the clauses described in the preceding sentence, Tenant shall, if legally possible and without necessitating a change in insurance carriers, have Landlord named in such policy or policies as an additional insured. If Landlord shall be named as an additional insured in accordance with the foregoing, Landlord agrees to endorse promptly to the order of Tenant, without recourse, any check, draft, or order for the payment of money representing the proceeds of any such policy or representing any other payment growing out of or connected with said policies, and Landlord does hereby irrevocably waive any and all rights in and to such proceeds and payments.

(c) Provided that Landlord’s right of full recovery under its policy or policies aforesaid is not adversely affected or prejudiced thereby, Landlord hereby waives any and all right of recovery which it might otherwise have against Tenant, its servants, agents and employees, for loss or damage occurring to the Real Property and the fixtures, appurtenances and equipment therein, except Tenant Additions, to the extent the same is covered by Landlord’s insurance, notwithstanding that such loss or damage may result from the negligence or fault of Tenant, its servants, agents or employees. Provided that Tenant’s right of full recovery under its aforesaid policy or policies is not adversely affected or prejudiced thereby, Tenant hereby waives any and all right of recovery which it might otherwise have against Landlord, its servants, and employees and against every other tenant of the Real Property who shall have executed a similar waiver as set forth in this Section 16.04(c) for loss or damage to Tenant Additions, whether or not removable, and to Tenant’s furniture, furnishings, fixtures and other property removable by Tenant under the provisions hereof to the extent the same is coverable by Tenant’s insurance required under this Lease, notwithstanding that such loss or damage may result from the negligence or fault of Landlord, its servants, agents or employees, or such other tenant and the servants, agents or employees thereof.

(d) Landlord and Tenant hereby agree to advise the other promptly if the clauses to be included in their respective insurance policies pursuant to Sections (a) and (b) above cannot be obtained on the terms hereinbefore provided and thereafter to furnish the other with a certificate of insurance or copy of such policies showing the naming of the other as an additional insured, as aforesaid. Landlord and Tenant hereby also agree to notify the other promptly of any cancellation or change of the terms of any such policy which would affect such clauses or naming. All such policies which name both Landlord and Tenant as additional insureds shall, to the extent obtainable, contain agreements by the insurers to the effect that no act or omission of any additional insured will invalidate the policy as to the other additional insureds.

16.05 NOTICE OF CASUALTY

Tenant shall give Landlord notice in case of a fire or accident in the Premises promptly after Tenant is aware of such event.

ARTICLE SEVENTEEN

WAIVER OF CLAIMS AND INDEMNITY

17.01 WAIVER OF CLAIMS

To the extent permitted by Law, Tenant releases the Indemnitees from, and waives all claims for, damage to person or property sustained by the Tenant or any occupant of the Premises or the Property resulting directly or indirectly from any existing or future condition, defect, matter or thing in and about the Premises or the Property, or any part of either, or any equipment or appurtenance therein, or resulting from any accident in or about the Premises or the Property, or resulting directly or indirectly from any act or neglect of any tenant or occupant of the Property or of any other person, including Landlord’s agents and

18

jka v14-Continental_Grand-Learning_Tree-Lease

servants, except to the extent caused by the gross negligence or by the willful and wrongful act of any of the Indemnitees, but the foregoing exception is subject to and shall not diminish any other waivers by Tenant or Landlord or their respective insurers, including those in effect in accordance with Section 16.04. If any such damage, whether to the Premises or the Property or any part of either, or whether to Landlord or to other tenants in the Property, results from any act or neglect of Tenant, its employees, servants, agents, contractors, invitees or customers, Tenant shall be liable therefor and Landlord may, at Landlord’s option, repair such damage and Tenant shall, upon demand by Landlord, as payment of additional Rent hereunder, reimburse Landlord within ten (10) days of demand for the total cost of such repairs, in excess of amounts, if any, paid to Landlord under insurance covering such damages. Tenant shall not be liable for any such damage caused by its acts or neglect if Landlord or a tenant has recovered the full amount of the damage from proceeds of insurance policies and the insurance company has waived its right of subrogation against Tenant.

17.02 INDEMNITY BY TENANT

To the extent permitted by Law, Tenant hereby indemnifies, and agrees to protect, defend and hold the Indemnitees harmless, against any and all actions, claims, demands, liability, costs and expenses, including attorneys’ fees and expenses for the defense thereof, arising from Tenant’s occupancy of the Premises, from the undertaking of any Tenant Additions or repairs to the Premises, from the conduct of Tenant’s business on the Premises, or from any breach or default on the part of Tenant in the performance of any covenant or agreement on the part of Tenant to be performed pursuant to the terms of this Lease, or from any willful act or negligence of Tenant, its agents, contractors, servants, employees, customers or invitees, in or about the Premises or the Property or any part of either. In case of any action or proceeding brought against the Indemnitees by reason of any such claim, upon notice from Landlord, Tenant covenants to defend such action or proceeding by counsel chosen by Landlord, in Landlord’s reasonable discretion. Landlord reserves the right to settle, compromise or dispose of any and all actions, claims and demands related to the foregoing indemnity. The foregoing indemnity shall not operate to relieve Indemnitees of liability to the extent such liability is caused by the gross negligence or willful and wrongful act of Indemnitees. Further, the foregoing indemnity is subject to and shall not diminish any waivers in effect in accordance with Section 16.04 by Landlord or its insurers to the extent of amounts, if any, paid to Landlord under its “All-Risks” property insurance.

17.03 WAIVER OF CONSEQUENTIAL DAMAGES

To the extent permitted by law, Tenant hereby waives and releases the Indemnitees from any consequential damages, compensation or claims for inconvenience or loss of business, rents or profits as a result of any injury or damage, whether or not caused by the willful and wrongful act of any of the Indemnitees.

ARTICLE EIGHTEEN

RULES AND REGULATIONS

18.01 RULES

Tenant agrees for itself and for its subtenants, employees, agents, and invitees to comply with the rules and regulations listed on Exhibit C attached hereto and with all reasonable modifications and additions thereto which Landlord may make from time to time.

18.02 ENFORCEMENT

Nothing in this Lease shall be construed to impose upon the Landlord any duty or obligation to enforce the rules and regulations as set forth on Exhibit C or as hereafter adopted, or the terms, covenants or conditions of any other lease as against any other tenant, and the Landlord shall not be liable to the Tenant for violation of the same by any other tenant, its servants, employees, agents, visitors or licensees; provided, however, any enforcement of such rules and regulations shall be in a non-discriminatory manner.

ARTICLE NINETEEN

LANDLORD’S RESERVED RIGHTS

Landlord shall have the following rights exercisable without notice to Tenant and without liability to Tenant for damage or injury to persons, property or business and without being deemed an eviction or disturbance of Tenant’s use or possession of the Premises or giving rise to any claim for offset or abatement of Rent: (1) to change the Building’s name or street address upon thirty (30) days’ prior written notice to Tenant; (2) to install, affix and maintain all signs on the exterior and/or interior of the Building; (3) to designate and/or approve prior to installation, all types of signs, window shades, blinds, drapes, awnings or other similar items, and all internal lighting that may be visible from the exterior of the Premises; (4) upon reasonable notice to Tenant, to display the Premises to prospective purchasers during Standard Operating Hours at any time during the Term and to prospective tenants during Standard Operating Hours during the last twelve (12) months of the Term; (5) to grant to any party the exclusive right to conduct any business or render any service in or to the Building, provided such exclusive right shall not operate to prohibit Tenant from using the Premises for the purpose permitted hereunder; (6) to change the arrangement and/or location of entrances or passageways, doors and doorways, corridors, elevators, stairs, washrooms or public portions of the Building, and to close entrances, doors, corridors, elevators or other facilities, provided that such action shall not materially and adversely interfere with Tenant’s access to or use of the Premises, the Building or the Project parking structure; (7) to have access for Landlord and other tenants of the Building to any mail chutes and boxes located in or on the Premises as required by any applicable rules of the United States Post Office; and (8) to close the Building after Standard Operating Hours, except that Tenant and its employees and invitees shall be entitled to admission at all times, under such reasonable regulations as Landlord prescribes for security purposes.

ARTICLE TWENTY

ESTOPPEL CERTIFICATE

20.01 IN GENERAL

Within fifteen (15) business days after request therefor by Landlord, Mortgagee or any prospective mortgagee or owner, Tenant agrees as directed in such request to execute an Estoppel Certificate in recordable form, binding upon Tenant, certifying (i) that this Lease is unmodified and in full force and effect (or if there have been modifications, a description of such modifications and that this Lease as modified is in full force and effect); (ii) the dates to which Rent has been paid; (iii) that Tenant is in the possession of the Premises if that is the case; (iv) that Landlord is not in default under this Lease, or, if Tenant believes Landlord is in default, the nature thereof in detail; (v) that Tenant has no offsets or defenses to the performance of its obligations under this Lease (or if Tenant believes there are any offsets or defenses, a full and complete explanation thereof); (vi) that the Premises have been completed in accordance with the terms and provisions hereof, that Tenant has accepted the Premises and the condition thereof and of all improvements thereto and has no claims against Landlord or any other party with respect thereto; (vii) that if an assignment of rents or leases has been served upon the Tenant by a Mortgagee, Tenant will acknowledge receipt thereof and agree to be bound by the provisions thereof; (viii) that Tenant will give to the Mortgagee copies of all notices required or permitted to be given by Tenant to Landlord; and (ix) to any other information reasonably requested.

19

jka v14-Continental_Grand-Learning_Tree-Lease

20.02 ENFORCEMENT

In the event that Tenant fails to deliver an Estoppel Certificate, then such failure shall be a Default. In addition to any other remedy available to Landlord, Landlord may impose a charge equal to Five Hundred Dollars ($500.00) for each day that Tenant fails to deliver an Estoppel Certificate and Tenant shall be deemed to have irrevocably appointed Landlord as Tenant’s attorney-in-fact to execute and deliver such Estoppel Certificate.

ARTICLE TWENTY-ONE

Intentionally omitted.

ARTICLE TWENTY-TWO

REAL ESTATE BROKERS

Tenant represents that, except for the broker(s) listed in Section 1.01, Tenant has not dealt with any real estate broker, sales person, or finder in connection with this Lease, and no such person initiated or participated in the negotiation of this Lease, or showed the Premises to Tenant. Tenant hereby agrees to indemnify, protect, defend and hold Landlord and the Indemnitees, harmless from and against any and all liabilities and claims for commissions and fees arising out of a breach of the foregoing representation. Landlord agrees to pay any commission to which Landlord’s Broker listed in Section 1.01 is entitled in connection with this Lease pursuant to Landlord’s written agreement with such broker. Landlord and Tenant agree that any commission payable to Tenant’s Broker shall be paid by Tenant except to the extent that Tenant’s Broker and Landlord’s Broker have entered into a separate agreement between themselves to share the commission paid to Landlord’s Broker by Landlord.

ARTICLE TWENTY-THREE

MORTGAGEE PROTECTION

23.01 SUBORDINATION AND ATTORNMENT

(a) Subject to Section 23.01(b) hereof, this Lease is and shall be expressly subject and subordinate at all times to (i) any ground or underlying lease of the Real Property, now or hereafter existing, and all amendments, extensions, renewals and modifications to any such lease, and (ii) the lien of any mortgage or trust deed now or hereafter encumbering fee title to the Real Property and/or the leasehold estate under any such lease, and all amendments, extensions, renewals, replacements and modifications of such mortgage or trust deed and/or the obligation secured thereby, unless such ground lease or ground lessor, or mortgage, trust deed or Mortgagee, expressly provides or elects that the Lease shall be superior to such lease or mortgage or trust deed. If any such mortgage or trust deed is foreclosed (including any sale of the Real Property pursuant to a power of sale), or if any such lease is terminated, upon request of the Mortgagee or ground lessor, as the case may be, Tenant shall attorn to the purchaser at the foreclosure sale or to the ground lessor under such lease, as the case may be, provided, however, that such purchaser or ground lessor shall not be (i) bound by any payment of Rent for more than one month in advance except payments in the nature of security for the performance by Tenant of its obligations under this Lease; (ii) subject to any offset, defense or damages arising out of a default of any obligations of any preceding Landlord; or (iii) bound by any amendment or modification of this Lease made without the written consent of the Mortgagee or ground lessor; or (iv) liable for any security deposits not actually received in cash by such purchaser or ground lessor. This subordination shall be self-operative and no further certificate or instrument of subordination need be required by any such Mortgagee or ground lessor. In confirmation of such subordination, however, Tenant shall execute promptly any reasonable certificate or instrument that Landlord, Mortgagee or ground lessor may request. Tenant hereby constitutes Landlord as Tenant’s attorney-in-fact to execute such certificate or instrument for and on behalf of Tenant upon Tenant’s failure to do so within fifteen (15) days of a request to do so. Upon request by such successor in interest, Tenant shall execute and deliver reasonable instruments confirming the attornment provided for herein.

(b) Notwithstanding any provision of this Lease to the contrary, provided that: (i) Tenant pays any fees and costs associated with requesting a nondisturbance agreement, (ii) Tenant executes and delivers a subordination, nondisturbance and attornment agreement substantially in the form of Exhibit G hereto, with such changes thereto as any lessor under a ground or underlying lease or mortgagee or beneficiary may reasonably require (“Nondisturbance Agreement”) and complies with the provisions thereof, and (iii) Tenant is not in default under this Lease, no termination of any ground lease or underlying lease and no foreclosure, sale pursuant to power of sale or conveyance by deed in lieu of foreclosure shall affect Tenant’s rights under this Lease, except to the extent provided by such Nondisturbance Agreement. If Tenant fails to execute and deliver any Nondisturbance Agreement within fifteen (15) days of a request therefor from Landlord, Tenant hereby constitutes Landlord as Tenant’s attorney-in-fact to execute and deliver such instrument. Landlord’s inability to obtain the signature of any such lessor or Mortgagee on any such Nondisturbance Agreement shall not constitute a default by Landlord under this Lease, but so long as default by Tenant under this Lease is not the reason for Landlord’s inability to obtain such signature, any such lessor or Mortgagee shall be deemed to have elected that this Lease be superior to the lease, mortgage or deed of trust in question, and Tenant shall, at the request of such lessor, mortgagee or beneficiary (or purchaser at any sale pursuant to the mortgage or deed of trust), attorn to any such party or enter into a new lease with such party (as Landlord) for the balance of the Term then remaining hereunder upon the same terms and conditions as those herein, provided, however, that such party shall not be (i) bound by any payment of Rent for more than one month in advance except payments in the nature of security for the performance by Tenant of its obligations under this Lease; (ii) subject to any offset, defense or damages arising out of a default of any obligations of any preceding Landlord; or (iii) bound by any amendment or modification of this Lease made without the written consent of the Mortgagee or ground lessor; or (iv) liable for any security deposits not actually received in cash by such purchaser or ground lessor.

23.02 MORTGAGEE PROTECTION

Tenant agrees to give any Mortgagee or ground lessor, by registered or certified mail, a copy of any notice of default served upon the Landlord by Tenant, provided that prior to such notice Tenant has received notice (by way of service on Tenant of a copy of an assignment of rents and leases, or otherwise) of the address of such Mortgagee or ground lessor. Tenant further agrees that if Landlord shall have failed to cure such default within the time provided for in this Lease, then the Mortgagee or ground lessor shall have an additional thirty (30) days after receipt of notice thereof within which to cure such default or if such default cannot be cured within that time, then such additional notice time as may be necessary, if, within such thirty (30) days, any Mortgagee or ground lessor has commenced and is diligently pursuing the remedies necessary to cure such default (including commencement of foreclosure proceedings or other proceedings to acquire possession of the Real Property, if necessary to effect such cure). Such period of time shall be extended by any period within which such Mortgagee or ground lessor is prevented from commencing or pursuing such foreclosure proceedings or other proceedings to acquire possession of the Real Property by reason of Landlord’s bankruptcy. Until the time allowed as aforesaid for Mortgagee or ground lessor to cure such defaults has expired without cure, Tenant shall have no right to, and shall not, terminate this Lease on account of default. This Lease may not be modified or amended so as to reduce the Rent or shorten the Term, or so as to adversely affect in any other respect to any material extent the rights of the Landlord, nor shall this Lease be canceled or surrendered, without the prior written consent, in each instance, of the ground lessor or the Mortgagee.

20

jka v14-Continental_Grand-Learning_Tree-Lease

ARTICLE TWENTY-FOUR

NOTICES

(a) All notices, demands or requests provided for or permitted to be given pursuant to this Lease must be in writing and shall be personally delivered, sent by Federal Express or other reputable overnight courier service, or mailed by first class, registered or certified United States mail, return receipt requested, postage prepaid.

(b) All notices, demands or requests to be sent pursuant to this Lease shall be deemed to have been properly given or served by delivering or sending the same in accordance with this Section, addressed to the parties hereto at their respective addresses listed in Sections 1.01.

(c) Notices, demands or requests sent by mail or overnight courier service as described above shall be effective upon deposit in the mail or with such courier service. However, the time period in which a response to any such notice, demand or request must be given shall commence to run from (i) in the case of delivery by mail, the date of receipt on the return receipt of the notice, demand or request by the addressee thereof, or (ii) in the case of delivery by Federal Express or other overnight courier service, the date of acceptance of delivery by an employee, officer, director or partner of Landlord or Tenant. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given, as indicated by advice from Federal Express or other overnight courier service or by mail return receipt, shall be deemed to be receipt of notice, demand or request sent. Notices may also be served by personal service upon any officer, director or partner of Landlord or Tenant, and shall be effective upon such service.

(d) By giving to the other party at least thirty (30) days written notice thereof, either party shall have the right from time to time during the term of this Lease to change their respective addresses for notices, statements, demands and requests, provided such new address shall be within the United States of America.

ARTICLE TWENTY-FIVE

PARKING

During the Term, Tenant may use up to the number and type of Parking Spaces specified in Section 1.01 for parking. The locations shall be at the Project and the type of parking shall be designated by Landlord or Landlord’s parking operator from time to time. Tenant acknowledges and agrees that the parking spaces in the Project’s surface parking may include a mixture of spaces for compact vehicles as well as full-size passenger automobiles, and that Tenant shall not use parking spaces for vehicles larger than the striped size of the parking spaces. All vehicles using Tenant’s spaces shall prominently display identification stickers or other markers, and/or have passes or keycards for ingress and egress, as may be required and provided by Landlord or its parking operator from time to time. Tenant and its employees and business invitees shall not park any vehicle in any area designated as a loading area or designated for use by visitors or for the exclusive use of any other person and Tenant agrees to employ reasonable measures to assure that its employees do not park in any such area. Tenant shall furnish Landlord with a list of its and its employees’ vehicle license numbers within fifteen (15) days after the Commencement Date and thereafter notify Landlord of any change in such list within five (5) days after such change occurs. Tenant agrees to assume responsibility for compliance by its employees with all parking regulations established by Landlord, including a requirement that Tenant pay to Landlord a charge for loss and replacement of parking entrance key-cards or other access control identification, if any. During any period that Tenant is required by Section 1.01 to pay for parking at the prevailing rates (“Parking Rent”), the prevailing rates shall mean base rates being charged from time to time by Landlord or its parking operator to other tenants for similar parking rights without consideration of any discounts, but in no event greater than prevailing parking rates in other Class A office buildings in the El Segundo, California area. Parking Rent shall be paid monthly in advance on the first day of each month of the Term at the same time and manner as for payment of Monthly Base Rent, and shall be paid directly to Landlord at the first office specified in Section 1.01(2), or to such other persons, or at such other places, designated by Landlord. Tenant’s right to use the Parking Spaces is conditional upon timely receipt of full payment of Parking Rent. In the event any surcharge, regulatory fee or parking tax is at any time imposed by any governmental authority, Tenant shall pay all such amounts applicable to Tenant’s parking privileges hereunder to Landlord either in advance on the first day of each calendar month concurrently with its installments of Monthly Base Rent or as otherwise billed from time to time by Landlord. If pursuant to any provision of this Lease Landlord has agreed to mark any of Tenant’s Parking Spaces as assigned or reserved for Tenant’s use, Landlord shall have no obligation for unauthorized use of such reserved spaces, nor shall Landlord be required to police or patrol such spaces. Tenant shall not allow any vehicles using Tenant’s parking privileges to be parked, loaded or unloaded in violation of the parking provisions of this Lease. If any vehicle is using the parking or loading areas contrary to any provision of this Section, Landlord or its parking operator shall have the right, in addition to all other rights and remedies of Landlord under this Lease, to remove or tow away the vehicle without prior notice to Tenant, and the cost thereof shall be paid by the owner of the vehicle towed. Upon Tenant’s request for additional parking on a month-to-month basis, and subject to availability of spaces for such parking, Landlord may, without obligation to do so, from time to time provide additional parking on a month-to-month basis at the prevailing rates, but Landlord shall determine such availability and may terminate such additional use in Landlord’s sole discretion. In addition, during the Term, Tenant shall receive 1,000 full day parking validations for visitors per month, free of charge.

ARTICLE TWENTY-SIX

MISCELLANEOUS

26.01 LATE CHARGES

(a) The Monthly Base Rent, Rent Adjustments, Rent Adjustment Deposits and Parking charges shall be due when specifically provided above. Except for such payments and late charges described below, which late charge shall be due when provided below (without notice or demand), all other payments required hereunder to Landlord shall be paid within ten (10) days after Landlord’s demand therefor. All Rent and charges, except late charges, not paid when due shall bear interest from the date due until the date paid at the Default Rate in effect on the date such payment was due.

(b) In the event Tenant is more than three (3) days late more than once in any twelve (12) month period in paying any installment of Rent due under this Lease, Tenant shall pay Landlord a late charge equal to five percent (5%) of the delinquent installment of Rent. The parties agree that (i) such delinquency will cause Landlord to incur costs and expenses not contemplated herein, the exact amount of which will be difficult to calculate, including the cost and expense that will be incurred by Landlord in processing each delinquent payment of rent by Tenant, (ii) the amount of such late charge represents a reasonable estimate of such costs and expenses and (iii) that such late charge shall be paid to Landlord for each delinquent payment in addition to all Rent otherwise due hereunder. The parties further agree that the payment of late charges and the payment of interest provided for in subparagraph (a) above are distinct and separate from one another in that the payment of interest is to compensate Landlord for its inability to use the money improperly withheld by Tenant, while the payment of late charges is to compensate Landlord for its additional administrative expenses in handling and processing delinquent payments.

21

jka v14-Continental_Grand-Learning_Tree-Lease

(c) Payment of interest at the Default Rate and/or of late charges shall not excuse or cure any default by Tenant under this Lease, nor shall the foregoing provisions of this Article or any such payments prevent Landlord from exercising any right or remedy available to Landlord upon Tenant’s failure to pay Rent when due, including the right to terminate this Lease.

26.02 NO JURY TRIAL; VENUE; JURISDICTION

Each party hereto (which includes any assignee, successor, heir or personal representative of a party) shall not seek a jury trial, hereby waives trial by jury, and hereby further waives any objection to venue in the County in which the Project is located, and agrees and consents to personal jurisdiction of the courts of the State of California, in any action or proceeding or counterclaim brought by any party hereto against the other on any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant’s use or occupancy of the Premises, or any claim of injury or damage, or the enforcement of any remedy under any statute, emergency or otherwise, whether any of the foregoing is based on this Lease or on tort law. No party will seek to consolidate any such action in which a jury has been waived with any other action in which a jury trial cannot or has not been waived. It is the intention of the parties that these provisions shall be subject to no exceptions. By execution of this Lease the parties agree that this provision may be filed by any party hereto with the clerk or judge before whom any action is instituted, which filing shall constitute the written consent to a waiver of jury trial pursuant to and in accordance with Section 631 of the California Code of Civil Procedure. No party has in any way agreed with or represented to any other party that the provisions of this Section will not be fully enforced in all instances. The provisions of this Section shall survive the expiration or earlier termination of this Lease.

26.03 INTENTIONALLY OMITTED

26.04 OPTION

This Lease shall not become effective as a lease or otherwise until executed and delivered by both Landlord and Tenant. The submission of the Lease to Tenant does not constitute a reservation of or option for the Premises, but when executed by Tenant and delivered to Landlord, the Lease shall constitute an irrevocable offer by Tenant in effect for fifteen (15) days to lease the Premises on the terms and conditions herein contained.

26.05 TENANT AUTHORITY

Tenant represents and warrants to Landlord that it has full authority and power to enter into and perform its obligations under this Lease, that the person executing this Lease is fully empowered to do so, and that no consent or authorization is necessary from any third party. Landlord may request that Tenant provide Landlord evidence of Tenant’s authority.

26.06 ENTIRE AGREEMENT

This Lease, the Exhibits and Rider(s) attached hereto contain the entire agreement between Landlord and Tenant concerning the Premises and there are no other agreements, either oral or written, and no other representations or statements, either oral or written, on which Tenant has relied. This Lease shall not be modified except by a writing executed by Landlord and Tenant.

26.07 MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE

If any Mortgagee requires a modification of this Lease which shall not result in any increased cost or expense to Tenant or in any other substantial and adverse change in the rights and obligations of Tenant hereunder, then Tenant agrees that the Lease may be so modified.

26.08 EXCULPATION

Tenant agrees, on its behalf and on behalf of its successors and assigns, that any liability or obligation of Landlord in connection with this Lease shall only be enforced against Landlord’s equity interest in the Building up to a maximum of Five Million Dollars ($5,000,000.00) and in no event against any other assets of the Landlord, or Landlord’s officers or directors, partners or members, and that any liability of Landlord with respect to this Lease shall be so limited and Tenant shall not be entitled to any judgment in excess of such amount.

26.09 ACCORD AND SATISFACTION

No payment by Tenant or receipt by Landlord of a lesser amount than any installment or payment of Rent due shall be deemed to be other than on account of the amount due, and no endorsement or statement on any check or any letter accompanying any check or payment of Rent shall be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such installment or payment of Rent or pursue any other remedies available to Landlord. No receipt of money by Landlord from Tenant after the termination of this Lease or Tenant’s right of possession of the Premises shall reinstate, continue or extend the Term. Receipt or acceptance of payment from anyone other than Tenant, including an assignee of Tenant, is not a waiver of any breach of Article Ten, and Landlord may accept such payment on account of the amount due without prejudice to Landlord’s right to pursue any remedies available to Landlord.

26.10 LANDLORD’S OBLIGATIONS ON SALE OF BUILDING

In the event of any sale or other transfer of the Building, Landlord shall be entirely freed and relieved of all agreements and obligations of Landlord hereunder accruing or to be performed after the date of such sale or transfer, and any remaining liability of Landlord with respect to this Lease shall be limited to Five Million Dollars ($5,000,000.00) and Tenant shall not be entitled to any judgment in excess of such amount.

26.11 BINDING EFFECT

Subject to the provisions of Article Ten, this Lease shall be binding upon and inure to the benefit of Landlord and Tenant and their respective heirs, legal representatives, successors and permitted assigns.

26.12 CAPTIONS

The Article and Section captions in this Lease are inserted only as a matter of convenience and in no way define, limit, construe, or describe the scope or intent of such Articles and Sections.

26.13 TIME; APPLICABLE LAW; CONSTRUCTION

Time is of the essence of this Lease and each and all of its provisions. This Lease shall be construed in accordance with the Laws of the State of California. If more than one person signs this Lease as Tenant, the obligations hereunder imposed shall

22

jka v14-Continental_Grand-Learning_Tree-Lease

be joint and several. If any term, covenant or condition of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each item, covenant or condition of this Lease shall be valid and be enforced to the fullest extent permitted by Law. Wherever the term “including” or “includes” is used in this Lease, it shall have the same meaning as if followed by the phrase “but not limited to”. The language in all parts of this Lease shall be construed according to its normal and usual meaning and not strictly for or against either Landlord or Tenant.

26.14 ABANDONMENT

In the event Tenant vacates or abandons the Premises but is otherwise in compliance with all the terms, covenants and conditions of this Lease, Landlord shall (i) have the right to enter into the Premises in order to show the space to prospective tenants, (ii) have the right to reduce the services provided to Tenant pursuant to the terms of this Lease to such levels as Landlord reasonably determines to be adequate services for an unoccupied premises and (iii) during the last six (6) months of the Term, have the right to prepare the Premises for occupancy by another tenant upon the end of the Term. Tenant expressly acknowledges that in the absence of written notice pursuant to Section 11.02(b) or pursuant to California Civil Code Section 1951.3 terminating Tenant’s right to possession, none of the foregoing acts of Landlord or any other act of Landlord shall constitute a termination of Tenant’s right to possession or an acceptance of Tenant’s surrender of the Premises, and the Lease shall continue in effect.

