8-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):   May 4, 2004

Encore Capital Group, Inc.
(Exact Name of Registrant as Specified in its Charter)

Delaware	000-26489	48-1090909
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S Employer (Identification No.)

5775 Roscoe Court San Diego, California 92123
(Address of Principal Executive Offices) (Zip Code)

(877) 445-4581
(Registrant’s Telephone Number, Including Area Code)

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

    (c)        Exhibits:

10.1 Multi-Tenant Office Lease dated as of April 8, 2004 by and between LBA Realty Fund-Holding Co. I, LLC and Midland Credit Management, Inc. (the "Midland Lease").

10.2 Lease Guaranty by Encore Capital Group, Inc. in favor of LBA Realty Fund-Holding Co. I, LLC in connection with the Midland Lease.

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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.

Date:      May 4, 2004 ENCORE CAPITAL GROUP, INC.


By /s/ Barry R. Barkley
——————————————
Barry R. Barkley
Executive Vice President,
Chief Financial Officer and Treasurer

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EXHIBIT INDEX

Exhibit Description                                                 

10.1 Multi-Tenant Office Lease dated as of April 8, 2004 by and between LBA Realty Fund-Holding Co. I, LLC and Midland Credit Management, Inc. (the "Midland Lease").

10.2 Lease Guaranty by Encore Capital Group, Inc. in favor of LBA Realty Fund-Holding Co. I, LLC in connection with the Midland Lease.

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EX-99

Exhibit 10.1

                                                MULTI-TENANT LEASE
                                                   (TRIPLE NET)


                                                     LANDLORD:

                                        LBA REALTY FUND–HOLDING CO. I, LLC,
                                       a Delaware limited liability company


                                                      TENANT:
                                         MIDLAND CREDIT MANAGEMENT, INC.,
                                               a Kansas corporation

8875 Aero Drive
Midland Credit Management, Inc.

                                SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS

This SUMMARY OF BASIC LEASE  INFORMATION AND DEFINITIONS  ("Summary") is hereby  incorporated  into and made a part
of the attached  Multi-Tenant  Lease which pertains to the Project  described in Section 1.3  below. All references
in the Lease to the "Lease"  shall include this  Summary.  All  references in the Lease to any term defined in this
Summary  shall have the meaning set forth in this Summary for such term.  Any initially  capitalized  terms used in
this  Summary and any  initially  capitalized  terms in the Lease which are not  otherwise  defined in this Summary
shall have the meaning  given to such terms in the Lease.  If there is any  inconsistency  between this Summary and
the Lease, the provisions of the Lease shall control.

1.1      Landlord's Address:                LBA REALTY FUND – HOLDING CO., I, LLC
                                            c/o Layton-Belling & Associates
                                            4440 Von Karman Avenue, Suite 150
                                            Newport Beach, California  92660
                                            Attention: Mr. Steven R. Layton

1.2      Tenant's Address:                  (Before taking possession)
                                            MIDLAND CREDIT MANAGEMENT, INC.
                                            c/o Encore Capital Group, Inc.
                                            5775 Roscoe Court
                                            San Diego CA 92123
                                            Attention:  General Counsel
                                            (After taking possession) At the Premises.

1.3      Project:  The  development in the City of San Diego,  County of San Diego,  State of California,  as shown
on  the  site  plan  attached  hereto  as  Exhibit "A".  The  Project  includes  all  buildings,  improvements  and
facilities,  now or subsequently located within such development from time to time, including,  without limitation,
the Building  currently  located within the Project,  as depicted on the site plan attached  hereto as Exhibit "A".
The  aggregate  rentable  square  feet  of all of the  Project  is  approximately  101,590  rentable  square  feet.
Landlord may, from time to time, expand or reduce the area comprising the Project.

1.4      Building:  A multi-tenant  building  located in the Project,  containing  approximately  101,590  rentable
square feet, the address of which is 8875 Aero Drive, San Diego, California 92123.

1.5      Premises:  Those  certain  premises  within the  Building  located on the second  floor of the Building as
shown on the floor plan attached hereto as Exhibit "B",  containing  approximately 50,549 rentable square feet, and
not to exceed 52,500  rentable  square feet. The Premises also includes  Tenant’s  nonexclusive  right to use parts
of the roof for  communications  facilities and mechanical  equipment in accordance  with  Section 36.  Because the
Premises include the primary  telecommunications  portals to the Building, Tenant shall permit other tenants of the
Building access to such portals through an intermediate  distribution  frame; but no such tenant will have physical
access to Tenant’s telecommunications closet or such portals.

1.6      Tenant's  Share:  Tenant's Share is the percentage  ratio that the rentable square footage of the Premises
bears to the rentable  square footage of the Building.  Accordingly,  as more  particularly  set forth in Section 4
of this Lease,  Tenant shall pay to Landlord that percentage  ratio of the Operating  Expenses.  See  Section 6.2.3
concerning  Tenant's  Share for  Operating  Expenses  for the New Parking  Space Area and Section 4.12 for Tenant's
Share for Operating Expenses for the HVAC System.

1.7      Commencement  Date:  The earlier to occur of (i) the  date Tenant  commences  business  operations  in the
Premises,  or (ii) the  later of (a) four (4) months  following the Delivery  Date,  (b) the date on which Landlord
gives Tenant  accurate  written notice that  Landlord's  Work has been  Substantially  Completed or  (c) October 1,
2004.  Landlord shall deliver the Premises to Tenant  immediately  following the date Landlord  obtains  possession
of the Premises  from the current  tenant  thereof.  The date of  Landlord's  delivery of the Premises to Tenant is
referred to herein as the  "Delivery  Date",  which shall be deemed to have  occurred on the date Landlord
has obtained  possession  of the Premises from the current  tenant  thereof.  The  foregoing  four (4) month period
shall be subject to extension as provided in Section 7 of the Tenant Work Letter.

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8875 Aero Drive
Midland Credit Management, Inc.

1.8      Term: One hundred  twenty-six  (126) months,  as may be sooner  terminated or extended in accordance  with
this Lease.

1.9      Basic Rent:

                Months                                Basic Rent

                 1-12*                                 $62,900.00**

                 13-24                                 $71,040.00***

                 25-48                                $1.55 x RSF****

                 49-72                                $1.63 x RSF

                 73-96                                $1.71 x RSF

                97-120                                $1.80 x RSF

                121-126                               $1.89 x RSF

*Including  any partial  month at the  beginning of the Term if the  Commencement  Date is not the first day of the
month.
**The  Basic Rent during  this  period is  calculated  on 42,500  rentable  square  feet  notwithstanding  that the
Premises contain approximately 50,000 rentable square feet.
***The  Basic Rent  during this period is  calculated  on 48,000  rentable  square  feet  notwithstanding  that the
Premises contain approximately 50,000 rentable square feet.
****“RSF”  means the number of rentable  square feet of the Premises as determined  in accordance  with Section 1.3
of the Lease.

1.10     Parking:  The greater of (i) three  hundred fifty (350) parking  spaces or (ii) seven  (7) parking  spaces
per 1,000 rentable  square feet of the Premises (and one space per 143 rentable  square feet for the area above the
nearest 1000 rentable square feet), as shown on Exhibit G"  attached hereto,  subject,  however, to the provisions
of Section 6.2 of the Lease.  Parking will be provided at no additional cost to Tenant.

1.11     Security Deposit:  $62,900.00.

1.12     Permitted Use: A call center,  general office,  customer service center,  engineering offices and, subject
to Landlord's  reasonable approval,  any other use permitted under all applicable laws and zoning, and for no other
purpose whatsoever.

1.13     Brokers:  Burnham Real Estate  Services  representing  Landlord and The Irving  Hughes Group  representing
Tenant.

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8875 Aero Drive
Midland Credit Management, Inc.

1.14     Interest  Rate:  The lesser of:  (a) the prime rate announced from time to time by Wells Fargo Bank or, if
Wells Fargo Bank ceases to exist or ceases to publish such rate,  then the rate  announced from time to time by the
largest (as  measured by  deposits)  chartered  operating  bank  operating  in  California,  as its "prime rate" or
"reference rate", plus five percent (5%) per annum; or (b) the maximum rate permitted by law.


1.15     Tenant  Improvements:  The tenant  improvements  to be  installed  in the  Premises,  as  described in the
Tenant Work Letter attached hereto as Exhibit "C".

1.16     Guarantor:  Encore Capital Group, Inc., a Delaware corporation.

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8875 Aero Drive
Midland Credit Management, Inc.