26.15 LANDLORD’S RIGHT TO PERFORM TENANT’S DUTIES

If Tenant fails timely to perform any of its duties under this Lease, Landlord shall have the right (but not the obligation), to perform such duty on behalf and at the expense of Tenant without prior notice to Tenant, and all sums expended or expenses incurred by Landlord in performing such duty shall be deemed to be additional Rent under this Lease and shall be due and payable upon demand by Landlord.

26.16 SECURITY SYSTEM

Landlord shall not be obligated to provide or maintain any security patrol or security system. Landlord shall not be responsible for the quality of any such patrol or system which may be provided hereunder or for damage or injury to Tenant, its employees, invitees or others due to the failure, action or inaction of such patrol or system.

26.17 NO LIGHT, AIR OR VIEW EASEMENTS

Any diminution or shutting off of light, air or view by any structure which may be erected on lands of or adjacent to the Project shall in no way affect this Lease or impose any liability on Landlord.

26.18 RECORDATION

Neither this Lease, nor any notice nor memorandum regarding the terms hereof, shall be recorded by Tenant. Any such unauthorized recording shall be a Default for which there shall be no cure or grace period. Tenant agrees to execute and acknowledge, at the request of Landlord, a memorandum of this Lease, in recordable form.

26.19 SURVIVAL

The waivers of the right of jury trial, the other waivers of claims or rights, the releases and the obligations of Tenant under this Lease to indemnify, protect, defend and hold harmless Landlord and/or Indemnitees shall survive the expiration or termination of this Lease, and so shall all other obligations or agreements which by their terms survive expiration or termination of the Lease.

IN WITNESS WHEREOF, this Lease has been executed as of the date set forth in Section 1.01 hereof.

TENANT:		LANDLORD:
Learning Tree International, Inc.,		Metropolitan Life Insurance Company,
a Delaware corporation		a New York corporation
By		By
	Print name		Print name
Its		Its
(CEO or CAO)
By
	Print name
Its
(Secretary or CFO)

23

jka v14-Continental_Grand-Learning_Tree-Lease

EXHIBIT A

PLAN OF PREMISES

Exhibit A - Page 1

jka v14-Continental_Grand-Learning_Tree-Lease

EXHIBIT B

WORKLETTER AGREEMENT

(Tenant Build)

This Workletter Agreement (“Workletter”) is attached to and a part of a certain Office Lease dated as of April 26, 2005 by and between Metropolitan Life Insurance Company, a New York corporation, as Landlord, and Learning Tree International, Inc., a Delaware corporation, as Tenant, for the Premises (the “Lease”). Terms used herein and not defined herein shall have the meaning of such terms as defined elsewhere in the Lease. For purposes of this Workletter, references to “State” and “City” shall mean the State and City in which the Building is located.

1. Base Building Work.

All work performed during the Building’s initial course of construction and modifications thereto, excluding all original and modified build-outs of any tenant spaces, shall be referred to as the “Base Building Work” or ““Base Building”, as applicable. Neither Landlord nor Landlord’s representatives have made any representations or promises with respect to the Premises or the Base Building Work except as herein expressly set forth.

2. Landlord Work.

There is no Landlord Work. Within a reasonable time after the Lease has been executed by both Tenant and Landlord, but subject to the provisions of Article Two of the Lease, Landlord shall deliver the Premises to Tenant broom clean in its “AS IS” condition (including its current “as built” configuration with existing build-out of the tenant space).

3. Tenant’s Plans.

3.1. Description. At its expense, Tenant shall employ:

(i) one or more architects reasonably satisfactory to Landlord and licensed by the State (“Tenant’s Architect”) to prepare architectural drawings and specifications for all layout and Premises improvements not included in, or requiring any change or addition to, the AS IS condition or Landlord Work (if any) (Shlemmer Algaze & Associates, if used by Tenant as Tenant’s Architect, is consented to by Landlord);

(ii) one or more engineers reasonably satisfactory to Landlord and licensed by the State (“Tenant’s Engineers”) to prepare mechanical and electrical working drawings and specifications for all Premises improvements not included in, or requiring any change or addition to, the AS IS condition or Landlord Work (if any), and to prepare mechanical and electrical working drawings and specifications for all Premises improvements not included in, or requiring any change or addition to the AS IS condition or Landlord Work (if any); and

(iii) the structural engineer designated by Landlord and licensed by the State to prepare structural working drawings and specifications for all Premises improvements not included in, or requiring any change or addition to the AS IS condition or Landlord Work (if any).

All such drawings and specifications are referred to herein as “Tenant’s Plans”. Tenant’s Plans shall be in form and detail sufficient to secure all applicable governmental approvals. Tenant’s Architect shall be responsible for coordination of all engineering work for Tenant’s Plans and shall coordinate with any consultants of Tenant (the use of which is subject to Landlord’s consent), and Landlord’s space planner or architect to assure the consistency of Tenant’s Plans with the Base Building Work and Landlord Work (if any).

Tenant shall pay Landlord, within ten (10) days of receipt of each invoice from Landlord, the cost incurred by Landlord for Landlord’s architects and engineers to review Tenant’s Plans for consistency of same with the Base Building Work and Landlord Work (if any). Tenant’s Plans shall also include the following:

(a) Final Space Plan: The “Final Space Plan” for the Premises shall include a full and accurate description of room titles, floor loads, alterations to the Base Building or Landlord Work (if any) or requiring any change or addition to the AS IS condition, and the dimensions and location of all partitions, doors, aisles, plumbing (and furniture and equipment to the extent same affect floor loading). The Final Space Plan shall be (i) compatible with the design, construction, systems and equipment of the Base Building and Landlord Work, if any (“Building Standards”), (ii) comply with Laws, (iii) be capable of logical measurement and construction, and (iv) contain all such information as may be required for the preparation of the Mechanical and Electrical Working Drawings and Specifications (including, without limitation, a capacity and usage report, from Landlord’s engineers pursuant to Section 3.1(b). below, for all mechanical and electrical systems in the Premises). Prior to submission to Landlord, the Final Space Plan shall have been reviewed and approved by the City Building and Fire Departments, and shall be on file with the Building Department, registered with a preliminary plan check number.

(b) Mechanical and Electrical Working Drawings and Specifications: Tenant shall employ engineers approved by Landlord to prepare Mechanical and Electrical Working Drawings and Specifications showing complete plans for electrical, life safety, automation, plumbing, water, and air cooling, ventilating, heating and temperature control and to prepare a capacity and usage report (“Capacity Report”) for all mechanical and electrical systems in the Premises.

(c) Issued for Construction Documents: The “Issued for Construction Documents” shall consist of all drawings (1/8” scale) and specifications necessary to construct all Premises improvements including, without limitation, architectural and structural working drawings and specifications and Mechanical and Electrical Working Drawings and Specifications and all applicable governmental authorities plan check corrections.

3.2. Approval by Landlord. Tenant’s Plans and any revisions thereof shall be subject to Landlord’s approval, which approval or disapproval:

(i) shall not be unreasonably withheld, provided however, that Landlord may disapprove Tenant’s Plans in its sole and absolute discretion if they (a) adversely affect the structural integrity of the Building, (b) adversely affect any of the Building Systems (as defined below), the Common Areas or any other tenant space (whether or not currently occupied), (c) fail to fully comply with Laws, (d) affect the exterior appearance of the Building, or (e) provide for improvements which do not meet or exceed the Building Standards. Building Systems collectively shall mean the structural, electrical, mechanical (including, without limitation, heating, ventilating and air conditioning), plumbing, fire and life-safety (including, without limitation, fire protection system and any fire alarm), communication, utility, gas (if any), security (if any), and elevator (if any) systems in the Building.

Exhibit B - Page 1

jka v14-Continental_Grand-Learning_Tree-Lease

(ii) shall not be delayed beyond ten (10) business days with respect to initial submissions and major change orders (those which impact Building Systems or any other item listed in subpart (i) of Section 3.2 above) and beyond five (5) business days with respect to required revisions and any other change orders.

If Landlord disapproves of any of Tenant’s Plans, Landlord shall advise Tenant of what Landlord disapproves in reasonable detail. After being so advised by Landlord, Tenant shall submit a redesign, incorporating the revisions required by Landlord, for Landlord’s approval. The approval procedure shall be repeated as necessary until Tenant’s Plans are ultimately approved. Approval by Landlord shall not be deemed to be a representation or warranty by Landlord with respect to the safety, adequacy, correctness, efficiency or compliance with Laws of Tenant’s Plans. Tenant shall be fully and solely responsible for the safety, adequacy, correctness and efficiency of Tenant’s Plans and for the compliance of Tenant’s Plans with any and all Laws.

3.3. Landlord Cooperation. Landlord shall cooperate with Tenant and make good faith efforts to coordinate Landlord’s construction review procedures to expedite the planning, commencement, progress and completion of Tenant Work. Landlord shall complete its review of each stage of Tenant’s Plans and any revisions thereof and communicate the results of such review within the time periods set forth in Section 3.2 above.

3.4. City Requirements. Any changes in Tenant’s Plans which are made in response to requirements of the applicable governmental authorities and/or changes which affect the Base Building Work shall be immediately submitted to Landlord for Landlord’s review and approval.

3.5. “As-Built” Drawings and Specifications. A CADD-DXF diskette file and a set of mylar reproducibles of all “as-built” drawings and specifications of the Premises (reflecting all field changes and including, without limitation, architectural, structural, mechanical and electrical drawings and specifications) prepared by Tenant’s Architect and Engineers or by Contractors (defined below) shall be delivered by Tenant at Tenant’s expense to the Landlord within thirty (30) days after completion of the Tenant Work. If Landlord has not received such drawings and diskette(s) within thirty (30) days, Landlord may give Tenant written notice of such failure. If Tenant does not produce the drawings and diskette(s) within ten (10) days after Landlord’s written notice, Landlord may, at Tenant’s sole cost which may be deducted from the Allowance, produce the drawings and diskette(s) using Landlord’s personnel, managers, and outside consultants and contractors. Landlord shall receive an hourly rate reasonable for such production.

3.6. Lender’s Certificate. Tenant shall cause Tenant’s Architect to provide to Landlord’s lender(s), within ten (10) days after request of Landlord, a certificate, in form and substance satisfactory to such lender(s), certifying that, as of the date of the certificate, Tenant Work and its use fully comply with all Laws in effect at the time Tenant took occupancy.

4. Tenant Work.

4.1. Tenant Work Defined. All tenant improvement work required by the Issued for Construction Documents (including, without limitation, any approved changes, additions or alterations pursuant to Section 7 below) is referred to in this Workletter as “Tenant Work.”

4.2. Tenant to Construct. Tenant shall construct all Tenant Work pursuant to this Workletter, and except to the extent modified by or inconsistent with express provisions of this Workletter, pursuant with the provisions of the terms and conditions of Article Nine of the Lease, governing Tenant Alterations (except to the extent modified by this Workletter) and all such Tenant Work shall be considered “Tenant Alterations” for purposes of the Lease.

4.3. Construction Contract. All contracts and subcontracts for Tenant Work shall include any reasonable terms and conditions required by Landlord.

4.4. Contractor. Tenant shall select one or more contractors to perform the Tenant Work (“Contractor”) from a list of approved contractors made available by Landlord.

4.5. Division of Landlord Work and Tenant Work. Tenant Work is defined in Section 4.1. above and Landlord Work, if any, is defined in Section 2.

4.6. Access & Services. Landlord shall provide without charge to Tenant, the Contractor, Subcontractors, Architect, Engineers, Consultants and their respective employees normal Building security, access to and use of the loading dock, utilities and HVAC, toilet facilities, freight elevators or other normal Building services, to the extent they are compatible with construction in progress, during the design and construction period for Tenant Work, so long as the Contractor, Tenant’s Architect and Tenant’s Engineers perform their work during Standard Operating Hours. Notwithstanding the foregoing agreement not to charge Tenant for such expenses, Tenant understands and agrees that such expenses, whether incurred for Tenant or other tenants in the Building are part of Operating Expenses. To the extent Tenant’s move-in, and any of the foregoing activities do not occur during Standard Operating Hours, Tenant shall pay for Landlord’s additional expenses (excluding, however, expenses for utilities) incurred as reasonably calculated by Landlord in providing such after hours services (including, without limitation, elevator and HVAC).

5. Tenant’s Expense.

Tenant agrees to pay for all Tenant Work, including, without limitation, the costs of design thereof, whether or not all such costs are included in the “Permanent Improvement Costs” (defined below). Subject to the terms and conditions of this Workletter, Tenant shall apply the “Allowance” (defined below) to payment of the Permanent Improvement Costs. Landlord shall provide Tenant a tenant improvement allowance (“Allowance”) in the amount of Thirty Five Dollars ($35.00) per square foot of the Rentable Area of the Premises. The Allowance shall be used solely to reimburse Tenant for the Permanent Improvement Costs, but of such total Allowance, no more than the amount equal to Five Dollars ($5.00) per square foot of the Rentable Area of the Premises (the “Design Allowance Portion”) shall be used to reimburse Tenant’s reasonable costs of design, space planning, moving costs, consultants and construction drawings and specifications (including the Issued for Construction Documents). The term “Permanent Improvement Costs” shall mean the actual and reasonable costs of construction of that Tenant Work which constitutes permanent improvements to the Premises, actual and reasonable costs of design thereof, costs incurred by Landlord for Landlord’s architects and engineers pursuant to Section 3.1, and Landlord’s construction administration fee (defined in Section 8.12 below), and shall include up to a maximum of Five Dollars ($5.00) per square foot of Rentable Area for costs of “Tenant’s FF& E” (defined below). For purposes of this Workletter, “Tenant’s FF& E” shall mean furniture, furnishings, telephone systems and computer systems (including cabling), equipment, any other personal property or fixtures, and installation thereof. If and to the extent that any of the Design Allowance Portion remains unused and available, and only after Tenant has completed the Tenant Work and provided to Landlord all the items required by Section 6.4 below, Tenant may, upon written application to Landlord, use the remainder of the Design Allowance Portion as a credit against rent coming due under the Lease. If Tenant does not utilize one hundred percent (100%) of the Allowance for Permanent Improvement Costs within six (6) months after the execution date of the Lease, Tenant shall have no right to the unused portion of the Allowance.

Exhibit B - Page 2

jka v14-Continental_Grand-Learning_Tree-Lease

6. Application and Disbursement of the Allowance.

6.1. Tenant shall prepare a budget for all Tenant Work, including the Permanent Improvement Costs and all other costs of the Tenant Work (“Budget”), which Budget shall be subject to the reasonable approval of Landlord. Such Budget shall be supported by a guaranteed maximum price construction contract and such other documentation as Landlord may require to evidence the total costs. To the extent the Budget exceeds the available Allowance (“Excess Cost”), Tenant shall be solely responsible for payment of such Excess Cost. Tenant shall be obligated to disburse funds relating to the Excess Cost after Landlord has disbursed, in payment of Permanent Improvement Costs, that portion of the Allowance constituting the entire Allowance, less ten percent (10%) of the Allowance (“Landlord’s Retention”). No disbursement of the Allowance shall be made unless Tenant has provided Landlord with (a) bills and invoices covering all labor and material expended and used, (b) an affidavit from Tenant stating that all of such bills and invoices have either been paid in full by Tenant or are due and owing, and all such costs qualify as Permanent Improvement Costs, (c) contractors affidavit covering all labor and materials expended and used, (d) Tenant, contractors and architectural completion affidavits (as applicable), and (e) valid mechanics’ lien releases and waivers pertaining to any completed portion of the Tenant Work which shall be conditional or unconditional, as applicable, all as provided pursuant to Section 6.2 and 6.4 below. Notwithstanding anything herein to the contrary, no completion, performance or similar bond shall be required for the Tenant Work.

6.2. Upon Tenant’s full compliance with the provisions of Section 6, and if Landlord determines that there are no applicable or claimed stop notices (or any other statutory or equitable liens of anyone performing any of Tenant Work or providing materials for Tenant Work) or actions thereon, Landlord shall disburse the applicable portion of the Allowance as follows:

(a) In the event of conditional releases, to the respective contractor, subcontractor, vendor, or other person who has provided labor and/or services in connection with the Tenant Work, upon the following terms and conditions: (i) such costs are included in the Budget, are Permanent Improvement Costs, are covered by the Allowance, and Tenant has completed and delivered to Landlord a written request for payment, in form reasonably approved by Landlord, setting forth the exact name of the contractor, subcontractor or vendor to whom payment is to be made and the date and amount of the bill or invoice, (ii) the request for payment is accompanied by the documentation set forth in Section 6.1; and (iii) Landlord, or Landlord’s appointed agent, has inspected and approved the work for which Tenant seeks payment; or

(b) In the event of unconditional releases, directly to Tenant upon the following terms and conditions: (i) Tenant seeks reimbursement for costs of Tenant Work which have been paid by Tenant, are included in the Budget, are Permanent Improvement Costs, and are covered by the Allowance; (ii) Tenant has completed and delivered to Landlord a request for payment, in form reasonably approved by Landlord, setting forth the name of the contractor, subcontractor or vendor paid and the date of payment, (iii) the request for payment is accompanied by the documentation set forth in Section 6.1.; and (iv) Landlord, or Landlord’s appointed agent, has inspected and approved the work for which Tenant seeks reimbursement.

6.3. Tenant shall provide Landlord with the aforementioned documents by the 15th of the month and payment shall be made by the 30th day of the month following the month in which such documentation is provided.

6.4. Prior to Landlord disbursing the Landlord’s Retention to Tenant, Tenant shall submit to Landlord the following items within thirty (30) days after completion of the Tenant Work: (i) “As Built” drawings and specifications pursuant to Section 3.5 above, (ii) all unconditional lien releases from all general contractor(s) and subcontractor(s) performing work, (iii) a “Certificate of Completion” prepared by Tenant’s Architect, and (iv) a final budget with supporting documentation detailing all costs associated with the Permanent Improvement Costs.

7. Changes, Additions or Alterations.

If Tenant desires to make any non-de minimis change, addition or alteration or desires to make any change, addition or alteration to any of the Building Systems after approval of the Issued for Construction Documents, Tenant shall prepare and submit to Landlord plans and specifications with respect to such change, addition or alteration. Any such change, addition or alteration shall be subject to Landlord’s approval in accordance with the provisions of Section 3.2 of this Workletter. Tenant shall be responsible for any submission to and plan check and permit requirements of the applicable governmental authorities.

8. Miscellaneous.

8.1. Scope. Except as otherwise set forth in the Lease, this Workletter shall not apply to any space added to the Premises by Lease option or otherwise.

8.2. Electrical: The Building electrical system allows a Tenant improvement design as follows:

(a) Lighting: A maximum of 2.5 watts of connected load per square foot of Useable Area within the Premises for all lighting.

(b) Power: A maximum of 4 watts of connected load per square foot of Useable Area within the Premises for all outlets and non-lighting requirements; however, provided the Tenant Work includes meters reasonably satisfactory to Landlord measuring all electricity supplied to the Premises, the first floor portion of the Premises shall be permitted a maximum of 5 watts of connected load per square foot of Useable Area for all outlets and non-lighting requirements.

8.3. Tenant Work shall include (at Tenant’s expense) for all of the Premises:

(a) Building approved lighting sensor controls as necessary to meet applicable Laws;

(b) Building Standard fluorescent fixtures in all Building office areas, or other lighting fixtures acceptable to Landlord;

(c) [intentionally omitted];

(d) Building Standard ceiling systems (including tile and grid) and;

(e) Building Standard air conditioning distribution and Building Standard air terminal units.

Exhibit B - Page 3

jka v14-Continental_Grand-Learning_Tree-Lease

8.4. Sprinklers. Subject to any terms, conditions and limitations set forth herein, Landlord shall provide an operative sprinkler system consisting of mains, laterals, and heads “AS IS” on the date of delivery of the Premises to Tenant. Tenant shall pay for piping distribution, drops and relocation of, or additional, sprinkler system heads and Building firehose or firehose valve cabinets, if Tenant’s Plans and/or any applicable Laws necessitate such.

8.5. Floor Loading. Floor loading capacity is 100 lbs. per square foot (80 lbs. live load plus 20 lbs. for partitions, ceiling and doors). Tenant may exceed floor loading capacity with Landlord’s consent, at Landlord’s sole discretion and must, at Tenant’s sole cost and expense, reinforce the floor as required for such excess loading.

8.6. Work Stoppages. If any work on the Real Property other than Tenant Work is delayed, stopped or otherwise affected by construction of Tenant Work, Tenant shall immediately take those actions necessary or desirable to eliminate such delay, stoppage or effect on work on the Real Property other than Tenant Work.

8.7. Freight Elevator. The Building contains one (1) freight elevator.

8.8. Life Safety. It is agreed that Tenant (or Contractor) shall employ the services of National Fail Safe, Landlord’s approved Building fire and life-safety subcontractor for all fire and life-safety work at the Building.

8.9. Locks. Tenant agrees to purchase from Landlord or its agent all cylinders and keys used in locks used in the Premises.

8.10. Authorized Representatives. Tenant has designated Mary Adams to act as Tenant’s representative with respect to the matters set forth in this Workletter. Such representative(s) shall have full authority and responsibility to act on behalf of Tenant as required in this Workletter. Tenant may add or delete authorized representatives upon five (5) business days notice to Landlord.

8.11. Access to Premises. After Landlord has recovered possession of the Premises from any prior Tenant, prior to delivery of possession to Tenant and during the period any Landlord Work is being performed, Tenant and its architects, engineers, consultants, and contractors shall have access at reasonable times (which shall include weekends and evenings) and upon advance notice and coordination with the Building management, to the Premises for the purpose of inspecting Landlord Work, if any, and planning Tenant Work. Such access shall not in any manner interfere with Landlord Work, if any. Such access, and all acts and omissions in connection with it, shall be subject to and governed by all other provisions of the Lease, including, without limitation, Tenant’s indemnification obligations, insurance obligations, etc, except for the payment of Monthly Base Rent and Additional Rent. To the extent that such access by Tenant delays the Substantial Completion of the Landlord Work, such delay shall be a Tenant Delay and the Landlord Work shall be deemed Substantially Complete on the date such Landlord Work would have been completed but for such access.

8.12. Fee. Landlord shall receive a fee equal to one percent (1.0%) of Tenant’s construction contract for all costs, including, without limitation, materials, labor, supervision, profit, overhead or general conditions in connection with the construction of the Tenant Work. Such fee is in addition to Tenant’s reimbursement of costs incurred by Landlord pursuant to other provisions hereof, including, without limitation, for Landlord’s architects and engineers to review Tenant’s Plans.

8.13. Unions. Tenant shall utilize union contractors and/or subcontractors.

9. Delays.

(a) If the Substantial Completion of the Tenant Improvements in the Premises is delayed: (i) at the request of Tenant; or (ii) by Tenant’s failure timely to comply with the provisions of this Workletter; or (iii) Tenant’s request for change, addition or alteration in the Issued for Construction Documents; or (iv) Tenant’s request for any change, addition or alteration in the Landlord Work, if any, but any such request shall be subject to Landlord’s approval, in its sole and absolute discretion; then in each such event Tenant shall be responsible for all costs and any expenses occasioned by such delay including, without limitation, any costs and expenses attributable to increases in labor or materials; and each such event shall be a “Tenant Delay.” In the event that any Tenant Delay delays Substantial Completion of the Landlord Work, if any, then, notwithstanding that Substantial Completion has not yet occurred, the delivery date, Commencement Date and Tenant’s obligation to pay Rent and all other obligations of Tenant under the Lease shall be advanced to a date before the actual date of Substantial Completion at the rate of one day for each day of Tenant Delay.

(b) If the Substantial Completion of the Tenant Improvements in the Premises is delayed by Landlord’s failure timely to comply with the provisions of this Workletter (other than Section 2 above), which failure is not cured by Landlord within three (3) business days following receipt of notice from Tenant specifically describing such failure (which notice shall also specifically assert a “Landlord Delay” and refer to this Section 9(b) of the Workletter), then the period commencing after expiration of such third day until such failure is cured or no longer delays Substantial Completion of the Tenant Improvements, shall be a “Landlord Delay.” In the event any Landlord Delay actually delays Substantial Completion of the Tenant Work, then the date in Section 1.01(8) of the Lease on which Monthly Base Rent increases above $0.00 (but no other date) shall be delayed by the lesser of (i) one day for each day of Landlord Delay, or (ii) the aggregate period of such actual delay, as determined on a critical path basis; provided, however, that in the event such lesser amount exceeds thirty (30) days, all subsequent dates in such Section 1.01(8) of the Lease shall be delayed, and the Expiration Date shall be extended, by such lesser amount.

10. Force and Effect.

The terms and conditions of this Workletter shall be construed to be a part of the Lease and shall be deemed incorporated in the Lease by this reference. Should any inconsistency arise between this Workletter and the Lease as to the specific matters which are the subject of this Workletter, the terms and conditions of this Workletter shall control.

Exhibit B - Page 4

jka v14-Continental_Grand-Learning_Tree-Lease

EXHIBIT C

RULES AND REGULATIONS

This Exhibit is attached to and a part of a certain Office Lease dated April 26, 2005 by and between Metropolitan Life Insurance Company, a New York corporation, as Landlord, and Learning Tree International, Inc., a Delaware corporation, as Tenant, for the Premises (the “Lease”).

1. No sidewalks, entrance, passages, courts, elevators, vestibules, stairways, corridors or halls shall be obstructed or encumbered by Tenant or used for any purpose other than ingress and egress to and from the Premises or the Project.

2. No awning or other projection shall be attached to the outside walls or windows of the Project without the prior written consent of Landlord. No curtains, blinds, shades, drapes or screens shall be attached to or hung in, or used in connection with any window or door of the Premises, without the prior written consent of Landlord. Such awnings, projections, curtains, blinds, shades, drapes, screens and other fixtures must be of a quality, type, design, color, material and general appearance approved by Landlord, and shall be attached in the manner approved by Landlord. All electrical fixtures hung in offices or spaces along the perimeter of the Premises must be fluorescent, of a quality, type, design, bulb color, size and general appearance approved by Landlord, which approval shall not be unreasonably withheld.

3. No sign, advertisement, notice or other lettering shall be exhibited, inscribed, painted or affixed by Tenant on any part of the outside or inside of the Premises or of the Project without the prior written consent of Landlord. In the event of the violation of the foregoing by Tenant, Landlord may remove same without liability, and may charge the expense incurred by such removal to Tenant. Interior signs on doors and directly tablet shall be inscribed, painted or affixed for Tenant by Landlord at the expense of Tenant, and shall be of a quality, quantity, type, design, color, size style, composition, material, location and general appearance acceptable to Landlord.

4. The sashes, sash doors, skylights, windows, and doors that reflect or admit light or air into the halls passageways or other public places in the Project shall not be covered or obstructed by Tenant, nor shall any bottles, parcels, or other articles be placed on the window sills, or in the public portions of the Project.

5. No show cases or other articles shall be put in front of or affixed to any part of the exterior of the Project, nor placed in public portions thereof without the prior written consent of Landlord.

6. The water and wash closets and other plumbing fixtures shall not be used for any purposes other than those for which they were constructed, and no sweepings, rubbish, rags or other substances shall be thrown therein. All damages resulting from any misuse of the fixtures by Tenant shall be borne by Tenant to the extent that Tenant or Tenant’s agents, servants, employees, contractors, visitors, or licensees shall have caused the same.

7. Tenant shall not paint, mark, drill into or in any way deface any part of the Premises or the Project. No boring or cutting shall be permitted, except with the prior written consent of Landlord, and as Landlord may direct, provided, however, Tenant may hang pictures and artwork on the walls of the Premises without Landlord’s prior approval.

8. No animals, except guide dogs, birds or aquariums of any kind shall be brought into or kept in or about the Premises or the Project.

9. Prior to leaving the Premises for the day, Tenant shall reasonably draw or lower window coverings and extinguish all lights.

10. Tenant shall not make, or permit to be made, any unseemly or disturbing noises or interfere with occupants of the Project or neighboring buildings or premises or those having business with them. Tenant shall not throw anything out of the doors, windows or skylights or down the passageways.

11. Except as otherwise permitted under Section 9 of the Lease, neither Tenant nor any of Tenant’s agents, servants, employees, contractors, visitors or licensees shall at any time bring or keep upon the Premises any flammable, combustible or explosive fluid, chemical or substance.