                                             MULTI-TENANT OFFICE LEASE


This LEASE ("Lease"),  which includes the preceding Summary of Basic Lease Information and Definitions  ("Summary")
attached hereto and  incorporated  herein by this reference,  is made as of the 8th day of April, 2004, by
and between LBA REALTY  FUND-HOLDING CO. I, LLC, a Delaware limited liability  company,  ("Landlord"),  and MIDLAND
CREDIT MANAGEMENT, INC., a Kansas corporation ("Tenant").

1.       Premises.

1.1      Premises.  Landlord  hereby leases to Tenant and Tenant  hereby  leases from Landlord the Premises,  on an
exclusive  basis,  and the Common Area, on a nonexclusive  basis (subject to Tenant’s  exclusive  parking  rights),
upon and subject to the terms, covenants and conditions contained in this Lease to be performed by each party.

1.2      Landlord's  Reservation of Rights.  Provided  Tenant's use of and access to the Premises is not interfered
with in an unreasonable manner,  Landlord reserves the right from time to time to install,  use, maintain,  repair,
replace  and  relocate  pipes,  ducts,  conduits,  wires and  appurtenant  meters and  equipment  above the ceiling
surfaces, below the floor surfaces and within the walls of the Building and the Premises.

1.3      Measurement.  Rentable  square  footage shall be determined  in  accordance  with the Standard  Method for
Measuring Floor Area in Office  Buildings,  ANSI/BOMA  Z65.1-1996 (the "BOMA  Standard").  Within 14 days after the
Commencement Date,  Landlord shall deliver to Tenant a certification by Pacific  Cornerstone,  or another architect
reasonably  acceptable to Tenant,  establishing  the number of rentable square feet for the Premises,  the Building
and the  Project.  Unless  Tenant  objects in writing to such  measurement  within two weeks  after its  receipt of
certification,  the  measurements set forth in such  certification  will be deemed the rentable square feet for the
Premises,  Building,  and  Project  and will not be subject to any  adjustment  unless the  Building  or Project is
expanded to include  additional  rentable square feet of space or reduced to exclude  rentable square feet of space
(including  converting the  approximately  15,000  rentable  square feet of the existing truck loading area for the
tenant  under the BofA  Lease to Common  Area).  If Tenant  objects to  Landlord’s  architect’s  measurement,  then
within two weeks after the date of Tenant’s  objection,  Landlord’s  architect and Tenant’s architect shall attempt
to agree on the rentable  square feet of the Premises and Building.  If they so agree within such two-week  period,
the agreed  measurements  constitute the rentable  square feet of the Premises,  Building,  and Project and are not
subject  to  adjustment  except  as  described  above.  If  Landlord  and  Tenant  do not  arrive  at an  agreed on
measurement  within such period,  then they shall immediately  submit to the American  Arbitration  Association for
the binding determination of such measurements.

2.       Term.

2.1      Term;  Notice of Lease Dates.  The Term of this Lease shall be for the period  designated  in  Section 1.8
of the Summary  commencing on the Commencement  Date, and ending on the expiration of such period,  unless the Term
is sooner  terminated or extended as provided in this Lease.  Notwithstanding  the foregoing,  if the  Commencement
Date  falls on any day other than the first day of a  calendar  month then the term of this Lease will be  measured
from the first day of the month  following the month in which the  Commencement  Date occurs.  Within ten (10) days
after the Commencement  Date,  Landlord and Tenant shall execute a written  confirmation of the  Commencement  Date
and expiration date of the Term in the form of the Notice of Lease Term Dates attached hereto as Exhibit "D".

2.2      Early  Occupancy.  If Tenant  occupies the Premises prior to the  Commencement  Date, such early occupancy
shall be subject to all of the terms and conditions of this Lease,  including,  without limitation,  the provisions
of  Sections 17,  20 and 22 except that  provided  Tenant does not  commence  the  operation  of business  from the
Premises, Tenant will not be obligated to pay rent during the period of such early occupancy.

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8875 Aero Drive
Midland Credit Management, Inc.

2.3      Option to Extend.  Tenant  shall have two (2) options  (each,  an  "Extension  Option") to extend the Term
for a period  (each,  an "Option  Period") of five (5) years each,  upon the same terms and  conditions  previously
applicable,  except for the grant of any  previously  exercised  Extension  Option and Basic Rent  (which  shall be
determined as set forth below).  An Extension  Option may be validly  exercised only by notice in writing  received
by Landlord  not later than nine (9) months  prior to  commencement  of the  applicable  Option  Period;  provided,
however,  that an Extension  Option may be validly  exercised only if no Tenant default exists after  expiration of
the applicable cure period,  as of the date of exercise and, at Landlord's  option,  as of the  commencement of the
Option  Period.  If Tenant does not exercise an  Extension  Option  during the  exercise  period set forth above in
strict  accordance  with the provisions  hereof,  the Extension  Option (and the subsequent  Extension  Option,  as
applicable)  shall  forever  terminate  and be of no further  force or effect.  Tenant  shall not have the right to
exercise an Extension  Option if Tenant (or a Permitted  Transferee)  does not  physically  occupy at least half of
the entire  Premises,  or if the Lease has been  assigned  or if more than half of the  Premises  have been  sublet
(other than to a Permitted Transferee).

Basic Rent during each Option  Period shall be equal to ninety seven  percent (97%) of the Fair Market Rental as of
the  commencement  of the Option  Period.  For  purposes  hereof,  "Fair  Market  Rental"  shall mean the base rent
payable  during  the  Option  Period  to a  willing  landlord  by a  willing  tenant  having  a  similar  financial
responsibility,  credit  rating and  capitalization  as Tenant  then has,  taking into  account all other  relevant
factors for like and comparable space,  improved with tenant  improvements of like and comparable  quality to those
then  existing in the  Premises  in the Kearney  Mesa area of San Diego.  Fair Market  Rental  shall also take into
consideration  Tenant's  parking  rights  under this Lease and all other terms and  conditions  of this  Lease.  At
least four (4) months  prior to the Option  Period,  Landlord  shall  notify  Tenant of the Fair  Market  Rental as
determined by Landlord.  Any dispute  between the parties hereto with respect to the amount so determined  shall be
resolved  by  arbitration,  as set forth  below;  provided,  however,  that there  shall be deemed not to be such a
dispute unless Tenant  notifies  Landlord  thereof in writing  within 60 days after Landlord so notifies  Tenant of
the Fair Market Rental and Tenant sets forth in such notice Tenant's  determination  of Fair Market Rental.  If, in
the event of a dispute,  the  arbitrators  have not  determined the Fair Market Rental by the  commencement  of the
Option  Period,  Tenant  shall pay as Basic  Rent the amount  determined  by  Landlord  until such time as the Fair
Market  Rental  has been  determined  by  arbitration,  whereupon  Tenant  shall pay any  additional  amount due to
Landlord based upon such  subsequent  determination  of Fair Market Rental.  If the Basic Rent so paid by Tenant is
higher than that ultimately  determined by the arbitration  process,  then Landlord shall reimburse such difference
to Tenant within 10 days after such determination.

If Tenant timely notifies  Landlord in writing of Tenant's dispute regarding  Landlord's  determination of the Fair
Market  Rental,  then Fair Market  Rental shall be  determined  as follows.  Landlord and Tenant shall each appoint
one  arbitrator who shall by profession be a real estate  appraiser  active over the five (5) year period ending on
the date of such  appointment  in the appraisal of commercial  properties in the Kearney Mesa area of San Diego and
who shall not have been  employed  or  engaged  by either  party (or by any  affiliate  of such party or any of its
owners) during said five (5) year period.  Each such arbitrator  shall be appointed  within fifteen (15) days after
Tenant  notifies  Landlord  of  Tenant's  dispute  of  Landlord's  determination  of Fair  Market  Rental.  The two
arbitrators  so appointed  shall,  within  fifteen (15) days of the date of the  appointment  of the last appointed
arbitrator,  agree upon and appoint a third  arbitrator  who shall be qualified  under the same  criteria set forth
above. The three arbitrators  shall,  within thirty (30) days of the appointment of the third  arbitrator,  reach a
decision  as to whether  the  parties  shall use  Landlord's  or  Tenant's  submitted  Fair  Market  Rental for the
Premises,  and shall  notify  Landlord  and Tenant  thereof.  Such  decision  shall be based upon the  criteria and
variables  set forth  above.  The new Basic Rent shall  thereafter  be equal to ninety seven  percent  (97%) of the
Fair  Market  Rental of the  Premises so selected by the  arbitrators.  The  decision of the  majority of the three
arbitrators  shall be  binding  upon  Landlord  and  Tenant.  If either  Landlord  or Tenant  fails to  appoint  an
arbitrator  within the time period  specified  hereinabove,  the arbitrator  appointed by one of them shall reach a
decision,  notify Landlord and Tenant thereof,  and such  arbitrator's  decision shall be binding upon Landlord and
Tenant.  If the two  arbitrators  fail to agree upon and  appoint a third  arbitrator,  both  arbitrators  shall be
dismissed  and the matter to be decided shall be forthwith  submitted to  arbitration  under the  provisions of the
American  Arbitration  Association in accordance with the method described above. The cost of arbitration  shall be
paid by Landlord and Tenant equally.

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8875 Aero Drive
Midland Credit Management, Inc.

3.       Rent.

3.1      Basic Rent.  Tenant agrees to pay Landlord,  as basic rent for the Premises,  the Basic Rent designated in
Section 1.9  of the  Summary.  The Basic Rent shall be paid by Tenant in advance on the first day of each and every
calendar  month  during the Term,  except  that the first  full  month's  Basic  Rent  shall be paid upon  Tenant's
execution  and  delivery  of this Lease to  Landlord.  Basic Rent for any  partial  month  shall be prorated in the
proportion  that the number of days this Lease is in effect  during such month  bears to the actual  number of days
in such month.

Notwithstanding  anything to the contrary contained herein,  Landlord hereby agrees to abate Tenant's obligation to
pay Basic  Rent and  Operating  Expenses  for the first  full  calendar  month of the  initial  Term.  During  such
abatement period, Tenant shall still be responsible for all of its other obligations under this Lease.

3.2      Additional  Rent.  All  amounts and  charges  payable by Tenant  under this Lease in addition to the Basic
Rent described in Section 3.1  above shall be considered  additional  rent for the purposes of this Lease,  and the
word "rent" in this Lease shall include such  additional  rent unless the context  specifically  or clearly implies
that only the Basic Rent is referenced.  The Basic Rent and  additional  rent shall be paid to Landlord as provided
in Section 7,  without any prior demand therefor and without any deduction or offset (except as otherwise  provided
herein), in lawful money of the United States of America.

3.3      Late  Payments.  Late  payments  of Basic  Rent  and/or  any item of  additional  rent will be  subject to
interest and a late charge as provided in Section 23.7 below.

3.4      Triple-Net  Lease.  All rent shall be  absolutely  net to  Landlord  so that this Lease shall yield net to
Landlord,  the rent to be paid each month during the Term of this Lease.  Accordingly,  except as specifically  set
forth herein,  all costs,  expenses and obligations of every kind or nature whatsoever  relating to Tenant’s use of
the  Premises,  and  Tenant's  Share of all costs,  expenses  and  obligations  of every kind or nature  whatsoever
relating  to the  remaining  portion  of the  Project,  which may arise or become due during the Term of this Lease
shall be paid by Tenant.  Nothing  herein  contained  shall be deemed to  require  Tenant to pay or  discharge  any
liens or  mortgages  of any  character  whatsoever  which may exist or  hereafter  be placed upon the Project by an
affirmative act or omission of Landlord.

4.       Common Area; Operating Expenses.

4.1      Definition of Common Area.  The term "Common  Area" means all areas and the  improvements  thereon  within
the exterior  boundaries  of the Project now or later made  available  for the general use of Landlord,  Tenant and
other persons  entitled to occupy floor area in the Project and their  customers,  including,  without  limitation,
the parking facilities of the Project,  loading and unloading areas, trash areas,  roadways,  sidewalks,  walkways,
parkways,  driveways,  landscaped areas, and similar areas and facilities situated within the Project which are not
reserved for the exclusive use of any Project occupants.  Common Area also shall include,  without limitation,  any
common  entrances,  lobbies,  restrooms on multi-tenant  floors,  stairways and accessways,  loading docks,  ramps,
drives and platforms and any  passageways and  serviceways  thereto to the extent not  exclusively  serving another
tenant or contained  within  another  tenant's  premises,  and the common pipes,  conduits,  wires and  appurtenant
equipment serving the Premises.

4.2      Maintenance  and Use of Common  Area.  Landlord  shall  maintain  the Common  Area in good  condition  and
repair.  The use and  occupancy  by Tenant of the Premises  shall  include the right to use the Common Area (except
to the extent such use would interfere with the  maintenance or operation of the Project),  in common with Landlord
and other tenants of the Project and their  customers and invitees,  subject to (i) any  covenants,  conditions and
restrictions  now or hereafter of record  (collectively  the  "Declaration"),  and (ii)  the Rules and  Regulations
attached  hereto  as  Exhibit "E".   Landlord  shall  enforce  the  Rules  and  Regulations  in  a  reasonable  and
non-discriminatory   manner  and  Tenant  agrees  to  promptly   comply  with  all  such  Rules  and   Regulations.
Notwithstanding  the foregoing,  any Declaration that is recorded  subsequent to the date hereof shall not diminish
any rights of Tenant hereunder or increase any obligations of Tenant hereunder in any material respect.

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8875 Aero Drive
Midland Credit Management, Inc.

4.3      Control of and Changes to Common Area.  Landlord  shall have the sole control of the Common Area,  as well
as the right to make reasonable  changes to the Common Area.  Provided Landlord does not materially  interfere with
Tenant's use of and access to the Premises as  contemplated  by this Lease,  Landlord's  rights shall include,  but
not be limited to, the right to (a) restrain the use of the Common Area by unauthorized  persons;  (b) cause Tenant
to remove or restrain  persons  from any  unauthorized  use of the Common Area if they are using the Common Area by
reason of  Tenant's  presence in the  Project;  (c) temporarily  close any portion of the Common Area for  repairs,
improvements or alterations;  and  (d) reasonably  change the shape and size of the Common Area, add,  eliminate or
change the location of  improvements  to the Common  Area,  including,  without  limitation,  buildings,  lighting,
parking areas, landscaped areas, roadways, walkways, drive aisles and curb cuts.

4.4      Operating  Expenses.  Throughout  the Term of this Lease,  commencing  on the  Commencement  Date,  Tenant
agrees to pay  Landlord as  additional  rent in  accordance  with the terms of this  Section 4,  Tenant's  Share of
Operating  Expenses.  As used in this Lease, the term "Operating  Expenses" shall consist of all costs and expenses
reasonably  incurred  by  Landlord  for the  ownership,  operation,  maintenance,  repair  and  replacement  of the
Project.  Operating  Expenses  shall  include  the  following  costs  by way of  illustration  but not  limitation:
(i) Real  Property Taxes (but excluding any increases to Real Property Taxes resulting from any improvements to the
Project  constructed for the sole benefit of another  tenant);  (ii) any and all  assessments  under any covenants,
conditions and restrictions affecting the Project;  (iii) water,  sewer and other utility charges on account of the
Common Area;  (iv) costs of insurance  obtained by Landlord  pursuant to Section 21  of this Lease  (excluding  any
earthquake,  flood,  terrorism,  rental  loss in  excess of six (6)  months,  business  interruption,  or any other
extraordinary  insurance  coverage,  except to the extent that such insurance is reasonably  required by Landlord's
lender);   (v) waste  disposal  and  janitorial   services  for  the  Common  Area;   (vi) security;   (vii) labor;
(viii) management fees and costs, including,  without limitation:  (A) wages,  salaries,  pension payments,  fringe
benefits,  uniforms and  dry-cleaning  thereof  (and  payroll  taxes,  insurance  and similar  charges) of property
management  employees,  (B) management  office  rental,  supplies,  equipment  and related  operating  expenses and
(C) management/administrative  fees,  provided that the sum of all such  management  fees and costs under this item
(viii) may not exceed 3% of Basic Rent from the Project;  (ix) supplies,  materials,  equipment and tools including
rental of  personal  property;  (x) repair  and  maintenance  of all common  portions of the  buildings  within the
Project,  including the plumbing,  heating,  ventilating,  air-conditioning  and  electrical  systems  installed or
furnished  by  Landlord  as  well  as  the  HVAC   equipment   installed  as  part  of  the  Tenant   Improvements;
(xi) maintenance,   sweeping,   repairs,   resurfacing,   and  upkeep  of  all  parking  and  other  Common  Areas;
(xii) amortization  on a straight line basis over the useful life (together with interest at the annual rate of six
percent on the unamortized balance) of all capitalized  expenditures which are:  (A) reasonably intended to produce
a reduction in operating  charges or energy  consumption (but only to the extent of such  reduction);  (B) required
under any  governmental  law or regulation  that was not applicable to the Project as of the date of this Lease; or
(C) for  replacement or restoration of any Project equipment and/or  improvements needed to operate and/or maintain
the  Project  at the  same  quality  levels  as prior  to the  replacement  or  restoration;  (xiii) gardening  and
landscaping;  (xiv) maintenance of signs (other than signs of tenants of the Project);  and (xv) personal  property
taxes levied on or  attributable  to Landlord’s  personal  property used  exclusively in connection with the Common
Areas (or, if not used  exclusively,  then a prorata share of such taxes based upon the ratio that at the time such
personal  property  is devoted  to the Common  Area bears to the total  amount of time such  personal  property  is
used).  Notwithstanding  the forgoing,  the amount of any charges for any services provided by affiliates,  related
or  designated  parties of Landlord  that are included in Operating  Expenses,  must be  reasonable,  customary and
competitive with charges for similar services of independent contractors in the area where the Project is located.