12. No additional locks, bolts or mail slots of any kind shall be placed upon any of the doors or windows by Tenant, nor shall any change be made in existing locks or the mechanism thereof; however, the foregoing shall not apply to any card key system which Tenant installs in full compliance with all other provisions of the Lease at its sole expense and with respect to which Landlord is provided with all access cards necessary to fully exercise all of its entry rights under the Lease with respect to the Premises. Tenant must, upon the termination of the tenancy, restore to Landlord all keys of stores, offices and toilet rooms either furnished to or otherwise procured by Tenant and, in the event of the loss of any keys so furnished, Tenant shall pay to Landlord the cost thereof.

13. All removals, or the carrying in or out of any safes, freight, furniture, fixtures, bulky matter or heavy equipment of any description must take place during the hours which Landlord or its agent may determine from time to time. Landlord reserves the right to prescribe the weight and position of all safes, which must be placed upon two-inch thick plank strips to distribute the weight. The moving of safes, freight, furniture, fixtures, bulky matter or heavy equipment of any kind must be made upon previous notice to the Superintendent of the Building and in a manner and at the time prescribed by him, and the persons employed by Tenant for such work are subject to Landlord’s prior approval. Landlord reserves the right to inspect all safes, freight or other bulky articles to be brought into the Project and to exclude from the Project all safes, freight or other bulky articles which violate any of these Rules and Regulations or the lease of which these Rules and Regulations are a part.

14. Tenant shall not occupy or permit any portion of the Premises to be occupied as an office that is not generally consistent with the character and nature of an ordinary desk-type office. Nor shall Tenant permit any portion of the Premises to be used (a) for an employment agency, a public stenographer or typist, a labor union office, a physician’s or dentist’s office, a dance or music studio, a school, a beauty salon or barber shop, the business of photographic or multilith or multigraph reproductions or offset printing (not precluding using any part of the Premises for photographic, multilith or multigraph reproductions solely in connection with Tenant’s own business and/or activities), a restaurant or bar, an establishment for the sale of confectionery or soda or beverages or sandwiches or ice cream or baked goods, an establishment for the preparation or dispensing or consumption of food or beverages (of any kind) in any manner whatsoever, or as a news or cigar stand, or as a radio or television or recording studio, theater or exhibition hall, for manufacturing, for the storage of merchandise or for the sale of merchandise, goods or property of any kind at auction, or for lodging, sleeping or for any immoral purpose, or for any business which would tend to generate a large amount of foot traffic in or about the Project or any of the areas used in connection with the operation thereof, including but not limited to any use (i) for a banking, trust company, depository, guarantee, or safe deposit business, (ii) as a savings bank, or as savings and loan association, or as a loan company, (iii) for the sale of travelers checks, money orders, drafts, foreign exchange or letters of credit or for the receipt of money for transmission, (iv) as a stock broker’s or dealer’s office or for the underwriting of securities, or (v) a government office

Exhibit C - Page 1

jka v14-Continental_Grand-Learning_Tree-Lease

or foreign embassy or consulate, or (vi) tourist or travel bureau, or (b) a use which conflicts with any so-called “exclusive” then in favor of, or is for any use the same as that stated in any percentage lease to, another tenant of the Project, or (c) a use which would be prohibited by any other portion of the Lease (including but not limited to any Rules and Regulations then in effect) or in violation of Law. Tenant shall not engage or pay for any employees on the Premises other than those working at the Premises, nor shall Tenant advertise for laborers giving an address at the Premises.

15. Tenant shall not purchase spring water, towels, janitorial or maintenance or other like service from any company or persons not reasonably approved by Landlord. Landlord shall approve a sufficient number of sources of such service to provide Tenant with a reasonable selection, but only in such instances and to such extent as Landlord in its judgment shall consider consistent with security and proper operation of the Project.

16. Landlord shall have the right to prohibit any advertising or business conducted by Tenant referring to the Project which, in Landlord’s opinion, tends to impair the reputation of the Project or its desirability as a first class building for offices and, upon notice from Landlord, Tenant shall refrain from or discontinue such advertising.

17. Landlord reserves the right to exclude from the Project between the hours of 6:00 P.M. and 7:00 A.M. on all days, and at all hours on Saturdays, Sundays and National Holidays, all persons who do not present a pass to the Project issued by Landlord. Landlord may furnish passes to Tenant so that Tenant may validate and issue same. Tenant shall safeguard said passes and shall be responsible for all acts of persons in or about the Project who possess a pass issued to Tenant.

18. Tenant’s contractors shall, while in the Project, be subject to and under the control and direction of the Superintendent of the Building (but not as agent or servant of said Superintendent or of Landlord) except for supervision of work.

19. If the Premises is or becomes infested with vermin as a result of the use or any misuse or neglect of the Premises by Tenant, its agents, servants, employees, contractors, visitors, or licensees, Tenant shall forthwith at Tenant’s expense cause the same to be exterminated from time to time to the satisfaction of Landlord and shall employ such licensed exterminators as shall be approved in writing in advance by Landlord. Tenant shall store all its trash and garbage within the interior of the Premises. No material shall be placed in the trash boxes or receptacles if such material is of such nature that it may not disposed of on the ordinary and customary manner of removing and disposing of trash and garbage in El Segundo, California without violation of any law or ordinance governing such disposal. All trash, garbage and refuse disposal shall be made only through entry ways and elevators provided for such purposes and at such times as Landlord shall designate.

20. The requirements of Tenant will be attended to only upon application at or call to the office of the Project. Project personnel shall not perform any work or do anything outside of their regular duties, unless under special instructions from the office of the Landlord.

21. Canvassing, soliciting and peddling in the Project are prohibited and Tenant shall cooperate to prevent the same.

22. No water cooler, air conditioning unit or system or other apparatus shall be installed or used by Tenant without the written consent of Landlord.

23. There shall not be used in any Common Areas, public halls, plaza areas, lobbies or other space in the Project, either by Tenant or by jobbers or others, in the delivery or receipt of merchandise, any hand trucks or dollies, except those equipped with rubber tires and side guards.

24. Tenant, Tenant’s agents, servants, employees, licensees or visitors shall not park any vehicles in any driveways, service entrances, or areas posted “No Parking.”

25. Tenant shall install and maintain, at Tenant’s sole cost and expense, an adequate visibly marked (at all times property operational) fire extinguisher next to any duplicating or photocopying machine or similar heat producing equipment, which may or may not contain combustible material, in the Premises.

26. Tenant shall reasonably keep its window coverings closed during any period of the day when the sun is shining directly on the windows of the Premises.

27. Tenant shall not use the name of the Project for any purpose other than as the address of the business to be conducted by Tenant in the Premises, nor shall Tenant use any picture of the Project in its advertising, stationary or in any other manner without the prior written permission of Landlord. Landlord expressly reserves the right at any time to change said name without in any manner being liable to Tenant therefor.

28. Except for vending machines intended for the sole use of Tenant’s employees and invitees, no vending machines or machines other than fractional horsepower office machines shall be installed, maintained or operated upon the Premises without the written consent of the Landlord.

29. Tenant shall not use, keep or permit to be used or kept, any foul or noxious gas or substance in or on the Premises, or permit or allow the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the Project by reason of noise, odors, or vibrations or interfere with other tenants or those having business therein, whether by the use of any musical instrument, radio, phonograph, or in any other way. Tenant shall not throw anything out of doors, windows or skylights or down passageways.

30. No cooking shall be done or permitted on the Premises, nor shall the Premises be used for the storage of merchandise, for lodging or for any improper, objectionable or immoral purposes. Notwithstanding the foregoing, Underwriters’ laboratory-approved equipment and microwave ovens may be used in the Premises for heating and cooking food and brewing coffee, tea, hot chocolate and similar beverages for employees and visitors, provided that such use is in accordance with all applicable federal, state, county and city laws, codes, ordinances, rules and regulations.

31. Landlord reserves the right to exclude or expel from the Project any person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any manner do any act in violation of any of these Rules and Regulations.

32. Tenant, its employees and agents shall not loiter in or on the entrances, corridors, sidewalks, lobbies, courts, halls, stairways, vestibules or any Common Area for the purpose of smoking tobacco products or for any other purpose, nor in any way obstruct such areas, and shall use them only as a means of ingress and egress for the Premises.

Exhibit C - Page 2

jka v14-Continental_Grand-Learning_Tree-Lease

33. Tenant shall comply with all safety, fire protection and evacuation procedures and regulations reasonably established by Landlord or any governmental agency.

34. Tenant must comply with requests by Landlord concerning the informing of their employees of items of importance to the Landlord.

35. Tenant must comply with applicable “NO-SMOKING” or similar governmental or quasi government rules, regulations and ordinances.

36. No tenant shall use or permit the use of any portion of the Premises for living quarters, sleeping apartments or lodging rooms.

37. No bicycles or other vehicles of any kind shall be brought into or kept in or about the Premises or the Project except in areas designated by Landlord.

Exhibit C - Page 3

jka v14-Continental_Grand-Learning_Tree-Lease

EXHIBIT D

FAIR MARKET RENTAL RATE

1. Definition of Fair Market Rental Rate. “Fair Market Rental Rate” shall mean as to Monthly Base Rent the monthly base rental per rentable square foot which a tenant would pay and which a willing landlord would accept for space comparable to the Premises in the Building and in other buildings of class A standards in El Segundo, California for the period for which such rental is to be paid and for a lease on terms substantially similar to those of the Lease (including, without limitation, those applicable to Taxes, Operating Expenses and exclusions, but also considering so-called net and triple net leases, and leases utilizing operating expense stops or base years, and making appropriate adjustment between such leases and this Lease, as described below), based on prevailing market conditions in the Building and in other buildings of class A standards in El Segundo, California at the time such determination is made (“Comparable Transactions”). Without limiting the generality of the foregoing, Comparable Transactions shall be for a term similar to the term of tenancy and for space comparable in use, floor levels, square footage and location within the Building and in other buildings of class A standards in El Segundo, California as the transaction for which Fair Market Rental Rate is being determined; however, leases of unusual or odd shaped spaces shall not be considered. In any determination of the Fair Market Rental Rate for the Option Term: (i) the rate of Monthly Base Rent under the Lease shall be based upon a step-up to change the calendar year for calculation of Base Operating Expenses for the Option Term to be the full calendar year in which the Option Term commences, and such step-up shall be part of the determination of Fair Market Rental Rate; and (ii) the amount of parking rent may be increased or decreased to amounts corresponding to market rates in Comparable Transactions. Further, in any determination of Fair Market Rental Rate, the stated or contract monthly net or base rental in Comparable Transactions shall be appropriately adjusted to take into account the different terms and conditions prevailing in such transactions and those present in the Lease, including, without limitation: (a) the extent to which average annual expenses and taxes per rentable square foot payable by tenants in Comparable Transactions vary from those payable by Tenant under the Lease; (b) tenant improvements, value of existing tenant improvements, the concessions, if any, being given by landlords in Comparable Transactions, such as parking charge abatement, free rent or rental abatement applicable after substantial completion of any tenant improvements (and no adjustment shall be made for any free or abated rent during any construction periods), loans at below-market interest rates, moving allowances, space planning allowances, lease takeover payments and work allowances, as compared to any tenant improvement, refurbishment or repainting allowance given to Tenant under the Lease for the space for which Fair Market Rental Rate is being determined; (c) the brokerage commissions, fees and bonuses payable by landlords in Comparable Transactions (whether to tenant’s agent, such landlord or any person or entity affiliated with such landlord), as compared to any such amounts payable by Landlord to the broker(s) identified in the Amendment with respect to the transaction for which Fair Market Rental Rate is being determined; (d) the time value of money; and (e) any material difference between the definition of rentable area and the ratio of project rentable to useable square feet in Comparable Transactions, as compared to such figures applicable to the space for which Fair Market Rental Rate is being determined.

2. Sealed Estimates. In the event the Lease requires Fair Market Rental Rate to be determined in accordance with this Exhibit, Landlord and Tenant shall meet within ten (10) business days thereafter and each simultaneously submit to the other in a sealed envelope its good faith estimate of Fair Market Rental Rate (the “Estimates”). If the higher Estimate is not more than one hundred five percent (105%) of the lower Estimate, then Fair Market Rental Rate shall be the average of the two Estimates. If such simultaneous submission of Estimates does not occur within such ten (10) business day period, then either party may by notice to the other designate any reasonable time within five (5) business days thereafter and any reasonable place at or near the Building for such meeting to take place. In the event only one party submits an Estimate at that meeting, such Estimate shall be Fair Market Rental. In the event neither party submits an Estimate at that meeting, the transaction for which Fair Market Rental Rate is being determined shall be deemed canceled and of no further force or effect.

3. Selection of Arbitrators. If the higher Estimate is more than one hundred five percent (105%) of the lower Estimate, then either Landlord or Tenant may, by written notice to the other within five (5) business days after delivery of Estimates at the meeting, require that the disagreement be resolved by arbitration. In the event neither party gives such notice, the transaction for which Fair Market Rental Rate is being determined shall be deemed canceled and of no further force or effect. Within five (5) business days after such notice, the parties shall select as arbitrators three (3) mutually acceptable independent MAI appraisers with experience in real estate activities, including at least five (5) years experience in appraising Class A space in El Segundo, California (“Qualified Appraisers”). If the parties cannot timely agree on such arbitrators, then within the following five (5) business days, each shall select and inform the other party of one (1) Qualified Appraiser and within a third period of five (5) business days, the two appraisers (or if only one (1) has been duly selected, such single appraiser) shall select as arbitrators a panel of three additional Qualified Appraisers, which three arbitrators shall proceed to determine Fair Market Rental Rate pursuant to Section 4 below. Both Landlord and Tenant shall be entitled to present evidence supporting their respective positions to the panel of three arbitrators.

4. Arbitration Procedure. Once a panel of arbitrators has been selected as provided above, then as soon thereafter as practicable each arbitrator shall select one of the two Estimates as the one which, in its opinion, is closer to Fair Market Rental Rate. Upon an Estimate’s selection by two (2) of the arbitrators, it shall be the applicable Fair Market Rental Rate and such selection shall be binding upon Landlord and Tenant. If the arbitrators collectively determine that expert advice is reasonably necessary to assist them in determining Fair Market Rental Rate, then they may retain one or more qualified persons, including but not limited to legal counsel, brokers, architects or engineers, to provide such expert advice. The party whose Estimate is not chosen by the arbitrators shall pay the costs of the arbitrators and any experts retained by the arbitrators. Any fees of any counsel or expert engaged directly by Landlord or Tenant, however, shall be borne by the party retaining such counsel or expert.

5. Rent Pending Determination of Fair Market Rental Rate. In the event that the determination of Fair Market Rental Rate has not been concluded prior to commencement of the applicable rental period for the applicable space for which the Fair Market Rental Rate is being determined, Tenant shall pay Landlord Monthly Base Rent and Rent Adjustment Deposits as would apply under Landlord’s Estimate pursuant to Section 2 of this Exhibit until the Fair Market Rental Rate is determined. In the event that the Fair Market Rental Rate subsequently determined is different from the amount paid for the applicable period, then within thirty (30) days after such determination, Tenant shall pay Landlord any greater amounts due and Landlord shall credit Tenant (against the next Monthly Base Rent installments due) for any reduction in the amounts due.

Exhibit D - Page 1

jka v14-Continental_Grand-Learning_Tree-Lease

EXHIBIT E

OFFER SPACE

Exhibit E - Page 1

jka v14-Continental_Grand-Learning_Tree-Lease

EXHIBIT F

SIGNAGE

Continental Grand Plaza II
Highridge Partners	DR Horton
Learning Tree	Sierra Systems Group
Douglas Furniture	Regus Business Centre

Exhibit F - Page 1

jka v14-Continental_Grand-Learning_Tree-Lease

EXHIBIT G

FORM OF SUBORDINATION, NONDISTURBANCE & ATTORNMENT AGREEMENT

RECORDING REQUESTED

BY AND WHEN

RECORDED RETURN TO:

                                                                                       , Esq

SUBORDINATION,

NONDISTURBANCE

AND ATTORNMENT AGREEMENT

NOTICE:    THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS IN YOUR LEASEHOLD ESTATE IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.

DEFINED TERMS

Execution Date:

Beneficiary & Address:

Attn:

with a copy to:

Tenant & Address:

Landlord & Address:

Loan: A first mortgage loan in the original principal amount of $

from Beneficiary to Landlord.

Note: A Promissory Note executed by Landlord in favor of Beneficiary in the amount of the Loan dated as of

Deed of Trust: A Deed of Trust, Security Agreement and Fixture Filing dated as of

executed by Landlord, to                    as Trustee, for the benefit of Beneficiary securing repayment of the Note to be recorded in the records of the County in which the Property is located.

Lease and Lease Date: The lease entered into by Landlord and Tenant dated as of                    covering the Premises.

[Add amendments]

Property: [Property Name]

[Street Address 1]

[City, State, Zip]

            The Property is more particularly described on Exhibit A.

THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT (the “Agreement”) is made by and among Tenant, Landlord, and Beneficiary and affects the Property described in Exhibit A. Certain terms used in this Agreement are defined in the Defined Terms. This Agreement is entered into as of the Execution Date with reference to the following facts:

A. Landlord and Tenant have entered into the Lease covering certain space in the improvements located in and upon the Property (the “Premises”).

B. Beneficiary has made or is making the Loan to Landlord evidenced by the Note. The Note is secured, among other documents, by the Deed of Trust.

C. Landlord, Tenant and Beneficiary all wish to subordinate the Lease to the lien of the Deed of Trust.

D. Tenant has requested that Beneficiary agree not to disturb Tenant’s rights in the Premises pursuant to the Lease in the event Beneficiary forecloses the Deed of Trust, or acquires the Property pursuant to the trustee’s power of sale contained in the Deed of Trust or receives a transfer of the Property by a conveyance in lieu of foreclosure of the Property (collectively, a “Foreclosure Sale”) but only if Tenant is not then in default under the Lease and Tenant attorns to Beneficiary or a third party purchaser at the Foreclosure Sale (a “Foreclosure Purchaser”).

Exhibit G - Page 1

jka v14-Continental_Grand-Learning_Tree-Lease

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

1. Subordination. The Lease and the leasehold estate created by the Lease and all of Tenant’s rights under the Lease are and shall remain subordinate to the Deed of Trust and the lien of the Deed of Trust, to all rights of Beneficiary under the Deed of Trust and to all renewals, amendments, modifications and extensions of the Deed of Trust.

2. Acknowledgements by Tenant. Tenant agrees that: (a) Tenant has notice that the Lease and the rent and all other sums due under the Lease have been or are to be assigned to Beneficiary as security for the Loan. In the event that Beneficiary notifies Tenant of a default under the Deed of Trust and requests Tenant to pay its rent and all other sums due under the Lease to Beneficiary, Tenant shall pay such sums directly to Beneficiary or as Beneficiary may otherwise request; (b) Tenant shall send a copy of any notice or statement under the Lease to Beneficiary at the same time Tenant sends such notice or statement to Landlord; and (c) this Agreement satisfies any condition or requirement in the Lease relating to the granting of a nondisturbance agreement.

3. Foreclosure and Sale. In the event of a Foreclosure Sale:

(a) So long as Tenant is not in default under any of the provisions of the Lease, the Lease shall continue in full force and effect as a direct lease between Beneficiary and Tenant, and Beneficiary will not disturb the possession of Tenant, subject to this Agreement. To the extent that the Lease is extinguished as a result of a Foreclosure Sale, a new lease shall automatically go into effect upon the same provisions as contained in the Lease between Landlord and Tenant, except as set forth in this Agreement, for the unexpired term of the Lease. Tenant agrees to attorn to and accept Beneficiary as landlord under the Lease and to be bound by and perform all of the obligations imposed by the Lease, or, as the case may be, under the new lease, in the event that the Lease is extinguished by a Foreclosure Sale. Upon Beneficiary’s acquisition of title to the Property, Beneficiary will perform all of the obligations imposed on the Landlord by the Lease except as set forth in this Agreement; provided, however, that Beneficiary shall not be: (i) liable for any act or omission of a prior landlord (including Landlord); or (ii) subject to any offsets or defenses that Tenant might have against any prior landlord (including Landlord); or (iii) bound by any rent or additional rent which Tenant might have paid in advance to any prior landlord (including Landlord) for a period in excess of one month or by any security deposit, cleaning deposit or other sum that Tenant may have paid in advance to any prior landlord (including Landlord); or (iv) bound by any amendment, modification, assignment or termination of the Lease made without the written consent of Beneficiary; (v) obligated or liable with respect to any representations, warranties or indemnities contained in the Lease; or (vi) liable to Tenant or any other party for any conflict between the provisions of the Lease and the provisions of any other lease affecting the Property which is not entered into by Beneficiary.

(b) Upon the written request of Beneficiary after a Foreclosure Sale, the parties shall execute a lease of the Premises upon the same provisions as contained in the Lease between Landlord and Tenant, except as set forth in this Agreement, for the unexpired term of the Lease.

(c) Notwithstanding any provisions of the Lease to the contrary, from and after the date that Beneficiary acquires title to the Property as a result of a Foreclosure Sale, (i) Beneficiary will not be obligated to expend any monies to restore casualty damage in excess of available insurance proceeds; (ii) tenant shall not have the right to make repairs and deduct the cost of such repairs from the rent without a judicial determination that Beneficiary is in default of its obligations under the Lease; (iii) in no event will Beneficiary be obligated to indemnify Tenant, except where Beneficiary has been actively negligent in the performance of its obligations as landlord; and (iv) other than determination of fair market value, no disputes under the Lease shall be subject to arbitration unless Beneficiary and Tenant agree to submit a particular dispute to arbitration.

4. Subordination and Release of Purchase Options. Tenant represents that it has no right or option of any nature to purchase the Property or any portion of the Property or any interest in the Borrower. To the extent Tenant has or acquires any such right or option, these rights or options are acknowledged to be subject and subordinate to the Mortgage and are waived and released as to Beneficiary and any Foreclosure Purchaser.

5. Acknowledgement by Landlord. In the event of a default under the Deed of Trust, at the election of Beneficiary, Tenant shall and is directed to pay all rent and all other sums due under the Lease to Beneficiary.

6. Construction of Improvements. Beneficiary shall not have any obligation or incur any liability with respect to the completion of the improvements in which the Premises are located at the commencement of the term of the Lease.

7. Notice. All notices under this Agreement shall be deemed to have been properly given if delivered by overnight courier service or mailed by United States certified mail, with return receipt requested, postage prepaid to the party receiving the notice at its address set forth in the Defined Terms (or at such other address as shall be given in writing by such party to the other parties) and shall be deemed complete upon receipt or refusal of delivery.

8. Miscellaneous. Beneficiary shall not be subject to any provision of the Lease that is inconsistent with this Agreement. Nothing contained in this Agreement shall be construed to derogate from or in any way impair or affect the lien or the provisions of the Deed of Trust. This Agreement shall be governed by and construed in accordance with the laws of the State of in which the Property is located.

9. Liability and Successors and Assigns. In the event that Beneficiary acquires title to the Premises or the Property, Beneficiary shall have no obligation nor incur any liability beyond the lesser of (a) Five Million Dollars ($5,000,000.00) or (b) Beneficiary’s then equity interest in the Property and Tenant shall look solely to Beneficiary’s then equity interest for the payment and performance of any obligations imposed upon Beneficiary under this Agreement or under the Lease but Tenant’s recourse against Beneficiary shall in no event exceed the amount of Five Million Dollars ($5,000,000.00). This Agreement shall run with the land and shall inure to the benefit of the parties and, their respective successors and permitted assigns including a Foreclosure Purchaser. If a Foreclosure Purchaser acquires the Property or if Beneficiary assigns or transfers its interest in the Note and Deed of Trust or the Property, all obligations and liabilities of Beneficiary under this Agreement shall terminate and be the responsibility of the Foreclosure Purchaser or other party to whom Beneficiary’s interest is assigned or transferred. The interest of Tenant under this Agreement may not be assigned or transferred except in connection with an assignment of its interest in the Lease which has been consented to by Beneficiary.

Exhibit G - Page 2

jka v14-Continental_Grand-Learning_Tree-Lease

IN WITNESS WHEREOF, the parties have executed this Subordination, Nondisturbance and Attornment Agreement as of the Execution Date.

NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT CONTAINS PROVISIONS WHICH ALLOW THE PERSON OBLIGATED ON THE LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE PROPERTY.

IT IS RECOMMENDED THAT THE PARTIES CONSULT WITH THEIR ATTORNEYS PRIOR TO THE EXECUTION OF THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT.

BENEFICIARY:	,
	By
	Its
TENANT:	,
	a
	By
	Its
LANDLORD:	,
	a
	By
	Its

EXHIBIT A

PROPERTY DESCRIPTION

State of                         

County of                     

On                         , 200   before me,                         , personally appeared                         , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature	(Seal)
*****************
State of
County of

On                         , 200   before me,                         , personally appeared                         , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature	(Seal)
*****************
State of
County of

On                         , 200   before me,                         , personally appeared                         , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature                                                                              (Seal)

Exhibit G - Page 3

jka v14-Continental_Grand-Learning_Tree-Lease

RIDER 1

COMMENCEMENT DATE AGREEMENT

Metropolitan Life Insurance Company, a New York corporation (“Landlord”), and Learning Tree International. Inc., a Delaware corporation (“Tenant”), have entered into a certain Office Lease dated April 26, 2005 (the “Lease”).

WHEREAS, Landlord and Tenant wish to confirm and memorialize the Commencement Date and Expiration Date of the Lease as provided for in Section 2.02(b) of the Lease;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein and contained in the Lease, Landlord and Tenant agree as follows:

1. Unless otherwise defined herein, all capitalized terms shall have the same meaning ascribed to them in the Lease.

2. The Commencement Date (as defined in the Lease) of the Lease is                    .

3. The Expiration Date (as defined in the Lease) of the Lease is                    .

4. Tenant hereby confirms the following:

(a) That it has accepted possession of the Premises pursuant to the terms of the Lease;

(b) That the Landlord Work is Substantially Complete;

(c) That the Rentable Area of the Premises is            ; and

(d) That the Lease is in full force and effect.

5. Except as expressly modified hereby, all terms and provisions of the Lease are hereby ratified and confirmed and shall remain in full force and effect and binding on the parties hereto.

6. The Lease and this Commencement Date Agreement contain all of the terms, covenants, conditions and agreements between the Landlord and the Tenant relating to the subject matter herein. No prior other agreements or understandings pertaining to such matters are valid or of any force and effect.

TENANT:			LANDLORD:
	,		Metropolitan Life Insurance Company,
a			a New York corporation
By		By
	Print name		Print name
Its		Its
(Chairman of Board, President or Vice President)
By
Print name
Its
(Secretary, Assistant Secretary, CFO or Assistant Treasurer)

Rider 1 - Page 1

jka v14-Continental_Grand-Learning_Tree-Lease

RIDER 2

ADDITIONAL PROVISIONS

This Rider 2 (“Rider 2”) is attached to and a part of a certain Office Lease dated as of April 26, 2005 executed concurrently herewith by Metropolitan Life Insurance Company, a New York corporation, as Landlord, and Learning Tree International, Inc., a Delaware corporation, as Tenant, for the Premises as described therein (the “Lease”).

SECTION 1. DEFINED TERMS; FORCE AND EFFECT

Capitalized terms used in this Rider 2 shall have the same meanings set forth in the Lease except as otherwise specified herein and except for terms capitalized in the ordinary course of punctuation. This Rider 2 forms a part of the Lease. Should any inconsistency arise between this Rider 2 and any other provision of the Lease as to the specific matters which are the subject of this Rider 2, the terms and conditions of this Rider 2 shall control.

SECTION 2. INTENTIONALLY OMITTED.

SECTION 3. OPTION TO EXTEND.

(a) Landlord hereby grants Tenant a single option to extend the initial Term of the Lease for an additional period of five (5) years (such period may be referred to as the “Option Term”), as to the entire Premises as it may then exist, upon and subject to the terms and conditions of this Section (the “Option To Extend”), and provided that at the time of exercise of such right Tenant or its Affiliate must be in occupancy of the entire Premises.

(b) Tenant’s election (the “Election Notice”) to exercise the Option To Extend must be given to Landlord in writing no earlier than the date which is twelve (12) months prior to the Expiration Date and no later than the date which is nine (9) months prior to the Expiration Date. If Tenant either fails or elects not to exercise its Option to Extend by not timely giving its Election Notice, then the Option to Extend shall be null and void.