Notwithstanding  any  implication to the contrary,  Operating  Expenses will not include any of the following:  (a)
legal fees,  brokerage  commissions,  advertising costs or related expenses in connection with the sale,  financing
or  development  of any portion of the  Project or the  leasing of other  premises  within the  Project;  (b) costs
incurred in connection  with damage or repairs that are covered under any insurance  policy  carried or required to
be  carried  by  Landlord  in  connection  with the  Project;  (c)  expenses  for  repair  or  replacement  paid by
condemnation  awards; (d) costs associated with damage or repairs to the Project  necessitated by the negligence or
misconduct of Landlord or Landlord’s employees,  agents,  invitees,  or contractors;  (e) reserves or any kind; (f)
salaries or  overhead  expenses of Landlord  or any of its  affiliates  (other than the  management  fees and costs
permitted in clause (viii) above); (g) any principal,  interest,  loan fees, or other carrying costs related to any
mortgage  or deed of trust  encumbering  the  Project or  Premises  and all rental and other  payment due under any
ground or underlying lease; (h) legal fees,  accountant fees and other expenses  incurred in disputes  regarding or
associated  with the Project,  including  enforcement or defense of Landlord’s  title to or interest in the Project
or any part thereof or with respect to disputes  with other  tenants of the Project;  (i) any fines,  late charges,
penalties or other similar costs  incurred due to  violations  by Landlord of any  governmental  rule or authority,
this Lease or any other lease,  or due to Landlord’s  negligence or  misconduct;  (j) costs incurred to comply with
laws relating to Hazardous  Materials or to remove,  remedy,  contain,  or treat such Hazardous  Materials,  to the
extent such  Hazardous  Materials are (i) in  existence as of the  Commencement  Date in violation of then existing
Environmental  Law or  (ii) introduced  after the Commencement  Date by Landlord or Landlord's  employees,  agents,
contractors,  invitees or other tenants in violation of Environmental  Law in effect as of the date of introduction
and (k) the Landlord’s Work.

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4.5      Tenant's  Monthly  Operating  Expense Charge.  From and after the Commencement  Date,  Tenant shall pay to
Landlord,  on the first day of each  calendar  month  during the Term of this  Lease,  Tenant's  Share of an amount
estimated  by Landlord to be the  Monthly  Operating  Expenses  for the Project for that month  ("Tenant's  Monthly
Operating Expense Charge") per the Estimate Statement.

4.6      Estimate  Statement.  Prior  to the  Commencement  Date  and on or  about  March 1st  of  each  subsequent
calendar year during the Term of this Lease,  Landlord shall deliver to Tenant a statement  ("Estimate  Statement")
wherein  Landlord will  reasonably  estimate both the Operating  Expenses and Tenant's  Monthly  Operating  Expense
Charge for the then current calendar year. Tenant agrees to pay Landlord,  as additional rent,  Tenant's  estimated
Monthly  Operating  Expense Charge each month  thereafter,  beginning with the next  installment of rent due, until
such time as Landlord issues a revised  Estimate  Statement or the Estimate  Statement for the succeeding  calendar
year;  except that,  concurrently with the regular monthly rent payment next due following the receipt of each such
Estimate  Statement,  Tenant  agrees to pay  Landlord  an  amount  equal to one  monthly  installment  of  Tenant's
estimated  Monthly  Operating  Expense  Charge  multiplied  by the number of months  from  January,  in the current
calendar  year, to the month of such rent payment next due, all months  inclusive  (less any  applicable  Operating
Expenses  already  paid).  If at any time  during the Term of this  Lease,  but not more often than  semi-annually,
Landlord  reasonably  determines  that Tenant's Share of Operating  Expenses for the current  calendar year will be
greater than the amount set forth in the then current  Estimate  Statement,  Landlord may issue a revised  Estimate
Statement and Tenant  agrees to pay  Landlord,  within 30 days of receipt of the revised  Estimate  Statement,  the
difference  between the amount owed by Tenant under such revised  Estimate  Statement and the amount owed by Tenant
under the  original  Estimate  Statement  for the  portion of the then  current  calendar  year which has  expired.
Thereafter,  Tenant  agrees to pay  Tenant's  Monthly  Operating  Expense  Charge  based on such  revised  Estimate
Statement until Tenant receives the next calendar year's  Estimate  Statement or a new revised  Estimate  Statement
for the current calendar year.

4.7      Actual  Statement.  By March 1st of each calendar year during the Term of this Lease,  Landlord shall also
deliver to Tenant a statement  ("Actual  Statement")  which states Tenant's Share of the actual Operating  Expenses
for the preceding  calendar  year,  along with a detailed and  categorized  list of the  expenditures  on which the
Actual  Statement is based. If the Actual Statement  reveals that Tenant's Share of the actual  Operating  Expenses
is more than the total Additional Rent paid by Tenant for Operating  Expenses on account of the preceding  calendar
year,  Tenant  agrees to pay  Landlord the  difference  in a lump sum within ten (10) days of receipt of the Actual
Statement.  If the Actual Statement  reveals that Tenant's Share of the actual Operating  Expenses is less than the
Additional  Rent paid by Tenant for Operating  Expenses on account of the preceding  calendar  year,  Landlord will
credit any  overpayment  toward the next monthly  installment(s)  of Tenant's  Share of the Operating  Expenses due
under  this  Lease.  Such  obligation  will be a  continuing  one which  will  survive  the  expiration  or earlier
termination  of this  Lease.  Prior to the  expiration  or  sooner  termination  of the Lease  Term and  Landlord's
acceptance  of Tenant's  surrender of the Premises,  Landlord will have the right to estimate the actual  Operating
Expenses  for the then  current  calendar  year and to collect  from  Tenant  prior to  Tenant's  surrender  of the
Premises,  Tenant's Share of any excess of such actual  Operating  Expenses over the estimated  Operating  Expenses
paid by Tenant in such calendar year.

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4.8      Miscellaneous.  Any  delay or  failure  by  Landlord  in  delivering  any  Estimate  Statement  or  Actual
Statement  pursuant  to this  Section 4  will not  constitute  a waiver  of its right to  require  an  increase  in
additional rent for Operating  Expenses nor will it relieve Tenant of its  obligations  pursuant to this Section 4,
except  that  Tenant  will not be  obligated  to make any  payments  based on such  Estimate  Statement  or  Actual
Statement until ten (10) days after receipt of such Estimate  Statement or Actual  Statement.  Even though the Term
has expired and Tenant has vacated the  Premises,  when the final  determination  is made of Tenant's  Share of the
actual Operating  Expenses for the year in which this Lease terminates,  Tenant agrees to promptly pay any increase
due over the estimated  expenses paid and,  conversely,  any overpayment  made in the event said expenses  decrease
shall promptly be rebated by Landlord to Tenant.  Such  obligation  will be a continuing one which will survive the
expiration  or  termination  of this Lease.  Prior to the  expiration or sooner  termination  of the Lease Term and
Landlord's  acceptance of Tenant's  surrender of the Premises,  Landlord will have the right to estimate the actual
Operating  Expenses for the then current  Lease Year and to collect from Tenant prior to Tenant's  surrender of the
Premises,  Tenant's Share of any excess of such actual  Operating  Expenses over the estimated  Operating  Expenses
paid by Tenant in such Lease Year.

4.9      Cap On  Controllable  Operating  Expenses.  Notwithstanding  anything  herein to the contrary,  solely for
purposes of  calculating  Tenant's  Share of  Operating  Expenses  during the initial Term only,  the  Controllable
Operating  Expenses for any calendar year  following the first full calendar year of the Term shall not increase by
more than five  percent  (5%) over the  maximum  permitted  Controllable  Operating  Expenses  for the  immediately
preceding  calendar  year (i.e.,  on a cumulative  and compound  basis and  regardless  of the actual  Controllable
Operating  Expense  incurred for such preceding  calendar  year);  however,  if the actual  Controllable  Operating
Expenses for any calendar  year are greater than the maximum  amount  permitted to be charged to Tenant  hereunder,
the difference shall be added to the actual  Controllable  Operating  Expenses for succeeding  calendar years until
exhausted.  The term  "Controllable  Operating  Expenses"  means all  Operating  Expenses  other than Real Property
Taxes, insurance and capital expenditures described in clause (xii) of Section 4.4 above.

4.10     Limited Proposition 13  Protection.  Notwithstanding anything herein to the contrary,  solely for purposes
of  calculating  Tenant's  Share of Operating  Expenses  during the first three (3) years of the initial Term only,
Real Property Taxes shall not include the amount of any increase in Real Property Taxes  directly  attributable  to
Landlord's  sale or transfer of the Project (or any transfer of ownership  interests in Landlord)  during the first
three (3) years of the initial Term.  After the  expiration  of the first three (3) years of the initial Term,  the
provisions of this Section 4.10 shall no longer apply.

4.11     Audit  Right.  Within  one  hundred  twenty  (120) days after  receipt  of an Actual  Statement  by Tenant
("Review  Period"),  if Tenant  disputes  the amount set forth in the Actual  Statement,  Tenant's  employees or an
independent  certified public  accountant  (which  accountant is a member of a nationally or regionally  recognized
accounting firm),  designated by Tenant, may, after reasonable notice to Landlord and at reasonable times,  inspect
Landlord's records (pertaining to Landlord's  calculation of Operating  Expenses) at Landlord's  offices,  provided
that Tenant is not then in default  after  expiration  of all  applicable  cure periods and  provided  further that
Tenant and such  accountant  or  representative  shall,  and each of them shall use their  commercially  reasonable
efforts to cause their  respective  agents and  employees  to,  maintain all  information  contained in  Landlord's
records  in  strict  confidence.  Notwithstanding  the  foregoing,  Tenant  shall  only  have the  right to  review
Landlord's  records one (1) time during any twelve (12) month period.  Tenant's  failure to dispute the amounts set
forth in any Actual  Statement  within the Review  Period  shall be deemed to be  Tenant's  approval of such Actual
Statement  and  Tenant,  thereafter,  waives the right or ability to dispute  the  amounts set forth in such Actual
Statement.  If after  such  inspection,  but within  thirty  (30) days after the  Review  Period,  Tenant  notifies
Landlord in writing that Tenant still  disputes  such  amounts,  a  certification  as to the proper amount shall be
made, at Tenant's expense,  by an independent  certified public accountant selected by Landlord and who is a member
of a nationally or regionally  recognized  accounting firm (and who has not previously been retained by Landlord or
any  affiliate  of Landlord  or any of its  owners).  Landlord  shall  cooperate  in good faith with Tenant and the
accountant  to provide  Tenant and the  accountant  with the  information  upon  which the  certification  is to be
based.  However,  if such  certification by the accountant  proves that the total amount of Operating  Expenses set
forth in the Actual  Statement were overstated by more than three percent (3.0%),  then the reasonable costs of the
accountant  originally  retained by Tenant and the  accountant  selected by  Landlord as  described  above and such
certification  shall be paid for by Landlord.  Promptly  following the parties receipt of such  certification,  the
parties  shall  make  such  appropriate  payments  or  reimbursements,  as the case may be, to each  other,  as are
determined  to be owing  pursuant to such  certification.  In no event shall  Landlord or its  property  manager be
required  to  (i) photocopy  any  accounting  records  or other  items or  contracts,  (ii) create  any  ledgers or
schedules not already in existence,  (iii) incur  any  unreimbursed  costs or expenses  relative to such inspection
(except as otherwise  provided above),  or (iv) perform any other tasks other than making available such accounting
records as are  described in this  Section.  Landlord  shall not be liable for the payment of any  contingency  fee
payments to any auditor or  consultant  of Tenant.  The  provisions  of this Section shall be the sole method to be
used by Tenant to dispute the amount of Operating  Expenses  payable by Tenant  under this Lease and Tenant  waives
any other rights or remedies relating to the amount of Operating Expenses.

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4.12     HVAC System Expenses.  Landlord shall monitor and account for the following  Operating  Expenses  separate
from all other Operating Expenses:

(a)      The days and hours of usage by each  occupant  of the  Building of the HVAC  system  serving the  Building
         (the "HVAC  System")  and units of actual  energy and other  utilities  consumed in  connection  with such
         usage and the cost of such consumption of energy and other utilities (the "Consumption Costs"); and

(b)      The cost of the maintenance,  repair and, subject to the limitations of Section 4.4 above,  replacement of
         the HVAC  System or  portions  thereof,  including  separate  accounting  for all  parts and labor  (e.g.,
         engineer's time) (the "Maintenance Costs").

The Consumption  Costs and Maintenance  Costs are  collectively  referred to herein as the "HVAC System  Expenses."
Tenant's  Share of the HVAC  System  Expenses  shall be the sum of  (i) the  product  of the HVAC  System  Expenses
multiplied by the fraction  arrived at by dividing the  electricity  consumed by Tenant's  usage of the HVAC System
by the total  electricity  consumed by the operation of the HVAC System for all purposes,  plus (ii) Tenant's Share
(as calculated in accordance  with the first sentence of Section 1.6 of the Summary) of (x) the  Consumption  Costs
for the  Common  Area and (y) the  product  of the  Maintenance  Costs  multiplied  by the  fraction  arrived at by
dividing the electricity  consumed by the HVAC System for the Common Area by the total electricity  consumed by all
usage of the HVAC System.

5.       Security  Deposit.  Concurrently  with Tenant's  execution and delivery of this Lease to Landlord,  Tenant
shall deposit with Landlord the Security  Deposit  designated in Section 1.11 of the Summary.  The Security Deposit
shall be held by  Landlord  as  security  for the full and  faithful  performance  by Tenant  of all of the  terms,
covenants  and  conditions of this Lease to be performed by Tenant  during the Term.  The Security  Deposit is not,
and may not be  construed  by Tenant to  constitute,  rent for the last  month or any  portion  thereof.  If Tenant
defaults  with  respect to any of its  obligations  under this Lease,  Landlord  may (but shall not be required to)
use,  apply or retain  all or any part of the  Security  Deposit  for the  payment  of any rent or any other sum in
default,  or for the payment of any other  amount,  loss or damage  which  Landlord  may spend,  incur or suffer by
reason of Tenant's  default.  Tenant hereby waives the provisions of California Civil Code  Section 1950.7  and any
other  provisions  of any law, now or hereafter  enforced,  which provide that Landlord may claim from the Security
Deposit only those sums  reasonably  necessary to remedy  defaults in the payment of rent,  to repair damage caused
by Tenant or to clean the Premises,  it being agreed that Landlord  may, in addition,  claim those sums  reasonably
necessary  to  compensate  Landlord  for any other loss or damage  caused by the acts or omissions of Tenant or any
Tenant's  Parties.  If any portion of the Security  Deposit is so used or applied,  Tenant  shall,  within ten (10)
days after demand therefor,  deposit cash with Landlord in an amount  sufficient to restore the Security Deposit to
its  original  amount.  Landlord  shall not be  required to keep the  Security  Deposit  separate  from its general
funds,  and  Tenant  shall  not be  entitled  to  interest  on the  Security  Deposit.  If Tenant  shall  fully and
faithfully  perform  every  provision  of this Lease to be  performed  by it, the  Security  Deposit or any balance
thereof shall be returned to Tenant  within two (2) weeks  following  the  expiration  of the Lease term,  provided
that  Landlord may retain the Security  Deposit  until such time as any amount due from Tenant in  accordance  with
this Lease has been  determined  and paid in full. If Landlord  sells its interest in the Building  during the Term
and if Landlord  deposits with the  purchaser  the Security  Deposit (or balance  thereof),  then,  upon such sale,
Landlord shall be discharged from any further liability with respect to the Security Deposit.

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Notwithstanding  the foregoing,  Landlord  shall return the Security  Deposit to Tenant  immediately  following the
expiration  of the twelfth  (12th) full  calendar  month of the initial  Term if, at such time,  Tenant's is not in
default under this Lease.