(c) The Option Term shall commence immediately after the expiration of the initial Term of the Lease. Tenant’s leasing of the Premises during the Option Term shall be upon and subject to the same terms and conditions contained in the Lease except that (i) the Monthly Base Rent and, if applicable, the calendar year which serves as the base year for calculation of Base Operating Expenses pursuant to the Lease, shall be amended to equal the “Option Term Rent”, defined and determined in the manner set forth in the immediately following Subsection; (ii) the Security Deposit, if any, shall be increased within fifteen (15) days after the Option Term Rent has been determined by the amount of the increase in the Base Monthly Rent, based upon the highest monthly installment of Monthly Base Rent for the Option Term; (iii) Tenant shall accept the Premises in its “as is” condition without any obligation of Landlord to repaint, remodel, repair, improve or alter the Premises or to provide Tenant any allowance therefor; and (iv) there shall be no further option or right to extend the term of the Lease. If Tenant timely and properly exercises the Option To Extend, references in the Lease to the Term shall be deemed to mean the initial Term as extended by the Option Term unless the context clearly requires otherwise.

(d) The Option Term Rent shall mean the “Fair Market Rental Rate” (as defined in Exhibit D hereto). The determination of Fair Market Rental Rate based upon the foregoing criteria shall be made by Landlord, in the good faith exercise of Landlord’s business judgment. Within forty-five (45) days after Tenant’s exercise of the Option To Extend, Landlord shall notify Tenant of Landlord’s determination of Option Term Rent for the Premises. Provided however, if Landlord notifies Tenant of Landlord’s determination of the Fair Market Rental Rate which is greater than the Preceding Rent, and that Landlord will require such Fair Market Rental Rate as the Option Term Rent, Tenant may, within thirty (30) days after receipt thereof, deliver to Landlord a written notice either: (i) accepting Landlord’s estimate of Fair Market Rental Rate, in which case the extension shall be effective and binding (subject to Subsection (f) below) at the accepted rate; or (ii) setting forth Tenant’s good faith estimate of the Fair Market Rental Rate, in which case Landlord and Tenant will promptly confer and attempt to agree upon the Fair Market Rental Rate. Tenant’s failure to timely deliver such notice within such thirty (30) day period shall be deemed its cancellation of the Option. In the event Tenant has delivered notice setting forth Tenant’s different estimate of Fair Market Rental Rate, but no agreement in writing between Tenant and Landlord on Fair Market Rental Rate is reached within fifteen (15) days after Landlord’s receipt of Tenant’s estimate, the Fair Market Rental Rate shall be determined in accordance with the terms of Exhibit D.

(e) This Option to Extend is personal to Learning Tree International, Inc. and may not be used by, and shall not be transferable or assignable (voluntarily or involuntarily) to any person or entity, except an Affiliate which is an assignee of the Lease and has complied with the requirements of Article Ten applicable to a transfer to an Affiliate and such Affiliate may exercise the Option to Extend with Tenant joining in or consenting to such exercise, and in such event Tenant shall remain liable for all obligation under this Lease, including those resulting from any such exercise with the same force and effect as if Tenant had joined in such exercise.

(f) Upon the occurrence of any of the following events, Landlord shall have the option, exercisable at any time prior to commencement of the Option Term, to terminate all of the provisions of this Section with respect to the Option to Extend, whereupon any prior or subsequent exercise of this Option to Extend shall be of no force or effect:

(i) Tenant’s failure to timely exercise or timely to perform the Option to Extend in strict accordance with the provisions of this Section.

(ii) The existence at the time Tenant exercises the Option to Extend or at the commencement of the Option Term of a Default on the part of Tenant under the Lease or of any state of facts which with the passage of time or the giving of notice, or both, would constitute such a Default.

(iii) Tenant’s third Default under the Lease prior to the commencement of the Option Term, notwithstanding that all such Defaults may subsequently be cured.

(g) Without limiting the generality of any provision of the Lease, time shall be of the essence with respect to all of the provisions of this Section.

Rider 2 - Page 1

jka v14-Continental_Grand-Learning_Tree-Lease

SECTION 4. RIGHT OF FIRST OFFER.

(a) Landlord hereby grants Tenant a one-time right of offer to lease each “Offer Space” (as defined below) during the period beginning on the execution date of this Lease and expiring nine months prior to the Expiration Date of the initial Term, or at the end of the initial Term if the Option to Extend is validly exercised and effective (the “Offer Period”), upon and subject to the terms and conditions of this Section (the “Offer Right”), and provided that at the time of exercise of such right: (i) Tenant must be in occupancy of the entire Premises; and (ii) there has been no material adverse change in Tenant’s financial position from such position as of the date of execution of the Lease, as certified by Tenant’s independent certified public accountants, and as supported by Tenant’s certified financial statements, copies of which shall be delivered to Landlord with Tenant’s written notice exercising its right hereunder. Without limiting the generality of the foregoing, Landlord may reasonably conclude there has been a material adverse change if Tenant’s independent certified public accountants do not certify there has been no such change.

(b) There shall be two (2) separate Offer Spaces, one being the space containing approximately 8,644 square feet of Rentable Area located on the first floor within the area known as Suite 160, and the other being the space containing approximately 2,594 square feet of Rentable Area located on the second floor within the area known as Suite 275, each respectively shown on Exhibit E to this Lease, but in each case only when and if it becomes “Available”. The term “Available” shall mean that the space in question is, or is expected by Landlord within a reasonable time to become, vacant, unencumbered and free and clear of all claims and rights of other parties and, without limiting the generality of the foregoing, space shall not be Available if as to such space there is a lease, lease option or option or other right of extension, renewal, expansion, refusal, negotiation or similar or other right, either: (i) pursuant to any lease or written agreement which is entered into on or before the beginning of the Negotiation Period, or (ii) pursuant to any extensions or renewal of any of the foregoing, whether or not set forth in the original lease or written agreement, or (iii) pursuant to any amendment or modification of any of the foregoing (no matter when executed).

(c) Tenant acknowledges that as of the execution date of this Lease the Offer Space on the first floor is under a lease with Highridge Partners, Inc. which expires May 31, 2006, and that Landlord is free to extend or renew such lease with the lessee without offering it to Tenant under this Offer Right. As to parties other than the lessee under the existing lease of the Offer Space, nothing herein shall be deemed to limit or prevent Landlord from marketing, discussing or negotiating with any other party for a lease of, or rights of any nature as to, any part of such space, but during the Offer Period before Landlord makes any written proposal to any other party for Offer Space, or contemporaneously with making any such proposal, or within a reasonable time after receipt of a proposal acceptable to Landlord, Landlord shall give Tenant written notice (“Landlord’s Notice”), which notice identifies the Offer Space Rent (defined below) at which Tenant may elect to lease the Offer Space. For a period of five (5) business days after Landlord gives Landlord’s Notice (the “Election Notice Period”), Tenant shall have the right to lease of all (and not less than all) the space identified in Landlord’s Notice on the terms identified therein by giving Landlord written notice (“Election Notice”) of Tenant’s election to exercise its Offer Right to lease such space. Tenant’s leasing of the Offer Space shall be upon and subject to the same terms and conditions contained in the Lease except that (i) the Monthly Base Rent and, if applicable, the Operating Expenses Base Year, the Taxes Base Year and free parking pursuant to the Lease shall be amended to equal the “Offer Space Rent”, defined and determined in the manner set forth in the immediately following Subsection, (ii) the term of the lease of the Offer Space shall be the remaining Term of this Lease (including any extension pursuant to the Option to Extend); (iii) the Security Deposit, if any, shall be increased within fifteen (15) days after Tenant gives its Election Notice by the amount equal to the highest monthly installment of Monthly Base Rent allocable to the Offer Space during the remainder of the initial Term of the Lease; and (iv) Tenant shall accept the Offer Space in its “as is” condition without any obligation of Landlord to repaint, remodel, repair, improve or alter the Premises or to provide Tenant any allowance therefor.

(d) The Offer Space Rent shall mean the “Fair Market Rental Rate” as defined in Exhibit D attached hereto. The determination of Fair Market Rental Rate based upon the criteria set forth in Exhibit D shall be made by Landlord, in the good faith exercise of Landlord’s business judgment.

(e) If Tenant either fails or elects not to exercise its Offer Right as to the Offer Space covered by Landlord’s Notice by not giving its Election Notice within the Election Notice Period or if Tenant gives Tenant’s Election Notice but does not execute a lease or amendment to this Lease prepared by Landlord within five (5) business days after Landlord gives Tenant such form, then in any such event Tenant’s Offer Right shall be null and void, and at any time thereafter Landlord shall be free to lease and/or otherwise grant options or rights to such space on any terms and conditions whatsoever free and clear of the Offer Right.

(f) This Offer Right is personal to Learning Tree International, Inc. and may not be used by, and shall not be transferable or assignable (voluntarily or involuntarily) to any person or entity, except an Affiliate which is an assignee of the Lease and has complied with the requirements of Article Ten applicable to a transfer to an Affiliate and such Affiliate may exercise the Offer Right with Tenant joining in or consenting to such exercise, and in such event Tenant shall remain liable for all obligation under this Lease, including those resulting from any such exercise with the same force and effect as if Tenant had joined in such exercise.

(g) Upon the occurrence of any of the following events, Landlord shall have the option, exercisable at any time prior to the time the Offer Space is to be added to the Premises, to terminate all of the provisions of this Section with respect to the Offer Right, with the effect of canceling and voiding any prior or subsequent exercise so this Offer Right is of no force or effect:

(i) Tenant’s failure to timely exercise the Offer Right in accordance with the provisions of this Section.

(ii) The existence at the time Tenant exercises the Offer Right or at the time the Offer Space is to be added to the Premises of any Default on the part of Tenant under the Lease or of any state of facts which with the passage of time or the giving of notice, or both, would constitute such a Default.

(iii) Tenant’s third Default under the Lease prior to the date the Offer Space is to be added to the Premises, notwithstanding that all such Defaults may subsequently be cured.

Rider 2 - Page 2

jka v14-Continental_Grand-Learning_Tree-Lease

In the event of Landlord’s termination of the Offer Right pursuant to this Section, Tenant shall reimburse Landlord for all costs and expenses Landlord incurs in connection with Tenant’s exercise of the Offer Right including, without limitation, costs and expenses with respect to any brokerage commissions and attorneys’ fees, and with respect to the design, construction or making of any tenant improvements, repairs or renovation or with respect to any payment of all or part of any allowance for any of the foregoing.

(h) Without limiting the generality of any provision of the Lease, time shall be of the essence with respect to all of the provisions of this Section.

SECTION 5. TENANT’S SIGNAGE

(a) Grant of Right. So long as Tenant is in continuous operation at and occupancy of the entire Premises, Tenant shall have the non-exclusive right to place a single sign on one line of the exterior monument sign located as set forth on Exhibit F attached hereto subject to the terms and conditions set forth in this Section (“Exterior Sign Right”). Nothing contained herein shall prohibit or limit Landlord in granting other tenants of the Project or Building rights to install signs on or at the Project or Building or space leased to such tenants. In addition, at Tenant’s sole cost and expense, Tenant shall be entitle to install elevator lobby signage, identifying Tenant and its Premises, in the elevator lobby on the first and second floor of the Building, subject to the terms and conditions contained herein.

(b) General Conditions & Requirements. The size, type, style, materials, color, method of installation and exact location of the sign, and the contractor for and all work in connection with the sign, contemplated by this Section shall (i) be subject to Tenant’s compliance with all applicable laws, regulations and ordinances which apply to the Property; (ii) be consistent with the design of the Building and the Project; and (iii) be further subject to Landlord’s prior written consent, in its sole and absolute discretion. Tenant, at its sole cost and expense, shall be responsible to obtain all approvals and/or permits necessary for the sign under applicable Laws, and its rights hereunder are subject to such Laws. Tenant shall, at its sole cost and expense: (i) procure, install, maintain and replace such sign; (ii) maintain the area on which the sign is mounted watertight and in good appearance; (iii) maintain insurance covering the sign; and (iv) be responsible for electrical service and connections, if any, for the sign.

(c) Removal & Restoration. Upon the expiration or termination of the Exterior Sign Right, but in no event later than the expiration of the Term or earlier termination of the Lease, Tenant shall, at its sole cost and expense, remove such sign and shall repair and restore the area in which the sign was located to its condition prior to installation of such sign.

(d) Advance Notice; No Liens. Tenant shall keep the Building and Project free of all liens and the provisions of Article Nine shall apply with respect to all work and materials performed and provided in connection with such sign, and Tenant shall give Landlord at least ten (10) days prior written notice of the intended commencement of work in connection with such sign in order to allow Landlord time to post appropriate notices of non-responsibility.

(e) Right Personal. The Exterior Sign Right under this Section is personal to Learning Tree International, Inc. and may not be used by, and shall not be transferable or assignable (voluntarily or involuntarily) to any person or entity, except only an Affiliate of Learning Tree International, Inc. which has received an assignment of and fully assumed all of Tenant’s rights, obligations and interest under this Lease and has complied with the requirements of Article Ten applicable to a transfer to an Affiliate.

Rider 2 - Page 3

jka v14-Continental_Grand-Learning_Tree-Lease

EX-10.18

EXHIBIT 10.18

THIS AGREEMENT made this              14th      day of      June                     , 2005

BETWEEN:

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) a wholly owned subsidiary of Manulife Financial Corporation, having a local regional office at 1475 E. Woodfield Road, Suite 108, in the Village Of Schaumburg, Illinois 60173

(hereinafter called the “Landlord”)

OF THE FIRST PART,

— and —

Learning Tree International USA, Inc.

A Delaware Corporation

having an office at	1501 E. Woodfield Road
	Suite 105-North
	Floor 1
in the	Village
of	Schaumburg, Illinois 60173

(hereinafter called the “Tenant”)

        OF THE SECOND PART,

In consideration of the rents, covenants and agreements hereinafter contained, the Landlord and Tenant hereby agree as follows:

1. LEASED PREMISES

Leased Premises

The Landlord does demise and lease to the Tenant the premises (the “Leased Premises”) located in a building (the “Building”) having a municipal address of 1501 E. Woodfield Road, Suite 105-North in the Village of Schaumburg, Illinois 60173 and known as Schaumburg Corporate Center (the Leased Premises, the Building, together with the lands described in Schedule “A” attached hereto and present and future improvements, additions and changes thereto being herein called the “Property”). The Leased Premises is located on the 1^st floor and the approximate location is outlined in heavy black and cross hatched on the plan or plans marked Schedule(s) “B1” attached hereto. The parties agree that the Rentable Area of the Leased Premises is 11,019 square feet and has been measured in accordance with the provisions of Schedule “B” attached hereto.

2. TERM

Term

(a) TO HAVE AND TO HOLD the Leased Premises for and during the term of 10 years (the “Term”) to be computed from the 1^st day of September, 2006 (the “Commencement Date”), and to be fully complete and ended on the 31^st day of August, 2016 (the “Lease Expiration Date”), unless otherwise terminated. Reference is made to that certain lease (the “Existing Lease”) between Landlord and Tenant with respect to certain other space in the Building (the “Existing Premises”). The term of the Existing Lease shall expire upon commencement of the Early Occupancy Period (September 1, 2005) as stated in Schedule “K-2”, and Tenant shall vacate and surrender the Existing Premises no later than 4 weeks after commencement of the Early Occupancy Period in the condition required by the Existing Lease upon expiration of the term thereof.

Delay in

Occupancy

(b) If the Leased Premises or any part thereof are not ready for occupancy (i.e., meaning that Landlord has not substantially completed Landlord’s Work” as described in Schedule “F”) on the date of commencement of the Term, no part of the “Rent” (as hereinafter defined) or only a proportionate part thereof, if part of the Leased Premises is available for occupancy by Tenant, shall be payable for the period prior to the date when the entire Leased Premises are ready for occupancy and the full Rent shall accrue only after such last mentioned date. The Tenant agrees to accept any such abatement of Rent in full settlement of all claims which the Tenant might otherwise have by reason of the Leased Premises not being ready for occupancy on the date of commencement of the Term, provided that when the Landlord has

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	1	Landlord | Tenant

completed construction of such part of the Leased Premises as it is obliged hereunder to construct, the Tenant shall not be entitled to any abatement of Rent for any delay in occupancy due to the Tenant’s failure or delay to provide plans or to complete any special installations or other work required for its purposes or due to any other reason, nor shall the Tenant be entitled to any abatement of Rent for any delay in occupancy if the Landlord has been unable to complete construction of the Leased Premises by reason of such failure or delay by the Tenant. A certificate of the Landlord as to the date the Leased Premises were ready for occupancy and such construction as the Landlord is obliged to complete is substantially completed, or as to the date upon which the same would have been ready for occupancy and completed respectively but for the failure or delay of the Tenant, shall be conclusive and binding on the Tenant and Rent in full shall accrue and become payable from the date set out in the said certificate. Notwithstanding any delay in occupancy, the expiry date of this Lease shall be extended accordingly.

Over-holding

(c) If at the expiration of the Term or sooner termination hereof, the Tenant shall remain in possession without any further written agreement or in circumstances where a tenancy would thereby be created by implication of law or otherwise, a tenancy from year to year shall not be created by implication of law or otherwise, but the Tenant shall be deemed to be a monthly tenant only, at One Hundred Fifty percent (150%) “Basic Rent” (as hereinafter defined) payable monthly in advance plus “Additional Rent” (as hereinafter defined) and otherwise upon and subject to the same terms and conditions as herein contained, excepting provisions for renewal (if any) and leasehold improvement allowance (if any), contained herein, and nothing, including the acceptance of any Rent by the Landlord, for periods other than monthly periods, shall extend this Lease to the contrary except an agreement in writing between the Landlord and the Tenant and the Tenant hereby authorizes the Landlord to apply any moneys received from the Tenant in payment of such monthly Rent. Further, in the event that Tenant remains in possession after the expiration of this Lease, without Landlord’s written consent, then Tenant will indemnify Landlord against all damages, losses and liabilities resulting from any delay in Tenant’s surrendering the Premises, including, without limitation, claims made by any succeeding tenants founded on such delay and any reasonable attorney’s fees and costs resulting therefrom. Notwithstanding the foregoing, in the event that the Tenant shall hold over after the expiration of the Term and the Landlord shall desire to regain possession of the Leased Premises promptly at the expiration of the Term, then the Landlord, at its sole option, may forthwith re-enter and take possession of the Leased Premises without process, or by any legal process in force, Tenant hereby expressly waiving any and all notices to cure or vacate or to quit the Leased Premises (except for those notices specifically provided by law).

3. RENT

Basic Rent

(a) (i) The Tenant shall without demand, deduction or right of offset, except as specifically set forth in this Lease, pay to the Landlord yearly and every year during the Term as rental (herein called “Basic Rent”), the sum of One Hundred Seventy-Three Thousand Five Hundred Forty-Four and 00/100 Dollars ($173,544.00) of lawful money of the jurisdiction in which the Leased Premises are located, in equal monthly installments of Fourteen Thousand Four Hundred Sixty-Two and 00/100 Dollars ($14,462.00) each in advance on the first day of each month during the Term, the first payment to be made on the first day of September, 2006.

Increase in

Basic Rent

(ii) Commencing on the 1^st day of September, 2007 and continuing until the 31^st day of August, 2008, the Basic Rent shall be increased to One Hundred Seventy-Eight Thousand Seven Hundred Twenty-Eight and 00/100 Dollars ($178,728.00) per annum of lawful money of the jurisdiction in which the Leased Premises are located payable in equal monthly installments of Fourteen Thousand Eight Hundred Ninety-Four and 00/100 Dollars ($14,894.00) each in advance on the first day of each month during the Term, the first payment to be made on the 1^st day of September, 2007.

(iii) Commencing on the 1^st day of September, 2008 and continuing until the 31^st day of August, 2009, the Basic Rent shall be increased to One Hundred Eighty-Four Thousand One Hundred Twenty-Eight and 00/100 Dollars ($184,128.00) per annum of lawful money of the jurisdiction in which the Leased Premises are located payable in equal monthly installments of Fifteen Thousand Three Hundred Forty-Four and 00/100 Dollars ($15,344.00) each in advance on the first day of each month during the Term, the first payment to be made on the 1^st day of September, 2008.

(iv) Commencing on the 1^st day of September, 2009 and continuing until the 31^st day of August, 2010, the Basic Rent shall be increased to One Hundred Eighty-Nine Thousand Six Hundred Thirty-Six and 00/100 Dollars ($189,636.00) per annum of lawful money of the jurisdiction in which the Leased Premises are located payable in equal monthly installments of Fifteen Thousand Eight Hundred Three and 00/100 Dollars ($15,803.00) each in advance on the first day of each month during the Term, the first payment to be made on the 1^st day of September, 2009.

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	2	Landlord | Tenant

(v) Commencing on the 1^st day of September, 2010 and continuing until the 31^st day of August, 2011, the Basic Rent shall be increased to One Hundred Ninety-Five Thousand Three Hundred Seventy-Two and 00/100 Dollars ($195,372.00) per annum of lawful money of the jurisdiction in which the Leased Premises are located payable in equal monthly installments of Sixteen Thousand Two Hundred Eighty-One and 00/100 Dollars ($16,281.00) each in advance on the first day of each month during the Term, the first payment to be made on the 1^st day of September, 2010.

(vi) Commencing on the 1^st day of September, 2011 and continuing until the 31^st day of August, 2012, the Basic Rent shall be increased to Two Hundred One Thousand Two Hundred Four and 00/100 Dollars ($201,204.00) per annum of lawful money of the jurisdiction in which the Leased Premises are located payable in equal monthly installments of Sixteen Thousand Seven Hundred Sixty-Seven and 00/100 Dollars ($16,767.00) each in advance on the first day of each month during the Term, the first payment to be made on the 1^st day of September, 2011.

(vii) Commencing on the 1^st day of September, 2012 and continuing until the 31^st day of August, 2013, the Basic Rent shall be increased to Two Hundred Seven Thousand Two Hundred Sixty-Four and 00/100 Dollars ($207,264.00) per annum of lawful money of the jurisdiction in which the Leased Premises are located payable in equal monthly installments of Seventeen Thousand Two Hundred Seventy-Two and 00/100 Dollars ($17,272.00) each in advance on the first day of each month during the Term, the first payment to be made on the 1^st day of September, 2012.

(viii) Commencing on the 1^st day of September, 2013 and continuing until the 31^st day of August, 2014, the Basic Rent shall be increased to Two Hundred Thirteen Thousand Four Hundred Forty-Four and 00/100 Dollars ($213,444.00) per annum of lawful money of the jurisdiction in which the Leased Premises are located payable in equal monthly installments of Seventeen Thousand Seven Hundred Eighty-Seven and 00/100 Dollars ($17,787.00) each in advance on the first day of each month during the Term, the first payment to be made on the 1^st day of September, 2013.

(ix) Commencing on the 1^st day of September, 2014 and continuing until the 31^st day of August, 2015, the Basic Rent shall be increased to Two Hundred Nineteen Thousand Eight Hundred Twenty-Eight and 00/100 Dollars ($219,828.00) per annum of lawful money of the jurisdiction in which the Leased Premises are located payable in equal monthly installments of Eighteen Thousand Three Hundred Nineteen and 00/100 Dollars ($18,319.00) each in advance on the first day of each month during the Term, the first payment to be made on the 1^st day of September, 2014.

(x) Commencing on the 1^st day of September, 2015 and continuing until the 31^st day of August, 2016, the Basic Rent shall be increased to Two Hundred Twenty-Six Thousand Four Hundred Forty and 00/100 Dollars ($226,440.00) per annum of lawful money of the jurisdiction in which the Leased Premises are located payable in equal monthly installments of Eighteen Thousand Eight Hundred Seventy and 00/100 Dollars ($18,870.00) each in advance on the first day of each month during the Term, the first payment to be made on the 1^st day of September, 2015.

Additional

Rent

(b) The Tenant shall, without deduction or right of offset, except as specifically set forth in this Lease, pay to the Landlord yearly and every year during the Term as additional rental (herein called “Additional Rent”).

(i) the amounts of any Taxes payable by the Tenant to the Landlord pursuant to the provisions of Schedule “C” attached hereto; and

(ii) the amounts required to be paid to the Landlord pursuant to the provisions of Schedule “D” attached hereto.

Payment -

Additional Rent

(c) Additional Rent shall be paid and adjusted with reference to a fiscal period of twelve (12) calendar months (“Fiscal Period”), which shall be a calendar year unless the Landlord shall from time to time have selected a Fiscal Period which is not a calendar year by written notice to the Tenant. Payments of Additional Rent shall be made in equal monthly installments, each in advance on the first day of each month during the Term.

The Landlord shall advise the Tenant in writing of its estimate of the Additional Rent to be payable by the Tenant during the Fiscal Period (or broken portion of the Fiscal Period, as the case may be, if applicable at the commencement or end of the Term or because of a change in Fiscal Period) which commenced upon

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	3	Landlord | Tenant

the commencement date of the Term and for each succeeding Fiscal Period or broken portion thereof which commences during the Term. Such estimate shall in every case be a reasonable estimate and, if requested by the Tenant, shall be accompanied by reasonable particulars of the manner in which it was calculated. The Additional Rent payable by the Tenant shall be paid in equal monthly installments in advance at the same time as payment of Basic Rent is due hereunder based on the Landlord’s estimate as aforesaid. From time to time, the Landlord may re-estimate, on a reasonable basis not more than two times per year, the amount of Additional Rent for any Fiscal Period or broken portion thereof, in which case the Landlord shall advise the Tenant in writing of such re-estimate and fix new equal monthly installments for the remaining balance of such Fiscal Period or broken portion thereof. After, no later than the 120^th day following the end of each such Fiscal Period or broken portion thereof, the Landlord shall provide the Tenant with a statement of the actual Additional Rent payable in respect of such Fiscal Period or broken portion thereof and a calculation of the amounts by which the Additional Rent payable by the Tenant exceeds or is less than (as the case may be) the aggregate installments paid by the Tenant on account of Additional Rent for such Fiscal Period.

Within thirty (30) days after the submission of such statement either the Tenant shall pay to the Landlord any amount by which the amount found payable by the Tenant with respect to such Fiscal Period or broken portion thereof exceeds the aggregate of the monthly payments made by it on account thereof during such Fiscal Period or broken portion thereof, or the Landlord shall pay to the Tenant any amount by which the amount found payable as aforesaid is less than the aggregate of such monthly payments.

Recovery

of Rent

(d) In this Lease “Rent” means all amounts required to be paid by the Tenant pursuant to this Lease including without limitation Basic Rent and Additional Rent.

Accrual of

Rent

(e) Basic Rent and Additional Rent shall be considered as accruing from day to day, and for an irregular period of less than one year or less than one calendar month shall be apportioned and adjusted by the Landlord for the Fiscal Periods of the Landlord in which the tenancy created hereby commences and expires. Where the calculation of Additional Rent for a period cannot be made until after the termination of this Lease, the obligation of the Tenant to pay Additional Rent shall survive the termination hereof and Additional Rent for such period shall be payable by the Tenant upon demand by the Landlord. If the Term commences or expires on any day other than the first or the last day of a month, Basic Rent and Additional Rent for such fraction of a month shall be apportioned and adjusted as aforesaid and paid by the Tenant on the commencement date of the Term.

Limitations

(f) The information set out in statements, documents or other writings setting out the amount of Additional Rent submitted to the Tenant under or pursuant to this Lease shall be binding on the Tenant and deemed to be accepted by it and shall not be subject to amendment for any reason unless the Tenant gives written notice (the “Dispute Notice”) to the Landlord within sixty (60) days of the Landlord’s submission of such statement, document, or writing identifying the statement, document, or writing. The Dispute Notice shall set out in reasonable detail the reason why such statement, document or writing is in error or otherwise should not be binding on the Tenant. If the Tenant disputes the amount of the Additional Rent as aforesaid, and if such dispute is not resolved within thirty (30) days after the Tenant delivers the Dispute Notice to the Landlord, then the Landlord shall cause an audited statement of Additional Rent to be prepared by an independent nationally recognized firm of certified public accountants. The statement of Additional Rent as prepared by such accountants shall be final and binding upon the parties hereto and within fifteen (15) days after delivery of such statement of Additional Rent to the parties by the accountants the Landlord and Tenant shall readjust Additional Rent as contemplated by section 3(c). The cost of preparation of such audited statement shall be paid by the Tenant as Rent unless the amount of Additional Rent payable by the Tenant as set forth in such audited financial statement is at least 4% less than the amount of Additional Rent demanded by the Landlord in accordance with the statement delivered to the Tenant pursuant to section 3(c).

4. SECURITY DEPOSIT

Security

Deposit

Upon Lease execution, Landlord shall refund to Tenant $6,300 of Tenant’s existing Security Deposit and retain $27,000 of their existing Security Deposit to be held as a Security Deposit on this Lease, and as a deposit to the Landlord to stand as security for the payment by the Tenant of any and all present and future debts and liabilities of the Tenant to the Landlord and for the performance by the Tenant of all of its obligations arising under or in connection with this Lease (the “Debts, Liabilities and Obligations”). The Landlord shall not be required to keep the Security Deposit separate from its general funds. In the event of

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	4	Landlord | Tenant

the Landlord disposing of its interest in this Lease, the Landlord shall credit the Security Deposit to its successor and thereupon shall have no liability to the Tenant to repay the Security Deposit to the Tenant. Subject to the foregoing and to the Tenant not being in default under this Lease, the Landlord shall repay the Security Deposit to the Tenant without interest at the end of the Term or sooner termination of the Lease provided that all Debts, Liabilities and Obligations of the Tenant to the Landlord are paid and performed in full, failing which the Landlord may on notice to the Tenant elect to retain the Security Deposit and to apply it in reduction of the Debts, Liabilities and Obligations and the Tenant shall remain fully liable to the Landlord for payment and performance of the remaining Debts, Liabilities and Obligations.

5. GENERAL COVENANTS

Landlord’s

Covenant

(a) The Landlord covenants with the Tenant:

(i) for quiet enjoyment; and

(ii) to observe and perform all the covenants and obligations of the Landlord herein.

Tenant’s

Covenant

(b) The Tenant covenants with the Landlord:

(i) to pay Rent; and

(ii) to observe and perform all the covenants and obligations of the Tenant herein.

6. USE AND OCCUPANCY

The Tenant covenants with the Landlord:

Use

(a) not to use the Leased Premises for any purpose other than a training facility for the conduct of the Tenant’s business which is computer and business technology-related training and related classes, and incidental and accessory uses including administration. Tenant shall ensure such use shall be consistent with the character of the Property and compatible with the other uses of the Property. In no event shall the Leased Premises be used in any manner that would violate any declarations, restrictions or encumbrances recorded in the public records of the County in which the Property is located or the restrictive covenants set forth in Schedule “J” attached hereto;

Waste,

Nuisance, etc.

(b) not to commit, or permit, any waste, injury or damage to the Property including the Leasehold Improvements and any trade fixtures therein, any loading of the floors thereof in excess of the maximum degree of loading as determined by the Landlord acting reasonably, any nuisance therein or any use or manner of use causing unreasonable annoyance to other tenants and occupants of the Property or to the Landlord;

Insurance

Risks

(c) not to do, omit or permit to be done or omitted to be done upon the Property anything which would cause to be increased the Landlord’s cost of insurance or the costs of insurance of another tenant of the Property against perils as to which the Landlord or such other tenant has insured or which shall cause any policy of insurance on the Property to be subject to cancellation;

Compliance

with Law

(d) to comply at its own expense with all governmental laws, regulations and requirements pertaining to the occupation and use of the Leased Premises, the condition of the Leasehold Improvements, trade fixtures, furniture and equipment installed by or on behalf of the Tenant therein and the making by the Tenant of any repairs, changes or improvements therein (however, Tenant shall not be responsible for modification of structural elements of the Building unless the particular legal requirement therefore is a result of Tenant’s particular use of the Leased Premises including Tenant’s alterations thereof); Landlord warrants that the Leased Premises will be in compliance with all Governmental Regulations on the date this Lease is signed by the parties.

Environmental

Compliance

(e) (i) to conduct and maintain its business and operations at the Leased Premises so as to comply in all respects with common law and with all present and future applicable federal, provincial/ state, local, municipal, governmental or quasi-governmental laws, by-laws, rules, regulations, licenses, orders, guidelines, directives, permits, decisions or requirements concerning occupational or public health and safety or the environment and any order, injunction, judgment, declaration, notice or demand issued thereunder, (“Environmental Laws”); but the Tenant is not obligated to continuously occupy the Leased Premises during the term.

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	5	Landlord | Tenant

(i) not to permit or suffer as a result of the positive action of the Tenant (or failure to control any of Tenant’s agents, contractors and/or employees) any substance which is hazardous or is prohibited, restricted, regulated or controlled under any Environmental Law to be present at, on or in the Leased Premises, except such incidental amounts of substances consistent with general office use, unless it has received the prior written consent of the Landlord which consent may be arbitrarily withheld;

Rules and Regulations

(f) to observe and perform, and to cause its employees, invitees and others over whom the Tenant can reasonably be expected to exercise control to observe and perform, the Rules and Regulations contained in Schedule “E” hereto, and such further and other reasonable rules and regulations and amendments and additions therein as may hereafter be made by the Landlord and notified in writing to the Tenant, except that no change or addition may be made that is inconsistent with this Lease unless as may be required by governmental regulation or unless the Tenant consents thereto. The imposition of such Rules and Regulations shall not create or imply any obligation of the Landlord to enforce them or create any liability of the Landlord for their non-enforcement or otherwise.

(g) Tenant shall be permitted to use not more than its prorata share of parking spaces as described in Paragraph 11 of Schedule “E”, inclusive of any reserved parking which Landlord and Tenant may subsequently agree upon.

7. ASSIGNMENT AND SUB-LETTING

No Assignment and Subletting

(a) The Tenant covenants that it will not assign this Lease or sublet all or any part of the Leased Premises or mortgage or encumber this Lease or the Leased Premises or any part thereof, or suffer or permit the occupation of all or any part thereof by others (each of which is a “Transfer”) without the prior written consent of the Landlord, which consent the Landlord covenants not to withhold unreasonably (i) as to any assignee, subtenant or occupant (the “Transferee”) who is in a satisfactory financial condition, agrees to use the Leased Premises for those purposes permitted hereunder, or a general office use, and is otherwise satisfactory to the Landlord, and (ii) as to any portion of the Leased Premises which, in the Landlord’s sole judgment, is a proper and rational division of the Leased Premises, subject to the Landlord’s right of termination arising under this paragraph. This prohibition against a Transfer shall be construed to include a prohibition against any Transfer by operation of law.

Assignment or Subletting Procedures

(b) The Tenant shall not effect a Transfer unless:

(i) it shall have received or procured a bona fide written offer to take an assignment or sublease which is not inconsistent with the Lease, and the acceptance of which would not breach any provision of this Lease if this paragraph is complied with and which the Tenant has determined to accept subject to this paragraph being complied with, and

(ii) it shall have first requested and obtained the consent in writing of the Landlord thereto.

Any request for consent shall be in writing and accompanied by a copy of the offer certified by the Tenant to be true and complete, and the Tenant shall furnish to the Landlord all information available to the Tenant and reasonably requested by the Landlord as to the responsibility, financial standing and business of the proposed Transferee. Notwithstanding the provisions of sub-paragraph (a), within twenty (20) days after the receipt by the Landlord of such request for consent and of all information which the Landlord shall have requested hereunder, the Landlord shall have the right upon written notice of termination submitted to the Tenant, if the request is to assign this Lease or sublet the whole of the Leased Premises through the end of the of the Lease Term, to cancel and terminate this Lease, as of a termination date to be stipulated in the notice of termination which shall be not less than sixty (60) days or more than ninety (90) days following the giving of such notice. In such event the Tenant shall surrender the whole or part, as the case may be, of the Leased Premises in accordance with such notice of termination and Basic Rent and Additional Rent shall be apportioned and paid to the date of surrender and, if a part only of the Leased Premises is surrendered, Basic Rent and Additional Rent shall after the date of surrender abate proportionately. If such consent shall be given the Tenant shall affect the Transfer only upon the terms set out in the offer submitted to the Landlord as aforesaid and not otherwise. Any consent shall be given without prejudice to the Landlord’s rights under the Lease and shall be limited to the particular Transfer in respect of which it was given and shall not be deemed to be an authorization for or consent to any further or other Transfer.

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	6	Landlord | Tenant

Excess Transfer Rent

(c) In the event the Landlord consents to any Transfer, the Tenant shall pay to the Landlord, as and when amounts on account are due or paid by the Transferee to the Tenant, 50% of the excess Transfer rents (hereinafter called the “Excess Transfer Rent”), if any, as Rent. The Excess Transfer Rent shall be determined in accordance with the following formula:

all gross revenue received by the Tenant from the Transferee and attributable to the Transfer less:

i) the Rent paid by the Tenant to the Landlord during the term of the Transfer;

ii) any reasonable and customary out of pocket transaction costs incurred by the Tenant in connection with such Transfer including attorney’s fees, brokerage commissions, cash inducements and alteration costs (which transaction costs shall be amortized on a straight line basis over the term of the Transfer).

The Tenant agrees to promptly furnish such information with regard to the Excess Transfer Rent as the Landlord may request from time to time.

Assumption of Obligations

(d) No Transfer shall be effective unless the Transferee shall execute an agreement, assuming the Tenant’s future obligations under this Lease, effective as of the date of the Transfer on the Landlord’s form, assuming all the obligations of the Tenant hereunder, and shall have paid to the Landlord its reasonable fee for processing the Transfer, not to exceed $500 each time a sublease is executed.

Tenant’s Continuing Obligations

(e) The Tenant agrees that any consent to a Transfer shall not thereby release the Tenant of its obligations hereunder but recapture by the Landlord shall release the Tenant of its obligations first accruing after the date of recapture.

Change of Control

(f) If the Tenant or occupant of the Leased Premises at any time is a corporation, it is acknowledged and agreed that the transfer of the majority of the issued capital stock of the corporation or the transfer or issuance of any capital stock of the corporation sufficient to transfer effective voting control of the corporation to others than the shareholder or shareholders having effective voting control of the corporation immediately prior to such transfer or issuance, shall be deemed for all purposes of this paragraph 7 to be a Transfer and, accordingly, a violation of this paragraph 7 respecting assignment of this Lease unless the prior written consent of the Landlord is first obtained, and the Landlord shall have all of the same rights in respect thereof as though any such transfer or issuing of shares or proposed transferring or issuing of shares were a Transfer. This subparagraph 7 (f) shall not apply to the Tenant if and for so long as the Tenant is a corporation whose shares are listed and traded on any recognized stock exchange in Canada or the United States.

(g) Notwithstanding anything in this Lease to the contrary, the Tenant shall not be permitted without the written consent of the Landlord to effect a Transfer to tenants currently occupying space in the Property (See Schedule K).

8. REPAIR & DAMAGE

Landlord’s Repairs to Building & Property

(a) The Landlord covenants with the Tenant to keep in a good and reasonable state of repair and decoration:

(i) those portions of the Property consisting of the entrance, lobbies, stairways, corridors, landscaped areas, parking areas, and other facilities from time to time provided for use in common by the Tenant and other tenants of the Building or Property, and the exterior portions (including foundations and roofs) of all buildings and structures from time to time forming part of the Property and affecting its general appearance; and

(ii) the Building (other than the Leased Premises and premises of other tenants) including the systems for interior climate control, the elevators and escalators (if any), entrances, lobbies, stairways, corridors and washrooms from time to time provided for use in common by the Tenant and other tenants of the Building or Property and the systems provided for use in common by the Tenant and other tenants of the Building or Property and the systems provided for bringing utilities to the Leased Premises.

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	7	Landlord | Tenant

(iii) To the best of Landlord’s knowledge based solely on review of Landlord’s current environmental report covering the Property, there is not present any hazardous substance in the Leased Premises and/or common areas, which is in violation of Environmental Laws. Landlord hereby agrees to promptly notify Tenant upon becoming aware of the presence of any hazardous substance in the Leased Premises and/or common areas which is in violation of Environmental Laws.

In the event that Landlord is notified of the presence of any hazardous substance in the Leased Premises and/or common areas which is in violation of Environmental Laws, and such hazardous substance has not been caused, introduced or permitted to be introduced by Tenant, Landlord shall commence remedial action with respect thereto as soon as practicable. Landlord shall comply with all applicable federal, state, or local controls or guidelines relating to the presence or removal of asbestos-containing materials.

In the event Landlord caused or introduced a hazardous substance then in violation of Environmental Laws, and said cause or introduction was not by other tenants or third parties, Landlord shall indemnify, defend and hold Tenant harmless from all damages, costs, losses and expenses (including without limitation reasonable attorney’s fees) arising from or attributable to any misrepresentation and/or breach by Landlord of its obligations under this paragraph. Notwithstanding the foregoing, Landlord shall at its sole cost be responsible for remediation of hazardous substances as required by Environmental Laws provided that such hazardous substances were not introduced by Tenant or any employee, agent or contractor of Tenant.

Landlord’s Repairs to the Leased Premises

(b) The Landlord covenants with the Tenant to repair, so far as reasonably feasible, and as expeditiously as reasonably feasible, defects in standard demising walls or in structural elements, exterior walls of the Building, suspended ceiling, electrical and mechanical installations standard to the Building installed by the Landlord in the Leased Premises (if and to the extent that such defects are sufficient to impair the Tenant’s use of the Leased Premises while using them in a manner consistent with this Lease) and “Insured Damage” (as herein defined). The Landlord shall in no event be required to make repairs to Leasehold Improvements made by the Tenant, or by the Landlord on behalf of the Tenant or another tenant or to make repairs to wear and tear within the Leased Premises.

Tenant’s Repairs

(c) The Tenant covenants with the Landlord to repair, maintain and keep at the Tenant’s own cost, except insofar as the obligation to repair rests upon the Landlord pursuant to this paragraph, the Leased Premises, including Leasehold Improvements in good and substantial repair, reasonable wear and tear excepted, provided that this obligation shall not extend to structural elements or to exterior glass or to repairs which the Landlord would be required to make under this paragraph but for the exclusion therefrom of defects not sufficient to impair the Tenant’s use of the Leased Premises while using them in a manner consistent with this Lease. The Landlord may enter the Leased Premises at all reasonable times upon reasonable verbal notice and view the condition thereof and the Tenant covenants with the Landlord to repair, maintain and keep the Leased Premises in good and substantial repair according to notice in writing, reasonable wear and tear excepted. If the Tenant shall fail to repair as aforesaid after reasonable notice to do so, the Landlord may effect the repairs and the Tenant shall pay the reasonable cost thereof to the Landlord on demand. The Tenant covenants with the Landlord that the Tenant will at the expiration of the Term or sooner termination thereof peaceably surrender the Leased Premises and appurtenances in good and substantial repair and condition, reasonable wear and tear excepted.

Indemnification

(d) If any part of the Property becomes out of repair, damaged or destroyed through the negligence of, or misuse by, the Tenant or its employees, agents, invitees or others under its control, the Tenant shall pay the Landlord on demand the expense of repairs or replacements, including the Landlord’s reasonable administration charge thereof, necessitated by such negligence or misuse.

Damage and Destruction

(e) It is agreed between the Landlord and the Tenant that:

(i) in the event of damage to the Property or to any part thereof, if in the reasonable opinion of the Landlord the damage is such that the Leased Premises or any substantial part thereof is rendered not reasonably capable of use and occupancy by the Tenant for the purposes of its business for any period of time in excess of three (3) days, then

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	8	Landlord | Tenant

(1) from the date of occurrence of the damage and until the Leased Premises are again reasonably capable for use and occupancy as aforesaid, the Rent payable pursuant to this Lease shall abate from time to time in proportion to the part or parts of the Leased Premises not reasonably capable of such use and occupancy, and

(2) unless this Lease is terminated as hereinafter provided, the Landlord or the Tenant as the case may be (according to the nature of the damage and their respective obligations to repair as provided in sub-paragraphs (a), (b) and (c) of this paragraph) shall repair such damage with all reasonable diligence, but to the extent that any part of the Leased Premises is not reasonably capable of such use and occupancy by reason of damage which the Tenant is obligated to repair hereunder, any abatement of Rent to which the Tenant would otherwise be entitled hereunder shall not extend later than the time by which, in the reasonable opinion of the Landlord, repairs by the Tenant ought to have been completed with reasonable diligence;

(ii) if the damage is such that the Leased Premises are rendered untenantable, in whole or in part, and if, in the opinion of the Landlord, the damage cannot be repaired with reasonable diligence within one hundred and twenty (120) days from the happening of the damage, then either party may, within thirty (30) days after the date of the damage, terminate this Lease by notice to the other. Upon the giving of such notice, this Lease shall be terminated as of the date of the damage and the Rent and all other payments for which the Tenant is liable under the terms of this Lease shall be apportioned and paid in full to the date of the damage. Notwithstanding anything herein to the contrary, in the event Landlord does not complete its required restoration of the Leased Premises within 270 days after the occurrence of the damage or destruction, Tenant shall be entitled to terminate this Lease by giving Landlord written notice of intent to terminate within ten (10) days after expiration of such 270 day period. However, if at any time Landlord believes it will be unable to complete restoration within such 270 day period, it shall be entitled to notify Tenant in writing of the Landlord’s estimated time frame for completion of restoration and if Tenant fails to cancel this Lease by notice of cancellation given to Landlord within 10 days following Landlord’s written notice, such 270 day period shall automatically be extended to the last day of Landlord’s estimated time frame;

(iii) the Landlord shall not be required to use plans and specifications and working drawings used in the original construction of the Building and nothing in this Section requires the Landlord to rebuild the Building in the condition and state that existed before the damage, but the Building, as rebuilt, will have reasonably similar facilities and similar to the quality and class of the original construction and services to those in the Building prior to the damage; and

(iv) if premises whether of the Tenant or other tenants of the Property comprising in the aggregate half or more of the total number of square feet of rentable office area in the Property or half or more of the total number of square feet of rentable office area in the Building (as determined by the Landlord) or portions of the Property which affect access or services essential thereto, are substantially damaged or destroyed by any cause and if in the reasonable opinion of the Landlord the damage cannot reasonably be repaired within one hundred and eighty (180) days after the occurrence thereof, then the Landlord may, by written notice to the Tenant given within thirty (30) days after the occurrence of such damage or destruction, terminate this Lease, in which event neither the Landlord nor the Tenant shall be bound to repair as provided in sub-paragraphs (a) (b) and (c) of this paragraph, and the Tenant shall instead deliver up possession of the Leased Premises to the Landlord with reasonable expedition but in any event within sixty (60) days after delivery of such notice of termination, and Rent shall be apportioned and paid to the date upon which possession is so delivered up (but subject to any abatement to which the Tenant may be entitled under sub-paragraph (e) (i) of this paragraph).

9. INSURANCE AND LIABILITY

Landlord’s Insurance

(a) The Landlord shall take out and keep in force during the Term insurance with respect to the Property except for the “Leasehold Improvements” (as hereinafter defined) in the Leased Premises. The insurance to be maintained by the Landlord shall be in respect of perils and in amounts and on terms and conditions which from time to time are insurable at a reasonable premium and which are normally insured by reasonable prudent owners of properties similar to the Property, all as from time to time determined at reasonable intervals by insurance advisors selected by the Landlord, and whose opinion shall be conclusive. Unless and until the insurance advisors shall state that any such perils are not customarily insured against by owners of properties similar to the Property, the perils to be insured against by the Landlord shall include,

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	9	Landlord | Tenant

without limitation, public liability, boilers and machinery, fire and extended perils and may include at the option of the Landlord losses suffered by the Landlord in its capacity as Landlord through business interruption. The property insurance to be maintained by the Landlord shall contain a waiver by the insurer of any rights of subrogation or indemnity or any other claim over which the insurer might otherwise be entitled against the Tenant or the agents or employees of the Tenant.

Tenant’s Insurance

(b) The Tenant shall take out and keep in force during the Term:

(i) commercial general public liability insurance all on an occurrence basis with respect to the business carried on in or from the Leased Premises and the Tenant’s use and occupancy of the Leased Premises and of any other part of the Property, with coverage for any one occurrence or claim of not less than Three Million Dollars ($3,000,000) or such other amount as the Landlord may reasonably require upon not less than one (1) month notice at any time during the Term, which insurance shall include the Landlord as an additional insured and shall contain a cross liability clause protecting the Landlord in respect of claims by the Tenant as if the Landlord were separately insured;

(ii) insurance in respect of fire and such other perils as are from time to time in the usual extended coverage endorsement covering the Leasehold Improvements, trade fixtures, and the furniture and equipment in the Leased Premises for not less than the full replacement cost thereof, and which insurance shall include the Landlord as an additional insured as the Landlord’s interest may appear; and

(iii) insurance against such other perils and in such amounts as the Landlord may from time to time reasonably require upon not less than ninety (90) days’ written notice, such requirement to be made on the basis that the required insurance is customary at the time for prudent tenants of properties similar to the Property.

All insurance required to be maintained by the Tenant shall be on terms and with insurers satisfactory to the Landlord. Each policy shall contain: (A) a waiver by the insurer of any rights of subrogation or indemnity or any other claim over to which the insurer might otherwise be entitled against the Landlord or the agents or employees of the Landlord, and (B) an undertaking by the insurer that no material change adverse to the Landlord or the Tenant will be made, and the policy will not lapse or be canceled, except after not less than thirty (30) days’ written notice to the Landlord of the intended change, lapse or cancellation. The Tenant shall furnish to the Landlord, if and whenever reasonably requested by it, certificates or other evidences acceptable to the Landlord as to the insurance from time to time effected by the Tenant and its renewal or continuation in force, together with evidence as to the method of determination of full replacement cost of the Tenant’s Leasehold Improvements, trade fixtures, furniture and equipment, and if the Landlord reasonably concludes that the full replacement cost has been underestimated, the Tenant shall forthwith arrange for any consequent increase in coverage required under sub-paragraph (b). If the Tenant shall fail to take out, renew and keep in force such insurance, or if the evidences submitted to the Landlord are unacceptable to the Landlord (or no such evidences are submitted within a reasonable period after request therefor by the Landlord), then the Landlord may give to the Tenant written notice requiring compliance with this sub-paragraph and specifying the respects in which the Tenant is not then in compliance with this sub-paragraph. If the Tenant does not within forty-eight (48) hours provide appropriate evidence of compliance with this sub-paragraph, the Landlord may (but shall not be obligated to) obtain some or all of the additional coverage or other insurance which the Tenant shall have failed to obtain, without prejudice to any other rights of the Landlord under this Lease or otherwise, and the Tenant shall pay all premiums and other reasonable expenses incurred by the Landlord to the Landlord on demand.

WAIVER OF SUBROGATION.

Each of Landlord and Tenant hereby waive any claims it may have against the other party for property damages that are insurable under special form all-risk property insurance policies, regardless whether (i) the damages were caused by the negligence of the other party or (ii) the waiving party actually maintains such insurance.

Limitation of Landlord’s Liability

(c) The Tenant agrees that the Landlord shall not be liable for any bodily injury or death of, or loss or damage to any property belonging to, the Tenant or its employees, invitees or licensees or any other person in, on or about the Property unless resulting from the actual willful misconduct or negligence of the Landlord or its own employees or contractors. In no event shall the Landlord be liable for any damage, including indirect, special or consequential damages, which is caused by steam, water, rain or snow or other

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	10	Landlord | Tenant

thing which may leak into, issue or flow from any part of the Property or from the pipes or plumbing works, including the sprinkler system (if any) therein or from any other place or for any damage caused by or attributable to the condition or arrangement of any electric or other wiring or of sprinkler heads (if any) or for any such damage caused by anything done or omitted by any other tenant.

Indemnity of Landlord

(d) Except with respect to claims or liabilities in respect of any damage which is Insured Damage to the extent of the cost of repairing such Insured Damage and claims which are waived pursuant to the Waiver of Subrogation set forth above, the Tenant agrees to indemnify and save harmless the Landlord in respect of:

(i) all claims for bodily injury or death, property damage or other loss or damage arising from the conduct of any work or any act or omission of the Tenant or any assignee, sub-tenant, agent, employee, contractor, invitee or licensee of the Tenant, and in respect of all costs, expenses and liabilities incurred by the Landlord in connection with or arising out of all such claims, including the expenses of any action or proceeding pertaining thereto; and

(ii) any loss, cost, (including, without limitation, lawyers’ fees and disbursements), expense or damage suffered by the Landlord arising from any breach by the Tenant of any of its covenants and obligations under this Lease.

Definition of “Insured Damage”

(e) Except with respect to claims or liabilities in respect of any damage which is Insured Damage to the extent of the cost of repairing such Insured Damage and claims which are waived pursuant to the Waiver of Subrogation set forth above, the Landlord agrees to indemnify and save harmless the Tenant in respect of all claims resulting from Landlord’s negligence or intentional misconduct.

(f) For purposes of this Lease, “Insured Damage” means that part of any damage occurring to the Property of which the entire cost of repair (or the entire cost of repair other than deductible amount properly collectable by the Landlord as part of the Additional Rent) is actually recovered by the Landlord under a policy or policies of insurance from time to time effected by the Landlord pursuant to sub-paragraph (a).

10. EVENTS OF DEFAULT AND REMEDIES

Events of Default and Remedies

(a) In the event of the happening of any one of the following events:

(i) the Tenant shall have failed to pay an installment of Rent or any other amount payable hereunder when due, and such failure shall be continuing for a period of more than ten (10) days after written notice of such failure to pay such installment or amount when due (however, Landlord shall not be required to give more than 2 such notices in any 12 month period, and after giving 2 such notices in any 12 month period, any subsequent failure in such 12 month period of Tenant to make a required monetary payment on its due date shall automatically constitute a default hereunder entitling Landlord to exercise default remedies without Landlord having given Tenant prior notice of such monetary default);

(ii) there shall be a default of or with any condition, covenant, agreement or other obligation on the part of the Tenant to be kept, observed or performed hereunder (other than the obligation to pay Rent or any other amount of money) and such default shall be continuing for a period of more than thirty (30) days after written notice by the Landlord to the Tenant specifying the default and requiring that it be cured, provided, however, if it cannot be cured within such time, there shall be no default if Tenant commences cure within such time and diligently proceeds to complete such cure;

(iii) if any policy of insurance upon the Property or any part thereof from time to time effected by the Landlord shall be canceled or is about to be canceled by the insurer by reason of the use or occupation of the Leased Premises by the Tenant or any assignee, sub-tenant or licensee of the Tenant or anyone permitted by the Tenant to be upon the Leased Premises and the Tenant after receipt of notice in writing from the Landlord shall have failed to take such immediate steps in respect of such use or occupation as shall enable the Landlord to reinstate or avoid cancellation (as the case may be) of such policy of insurance;

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	11	Landlord | Tenant

(iv) the Leased Premises shall, without the prior written consent of the Landlord, be used by any other persons than the Tenant or a permitted Transferee or for any purpose other than that for which they were leased or occupied or by any persons whose occupancy is prohibited by this Lease;

(v) the Leased Premises shall be vacated or abandoned and Tenant does not pay Basic Rent and Additional Rent and any other payments due under this Lease;

(vi) any of the goods and chattels of the Tenant located in the Leased Premises, shall at any time be seized in execution or attachment; or

(vii) the Tenant shall make any assignment for the benefit of creditors or become bankrupt or insolvent or take the benefit of any statute for bankrupt or insolvent debtors or, if a corporation, shall take any steps or suffer any order to be made for its winding-up or other termination of its corporate existence; or a trustee, receiver or receiver-manager or agent or other like person shall be appointed of any of the assets of the Tenant;

then the Landlord shall have the following rights and remedies all of which are cumulative and not alternative and not to the exclusion of any other or additional rights and remedies in law or equity available to the Landlord by statute or otherwise:

(A) to remedy or attempt to remedy any default of the Tenant, and in so doing to make any payments due or alleged to be due by the Tenant to third parties and to enter upon the Leased Premises to do any work or other things therein, and in such event all reasonable expenses of the Landlord in remedying or attempting to remedy such default shall be payable by the Tenant to the Landlord on demand;

(B) with respect to unpaid overdue Rent, to the payment by the Tenant of the Rent and of interest (which said interest shall be deemed included herein in the term “Rent”) thereon at a rate equal to the lesser of three percent (3%) above the prime commercial loan rate charged to borrowers having the highest credit rating from time to time by the Landlord’s principal bank from the date upon which the same was due until actual payment thereof and the maximum amount allowed under the laws of the jurisdiction in which the Building is located;

(C) to terminate this Lease forthwith by leaving upon the Leased Premises or by affixing to an entrance door to the Leased Premises notice terminating the Lease and to immediately thereafter cease to furnish any services hereunder and enter into and upon the Leased Premises or any part thereof in the name of the whole and the same to have again, re-possess and enjoy as of its former estate, anything in this Lease contained to the contrary notwithstanding;. The Tenant hereby expressly waives any and all notices (other than those notices specifically outlined in this Lease) to cure or vacate or to quit the Leased Premises provided by current or future law;

(D) to enter the Leased Premises as agent of the Tenant and as such agent to re-let them and to receive the rent therefor and as the agent of the Tenant to take possession of any furniture or other property thereon owned by Tenant and upon giving ten (10) days’ written notice to the Tenant to store the same at the expense and risk of the Tenant or to sell or otherwise dispose of the same at public or private sale without further notice and to apply the proceeds thereof and any rent derived from re-letting the Leased Premises upon account of the Rent due and to become due under this Lease and the Tenant shall be liable to the Landlord for the deficiency if any subject, however, to any rights or security interest therein; and

(E) in the event of any breach by the Tenant of any of the covenants or provisions of this Lease, the Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity, and mention in this Lease of any particular remedy shall not preclude the Landlord from any other remedy at law or in equity. Tenant hereby expressly waives any and all rights of redemption or to any notice to quit granted by or under any present or future laws in the event of this Lease being terminated and/or Landlord obtaining possession of the Leased Premises pursuant to the provisions of this section.