6.       Use.

6.1      General.  Tenant shall use the Premises  solely for the  Permitted Use  specified in  Section 1.12  of the
Summary,  and shall not use or permit  the  Premises  to be used for any  other  use or  purpose  whatsoever.  (But
Tenant is not  obligated to use or occupy the  Premises at all.)  Tenant  shall  observe and comply with the "Rules
and  Regulations"  attached  hereto as Exhibit "E".  Landlord shall endeavor to enforce the Rules and  Regulations,
but shall have no liability to Tenant for the violation or  non-performance  by any other tenant or occupant of the
Project of any such Rules and  Regulations.  Tenant  shall,  at its sole cost and expense,  observe and comply with
all  requirements  of any board of fire  underwriters  or similar  body  relating  to the  Premises,  all  recorded
covenants,  conditions and  restrictions  now or hereafter  affecting the Premises and all laws,  statutes,  codes,
rules  and  regulations  now or  hereafter  in force  relating  to or  affecting  the  condition,  use,  occupancy,
alteration or  improvement  of the Premises  (including,  without  limitation,  the  provisions of Title III of the
Americans with  Disabilities Act of 1990 as it pertains to Tenant's use,  occupancy,  improvement and alteration of
the Premises),  whether,  except as otherwise provided herein,  structural or nonstructural,  including  unforeseen
and/or  extraordinary  alterations  and/or  improvements  to the  Premises  and  regardless  of the  period of time
remaining in the Lease Term;  provided,  however,  Tenant is not  responsible  for  improvements to the Premises or
Project  resulting  from either the failure of any  portion of the  Project or  Landlord's  Work to comply with any
applicable laws or regulations  existing as of the Commencement  Date or from any portion of the Project other than
the Premises  requiring  alteration because of any change in applicable law or regulation (except to the extent the
same is triggered by Tenant's  particular  use of the Premises or Tenant's  alterations  to the Premises,  in which
event Tenant shall be responsible  for such  compliance),  and Landlord shall cause such  improvements  to be made,
subject  to  Tenant’s  obligation  to  contribute  to its share of the  improvement  costs in  accordance  with the
Operating  Expense  provisions  of this  Lease.  Tenant  shall  not use or allow  the  Premises  to be used  (a) in
violation of the Declaration or any other recorded  covenants,  conditions and  restrictions  affecting the Project
or of any law or governmental rule or regulation,  or of any certificate of occupancy issued for the Premises,  the
Building  and/or the Project,  or (b) for any unlawful  purpose.  Tenant shall not do or permit to be done anything
which will  obstruct or interfere  with the rights of other  tenants or  occupants of the Project,  or injure them.
Tenant shall not cause,  maintain or permit any nuisance in, on or about the  Premises,  nor commit or suffer to be
committed  any waste in,  on or about the  Premises,  nor cause  any  nuisance  or  voluntarily  permit  any of its
invitees to cause any  nuisance in the  Building or the Project.  Tenant and  Tenant's  employees  and agents shall
not solicit business in the Common Area, nor shall Tenant distribute any handbills or other  advertising  matter in
the Common Area.

Notwithstanding  the foregoing,  if any  improvements to the Premises are required during the last two (2) years of
the Term  solely as a result of a change in any law,  and the cost  thereof  exceeds  six (6)  months'  Base  Rent,
Tenant may terminate this Lease unless Landlord  notifies Tenant,  in writing,  within ten (10) business days after
receipt of Tenant's  Termination  Notice that  Landlord has elected to pay the  difference  between the actual cost
thereof  and the  amount  equal  to six  (6)  months'  Base  Rent.  If  Tenant  elects  termination,  Tenant  shall
immediately  cease the use of the Premises which requires such  improvement and deliver to Landlord  written notice
specifying a termination date at least thirty (30) days thereafter.  Such  termination date shall,  however,  in no
event be earlier  than the last day that  Tenant  could  legally  utilize  the  Premises  without  commencing  such
improvement.

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Without  limiting  the  foregoing,  during the period of time that the lease  between  Landlord and Bank of America
dated November 18,  2003, as it may be amended,  renewed or extended from time to time, for the ground floor of the
Building  (the "BofA  Lease") is in effect,  Tenant may not use or permit the  Premises  to be used for (i) any use
which is  reasonably  likely to create a nuisance,  (ii) any  school,  classroom  or training  facility,  (iii) any
medical or dental office,  clinic,  laboratory or similar use or (iv) any  government office.  Notwithstanding  the
foregoing,  and subject to the satisfaction of the condition set forth in Section 37.2 below,  (a) the operation of
a call center,  in and of itself,  shall not violate  clause (i) above and (b) the operation of a training facility
as a minor component of another primary use of the Premises shall not violate clause (ii) above.

6.2      Parking.

6.2.1    Tenant's Parking  Privileges.  During the Term of this Lease,  Landlord shall lease to Tenant,  and Tenant
shall lease from Landlord (at no additional  rent), the number of parking  privileges  specified in Section 1.10 of
the Summary hereof for use by Tenant's  employees and invitees in the location  identified on Exhibit "G"  attached
hereto or such other  location as Landlord may designate  from time to time and which is  reasonably  acceptable to
Tenant.  Landlord  shall at all times have the right to  establish  and modify the nature and extent of the parking
areas for the  Building  and Project  (including  whether  such areas shall be surface,  underground  and/or  other
structures)  as long as Tenant is provided  the number of parking  privileges  designated  in  Section 1.10  of the
Summary;  provided,  however,  no less than Tenant's  Share of the parking  spaces  located in the initial  Project
(i.e.,  excluding the New Parking Space Area) shall be available for Tenant's use.  Tenant's  parking  spaces shall
be  exclusive  and  Landlord  shall  cooperate  with Tenant to  facilitate  Tenant’s  ability to have  unauthorized
vehicles  removed  from  Tenant’s  parking  spaces.  Before the  Commencement  Date,  as part of  Landlord’s  Work,
Landlord  shall  number the parking  spaces.  Tenant may,  at its  option,  elect to label the parking  spaces with
Tenant's  name,  subject  to  Landlord's  reasonable  consent.  All  parking  spaces  provided  to Tenant  shall be
"standard" parking spaces as determined by applicable governmental requirements.

6.2.2    Parking  Rules.  The use of the  parking  areas  shall be subject  to the  Parking  Rules and  Regulations
contained in  Exhibit "E"  attached  hereto.  Tenant shall not use more parking  privileges  than its allotment and
shall not use any parking  spaces not  designated  by Landlord  for Tenant's  use or any  specifically  assigned by
Landlord to other tenants of the Building or Project or for such other uses as visitor  parking.  Tenant's  parking
privileges shall be used only for parking by vehicles no larger than normally sized passenger  automobiles,  sports
utility  vehicles,  passenger  vans, or pick-up  trucks.  Tenant shall not permit or allow any vehicles that belong
to or are  controlled by Tenant or Tenant's  employees,  suppliers,  shippers,  customers or invitees to be loaded,
unloaded,  or parked in areas other than those  designated by Landlord for such  activities.  If Tenant  permits or
allows any of the prohibited  activities  described herein, then Landlord shall have the right,  without notice, in
addition  to such other  rights and  remedies  that it may have,  to remove or tow away the  vehicle  involved  and
charge the cost thereof to Tenant, which cost shall be immediately payable by Tenant upon demand by Landlord.

6.2.3    New Parking Space Area.  Landlord is currently in escrow to acquire the property  depicted on  Exhibit "A"
as the "New Parking Space Area," which is a portion of Lot 7 of Research  Park  Subdivision  Addition,  City of San
Diego,  County of San Diego,  State of  California  according  to Map  No. 6386,  filed in the Office of the County
Recorder of San Diego County  ("Lot 7").  Landlord  anticipates  that the closing of Landlord's  acquisition of the
New  Parking  Space Area shall  occur on or about  April 5,  2004.  If  Landlord  has not closed  escrow on the New
Parking  Space Area by May 1,  2004,  or if Landlord  has not  otherwise  entered  into an  agreement,  in form and
substance  reasonably  acceptable  to  Tenant,  with the  owner of the New  Parking  Space  Area by such  date that
provides the requisite  number of parking  spaces to satisfy  Tenant's  parking rights  hereunder,  then Tenant may
terminate this Lease by giving  Landlord  written notice thereof within ten (10) business days following such date,
in which event  Landlord  shall return to Tenant the advance rent and any other sums  previously  paid to Landlord,
and Landlord and Tenant shall  thereafter have no obligation  under this Lease,  except for those  obligations that
expressly  survive  termination.  If Tenant  does not elect to so  terminate  this  Lease,  then  unless  and until
Landlord  closes escrow on the New Parking Space Area or otherwise  enters into a parking  agreement with the owner
thereof,  the number of parking  spaces to which Tenant is entitled as  designated in  Section 1.10  of the Summary
shall be reduced by the number of spaces  identified on  Exhibit "G"  as being located within the New Parking Space
Area.  In the event  Landlord  determines  that  escrow  will not close on the New  Parking  Space Area by April 5,
2004,  Landlord  shall give Tenant  written  notice  thereof  promptly  following the date Landlord  first has such
knowledge.  Upon Landlord's  acquisition of the New Parking Space Area or Landlord's  acquisition of parking rights
in the New Parking Space Area pursuant to a parking  agreement with the owner thereof,  as applicable,  (i) the New
Parking  Space Area shall become a portion of the Project and  (ii) Landlord  shall  improve the New Parking  Space
Area as a surface parking lot as part of Landlord's Work.

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8875 Aero Drive
Midland Credit Management, Inc.