Payment of Rent, etc. on Termination

(b) Upon the giving by the Landlord of a notice in writing terminating this Lease under paragraph 10 (a)(C) , above, this Lease and the Term shall terminate, the Tenant shall remain liable for and shall pay on demand by the Landlord (i) the full amount of all Rent which would have accrued until the date on which this Lease would have expired had such termination not occurred, and any and all damages and expenses incurred by the Landlord in re-entering and repossessing the Leased Premises or in making good any default

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	12	Landlord | Tenant

of the Tenant, in making any alterations to the Leased Premises, and any and all expenses which the Landlord may incur during the occupancy of any new tenant, less (ii) the net proceeds of any re-letting of the Leased Premises which has occurred at the time of the aforesaid demand by the Landlord to the Tenant. The Tenant agrees to pay to the Landlord the difference between items (i) and (ii) above for the period through and including the date on which this Lease would have expired if it had not been terminated. The Landlord shall be entitled to any excess with no credit to the Tenant. The Landlord may, in its sole discretion, make demand on the Tenant as aforesaid on any one or more occasions, and any suit brought by the Landlord to enforce collection of such difference for any one month shall not prejudice the Landlord’s right to enforce the collection of any difference for any subsequent month or months. In addition to the foregoing, and without regard to whether this Lease has been terminated, Tenant shall pay to the Landlord all costs incurred by the Landlord, including reasonable attorneys’ fees, with respect to any lawsuit or action instituted or taken by the Landlord to enforce the provisions of this Lease, except in the event that the Tenant prevails in such suit, as declared in suit. The Tenant’s liability shall survive the institution of summary proceedings and the issuance of any warrant hereunder.

If the Landlord determines that it is impracticable or extremely difficult to fix the actual damages, then, as an alternative to the remedy set forth in the preceding paragraph, the Tenant will pay to the Landlord on demand, liquidated and agreed final damages for the Tenant’s default calculated in accordance with this paragraph. Liquidated damages hereunder shall be an amount equal to the present value at a rate of six percent (6%) per annum of the excess, if any, of (i) all Rent payable under this Lease from the date of such demand for what would be the then unexpired Term of this Lease in the absence of such termination over (ii) the then fair market rental value of the Leased Premises (as reasonably determined by the Landlord). If any law shall limit the amount agreed upon, the Landlord shall be entitled to the maximum amount allowable under such law. Nothing herein shall be construed to affect or prejudice the Landlord’s right to prove, and claim in full, unpaid rent accrued prior to termination of this Lease. Upon termination of this Lease and the Term, the Tenant shall immediately deliver up possession of the Leased Premises to the Landlord, and the Landlord may forthwith re-enter and take possession of them.

(c) The Tenant shall pay to the Landlord on demand all costs and expenses, including lawyers’ fees, incurred by the Landlord in enforcing any of the obligations of the Tenant under this Lease, except in the event that the Tenant prevails in such suit, in which case the Landlord shall pay on demand all costs and expenses including attorney’s fees incurred by the Tenant.

ADDITIONAL PROVISIONS

Common Areas

11. The Tenant acknowledges and agrees that the common areas of the Property shall at all times be subject to the exclusive management and control of the Landlord. Without limiting the generality of the foregoing, the Tenant specifically acknowledges and agrees that the Landlord may temporarily close or restrict the use of all or any part of the common areas of the Property in an emergency, or for security or crowd control purposes, to facilitate tenants moving in or out of the building, or for the purpose of making repairs, alterations or renovations. The Landlord agrees not to permanently alter such common areas in any manner, which would deny reasonable access to the Leased Premises; provided, however, that Tenant shall at all times have reasonable access to the Leased Premises subject to emergencies and governmental requirements. In the event of any such temporary closure or restriction of use or if changes are made to such common areas by the Landlord, the Landlord shall not be subject to any liability nor shall the Tenant be entitled to any compensation or any diminution or abatement of Rent and such closures, restriction and changes shall not be deemed to be a constructive or actual eviction or a breach of the Landlord’s covenant for quiet enjoyment.

Relocation of

Leased Premises

12. (Deleted)

Subordination

and Attornment

13. This Lease and all rights of the Tenant hereunder are subject and subordinate to all underlying leases and charges, or mortgages now or hereafter existing (including charges, and mortgages by way of debenture, note, bond, deeds of trust and mortgage and all instruments supplemental thereto) which may now or hereafter affect the Property or any part thereof and to all renewals, modifications, consolidations, replacements and extensions thereof provided the lessor, chargee, mortgagee or trustee agrees to accept this Lease if not in default continuing after exhaustion of all applicable cure periods; and in recognition of the foregoing the Tenant agrees that it will, whenever requested, attorn to such lessor, chargee, mortgagee as a tenant upon all the terms of this Lease. The Tenant agrees to execute promptly whenever requested by the Landlord or by the holder of any such lease, charge, or mortgage an instrument of subordination or attornment as may be required of it.

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	13	Landlord | Tenant

Certificates

14. The Tenant agrees that it shall promptly whenever requested by the Landlord from time to time execute and deliver to the Landlord, and if required by the Landlord, to any lessor, chargee, or mortgagee (including any trustee) or other person designated by the Landlord, an acknowledgment in writing as to the then status of this Lease, including as to whether it is in full force and effect, is modified or unmodified, confirming the Rent payable hereunder and the state of the accounts between Landlord and the Tenant, the existence or non-existence of defaults, and any other matters pertaining to this Lease as to which the Landlord shall request an acknowledgment.

Inspection of and Access to the Leased Premises

15. The Landlord shall be permitted at any time and from time to time with reasonable verbal notice to Tenant to enter and to have its authorized agents, employees and contractors enter the Leased Premises for the purposes of inspection, window cleaning, maintenance, providing janitor service, making repairs, alterations or improvements to the Leased Premises or the Property, or to have access to utilities and services (including all ducts and access panels (if any), which the Tenant agrees not to obstruct) and the Tenant shall provide free and unhampered access for the purpose, and shall not be entitled to compensation or any diminution or abatement of Rent for any inconvenience, nuisance or discomfort caused thereby. The Landlord and its authorized agents and employees shall be permitted entry to the Leased Premises for the purpose of exhibiting them to prospective tenants during the final six (6) months of the Term. The Landlord in exercising its rights under this paragraph shall do so to the extent reasonably necessary so as to minimize interference with the Tenant’s use and enjoyment of the Leased Premises provided that in an emergency the Landlord or persons authorized by it may enter the Leased Premises without regard to minimizing interference.

Delay

16. Except as herein otherwise expressly provided, if and whenever and to the extent that either the Landlord or the Tenant shall be prevented, delayed or restricted in the fulfillment of any obligation hereunder in respect of the supply or provision of any service or utility, the making of any repair, the doing of any work or any other thing (other than the payment of moneys required to be paid by the Tenant to the Landlord hereunder) by reason of:

(a) strikes or work stoppages;

(b) being unable to obtain any material, service, utility or labor required to fulfill such obligation;

(c) any statute, law or regulation of, or inability to obtain any permission from any government authority having lawful jurisdiction preventing, delaying or restricting such fulfillment;

                        or

(d) other unavoidable occurrence,

the time for fulfillment of such obligation shall be extended during the period in which such circumstance operates to prevent, delay or restrict the fulfillment thereof, and the other party to this Lease shall not be entitled to compensation for any inconvenience, nuisance or discomfort thereby occasioned; provided that nevertheless the Landlord will use its best efforts to maintain services essential to the use and enjoyment of the Leased Premises and provided further that if the Landlord shall be prevented, delayed or restricted in the fulfillment of any such obligation hereunder by reason of any of the circumstances set out in sub-paragraph (c) of this paragraph 16 and to fulfill such obligation could not, in the reasonable opinion of the Landlord, be completed without substantial additions to or renovations of the Property, the Landlord may on sixty (60) days’ written notice to the Tenant terminate this Lease.

Waiver

17. If either the Landlord or the Tenant shall overlook, excuse, condone or suffer any default, breach, non-observance, improper compliance or non-compliance by the other of any obligation hereunder, this shall not operate as a waiver of such obligation in respect of any continuing or subsequent default, breach, or non-observance, and no such waiver shall be implied but shall only be effective if expressed in writing.

Sale, Demolition

and Renovation

18. (a) The term “Landlord” as used in this Lease, means only the owner for the time being of the Property, so that in the event of any sale or sales or transfer or transfers of the Property, or the making of any lease or leases thereof, or the sale or sales or the transfer or transfers or the assignment or assignments of any such lease or leases, previous landlords shall be and hereby are relieved of all covenants and obligations of

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	14	Landlord | Tenant

Landlord hereunder. It shall be deemed and construed without further agreement between the parties, or their successors in interest, or between the parties and the transferee or acquirer, at any such sale, transfer or assignment, or lessee on the making of any such lease, that the transferee, acquirer or lessee has assumed and agreed to carry out any and all of the covenants and obligations of Landlord hereunder to Landlord’s exoneration, and Tenant shall thereafter be bound to and shall attorn to such transferee, acquirer or lessee, as the case may be, as Landlord under this Lease;

(b) Notwithstanding anything contained in this Lease to the contrary, in the event the Landlord intends to demolish or to renovate substantially all the Building following expiration of the initial Term, then the Landlord, upon giving the Tenant one hundred and eighty (180) days’ written notice, shall have the right to terminate this Lease and this Lease shall thereupon expire on the expiration of one hundred and eighty (180) days from the date of the giving of such notice without compensation of any kind to the Tenant. In no event shall such termination of this Lease occur prior to expiration of the initial Term.

Public Taking

19. The Landlord and Tenant shall co-operate, each with the other, in respect of any Public Taking of the Leased Premises or any part thereof so that the Tenant may receive the maximum award to which it is entitled in law for relocation costs and business interruption and so that the Landlord may receive the maximum award for all other compensation arising from or relating to such Public Taking (including all compensation for the value of the Tenant’s leasehold interest subject to the Public Taking) which shall be the property of the Landlord, and the Tenant’s rights to such compensation are hereby assigned to the Landlord. If the whole or any part of the Leased Premises is Publicly Taken, as between the parties hereto, their respective rights and obligations under this Lease shall continue until the day on which the Public Taking authority takes possession thereof. If the whole or any part of the Leased Premises is Publicly Taken, the Landlord shall have the option, to be exercised by written notice to the Tenant, to terminate this Lease and such termination shall be effective on the day the Public Taking authority takes possession of the whole or the portion of the Property Publicly Taken. Rent and all other payments shall be adjusted as of the date of such termination and the Tenant shall, on the date of such Public Taking, vacate the Leased Premises and surrender the same to the Landlord, with the Landlord having the right to re-enter and re-possess the Leased Premises discharged of this Lease and to remove all persons therefrom. In this paragraph, the words “Public Taking” shall include expropriation and condemnation and shall include a sale by the Landlord to an authority with powers of expropriation, condemnation or taking, in lieu of or under threat of expropriation or taking and “Publicly Taken” shall have a corresponding meaning.

Registration of

Lease

20. The Tenant agrees with the Landlord not to register this Lease in any recording office and not to register notice of this Lease in any form without the prior written consent of the Landlord. If such consent is provided such notice of Lease or caveat shall be in such form as the Landlord shall have approved and upon payment of the Landlord’s reasonable fee for same and all applicable transfer or recording taxes or charges. The Tenant shall remove and discharge at Tenant’s expense registration of such a notice or caveat at the expiry or earlier termination of the Term, and in the event of Tenant’s failure to so remove or discharge such notice or caveat after ten (10) days’ written notice by Landlord to Tenant, the Landlord may in the name and on behalf of the Tenant execute a discharge of such a notice or caveat in order to remove and discharge such notice of caveat and for the purpose thereof the Tenant hereby irrevocably constitutes and appoints any officer of the Landlord the true and lawful attorney of the Tenant.

Lease Entire

Agreement

21. The Tenant acknowledges that there are no covenants, representations, warranties, agreements or conditions express or implied, collateral or otherwise forming part of or in any way affecting or relating to this Lease save as expressly set out in this Lease and Schedules attached hereto and that this Lease and such Schedules constitute the entire agreement between the Landlord and the Tenant and may not be modified except as herein explicitly provided or except by agreement in writing executed by the Landlord and the Tenant.

Notices

22. Any notice, advice, document or writing required or contemplated by any provision hereof shall be given in writing and if to the Landlord, either delivered personally to an officer of the Landlord or mailed by prepaid mail addressed to the Landlord at the said local office address of the Landlord as stated below, and if to the Tenant, either delivered personally to the Tenant (or to an officer of the Tenant, if a corporation) or mailed by prepaid mail addressed to the Tenant at the Leased Premises, or if an address of the Tenant is shown in the description of the Tenant, to such address as stated below. Every such notice, advice, document or writing shall be deemed to have been given when delivered or when refused as evidenced by the deliveryman’s records. The Landlord may from time to time by notice in writing to the Tenant designate another address as the address to which notices are to be mailed to it, or specify with greater particularity the address and persons to which such notices are to be mailed and may require that copies of notices be sent to

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	15	Landlord | Tenant

an agent designated by it. The Tenant may from time to time by notice in writing to the Landlord, designate another address as the address to which notices are to be mailed to it, or specify with greater particularity the address to which such notices are to be mailed.

NOTICES TO LANDLORD:	John Hancock Life Insurance Company (U.S.A.)
	c/o Manulife Financial Chicago Real Estate Office 1475 East Woodfield Road, Suite 108 Schaumburg, IL, 60173

Interpretation

23. In this Lease, “herein”, “hereof”‘, “hereby”, “hereunder”, “hereto”, “hereinafter” and similar expressions refer to this Lease and not to any particular paragraph, clause or other portion thereof, unless there is something in the subject matter or context inconsistent therewith; and the parties agree that all of the provisions of this Lease are to be construed as covenants and agreements as though words importing such covenants and agreements were used in each separate paragraph hereof, and that should any provision or provisions of this Lease be illegal or not enforceable it or they shall be considered separate and severable from the Lease and its remaining provisions shall remain in force and be binding upon the parties hereto as though the said provision or provisions had never been included, and further that the captions appearing for the provisions of this Lease have been inserted as a matter of convenience and for reference only and in no way define, limit or enlarge the scope or meaning of this Lease or of any provisions hereof.

Extent of Lease

Obligations

24. This Lease and everything herein contained shall enure to the benefit of and be binding upon the respective heirs, executors, administrators, successors, assigns and other legal representatives, as the case may be, of each and every of the parties hereto, subject to the granting of consent by the Landlord to any assignment or sublease, and every reference herein to any party hereto shall include the heirs, executors, administrators, successors, assigns and other legal representatives of such party, and where there is more than one tenant or there is a male or female party the provisions hereof shall be read with all grammatical changes thereby rendered necessary and all covenants shall be deemed joint and several.

Use and Occupancy Prior

to Term

25. If the Tenant shall for any reason use or occupy the Leased Premises in any way prior to the commencement of the Term without there being an existing lease between the Landlord and Tenant under which the Tenant has occupied the Leased Premises, then during such prior use or occupancy the Tenant shall be a Tenant of the Landlord and shall be subject to the same covenants and agreements in this Lease mutatis mutandis.

Limitation on

Landlord Liability

26. Notwithstanding any other provision of this Lease, it is expressly understood and agreed that the total liability of the Landlord arising out of or in connection with this Lease, the relationship of the Landlord and the Tenant hereunder and/or the Tenant’s use of the Leased Premises, shall be limited to the estate of the Landlord in the Property. No other property or asset of the Landlord or any partner or owner of the Landlord shall be subject to levy, execution, or other enforcement proceedings or other judicial process for the satisfaction of any judgment or any other right or remedy of the Tenant arising out of or in connection with this Lease, the relationship of the Landlord and the Tenant hereunder and/or the Tenant’s use of the Leased Premises.

Waiver of Jury

Trial

27. The Tenant hereby waives trial by jury in any claim, action, proceeding or counterclaim brought by either party against the other on any matters arising out of or in any way connected with this Lease, the relationship of the Landlord and the Tenant, or the Tenant’s use and occupancy of the Leased Premises.

Choice of Law

28. This Lease shall be governed by the laws of the State in which the Leased Premises are located. Any litigation between the Landlord and the Tenant concerning this Lease shall be initiated in the county in which the Leased Premises are located.

Broker

29. Landlord and Tenant represent to each other that the only person involved in this transaction is Leland Middleton, Studley, Inc. (the “Broker”). Landlord agrees to pay the Broker a leasing commission in accordance with a separate agreement. The parties shall indemnify each other for their breach of this paragraph.

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	16	Landlord | Tenant

Food Service

30. Tenant’s business requires the service of food (prepared off-site) through caterers. Tenant shall be free to direct that business to the caterer/food supplier of its selection and shall not be restricted to use any Landlord designated supplier/caterer. Tenant shall use its Leased Premises to serve and consume the food and will properly clean up and dispose of garbage.

Hazardous

Materials

31. The Landlord represents that to the best of the Landlord’s knowledge, Landlord has not used the Building to treat, store, refine, process, or dispose of hazardous wastes, hazardous substances, or toxic substances, as those terms are defined under CERCLA, 43 U.S.C. 9601 et seq., RECR, 52 U.S.C. 6901, et seq., or TSCA, 15 U.S.C. 2401 et seq., (hereinafter “Hazardous Materials”) except as is normal in the operation of a commercial office building, including but not limited to janitorial supplies and duplicating supplies, and further represents that to the best of Landlord’s knowledge, there are no releases nor, to the best of Landlord’s knowledge, have there ever been any releases of such Hazardous Materials at, on, or under the Building which would give rise to a cleanup or remediation obligation under any applicable federal, state, or local environmental law, regulation, or ordinance or under common law. Landlord further represents that to the best of Landlord’s knowledge the Building does not contain friable asbestos in any form, including insulation or flooring.

Americans with

Disabilities Act

32. The Landlord agrees that it will discharge any obligations imposed upon it as the owner of the Building by the Americans with Disabilities Act. The Tenant agrees that it will discharge any obligations with respect to the Leased Premises imposed by the Americans with Disabilities Act.

Anti-Terrorism

33. Tenant represents and warrants that it is not acting, directly or indirectly, for or on behalf of any person, group, entity, or nation named by the United States Treasury Department as a Specially Designated National and Blocked Person, or for or on behalf of any person, group, entity, or nation designated in Presidential Executive Order 13224 as a person who commits, threatens to commit, or supports terrorism; and that it is not engaged in this Lease directly or indirectly on behalf of, or facilitating this Lease directly or indirectly on behalf of, any such person, group, entity, or nation. Tenant agrees to defend, indemnify, and hold harmless Landlord from and against any and all claims, damages, losses, risks, liabilities, and expenses (including reasonable attorneys’ fees and costs) arising from or related to any breach of the foregoing representation and warranty.

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	17	Landlord | Tenant

Schedules

34. The provisions of the following Schedules attached hereto shall form part of this Lease as if the same were embodied herein:

Schedule “A”	-	Legal Description of Property
Schedule “B”	-	Measurement of Rentable Area
Schedule “B-1”	-	Location of Leased Premises
Schedule “B-2”	-	Space Plan
Schedule “C”	-	Taxes Payable by Landlord and Tenant
Schedule “D”	-	Services and Costs
Schedule “E”	-	Rules and Regulations
Schedule “F”	-	Leasehold Improvements
Schedule “G”	-	Tenant Cash Allowance
Schedule “H”	-	Option to Renew
Schedule “I”	-	Not Applicable – not a part of this Lease
Schedule “J”	-	Restrictive Covenant in other Leases
Schedule “K”	-	Right to Assign & Sublet
Schedule “K-1”	-	Option to Cancel
Schedule “K-2”	-	Occupancy Prior to Commencement of Term
Schedule “L-1”	-	Cleaning Specifications
Schedule “L-2”	-	Security

IN WITNESS WHEREOF the parties hereto have executed this Agreement. I/We have authority to bind the corporation.

	Landlord:
	JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)
	by Signature
Witness as to signing by Landlord	Title:	Bruce R. Pearson Regional Director
	Tenant:
Witness/Attest	LEARNING TREE INTERNATIONAL USA, INC. A Delaware Corporation
	by Signature
Witness as to signing by	Title:	General Manager, USA
Tenant or officer(s) of Tenant	Print Name:	Donald Berbary
	by Signature
	Title:	President & COO
	Print Name:	Nicholas R. Schacht

(03/5/98) OFFICE LEASE (U.S.A.)		INITIAL       .
	18	Landlord | Tenant

SCHEDULE “A”

(Legal Description of Property)

The East Half of the South West quarter of Section 13, Township 41 North, Range 10, East of the Third Principal Meridian (excepting therefrom the following: the East 25.00 feet thereof; the North 67.00 feet thereof dedicated for Woodfield Road per Document 20944554; the West 70.00 feet thereof taken for Meacham Road; that part thereof lying Southwesterly of the Northeasterly line of Higgins Road as monumented and occupied) all in Cook County, Illinois

Property Name: Schaumburg Corporate Center

(03/5/98): File (SCH_A)	Schedule A	INITIAL       .
	1	Landlord | Tenant

SCHEDULE “B”

(Measurement of Rentable Area)

The rentable area and usable area of the Premises have been calculated in accordance with the methods of measurement rentable area and usable area as described in the Standard Method for Measuring Floor Area in Office Building, ANSI Z65.1-1996, as promulgated by the Building Owners and Managers Association (BOMA) International.

Property Name: Schaumburg Corporate Center

(03/5/98): File (SCH_B)	Schedule B	INITIAL       .
	1	Landlord | Tenant

SCHEDULE “B-1”

(Location of Leased Premises cross-hatched)

This Schedule is for identification purposes only and is not to be interpreted as being a representation or warranty on the part of the Landlord as to the exact location, area, configuration and layout.

Property Name: Schaumburg Corporate Center

(03/5/98): File (SCH_B-1)	Schedule B-1	INITIAL       .
	1	Landlord | Tenant

SCHEDULE “B-2”

(Interior Plan of Leased Premises cross-hatched)

This Schedule is for identification purposes only and is not to be interpreted as being a representation or warranty on the part of the Landlord as to the exact location, area, configuration and layout.

(03/5/98): File (SCH_B-2)	Schedule B-2	INITIAL       .
	1	Landlord | Tenant

SCHEDULE “C”

Taxes Payable by Landlord and Tenant

Tenant’s Taxes

1.  (a)   The Tenant covenants to pay all Tenant’s Taxes, as and when the same become due and payable. Where any Tenant’s Taxes are payable by the Landlord to the relevant taxing authorities, the Tenant covenants to pay the amount thereof to the Landlord.

(b) The Tenant covenants to pay the Landlord the Tenant’s Proportionate Share of the amount of the Landlord’s Taxes in each Fiscal Period.

(c) The Tenant covenants to pay to the Landlord the Tenant’s Proportionate Share of the costs and expenses (including legal and other professional fees and interest and penalties on deferred payments) incurred in good faith by the Landlord in contesting, resisting or appealing any of the Taxes.

Landlord’s Taxes

(d) The Landlord covenants to pay all Landlord’s Taxes subject to the payments on account of Landlord’s Taxes required to be made by the Tenant elsewhere in this Lease. The Landlord may appeal any official assessment or the amount of any Taxes or other taxes based on such assessment and relating to the Property. In connection with any such appeal, the Landlord may defer payment of any Taxes or other taxes, as the case may be, payable by it to the extent permitted by law, and the Tenant shall co-operate with the Landlord and provide the Landlord with all relevant information reasonably required by the Landlord in connection with any such appeal.

Separate Allocation

(e) In the event that the Landlord is unable to obtain from the taxing authorities any separate allocation of Landlord’s Taxes, Tenant’s Taxes or assessment as required by the Landlord to make calculations of Additional Rent under this Lease, such allocation shall be made by the Landlord acting reasonably and shall be conclusive.

Information

(f) Whenever requested by the Landlord, the Tenant shall deliver to it receipts for payment of all the Tenant’s Taxes and furnish such other information in connection therewith as the Landlord may reasonably require.

Tax Adjustment

(g) If the Property has not been taxed as a completed and fully occupied property for any Fiscal Period, the Landlord’s Taxes will be determined by the Landlord as if the Property had been taxed as a completed property with all improvements therein fully occupied by commercial tenants for any such Fiscal Period.

Definition

2. In this Lease:

(a) “Landlord’s Taxes” shall mean the aggregate of all Taxes attributable to the Property, the Rent or the Landlord in respect thereof and including, any amounts imposed, assessed, levied or charged in substitution for or in lieu of any such Taxes, but excluding such taxes as capital gains taxes, corporate income, profit or excess profit taxes to the extent such taxes are not levied in lieu of any of the foregoing against the Property or the Landlord in respect thereof;

(b) “Taxes” shall mean all taxes, rates, duties, levies, fees, charges, local improvement rates, capital taxes, rental taxes and assessments whatsoever including fees, rents, and levies for air rights and encroachments on or over municipal property imposed, assessed, levied or charged by any school, municipal, regional, state, provincial, federal, parliamentary or other body, corporation, authority, agency or commission provided that “Taxes” shall not include any special utility, levies, fees or charges imposed, assessed, levied or charged which are directly associated with initial construction of the Property;

(c) “Tenant’s Taxes” shall mean the aggregate of:

(i) all Taxes (whether imposed upon the Landlord or the Tenant) attributable to the personal property, trade fixtures, business, income, occupancy or sales of the Tenant or any other occupant of the Leased Premises, and to any Leasehold Improvements or fixtures installed by or on behalf of the Tenant within the Leased Premises, and to the use by the Tenant of any of the Property; and

(03/5/98) Net Office: File (SCH_CNET)	Schedule C	INITIAL       .
	1	Landlord | Tenant

(ii) the amount by which Taxes (whether imposed upon the Landlord or the Tenant) are increased above the Taxes which would have otherwise been payable as a result of the Leased Premises or the Tenant or any other occupant of the Leased Premises being taxed or assessed in support of separate schools; and

(d) “Tenant’s Proportionate Share” shall mean 1.10% subject to adjustment as determined solely by the Landlord and notified to the Tenant in writing for physical increases or decreases in the total Rentable Area of the Property provided that total Rentable Area of the Property and the Rentable Area of the Leased Premises shall exclude areas designated (whether or not rented) for parking and for storage. The above referenced proportionate share was calculated using 1,000,211 rentable square feet as the total area of the Building/Property. It is agreed and understood that the Landlord has confirmed that the rentable area and usable area of the Premises and the Property has been calculated in accordance with the methods of measurement rentable area and usable area as described in the Standard Method for Measuring Floor Area in Office Building, ANSI Z65.1-1996, as promulgated by the Building Owners and Managers Association (BOMA) International.

(e) Tenant shall receive credit for any reduction in Taxes applicable in the year received by taxing authority, from the amount Tenant paid for that year in which the refund was made.

(03/5/98) Net Office: File (SCH_CNET)	Schedule C	INITIAL       .
	2	Landlord | Tenant

SCHEDULE “D”

Services and Costs

Interior Climate

Control

1. The Landlord covenants with the Tenant:

(a) To maintain in the Leased Premises conditions of reasonable temperature and comfort in accordance with good standards applicable to normal occupancy of premises for office purposes subject to governmental regulations during hours to be determined by the Landlord (but to be at least the hours from 8:00 a.m. to 7:00 p.m. from Monday to Friday and from 8:00 a.m. to 1:00 p.m. on Saturdays as long as it is customary in similar buildings in the Woodfield area of Schaumburg, Illinois, inclusive with the exception of holidays, and Sundays), such conditions to be maintained by means of a system for heating and cooling, filtering and circulating air. At times other than the normal business hours and days aforesaid, central air conditioning and heating shall be provided to the Tenant upon at least twenty four (24) hours’ prior notice from the Tenant, and upon payment by the Tenant of the hourly charge established by the Landlord for each hour (or a portion) of after-hours HVAC usage. As of the date hereof, the charge for the provision by the Landlord of after-hours HVAC service is $35.00 per hour, per floor, for which the Tenant requests that the Landlord provide such services. The Landlord shall have no responsibility for any inadequacy of performance of the said system if the occupancy of the Leased Premises or the electrical power or other energy consumed on the Leased Premises for all purposes exceeds reasonable amounts as determined by the Landlord or the Tenant installs partitions or other installations in locations which interfere with the proper operation of the system of interior climate control or if the window covering on exterior windows is not kept fully closed;

Janitor

Service

(b) To provide janitor and cleaning services to the Leased Premises and to common areas of the Building consisting of reasonable services in accordance with the standards of similar office buildings (See Schedule L-1);

Elevators,

Lobbies, etc.

(c) To keep available the following facilities for use by the Tenant and its employees and invitees in common with other persons entitled thereto:

(i) passenger and freight elevator service to each floor upon which the Leased Premises are located provided such service is installed in the Building and provided that the Landlord may prescribe the hours during which and the procedures under which freight elevator service shall be available and may limit the number of elevators providing service outside normal business hours;

(ii) common entrances, lobbies, stairways and corridors giving access to the Building and the Leased Premises, including such other areas from time to time which may be provided by the Landlord for common use and enjoyment within the Property;

(iii) the washrooms as the Landlord may assign from time to time which are standard to the Building, provided that the Landlord and the Tenant acknowledge that where an entire floor is leased to the Tenant or some other tenant the Tenant or such other tenant, as the case may be, may exclude others from the washrooms thereon. Tenant shall have the use of potable water for drinking and lavatory use as provided for in the common areas of the Property.

Security                   (d)      See  Schedule  L-2.

Electricity

2.    (a)     The Landlord covenants with the Tenant and the Landlord shall have the sole right to furnish electricity to the Property. Standard to the common areas of the Building, the Landlord shall furnish electricity during hours to be determined by the Landlord (but to be at least the hours from 8:00 a.m. to 6:00 p.m. from Monday to Friday and from 8:00 a.m. to 1:00 p.m. on Saturdays as long as it is customary in similar buildings in the Woodfield area of Schaumburg, Illinois inclusive with the exception of holidays and Sundays) and during such other hours that the Tenant elects at its sole cost and expense subject to governmental regulations;

      (b)     The amount of electricity consumed in the Leased Premises, required by the Tenant for normal office use, available 24 hours a day, shall be as determined by a sub metering device for energy allocation purposes, and billed directly to the Tenant by the local electrical company. The Tenant shall pay the Landlord for any such excess electricity on demand (i.e. as may be required for HVAC after-hour usage).

3. The Landlord shall maintain and keep in repair the facilities required for the provision of the interior climate control, elevator (if installed in the Building) and other services referred to in sub-paragraph (a) and

(03/5/98) Net Office: File (SCH_DNET)	Schedule D	INITIAL       .
	1	Landlord | Tenant

(c) of paragraph 1 and sub-paragraph (a) of paragraph 2 of this Schedule in accordance with the standards of office buildings similar to the Building but reserves the right to stop the use of any of these facilities and the supply of the corresponding services when necessary by reason of accident or breakdown or during the making of repairs, alterations or improvements, in the reasonable judgment of the Landlord necessary or desirable to be made, until the repairs, alterations or improvements shall have been completed to the satisfaction of the Landlord.

Additional

Services

4.    (a)     The Landlord may (but shall not be obliged) on request of the Tenant supply services or materials to the Leased Premises and the Property which are not provided for under this Lease and which are used by the Tenant (the “Additional Services”) including, without limitation,

(i) replacement of tubes and ballasts;

(ii) carpet shampooing;

(iii) window covering cleaning;

(iv) locksmithing;

(v) removal of bulk garbage;

(vi) picture hanging; and

(vii) special security arrangement.

    (b)   When Additional Services are supplied or furnished by the Landlord, accounts therefor shall be rendered by the Landlord and shall be payable by the Tenant to the Landlord within thirty (30) days. In the event the Landlord shall elect not to supply or furnish Additional Services, only persons with prior written approval by the Landlord (which approval shall not be unreasonably withheld) shall be permitted by the Landlord or the Tenant to supply or furnish Additional Services to the Tenant and the supplying and furnishing shall be subject to the reasonable rules fixed by the Landlord with which the Tenant undertakes to cause compliance and to comply.

Operating

Charges Payable

5.    (a)     The Tenant covenants to pay to the Landlord the Tenant’s Proportionate Share of the amount of the Operating Costs in each Fiscal Period (Landlord shall maintain its books and records regarding Operating Costs calculated according to GAAP);

        (b) Subject to the other terms and conditions of this Lease, the Landlord shall not be responsible during the Term for any costs, charges, expenses and outlays of any nature whatsoever arising from or relating to the Leased Premises and the Tenant shall pay all charges, impositions, costs and expenses of every nature and kind relating to the Leased Premises and the amounts included as Additional Rent whether or not specifically provided for herein and the Tenant covenants with the Landlord accordingly;

        (c) In this Lease “Operating Costs” shall include all costs incurred or which will be incurred by the Landlord in discharging its obligations under this Lease and in the maintenance, operation, administration and management of the Property including without limitation which are not incurred by or charged directly to a specific tenant:

(i) cost of heating, ventilating and air-conditioning;

(ii) cost of water and sewer charges;

(iii) cost of electricity, fuel or other form of energy which are not separately metered and recovered or paid by tenants;

(iv) costs of insurance carried by the Landlord pursuant to paragraph 9(a) of this Lease and cost of any deductible amount paid by the Landlord in connection with each claim made by the Landlord under such insurance;

(v) cost of building office expenses, including telephone, rent, stationery and supplies;

(vi) costs of all elevator and escalator (if installed in the Building) maintenance and operation;

(vii) costs of operating staff, management staff and other administrative personnel, including salaries, wages, and fringe benefits of such personnel who are devoted to the Property;

(viii) cost of providing security and costs of repair, maintenance and replacement of communications, fire and life safety systems serving the Property;

(ix) cost of providing janitorial services, window cleaning, garbage and snow removal and pest control;

(x) cost of supplies and materials;

(xi) cost of decoration of common areas;

(xii) cost of landscaping;

(xiii) cost of maintenance and operation of the parking area and costs of operating, maintaining, repairing, and replacing all pedestrian and vehicular entrances and exits, passageways, driveways, tunnels, subway connections and delivery and holding areas used in connection with the Property;

(03/5/98) Net Office: File (SCH_DNET)	Schedule D	INITIAL       .
	2	Landlord | Tenant

(xiv) cost of consulting, and professional fees including expenses;

(xv) cost of replacements, additions and modifications unless otherwise included under Operating Costs under subparagraph (xvi), and cost of repair and;

(xvi) costs in respect of each Major Expenditure (as hereinafter defined) as amortized over the period of the Landlord’s reasonable estimate of the economic life of the Major Expenditure, but not to exceed fifteen (15) years, using equal monthly installments of principal and interest at ten percent (10%) per annum compounded semi-annually. For the purpose hereof “Major Expenditure” shall mean any expenditure incurred after the date of substantial completion of the Building for replacement of machinery, equipment, building elements, systems or facilities forming a part of or used in connection with the Property or for modifications, upgrades or additions to the Property or facilities used in connection therewith, provided that, in each case, such expenditure was more than ten percent (10%) of the total Operating Costs for the immediately preceding Fiscal Period.

        (d)     In this Lease there shall be excluded from Operating Costs the following:

(i) interest on debt and capital retirement of debt;

(ii) such of the Operating Costs as are recovered from insurance proceeds; and

(iii) costs as determined by the Landlord of acquiring tenants for the Property or are chargeable to a particular tenant;

(iv) Ground lease rents;

(v) Political contributions;

(vi) Profit sharing contributions;

(vii) Property management fees in excess of 3% of Gross Rent.

6. In calculating Operating Costs for any Fiscal Period, if less than one hundred percent (100%) of Property is occupied by tenants, then the amount of such Operating Costs shall be deemed for the purposes of this Schedule to be increased to an amount equal to the like Operating Costs which normally would be expected by the Landlord to have been incurred had such occupancy been one hundred percent (100%) during such entire period.

7. “Tenant’s Proportionate Share” shall mean one decimal one zero percent (1.10%) subject to adjustment as determined solely by the Landlord and notified to the Tenant in writing for physical increases or decreases in the total Rentable Area of the Property provided that total Rentable Area of the Property and the Rentable Area of the Leased Premises shall exclude areas designated (whether or not rented) for parking and for storage. The above referenced proportionate share was calculated using 1,000,211 rentable square feet as the total area of the Building/Property. It is agreed and understood that the Landlord has confirmed that the rentable area and usable area of the Premises and the Property has been calculated in accordance with the methods of measurement rentable area and usable area as described in the Standard Method for Measuring Floor Area in Office Building, ANSI Z65.1-1996, as promulgated by the Building Owners and Managers Association (BOMA) International.

(03/5/98) Net Office: File (SCH_DNET)	Schedule D	INITIAL       .
	3	Landlord | Tenant

SCHEDULE “E”

Rules and Regulations

1. The sidewalks, entry passages, elevators (if installed in the Building) and common stairways shall not be obstructed by the Tenant or used for any other purpose than for ingress and egress to and from the Leased Premises. The Tenant will not place or allow to be placed in the Building corridors or public stairways any waste paper, dust, garbage, refuse or anything whatever.

2. The washroom plumbing fixtures and other water apparatus shall not be used for any purpose other than those for which they were constructed, and no sweepings, rubbish, rags, ashes or other substances shall be thrown therein. The expense of any damage resulting by misuse by the Tenant shall be borne by the Tenant.

3. The Tenant shall permit window cleaners to clean the windows of the Leased Premises during normal business hours.

4. No birds or animals shall be kept in or about the Property nor shall the Tenant operate or permit to be operated any musical or sound-producing instruments or device or make or permit any improper noise inside or outside the Leased Premises which may be heard outside such Leased Premises.

5. No one shall use the Leased Premises for residential purposes, or for the storage of personal effects or articles other than those required for business purposes.

6. All persons entering and leaving the Building at any time other than during normal business hours shall register in the books which may be kept by the Landlord at or near the night entrance and the Landlord will have the right to prevent any person from entering or leaving the Building or the Property unless provided with a key to the premises to which such person seeks entrance and a pass in a form to be approved by the Landlord. Any persons found in the Building at such times without such keys and passes will be subject to the surveillance of the employees and agents of the Landlord.

7. No dangerous or explosive materials shall be kept or permitted to be kept in the Leased Premises.

8. The Tenant shall not permit any cooking in the Leased Premises except for food warmed up in microwaves for consumption by employees or guests of the Tenant. The Tenant shall not install or permit the installation or use of any machine dispensing goods for sale in the Leased Premises without the prior written approval of the Landlord. Only persons authorized by the Landlord shall be permitted to deliver or to use the elevators (if installed in the Building) for the purpose of delivering food or beverages to the Leased Premises. Notwithstanding the foregoing, Tenant shall have the right to install four (4) vending machines for food/snacks within the Leased Premises.

9. The Tenant shall not bring in or take out, position, construct, install or move any safe, business machine or other heavy office equipment without first obtaining the prior written consent of the Landlord. In giving such consent, the Landlord shall have the right in its sole discretion, to prescribe the weight permitted and the position thereof, and the use and design of planks, skids or platforms to distribute the weight thereof. All damage done to the Building by moving or using any such heavy equipment or other office equipment or furniture shall be repaired at the expense of the Tenant. The moving of all heavy equipment or other office equipment or furniture shall occur only at times consented to by the Landlord and the persons employed to move the same in and out of the Building must be acceptable to the Landlord. Safes and other heavy office equipment will be moved through the halls and corridors only upon steel bearing plates. No freight or bulky matter of any description will be received into the Building or carried in the elevators (if installed in the Building) except during hours approved by the Landlord.

10. The Tenant shall give the Landlord prompt notice of any accident to or any defect in the plumbing, heating, air-conditioning, ventilating, mechanical or electrical apparatus or any other part of the Building.

11. The parking of automobiles shall be subject to the charges and the reasonable regulations of the Landlord. The Landlord shall not be responsible for damage to or theft of any car, its accessories or contents whether the same be the result of negligence or otherwise. So long as no Event of Default exists hereunder, Tenant shall be entitled to the use of 44 of the of the above-ground, non-reserved parking spaces or 4 per 1,000 square feet of Rentable Area of the Premises in common with Landlord and other tenants in the Building on an unassigned, “first come-first served” basis during the Lease Term. Tenant and its agents, employees, licensees and invitees shall not park in any spaces reserved for another tenant and clearly marked for reserve use. Landlord has and reserves the right to alter the methods used to control parking and the right to establish such controls and rules and regulations (such as parking stickers to be affixed to vehicles) regarding parking that Landlord may deem desirable. Without liability, Landlord will have the right to tow or otherwise remove vehicles improperly parked, blocking ingress or egress lanes, or

(03/5/98) OFFICE : File (SCH_E)	Schedule E	INITIAL       .
	1	Landlord | Tenant

violating parking rules, at the expense of the offending tenant and/or owner of the vehicle. Tenant’s right to use the parking facilities pursuant to this Lease are subject to the following conditions: (i) Landlord has no obligation to provide a parking attendant and Landlord shall have no liability on account of any loss or damage to any vehicle or the contents thereof, Tenant hereby agreeing to bear the risk of loss for same; and (ii) if and when so requested by Landlord, Tenant shall furnish Landlord with the license numbers of any vehicles of Tenant, its agents and employees.

12. The Tenant shall not mark, drill into or in any way deface the walls, ceilings, partitions, floors or other parts of the Leased Premises and the Building.

13. Except with the prior written consent of the Landlord, no tenant shall use or engage any person or persons other than the janitor or janitorial contractor of the Landlord for the purpose of any cleaning of the Leased Premises.

14. If the Tenant desires any electrical or communications wiring, the Landlord reserves the right to direct qualified persons as to where and how the wires are to be introduced, and without such directions no borings or cutting for wires shall take place. No other wires or pipes of any kind shall be introduced without the prior written consent of the Landlord.

15. The Tenant shall not place or cause to be placed any additional locks upon any doors of the Leased Premises without the approval of the Landlord and subject to any conditions imposed by the Landlord. Additional keys may be obtained from the Landlord at the cost of the Tenant.

16. The Tenant shall be entitled to have its name shown upon the directory board of the Building and at one of the entrance doors to the Leased Premises all at the Tenant’s expense, but the Landlord shall in its sole discretion design the style of such identification and allocate the space on the directory board for the Tenant.

17. The Tenant shall keep the window coverings (if any) in a closed position during period of direct sun load. The Tenant shall not interfere with or obstruct any perimeter heating, air-conditioning or ventilating units.

18. The Tenant shall not conduct, and shall not permit any, canvassing in the Building.

19. The Tenant shall take care of the rugs and window coverings (if any) in the Leased Premises and shall arrange for the carrying-out of regular spot cleaning and shampooing of carpets and cleaning of window coverings in a manner acceptable to the Landlord.

20. The Tenant shall permit the periodic closing of lanes, driveways and passages for the purpose of preserving the Landlord’s rights over such lanes, driveways and passages.

21. The Tenant shall not place or permit to be placed any sign, advertisement, notice or other display on any part of the exterior of the Leased Premises or elsewhere if such sign, advertisement, notice or other display is visible from outside the Leased Premises without the prior written consent of the Landlord which may be arbitrarily withheld. The Tenant, upon request of the Landlord, shall immediately remove any sign, advertisement, notice or other display which the Tenant has placed or permitted to be placed which, in the opinion of the Landlord, is objectionable, and if the Tenant shall fail to do so, the Landlord may remove the same at the expense of the Tenant.

22. The Landlord shall have the right to make such other and further reasonable rules and regulations and to alter the same as in its judgment may from time to time be needful for the safety, care, cleanliness and appearance of the Leased Premises and the Building and for the preservation of good order therein, and the same shall be kept and observed by the tenants, their employees and servants. The Landlord also has the right to suspend or cancel any or all of these rules and regulations herein set out.

(03/5/98) OFFICE : File (SCH_E)	Schedule E	INITIAL       .
	2	Landlord | Tenant

SCHEDULE “F”

Leasehold Improvements

Definition of

Leasehold

Improvements

1. For purposes of this Lease, the term “Leasehold Improvements” includes, without limitation, all fixtures, improvements, installations, alterations and additions from time to time made, erected or installed by or on behalf of the Tenant, or any previous occupant of the Leased Premises, in the Leased Premises and by or on behalf of other tenants in other premises in the Building (including the Landlord if an occupant of the Building), including all partitions, doors and hardware however affixed, and whether or not movable, all mechanical, electrical, telephone/data cabling, utility installations and all carpeting and drapes with the exception only of furniture and equipment not of the nature of fixtures.

Installation of

Improvements

and Fixtures

2. The Tenant shall not make, erect, install or alter any Leasehold Improvements in the Leased Premises without having requested and obtained the Landlord’s prior written approval. Tenant should note that the leased Premises contains post tensioning, therefore no drilling or coring to beams or slabs should be performed without prior written approval of Landlord and Building Structural Engineer. The Landlord’s approval shall not, if given, under any circumstances be construed as consent to the Landlord having its estate charged with the cost of work. The Landlord shall not unreasonably withhold its approval to any such request, but failure to comply with the Landlord’s reasonable requirements from time to time for the Building shall be considered sufficient reason for refusal. In making, erecting, installing or altering any Leasehold Improvements the Tenant shall not, without the prior written approval of the Landlord, alter or interfere with any installations which have been made by the Landlord or others and in no event shall alter or interfere with window coverings (if any) or other light control devices (if any) installed in the Building. The Tenant’s request for any approval hereunder shall be in writing and accompanied by an adequate description of the contemplated work and, where considered appropriate by the Landlord, working drawings and specifications thereof. If the Tenant requires from the Landlord drawings or specifications of the Building in connection with the Leasehold Improvements, the Tenant shall pay the cost thereof to the Landlord on demand (however, Tenant shall not be required to pay the cost of CAD drawings that were emailed to Tenant prior to signing of this Lease). Any reasonable costs and expenses incurred by the Landlord in connection with the Tenant’s Leasehold Improvements shall be paid by the Tenant to the Landlord on demand. Tenant will manage its construction process with their own construction manager. All work to be performed in the Leased Premises shall be performed by competent and adequately insured contractors and sub-contractors of whom the Landlord shall have approved in writing prior to commencement of any work, such approval not to be unreasonably withheld (except that the Landlord may require that the Landlord’s contractors and sub-contractors be engaged for any mechanical or electrical work) and by workmen who have labor union affiliations that are compatible with those affiliations (if any) of workmen employed by the Landlord and its contractors and sub-contractors. All such work including the delivery, storage and removal of materials shall be subject to the reasonable supervision of the Landlord, shall be performed in accordance with any reasonable conditions or regulations imposed by the Landlord including, without limitation, payment on demand of a reasonable fee of the Landlord for such supervision (however, such fee shall be waived with respect to the initial Leasehold Improvements), and shall be completed in good and workmanlike manner in accordance with the description of the work approved by the Landlord and in accordance with all laws, regulations and by-laws of all regulatory authorities. Required building permits or authorizations shall be obtained by the Tenant at its expense and copies thereof shall be provided to the Landlord. If the Tenant undertakes Leasehold Improvements, upon completion of such Leasehold Improvements the Tenant shall supply to the Landlord complete “As-Built” drawings representing Leasehold Improvements installed, in such format as reasonably required by the Landlord, and, if applicable, an engineer approved air balance report. No locks shall be installed on the entrance doors or in any doors in the Leased Premises that are not keyed to the Building master key system.

Liens and

Encumbrances on

Improvements

and Fixtures

3. In connection with the making, erection, installation or alteration of Leasehold Improvements and all other work or installations made by or for the Tenant in the Leased Premises the Tenant shall comply with all the provisions of the construction lien and other similar statutes from time to time applicable thereto (including any proviso requiring or enabling the retention by way of holdback of portions of any sums payable) and, except as to any such holdback, shall promptly pay all accounts relating thereto. The Tenant will not create any mortgage, conditional sale agreement or other encumbrance in respect of its Leasehold Improvements or, without the written consent of the Landlord, with respect to its trade fixtures nor shall the Tenant take any action as a consequence of which any such mortgage, conditional sale agreement or other encumbrance would attach to the Property or any part thereof. If and whenever any construction or other lien for work, labor, services or materials supplied to or for the Tenant or for the cost of which the Tenant

(03/5/98) OFFICE : File (SCH_F)	Schedule F	INITIAL       .
	1	Landlord | Tenant

may be in any way liable or claims therefore shall arise or be filed or any such mortgage, conditional sale agreement or other encumbrance shall attach, the Tenant shall within twenty (20) days after submission by the Landlord of notice thereof procure the discharge thereof, including any certificate of action registered in respect of any lien, by payment or giving security or in such other manner as may be required or permitted by law, and failing which the Landlord may avail itself of any of its remedies hereunder for default of the Tenant and may make any payments or take any steps or proceedings required to procure the discharge of any such liens or encumbrances, and shall be entitled to be repaid by the Tenant on demand for any such payments and to be paid on demand by the Tenant for all costs and expenses in connection with steps or proceedings taken by the Landlord and the Landlord’s right to reimbursement and to payment shall not be affected or impaired if the Tenant shall then or subsequently establish or claim that any lien or encumbrances so discharged was without merit or excessive or subject to any abatement, set-off or defense. The Tenant agrees to indemnify the Landlord from all claims, costs and expenses which may be incurred by the Landlord in any proceedings brought by any person against the Landlord alone or with another or others for or in respect of work, labor, services or materials supplied to or for the Tenant.

Removal of

Improvements

and Fixtures

4. All Leasehold Improvements in or upon the Leased Premises shall immediately upon their placement be and become the Landlord’s property without compensation therefore to the Tenant. Except to the extent otherwise expressly agreed by the Landlord in writing, no Leasehold Improvements, furniture or equipment shall be removed by the Tenant from the Leased Premises either during or at the expiration or sooner termination of the Term except that:

a) the Tenant shall, prior to the end of the Term, remove such of the Leasehold Improvements and trade fixtures in the Leased Premises as the Landlord shall require to be removed beyond those approved in Schedule “B-2”; however, in any event the Tenant is obligated to remove all telephone/data cabling installed on Tenant’s behalf; and

b) the Tenant may, at the times appointed by the Landlord and subject to availability of elevators (if installed in the Building), remove its furniture and equipment at the end of the Term, and also during the Term in the usual and normal course of its business where such furniture or equipment has become excess for the Tenant’s purposes or the Tenant is substituting therefore new furniture and equipment.

The Tenant shall, in the case of every removal, make good at the expense of the Tenant any damage caused to the Property by the installation and removal. In the event of the Non-removal by the end of the Term, or sooner termination of this Lease, of such trade fixtures or Leasehold Improvements required by the Landlord of the Tenant to be removed, the Landlord shall have the option, in addition to its other remedies under this Lease to declare to the Tenant that such trade fixtures are the property of the Landlord and the Landlord upon such a declaration may dispose of such trade fixtures and retain any proceeds of disposition as security for the obligations of the Tenant to the Landlord and the Tenant shall be liable to the Landlord for any expenses incurred by the Landlord.

5. For the purpose of this Lease,

a) the term “Tenant’s Work” shall mean all work required to be done to complete the Leased Premises for occupancy by the Tenant excluding the “Landlord’s Work” (as hereinafter defined).

b) the term “Landlord’s Work” shall mean:

i) All work related to base building construction (“Base Building Construction”). Base Building Construction means:

I. Window blinds or treatments;

II. Socket for metering the premises (which meter is currently provided by ComEd);

III. Completed men’s and women’s washroom facilities on each floor; a minimum of one water fountain on each floor;

IV. Heating, ventilating, air conditioning and sprinklers brought to the premises with all “main loops” and major distribution lines in place and perimeter window line heating installed;

V. All perimeter walls, core walls and columns dry walled, taped and ready for painting;

VI. Fire exits signs as required on open floors;

VII. All required fire hose cabinets and standpipe connections completed as required on open floors and all smoke detectors installed as required;

VIII. All other Base Building Construction supplied on typical multi-tenant floor lobbies and common areas such as: elevator lobby finishes; common area ceilings (all finished ceiling heights shall be 8’6”); security systems; air conditioning and lighting shall be installed on Tenant’s floor at no cost to Tenant.

(03/5/98) OFFICE : File (SCH_F)	Schedule F	INITIAL       .
	2	Landlord | Tenant

It is agreed and understood that all of the above described Base Building Construction is more specifically defined in the Base Building plans and specifications and shall prevail as the ultimate definition of said work and said documents shall be available to Tenant for review at Landlord’s office during normal business hours.

6. Other than Landlord’s work, Tenant shall accept the Leased Premises in its “as-is” condition and perform all work to complete the Leasehold Improvements.

7. Implementation Schedule:

May 24, 2005	On or before this date Tenant shall have delivered to Landlord executed Leases in a form acceptable to Landlord.
April 15, 2005	On or before this date Tenant shall have provided Landlord with space study.
May 27, 2005	On or before this date Tenant shall have provided Landlord with approved Working Drawings.
June 27, 2005	On or before this date Landlord shall commence construction of Landlord’s Work.
September 1, 2005	On or before this date Landlord shall have completed Landlord’s Work.
June 27, 2005	On or before this date Tenant shall commence construction of Tenant’s Work.
September 1, 2005	On or before this date Tenant shall have completed Tenant’s Work.

(03/5/98) OFFICE : File (SCH_F)	Schedule F	INITIAL       .
	3	Landlord | Tenant

SCHEDULE “G”

Tenant Cash Allowance and Improvements

Within Forty Five (45) days after occupancy by the Tenant in the Leased Premises and upon written request from Tenant to Landlord, following the date of commencement of the Term, the Landlord will pay to the Tenant the sum of Three Hundred Eighty-Five Thousand Six Hundred Sixty-Five and 00/100 Dollars ($385,665.00) as a Tenant Cash Allowance. Tenant will have the right to convert unused Tenant Improvement Allowance dollars ($35.00 prsf) into a rent credit or utilize funds for soft costs and telecommunications infrastructure.

Landlord, at its sole cost, shall provide Building Standard carpeting/floor covering and paint for the Lease Premises valued at approximately $6.00 per sf. Also, Landlord shall demise & separately meter the Premises as determined by the Tenant’s space plan, at Landlord’s sole cost. Additionally, Landlord shall remove all existing telephone/data cabling prior to Tenant’s commencement of Tenant’s construction of Tenant Improvements.

In the event Tenant requests Landlord to perform any Tenant Improvements to the Leased Premises, the cost of such improvement and related expenses shall be deducted from the Tenant Cash Allowance. If such improvements exceed the Tenant Cash Allowance, Tenant agrees to pay the difference to the Landlord within ten (10) days of receipt of Landlord’s invoice.

(06/97) OFFICE : File (SCH.G)	Schedule G	INITIAL       .
	1	Landlord | Tenant

SCHEDULE “H”

OPTION TO RENEW

(a) The Landlord covenants with the Tenant that if the Tenant duly and regularly pays the Rent and any and all amounts required to be paid pursuant to this Lease and performs each and every covenant, proviso and agreement on the part of the Tenant to be paid, rendered, observed and performed herein, the Landlord will at the expiration of the then expiring term on written notice by the Tenant to the Landlord given by the Tenant not more than Twelve (12) months prior to the expiration of the then expiring term and received by the Landlord not less than Nine (9) months prior to the expiration of the then expiring term grant to the Tenant a Five (5) Year renewal of lease of the Leased Premises (the Renewal Term”) on the same terms and conditions as in the standard lease agreement then, at the commencement of the Renewal Term, being used by the Landlord for the Building save and except the right of further renewal, Landlord’s Work (if any), Basic Rent, tenant improvement allowance (if any) and Rent Free Period (if any).