Tenant  acknowledges  that Landlord shall have the right, but not the obligation,  to construct a parking structure
on the New  Parking  Space Area in the  future,  and in such  case,  Tenant  agrees to  reasonably  cooperate  with
Landlord  (i) in  connection  with the  construction  of such parking  structure  (including,  without  limitation,
utilizing valet or other parking  attendant  service [at no charge to Tenant or its employees or guests] in lieu of
the parking spaces in the New Parking Space Area that have been displaced during  construction)  and  (ii) locating
Tenant's  parking  spaces in such new  parking  structure;  provided,  however,  not more than three (3) spaces per
1,000  rentable  square feet of the  Premises  shall be located on the top level of such parking  structure  and no
less than Tenant's  Share of the parking spaces  located in the initial  Project  (i.e.,  excluding the New Parking
Space Area) shall be available for Tenant's use.

Tenant's  Share of Operating  Expenses  (other than Real  Property  Taxes) for the New Parking  Space Area shall be
determined by multiplying the Operating  Expenses for the total parking area on Lot 7 by the percentage  ratio that
the number of Tenant's  parking  spaces  located in the New Parking Space Area bears to the total number of parking
spaces on Lot 7.  During the period of time that the New  Parking  Space Area is a surface  parking  lot,  Tenant's
Share of Real Property  Taxes for the New Parking Space Area shall be determined by  multiplying  the assessed land
value of Lot 7 by the percentage  ratio that Tenant's  Parking Square Footage (as defined below) bears to the total
square  footage  of land in Lot 7.  During the period of time that the New  Parking  Space Area  contains a parking
structure,  Tenant's  Share of the Real  Property  Taxes for the New  Parking  Space  Area shall be  determined  by
multiplying  the  assessed  land value  underlying  the parking  structure  and the  assessed  value of the parking
structure by the  percentage  ratio that the number of Tenant's  parking spaces in the parking  structure  bears to
the total number of parking spaces in the parking  structure.  "Tenant's  Parking Square Footage" means the product
obtained by multiplying the number of Tenant's parking spaces in the New Parking Space Area by 350 square feet.

6.3      Signs,  Awnings and  Canopies.  Tenant will not place or suffer to be placed or  maintained on the roof or
on any  exterior  door,  wall or window (or within 48 inches of any  window) of the  Premises  any sign,  awning or
canopy, or advertising  matter on the glass of any window or door of the Premises without  Landlord's prior written
consent.  Tenant agrees to maintain any such sign, awning, canopy,  decoration,  lettering or advertising matter as
may be approved by Landlord in good  condition and repair at all times.  At the  expiration or earlier  termination
of this Lease, at Landlord's election,  Tenant shall remove all signs, awnings,  canopies,  decorations,  lettering
and advertising and shall repair any damage to the Building,  the Premises or the Project  resulting  therefrom all
at Tenant's  sole cost and  expense.  If Tenant  fails to maintain  any such  approved  sign,  awning,  decoration,
lettering,  or  advertising,  Landlord may do so and Tenant shall  reimburse  Landlord for such cost.  If,  without
Landlord's  prior written  consent,  Tenant installs any sign,  awning,  decoration,  lettering or advertising,  or
fails to remove any such item(s) at the  expiration or earlier  termination  of this Lease,  Landlord may have such
item(s)  removed  and stored and may repair any damage to the  Building,  the  Premises  or the Project at Tenant's
expense.  The removal, repair and/or storage costs shall bear interest until paid at the Interest Rate.

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8875 Aero Drive
Midland Credit Management, Inc.

6.3.1    Building and Monument Signs.  Subject to this  Section 6.3.1,  Tenant shall have the  non-exclusive  right
to install,  at its sole cost and expense,  signage  identifying  Tenant's  (and/or  Guarantor's or, subject to the
last  paragraph  of this  Section 6.3.1,  any of their  affiliate’s  or any  assignee’s  or  subtenant's)  name and
logotype on the exterior of the Building  (limited to  Building-top  signage and signage  adjacent to Tenant's main
entrance) and on the main monument  sign for the Project when such a monument sign is built  ("Signage").  Landlord
shall,  subject to Force  Majeure  Delays,  construct a main  monument  sign for the Project  within six (6) months
following  the  Commencement  Date.  The  graphics,   materials,  color,  design,  lettering,  lighting  (if  any),
specifications and exact location of the Signage (collectively,  the "Signage  Specifications") shall be subject to
the prior written  approval of Landlord,  which approval shall not be unreasonably  withheld.  The size of Tenant’s
signage may not exceed  Tenant’s  Share of the gross signage  permitted for the Project under  applicable  laws and
regulations.  In  addition,  the  Signage  and all  Signage  Specifications  therefor  shall be subject to Tenant's
receipt of all required  governmental permits and approvals,  shall be subject to all applicable  governmental laws
and ordinances,  and all covenants,  conditions and restrictions affecting the Project.  Tenant hereby acknowledges
that, notwithstanding  Landlord's approval of the Signage and/or the Signage Specifications therefor,  Landlord has
made no  representations  or warranty to Tenant with respect to the  probability  of obtaining  such  approvals and
permits.  In the event Tenant does not receive the necessary  permits and  approvals for the Signage,  Tenant's and
Landlord's  rights and  obligations  under the remaining  provisions of this Lease shall not be affected.  The cost
of  installation  of the  Signage,  as well as all costs of design and  construction  of such Signage and all other
costs associated with such Signage, including,  without limitation,  permits,  maintenance and repair, shall be the
sole  responsibility  of Tenant.  Should the Signage  require  maintenance  or repairs as  determined in Landlord's
reasonable  judgment,  Landlord  shall have the right to provide  written notice thereof to Tenant and Tenant shall
cause such repairs  and/or  maintenance  to be performed  within thirty (30) days after receipt of such notice from
Landlord at Tenant's  sole cost and expense.  Should  Tenant fail to perform such  maintenance  and repairs  within
the period  described in the immediately  preceding  sentence,  Landlord shall have the right to cause such work to
be performed and to charge Tenant,  as Additional  Rent, for the cost of such work.  Upon the expiration or earlier
termination  of this Lease,  Tenant shall,  at Tenant's sole cost and expense,  cause the Signage to be removed and
shall restore the affected  areas to the  condition  existing  prior to the  placement of such  Signage.  If Tenant
fails to remove such  Signage and to restore the exterior of the Project as provided in the  immediately  preceding
sentence  within thirty (30) days  following the expiration or early  termination of this Lease,  then Landlord may
perform such work, and all costs and expenses  incurred by Landlord in so performing  such work shall be reimbursed
by Tenant to Landlord within ten (10) days after Tenant's receipt of invoice  therefor.  The immediately  preceding
sentence shall survive the expiration or earlier termination of this Lease.

Should the name and/or logo of Tenant,  or  Guarantor  change,  or should the Lease be assigned or the  Premises be
sublet,  or should  Tenant or Guarantor  desire to identify an  affiliate's  name or logo on the Signage,  then the
Signage  may be  modified  at  Tenant's  sole cost and expense to reflect the new name and/or logo of Tenant or the
name and/or logo of an assignee or a sublessee,  or the name and/or logo of an affiliate,  but only if the new name
and/or logo does not  (i) relate to an entity that is of a character or  reputation,  or associate with a political
orientation  or a faction,  that is  inconsistent  with the  quality of the Project or would  otherwise  reasonably
offend an institutional  Landlord of a project  comparable to the Project,  taking into consideration the level and
visibility  of such Signage or  (ii) cause  Landlord to be in default  under any lease or other  agreement to which
Landlord is bound.

Notwithstanding  the foregoing,  during the time that the BofA Lease is in effect,  the Signage may not contain the
name or logo,  or  advertise  the  services or  products,  of any bank or other  financial  institution;  provided,
however,  subject to the  satisfaction  of the condition set forth in Section 37.2  below,  the name or logo of the
original Tenant and Guarantor shall not violate the provisions of this sentence.

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8875 Aero Drive
Midland Credit Management, Inc.