(b) The Basic Rent for the Renewal Term shall be determined by negotiations between the parties hereto, and it is agreed that during such negotiations in respect of Basic Rent, they will be guided by fair market rental levels (either fixed or escalating during the said Renewal Term) as would then be charged by landlords entering into new leases with consideration for any incentives including but not limited to Landlord’s Work (if any), Tenant Improvement Allowance (if any) and Rent Free Period (if any) but having similar terms and conditions as contained herein and for similar premises in the Building or if not available in similar buildings in the Woodfield area of Schaumburg, Illinois. If the parties hereto are unable to agree in writing as to the Basic Rent for the Renewal Term prior to Ninety (90) days before the expiry of the Lease, this Lease shall end on the expiry of the Term and this Option to Renew and any subsequent options to renew shall be null and void.

(c) The Tenant agrees to execute the Landlord’s standard lease agreement or lease amendment agreement then, at the commencement of the Renewal Term, being used by the Landlord for the Building to give effect to this Option to Renew if exercised by the Tenant. The Tenant shall execute such agreement prior to the commencement date of the Renewal Term.

(d) Notwithstanding the above, if the Tenant does not exercise the Option to Renew in accordance with this Schedule “H” then this Option to Renew is null and void.

(e) The Tenant’s Option to Renew hereunder is personal to the Tenant and automatically expires on any Transfer or parting with possession of all or any part of the Leased Premises whether or not the same is with the consent of the Landlord.

(06/97) OFFICE : File (SCH.H)	Schedule H	INITIAL       .
	1	Landlord | Tenant

SCHEDULE “J”

Restrictive Covenant in Other Leases

Notwithstanding any use of the Leased Premises permitted by this Lease, the Leased Premises shall not be used in such a way as to contravene the following covenants in leases from the Landlord to other tenants in the Property. The Tenant hereby covenants and agrees that it will not carry on in the Leased Premises any business which will in any way place the Landlord in breach of such covenants and will indemnify and save the Landlord harmless against all actions, claims, demands, costs and expenses with respect thereto. If, in the opinion of the Landlord, any of such covenants are being contravened as a result of any use of the Leased Premises by the Tenant, the Tenant shall immediately discontinue such use upon the Landlord’s written request and failing such discontinuance the Landlord shall have the right to terminate this Lease forthwith by notice in writing. The covenants are:

1) “Lease to Northern Trust Bank”

Provided the Lease is in full force and effect and Tenant is not in default beyond any applicable cure period in payment of Rent or any other monetary obligation under the Lease, and that the Tenant duly and regularly pays the Basic Rent and any and all sums required to be paid pursuant to this Lease Agreement and its attached Schedules and performs each and every covenant, proviso and agreement on the part of the Tenant to be paid, rendered, observed, and performed herein, the Landlord agrees, as of the commencement date of the Lease and throughout the Term of the Lease, not to enter into a Lease or Sublease Agreement with any other bank, savings and loan association, credit union or trust company in the 1501 Building in the Property known as the Schaumburg Corporate Center.

Also, no other stockbroker or insurance company (except Landlord) will have rights to the sign band on the West side of the 1501 Building. Tenant’s exclusivity rights shall only be applicable to the 1501 Building.

2) “Lease to Dennis Smith and Maureen Smith, d/b/a The Atrium Shop”

Provided that the Tenant duly and regularly pays the Rent and any and all sums required pursuant to this Lease Agreement and performs each and every covenant, proviso and agreement on the part of the Tenant to be paid, rendered, observed, and performed herein, the Landlord agrees, throughout the Term of the Lease, not to enter into a Lease Agreement with any other smoke shop as defined herein, in the property known as the Schaumburg Corporate Center.

3) “Lease to Arthur G. Artman, an Individual, d/b/a Hair Studio 114”

Provided that the Tenant duly and regularly pays the Rent and any and all sums required pursuant to this Lease Agreement and performs each and every covenant, proviso and agreement on the part of the Tenant to be paid, rendered, observed, and performed herein, the Landlord agrees, as of the commencement date of the Lease and throughout the Term of the Lease, not to enter into a Lease Agreement with any other barber or beauty shop in the Property known as the Schaumburg Corporate Center.

4) “Lease to Hoopis Financial Group, Inc.”

The Landlord agrees that, as long as Tenant occupies a minimum of 16,500 square feet +/- 500 sq.ft. in the Property during the Lease Term, any major life insurance company shall not be permitted to display Building signage (name/logo) at the top of the 1475 E. Woodfield Road Building during this initial Lease Term.

5) “Lease to Xerox Corporation”

Landlord shall not lease space on the ground floor of the Building or on any floor of the Building on which [Xerox Corporation] is then occupying space to a competitor of Tenant. The term “competitor of Tenant” as used in this paragraph shall mean the following persons, firms or corporations, their respective successors and/or assigns and any distributors thereof:

(06/97) OFFICE : File (SCH.J)	Schedule J	INITIAL       .
	1	Landlord | Tenant

A.B. Dick	Imagistics	Olivetti
Canon	Kodak	Panasonic
Danka	Konica	Pitney Bowes
Gestetner	Lanier	Ricoh
HP (Hewlett Packard)	Minolta	Savin
BM	Mita	Sharp
IKON Office Solutions	Oce	Toshiba

6) “Lease to PepsiAmericas Inc.”

Subject to the original named Tenant (or a Controlled Tenant using the Pepsi logo) leasing and occupying a minimum of three full floors in the Building throughout the entire Lease Term, and subject to conflicting provisions of any existing leases in the Property, (i) Landlord shall ensure that the only food and beverage items sold in the Common Areas of Schaumburg Corporate Center (including cafeteria, sundry and vending areas to the extent such areas are under Landlord’s control for this purpose) are from the Tenant’s product line for so long as such products are reasonably comparable in terms of products otherwise desired by Landlord (and/or the operator of the café) and are available at commercially reasonable prices, and (ii) Landlord shall not lease any space in the Building to any competitive soft drink beverage company.

For so long as Tenant occupies a minimum of three full floors in the Building, Landlord agrees that it will not permit signage of any other tenant to be installed on [the marble wall in the elevator core of the Building across from the Building directory].

(06/97) OFFICE : File (SCH.J)	Schedule J	INITIAL       .
	2	Landlord | Tenant

SCHEDULE “K”

RIGHT TO ASSIGN AND SUBLET

(a) Notwithstanding anything to the contrary contained herein provided Tenant gives Landlord fifteen (15) days prior written notice, Tenant shall be entitled to assign this Lease or sublet the Premises to an entity (“Controlled Tenant”) (i) resulting from the merger of the originally named Tenant with, or acquisition (including all or substantially all of the assets) by or of, another company, provided such Controlled Tenant shall have a tangible net worth not less than the tangible net worth of Tenant as of the date of this Lease or (ii) any company that is and remains throughout the Lease Term an affiliate of Tenant. As used in the immediately preceding sentence, an affiliate is a company that controls Tenant, is controlled by Tenant or which is controlled by a company that likewise controls Tenant. In connection with any such assignment, Tenant shall cause the Controlled Tenant to execute and deliver to Landlord an agreement whereby the Controlled Tenant agrees to be bound by all the covenants and agreements in this Lease which Tenant has agreed to keep, observe or perform, and whereby the Controlled Tenant agrees that the provisions of this paragraph shall be binding upon it as if it were the original Tenant hereunder. Together with its required notice to Landlord regarding the proposed transfer to a Controlled Tenant, Tenant shall provide Landlord with supporting documentation confirming to Landlord’s reasonable satisfaction that the transferee is, in fact, a Controlled Tenant. Notwithstanding the foregoing, in no event shall the Tenant be released from liability for the obligations under the Lease upon a transfer to a Controlled Tenant.

(b) No sublease or assignment of this Lease under this Schedule shall be effective unless the Tenant and assignee or sublessee shall execute an agreement on the Landlord’s standard Consent By Landlord To Sublease and/or Assignment form, in which the assignee or sublessee shall assume all the obligations of the Tenant hereunder, and the Tenant shall pay to the Landlord its reasonable fee for processing the assignment or sublease.

(c) The Tenant agrees that any sublease or assignment of this Lease shall not thereby release the Tenant of its obligations hereunder.

(06/97) OFFICE : File (SCH.K)	Schedule K	INITIAL       .
	1	Landlord | Tenant

SCHEDULE “K-1”

OPTION TO CANCEL

(a) The Landlord covenants with the Tenant that if the Tenant duly and regularly pays the Rent and any and all amounts required to be paid pursuant to this Lease and performs each and every covenant, proviso and agreement on the part of the Tenant to be paid, rendered, observed and performed herein, the Tenant shall have and is hereby given the right and option to cancel and terminate this Lease following the 5^th rent paying year with twelve (12) months prior written notice to Landlord.

(b) In the event that the Tenant elects to exercise Tenant’s right and option to cancel and terminate this Lease, the Tenant shall without deduction or right of offset, pay to the Landlord as consideration for said cancellation and termination a termination fee equal to all unamortized transaction costs (including brokerage commissions, improvement costs, allowances and “free rent” based on Tenant’s occupancy of the Leased Premises prior to the Commencement Date) and such costs shall be amortized on a straight-line basis at a 10% interest rate. Said payment is to be made on the date that notification of Tenant’s intention to cancel and terminate this Lease is provided to the Landlord. The Tenant shall continue to pay Rent through the effective date of termination of this Lease.

(06/97) OFFICE : File (SCH.K-1)	Schedule K-1	INITIAL       .
	1	Landlord | Tenant

SCHEDULE “K-2”

EARLY OCCUPANCY PRIOR TO COMMENCEMENT OF TERM

The Tenant may enter the Leased Premises twelve (12) months prior to commencement of the Term (September 1, 2005 – August 31, 2006) “Early Occupancy Period”. Additionally, Landlord shall turn over the Demised Premises to Tenant upon the date Landlord completes any work it is required to perform pursuant to this Lease and its Schedules, to Early Occupancy for Tenant Construction.

Tenant’s occupancy of the Leased Premises during the Early Occupancy Period shall be upon and subject to the following conditions:

1. During the Early Occupancy Period the Tenant, its servants, agents, employees, contractors, subcontractors, officers and directors shall be subject to and bound by all of the terms and conditions of this Lease including without limiting the generality of the foregoing insurance and indemnification subject only to the following:

(a) During the Early Occupancy Period the Tenant shall not be obligated to pay Rent except those charges set out in 1(b).

(b) The Tenant shall be responsible for the Landlord’s reasonable charges during the Early Occupancy Period for services and utilities used for or in connection with the Leased Premises, including, without limiting the generality of the foregoing, those relating to power and telephone. The Tenant shall pay to the Landlord on demand the amount of such charges, based on estimates by the Landlord.

(06/97) OFFICE : File (SCH.K-1)	Schedule K-2	INITIAL       .
	1	Landlord | Tenant

Manulife Financial Real Estate Division

SCHEDULE “L-1”

CLEANING SPECIFICATIONS

The following tasks identify the work required. The frequency of the required tasks has been shown in the attached Frequency Schedule. Landlord reserves the right to modify these Cleaning Specifications provided that any modifications are consistent with other first class office buildings located in Schaumburg Illinois:

1. Lobby Glass:

All glass windows, doors and jambs to be spot cleaned to remove all fingermarks, smudges and spills.

2. Glass Doors & Partitions:

All glass doors and partitions including any directory glass, to be spot cleaned to remove any fingermarks, smudges or stains and to be left in a uniformly bright, clean condition.

3. Lobby Displays:

Clean all miscellaneous lobby displays as necessary.

4. Cigarette Urns:

Clean all cigarette urns, ash trays and remove all butts and debris. Replace sand as necessary.

5. Elevator Doors & Thresholds:

Elevator doors to be wiped down and polished, and left in a bright condition free of all dust and streaks.

6. Elevator Floors:

If carpeted, elevator carpets to be steam cleaned as often as necessary to maintain even appearance, but not less than once per month.

7. Miscellaneous Metalwork:

All metalwork, such as mail chutes and boxes, door hardware and frames, metal lettering, etc. to be wiped clean and polished and left in a bright condition, free of all dust and streaks.

8. Stairwells:

Spot clean all railways, doors jambs and walls and remove all fingermarks, smudges and stains from lobby areas, elevators and stairwell.

9. Stairs:

All uncarpeted stairs and landings up to and including the third level to be swept with a treated dust mop and spot cleaned as necessary to remove all spills, stains and litter. The remainder of landings and treads to be checked and cleaned and loose trash removed.

10. Stairs With Carpets:

All carpeted stairs and landings to be washed and dried as needed.

11. Restrooms-General:

It is the intention of this specification to keep lavatories thoroughly clean. Remove all waste paper and refuse, including soiled sanitary napkins, to designated areas in the building and dispose of same. All waste paper and sanitary napkin receptacles to be thoroughly cleaned and washed and new liners installed. Fill toilet tissue holders, seat cover containers, soap and hand lotion dispensers, towel dispensers, tissue dispensers and sanitary napkin vending dispensers and maintain the operation.

12. Restroom Walls, Partitions and Ceilings:

Wash thoroughly with water and germicidal solution. Wipe dry and polish to a uniformly bright clean condition.

13. Dusting:

Dust all furniture, accessories, ledges and all other horizontal surfaces, using a treated dust cloth.

14. Carpeted Areas:

All carpeted floors to be vacuumed and edged with a small broom or edging tools.

(03/5/98) OFFICE : File (cleaning)	INITIAL       .
	Landlord | Tenant

15. Uncarpeted Areas:

All hard surfaced floors to be mopped with a treated dust mop and buffed as needed.

16. Walls:

All walls to be spot-cleaned to remove as necessary all smudges, stains and handmarks.

17. Furniture and Accessories and Waste Baskets:

Spot clean all furniture, file cabinets and telephones. Empty all waste baskets and replace liners where necessary.

(03/5/98) OFFICE : File (cleaning)	INITIAL       .
	Landlord | Tenant

FREQUENCY SCHEDULE	Stairwells	Main Lobby	Public Areas	Elevators	Tenant Space	Rest Rooms	Below Grade
1. Lobby Glass		Nightly
2. Glass Doors/Partitions		Nightly	Nightly		Nightly
3. Lobby Displays		Nightly
4. Cigarette Urns		Nightly	Nightly		Nightly
5. Elevator Doors & Thresholds		Nightly	Nightly	Nightly
6. Elevator Floors				Monthly
7. Miscellaneous Metalwork		Nightly		Nightly	Nightly	Nightly
8. Stairwells	Daily/Nightly	Daily/Nightly		Daily/Nightly
9. Stairs	Daily/Nightly
10. Stairs with Carpets	Monthly
11. Restrooms-General						Nightly
12. Dusting		Nightly	Nightly		Nightly
21. Carpeted Areas		Nightly	Nightly		Nightly
22. Uncarpeted Areas		Nightly	Nightly	Nightly	Nightly		Nightly
24. Walls		Nightly	Nightly	Nightly	Nightly	Nightly
27. Furniture, Accessories and Waste Baskets					Nightly

•      Daily	= 5 Days/Week
•      Nightly	= 5 Nights/Week
•      Weekly	= Once/Week
•      Monthly	= Once/Month
•      Quarterly	= Once/3 Months

(03/5/98) OFFICE : File (cleaning)	INITIAL       .
	Landlord | Tenant

SCHEDULE “L-2”

SECURITY

Limited access services are currently contracted with Cognisa. The Property has 24 hours/7 days a week manned access limitation. In addition, there is a mobile unit that monitors the parking lot at varying times during the day/evening, five days a week. After-hours access to the Building is maintained by security card readers. Tenant shall have, barring emergency or unusual situations, 24-hour per day, 365-day per year access to the Building and its premises via this security card system. The Building, during regular building hours will be open to visitors and the public from 7:00 a.m. to 6:00 p.m. Monday through Friday and 8:00 a.m. to 1:00 p.m. on Saturday. In addition to all of the above, the Property has a security camera system, which is monitored at the security desk in the atrium. Notwithstanding anything herein to the contrary, in no event shall Landlord have any liability for loss or damage sustained by Tenant or any of its employees or invitees as a result of criminal activities.

Also, a limited access desk is located on the first floor of the office tower lobbies, which is manned during normal business hours.

# 2746388_v6

(03/5/98) OFFICE : File (cleaning)	INITIAL       .
	Landlord | Tenant

EX-10.19

EXHIBIT 10.19

RENTAL LEASE	Page 1(4)
for premises	No 4026-3520

Draft

The signers have on this day come to the following agreement: A tick in a box means that the following text is in force

Landlord	Förvaltningsbolaget Marievik HB c/o AMF Pension				Organization number 916503-8010
Tenant	Learning Tree International AB				Organization number 556282-4184
Premises address etc.	Municipality Stockholm		Name of building Marievik 15
	Street Årstaängsvägen 5			Floors/buildings 6 (4 stairs)	Apartment No 3420
	Postal address Årstaängsvägen 5 117 43 STOCKHOLM
Condition and use of premises	Unless otherwise stated, the premises with its adherent spaces is let in its present condition to be used for: Offices and education facilities
Size and extent of premises	Office area in floors | m2                         6             2572
	The stated areas ¨ have    x have not been measured prior to the signing of this contract If the area stated in the lease deviates from the measured area, the deviation does not give the tenant a refund right, nor does it give the landlord a right to raise the rent. x The extent of the pre-leased premises have been marked in the appended blueprint(s).                     Appendix 4
	access to loading by car	Space for signboard	Parking space for x 5 car(s)	Garage space for	¨ See appendix 6
Equipment etc.	Premises let x without special equipment for the intended business    ¨ with special equipment according to appendix At the termination of the lease, the tenant will, if no other agreement has been settled, dispose of property belonging to the tenant, and the premises must be left in an acceptable condition. The parties agree to, on the last day of the lease by the latest, perform a joint inspection of the premises. If, as a result of actions by the tenant – taken with or without the consent of the landlord – the premises, on the day of departure, contain material not previously agreed that the landlord is responsible for, the tenant must dispose of the material or compensate the landlord its cost for removal, such as taxes, transport and fees for dumping, or corresponding costs.
Telephone line	The tenant will pay for any costs for installing telephone lines from the connection point stated by the telephone x company to the places on the premises chosen by the tenant in consultation with the landlord.
	The landlord will pay for any costs to install lines to the premises. The installation within the premises will be performed and funded by the tenant, but all installation must take place in consultation with the landlord.
IT connection	The tenant will pay for any costs for installing IT connections from the connection point stated by the IT     x company to the places on the premises chosen by the tenant in consultation with the landlord.
	The landlord will pay for any costs to install lines to the premises. The installation within the premises will be performed and funded by the tenant, but all installation must take place in consultation with the landlord.
Term of lease	From 2006-01-01		Until 2011-12-31
Termination/ extensions	This contract must be terminated in writing at least 9 months prior to the expiry of the agreed leasing period. If not, the contract will be extended by 3 years at a time.
Heating and hot water	Necessary heating of the premises is taken care of by    x the landlord     ¨ the tenant
	Hot water is provided x all year round ¨ not at all ¨

Please note

In some cases an appendix might have be attached to the lease, in addition to a ticked box, in order for the agreement of the appendix to come into force. This might apply to clauses regarding index, real estate tax and regarding the tenant’s right to a reduced rent in case of customary maintenance.

RENTAL LEASE	Page 2(4)
for premises	No 4026-3520

The signers have on this day come to the following agreement: A tick in a box means that the following text is in force

Rent		SEK 4 200 000 annually comprising    ¨ total rent    x rent excl. supplements marked below
	Index clause	x Change of the rent stated above is made in accordance to the appended index clause
	Cost for heating and hot water	¨ Fuel/heating supplement according to appended clause
	Water and drainage	¨ Supplement for water and drainage according to appended clause
	Ventilation	¨ Costs for ventilation equipment compensated for in accordance with appended clause
	Electricity	¨ Included in the rent    x The tenant has separate contract
	Cleaning of stairwell	x Included in the rent    ¨ Arranged and paid for by the tenant
	Refuse and waste removal	To the extent that it falls on the landlord to on the one hand supply the tenant with space for storage of garbage and packing, and on the other hand to arrange for removal of such waste, it falls on the tenant to sort and place waste in intended containers on the intended site, as well as, without compensation, take part in further recycling measures that might be decided by the landlord. Refuse and waste removal ¨ Included in the rent ¨ Taken care of and funded by the tenant x Included in the rent regarding waste sections marked below. It falls on the tenant to take care of and fund collection, sorting, storage and transportation of any waste sections the tenant might have which are not marked below.
		¨domestic waste	¨ fluorescent tubes	¨ rigid plastic
		¨ bulky refuse	¨ metal	¨ toxic/harmful waste
		¨ compost waste	¨ untinted glass	x common office waste
		¨ paper	¨ tinted glass	¨
		¨ batteries	¨ paper packaging	¨
	Snow clearance and gritting	x Included in rent	¨ Taken care of and funded by tenant		¨ According to appendix
	Property taxes	¨ Included in rent    x This will be compensated according to a special agreement            Appendix 2:5
Unforeseen costs		If, after the signing of the contract, there should arise unforeseen increases of costs due to a)      introduced or raised costs for the building such as taxes, fees or duties decided by governmental or authoritative bodies b)      general conversion measures, or similar, of the building, which not only concern the premises, and which are imposed on the landlord due to decisions by governmental or authoritative bodies the tenant will, based on the arisen increase of costs, financially compensate the landlord for amounted share of the premises in the total annual cost for the building. The share of the premises is 8.04 percent. If the share has not been stated, it constitutes the tenant’s rent (excl. possible VAT) in relation to the rents in the building (excl. possible VAT) at the time of the increase of cost. For an unrented space, there will be an estimation of the market rent for the premises. Taxes according to a) above does not include VAT or property taxes to the extent that this is compensated for according to agreement. Unforeseen costs are those that at the time of the contract signing had not been decided by the below a) and b) stated authorities. The compensation is made payable according the regulations below regarding rent payment.

RENTAL LEASE	Page 3(4)
for premises	No 4026-3520

The signers have on this day come to the following agreement: A tick in a box means that the following text is in force

VAT	x The landlord must pay VAT for renting out the premises. The tenant must pay current VAT apart from the rent on each occasion. ¨ If the landlord, after a decision by the IRS, will have to pay VAT for renting out the premises, the tenant must pay current VAT apart from the rent on each occasion. The VAT paid together with the rent is calculated from the stated rent amount as well as, in accordance with the VAT rules for rents on each occasion, where appropriate, supplements and other compensations according to the leasing contract. If the landlord becomes liable to VAT according to the regulations in the law regulating VAT, as a result of the independent actions of the tenant – such as subletting (also to own company), or transfer – the tenant must fully compensate the landlord with the equivalent amount. The tenant must also financially compensate the increase of costs following the landlord’s loss of deductible taxes for the management costs, caused by the actions of the tenant.
Rent payment	The rent is paid in advance without demand, the last working day before every ¨ start of a calendar month    x start of a calendar quarter by making rent payable to see invoice
Interest, reminder	When a rental payment is delayed the tenant must pay interest according to the law regulating this, as well as compensation for a written reminder according to the law. Compensation for reminders on each occasion corresponds to what is stated in regulations.
Maintenance etc.	The landlord shall carry out and bear the cost of necessary ¨ maintenance of premises equipment supplied by him		However, the tenant is responsible for	Appendix
	The tenant shall carry out and bear the cost of necessary x maintenance of floor surfaces, walls and ceilings, as well as furnishings/fittings/fixtures supplied by the landlord.		In addition, the tenant’s maintenance obligation includes	Appendix
	If the tenant does not fulfil his maintenance obligations and does not within a reasonable time carry out rectification work following a written demand, the landlord may fulfil these obligations at the tenant’s expense.
	¨ The allocation of maintenance obligations is found in appendix			Appendix
Management and operation	Unless otherwise agreed, it falls upon the landlord, where applicable, to take care of the management and operation of public and common areas. The tenant has no right, without the written permission of the landlord, to carry out, within or without the premises, any fitting and/or installations and/or alterations which affect the structural components of the building or are important to the building, such as water and sewerage, electricity, ventilation, etc. which are the property of the landlord. Sprinkler heads and ventilation may not be covered by any fixtures/fittings by the tenant, so that the functional ability of such equipment is reduced. It is the responsibility of the tenant to make sure that radiators and other heating equipment retain maintain their function in all significant respects.
Inspections	If an authority performs an inspection of the electricity and sprinkler systems which are the property of the tenant, and finds any defects, it is the responsibility of the tenant to pay for and carry out necessary measures within the time stated by that authority. If the tenant has not taken the right measures within the set time the tenant has the right to carry out the measures required by the authority, at the tenant’s expense.
Access to certain spaces	The tenant must keep spaces required by maintenance staff easily accessible, and the entrance to such spaces must not be blocked by cupboards, crates, goods or any other obstruction.
Building material specifications	If the tenant, in accordance with this agreement or at other times, performs maintenance, improvement or alteration work in the premises, he must provide the landlord with specifications of the building materials – to the extent that such exist – for the products and materials that are to be used on the premises, in good time prior to the execution of the work.
Planning and Building Code (PBL) fines	If the tenant performs alterations to the premises without a construction permit, and the landlord therefore is forced to pay a construction fee or supplemental fees, the tenant must reimburse the landlord with the corresponding amount.
Reduction of rent	The tenant has no right to a reduced rent while the landlord performs work to place the premises in the agreed condition, or other works stated in the agreement.
	x The tenant’s right to a reduced rent when the landlord performs customary maintenance of the leased premises or the building in itself is stated in an appendice.			Appendix 3:9
Requirements by authorities, etc.	It falls upon ¨ the landlord    x the tenant	To take responsible for and pay for the measures which might be required for the intended use of the premises by insurance companies, building authorities, environmental or health authorities, fire departments, or other relevant authorities after the date of taking possession.

RENTAL LEASE	Page 4(4)
for premises	No 4026-3520

The signers have on this day come to the following agreement: A tick in a box means that the following text is in force

Signs, awnings, windows, doors, etc.	After consultation with the landlord, the tenant has a right to display a customary business sign provided that the landlord does not have justified cause for refusing, and that the tenant has received the necessary permits by relevant authorities. Upon surrender of the premises, it falls upon the tenant to restore the façade of the building to an acceptable condition. When more extensive maintenance work takes place, such as renovation of facades, etc., it falls upon the tenant to fund, without compensation, take down and put signs, awnings and antennas back up. The landlord promises not to fix vending machines and display cabinets on the outer walls of the premises let to the tenant without the tenant’s consent, and grants the tenant an option to fix vending machines and display cabinets on the said walls.
	¨ The landlord x The tenant        is responsible for damage on x windows x display/shop windows x entrance doors our facility x signs ¨
	x It is the responsibility of the tenant to sign and maintain a glass insurance for all the display windows and entrance door belonging to the premises.
Locks	It is the responsibility of    ¨ the landlord    x the tenant to equip the premises with locks required by the tenant’s insurance company.
Force majeure	The landlord is free from the obligations undertaken in this agreement if these cannot, or can to an unreasonably high cost, be fulfilled due to wars or riots, work stoppages, blockades, fires, explosions or intervention by a public authority over which the landlord has no control and which could not have been foreseen.
Security	This agreement is contingent upon the provision of security in the form of a ¨ bank guarantee    x personal guarantee    ¨	Appendix 5
Special provisions		Appendix
Signature

EX-31.1

EXHIBIT 31.1

Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer

I, David C. Collins, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Learning Tree International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2005	/s/ DAVID C. COLLINS
	David C. Collins Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer

I, Nicholas R. Schacht, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Learning Tree International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2005 /s/ NICHOLAS R. SCHACHT Nicholas R. Schacht President (Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

Certification of Chief Executive Officer and President (Principal Financial Officer) pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

We, David C. Collins and Nicholas R. Schacht, certify that the periodic report, to which this Statement is attached, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the periodic report to which this Statement is attached, fairly presents, in all material respects, the financial condition and results of operations of the registrant at the dates and for the periods indicated.

IN WITNESS WHEREOF, the undersigned have executed this Statement as of the date first written below.

Dated: August 9, 2005

/s/ DAVID C. COLLINS

David C. Collins

Chief Executive Officer

/s/ NICHOLAS R. SCHACHT

Nicholas R. Schacht

President

(Principal Financial Officer)