6.4      Hazardous Materials.

6.4.1    Tenant's  Obligations.  Tenant will  (i) obtain  and  maintain in full force and effect all  Environmental
Permits (as defined below) that may be required from time to time under any  Environmental  Laws (as defined below)
applicable  to  Tenant  or its use of the  Premises  and  (ii) be  and  remain  in  compliance  with all  terms and
conditions of all such Environmental Permits and with all other limitations,  restrictions,  conditions, standards,
prohibitions,  requirements,  obligations,  schedules and timetables contained in all Environmental Laws applicable
to Tenant,  and (iii) not violate any  Environmental  Law governing the Premises.  As used in this Lease,  the term
"Environmental  Law" means any past,  present or future  federal,  state or local  statutory  or common law, or any
regulation,  ordinance, code, plan, order, permit, grant, franchise,  concession,  restriction or agreement issued,
entered,  promulgated or approved thereunder,  relating to (a) the environment,  human health or safety, including,
without  limitation,  emissions,  discharges,  releases or threatened  releases of Hazardous  Materials (as defined
below) into the environment (including,  without limitation,  air, surface water,  groundwater or land), or (b) the
manufacture,  generation,  refining,  processing,  distribution,  use, sale, treatment, receipt, storage, disposal,
transport,   arranging  for  transport,  or  handling  of  Hazardous  Materials.   "Environmental  Permits"  means,
collectively,  any and all permits,  consents,  licenses,  approvals  and  registrations  of any nature at any time
required  pursuant to, or in order to comply with, any  Environmental  Law.  Except for ordinary and general office
supplies,  such as copier  toner,  liquid  paper,  glue,  ink and  common  cleaning  materials  used and  stored in
compliance  with all  Environmental  Laws  (some or all of which may  constitute  Hazardous  Materials  as  defined
below),  and  ordinary  parking  lot  residue  and  run-off,  Tenant  agrees not to cause or permit  any  Hazardous
Materials to be brought upon,  stored,  used,  handled,  generated,  released or disposed of on, in, under or about
the  Premises,  the  Building,  the Common  Areas or any other  portion  of the  Project  by  Tenant,  its  agents,
employees, subtenants,  assignees, licensees,  contractors or invitees (collectively,  "Tenant's Parties"), without
the prior written consent of Landlord,  which consent Landlord may withhold in its reasonable discretion.  Upon the
expiration or earlier termination of this Lease,  Tenant agrees to promptly remove from the Premises,  the Building
and the  Project,  at its sole cost and  expense,  any and all  Hazardous  Materials,  including  any  equipment or
systems  containing  Hazardous  Materials which are installed,  brought upon, stored,  used,  generated or released
upon, in, under or about the Premises,  the Building  and/or the Project or any portion thereof by Tenant or any of
Tenant's  Parties.  To the fullest extent permitted by law, Tenant agrees to promptly  indemnify,  protect,  defend
and hold  harmless  Landlord and  Landlord's  members,  shareholders,  partners,  officers,  directors,  employees,
agents,  successors  and  assigns  (collectively,  "Landlord  Indemnified  Parties")  from and  against any and all
claims,  defense costs,  damages,  judgments,  suits,  causes of action,  losses,  liabilities,  penalties,  fines,
expenses and costs (including,  without  limitation,  clean-up,  removal,  remediation and restoration  costs, sums
paid in  settlement of claims,  attorneys'  fees,  consultant  fees and expert fees and court costs) which arise or
result from the presence of Hazardous  Materials  on, in,  under or about the  Premises,  the Building or any other
portion  of the  Project  that are caused or  knowingly  permitted  by Tenant or any of  Tenant's  Parties.  Tenant
agrees to promptly notify Landlord of any release of Hazardous  Materials in violation of Environmental  Law in the
Premises,  the Building or any other portion of the Project  which Tenant  becomes aware of during the Term of this
Lease,  whether caused by Tenant,  Tenant's  Parties or any other persons or entities.  In the event of any release
of  Hazardous  Materials  in  violation  of  Environmental  Law caused or  permitted  by Tenant or any of  Tenant's
Parties,  Landlord shall have the right,  but not the  obligation,  to cause Tenant to  immediately  take all steps
Landlord  reasonably  deems  necessary  or  appropriate  to remediate  such release and prevent any similar  future
release to the reasonable  satisfaction  of Landlord and Landlord's  mortgagee(s).  At all times during the Term of
this  Lease,  Landlord  will have the  right,  but not the  obligation,  to enter  upon the  Premises  to  inspect,
investigate,  sample  and/or  monitor the Premises to determine if Tenant is in  compliance  with the terms of this
Lease regarding Hazardous Materials.  Such inspections,  investigations,  and sampling are to be at Landlord’s sole
cost and will not be included in Operating Expenses;  however, if any such inspections,  investigations or sampling
establish  that  Tenant  has  violated  provisions  of this  Section 6.4.1,  then the  costs  thereof  shall be the
responsibility  of Tenant.  Tenant  will,  upon the request of Landlord at any time during  which  Tenant is not in
compliance  with this  Section 6.4.1,  cause to be  performed  an  environmental  audit of the Premises at Tenant's
expense by an  established  environmental  consulting  firm  reasonably  acceptable  to  Landlord.  As used in this
Lease,  the term  "Hazardous  Materials"  shall mean and include any  hazardous or toxic  materials,  substances or
wastes as now or hereafter designated or regulated under any law, statute,  ordinance,  rule, regulation,  order or
ruling of any agency of the State, the United States  Government or any local  governmental  authority,  including,
without limitation,  asbestos,  petroleum,  petroleum hydrocarbons and petroleum based products,  urea formaldehyde
foam insulation,  polychlorinated  biphenyls ("PCBs"), and freon and other  chlorofluorocarbons.  The provisions of
this Section 6.4.1 and Section 6.4.2 below will survive the expiration or earlier termination of this Lease.

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8875 Aero Drive
Midland Credit Management, Inc.

6.4.2    Landlord's  Environmental  Representations  and  Indemnification.  Landlord  represents  and  warrants  to
Tenant  that as of the date of this  Lease and to  Landlord's  actual  knowledge  and except as  disclosed  in that
certain  Phase 1  Environmental  Site  Assessment  dated  July 21,  2003,  prepared  by ATC  Associates  Inc.  (the
"Environmental  Report") (i) there are no Hazardous Materials in, on, under, below or otherwise located on or about
the Project in violation of  Environmental  Law, and  (ii) there  has been no release or migration of any Hazardous
Materials in violation of Environmental  Law onto,  beneath,  upon or about the Project.  Landlord shall indemnify,
protect,  defend and hold Tenant and Tenant's members,  shareholders,  partners,  officers,  directors,  employees,
agents,  successors and assigns (collectively,  "Tenant Indemnified Parties") harmless from and against any and all
claims,  defense costs,  damages,  judgments,  suits,  causes of action,  losses,  liabilities,  penalties,  fines,
expenses and costs,  (including,  without limitation,  clean-up,  removal,  remediation and restoration costs, sums
paid in settlement of claims,  attorneys'  fees,  consultant  fees and expert fees and court costs)  (collectively,
"Claims"):  (i) which  arise or result from the presence of Hazardous  Materials on, in, under or about any portion
of the Project,  except to the extent the presence of such  Hazardous  Materials was caused or knowingly  permitted
by Tenant or any of the  Tenant's  Parties  or  (ii) due  to  Landlord's  breach of its  foregoing  representation.
Notwithstanding  the  foregoing,  Landlord's  obligations  under  clause (i) of the preceding  sentence shall apply
only to Claims  asserted  against  Tenant by third  parties if the Hazardous  Materials  giving rise to such Claims
were not caused or  knowingly  permitted by Landlord or any of the Landlord  Indemnified  Parties (for  purposes of
this  sentence,  "third  parties"  means  persons  or  entities  other  than the  Tenant's  Parties  or the  Tenant
Indemnified  Parties).  The provisions of this Section 6.4.2 will survive the expiration or earlier  termination of
this  Lease.  Landlord's  actual  knowledge  means  the  actual  knowledge  of the  following  individual,  without
inquiry:  David C. Thomas,  Robert K.  Worrell and Melanie Colbert, whom Landlord represents are the only agents or
employees  of  Landlord  who have or have had  significant  managerial  responsibility  for the  Project.  Landlord
agrees to promptly notify Tenant of any release of Hazardous  Materials in the Premises,  the Building or any other
portion of the Project in violation of  Environmental  Law which Landlord  becomes aware of during the Term of this
Lease,  whether  caused by Landlord,  its agents,  employees,  tenants  (other than Tenant),  successors,  assigns,
licensees,  contractors,  or invitees or any other  persons or  entities.  In the event of any release of Hazardous
Materials in violation of  Environmental  Law caused or permitted by anyone other than Tenant or a Tenant’s  Party,
Tenant shall have the right,  but not the obligation,  to cause Landlord to immediately  take all steps required by
Environmental Law to remediate such release.

6.4.3    Landlord's  Termination Option for Certain  Environmental  Problems. If Hazardous Materials are present at
the  Premises  that are required by  Environmental  Law to be  remediated  and Tenant is not  responsible  therefor
pursuant to Section 6.4.1,  Landlord shall either  (i) remediate such Hazardous Materials to the extent required by
Environmental  Law (at no cost to Tenant but subject to inclusion in Operating  Expenses to the extent permitted by
Section 4.4),  in which event this Lease shall  continue in full force and effect or (ii) if the estimated  cost to
remediate such Hazardous  Materials  exceeds twelve (12) times the then Basic Rent,  give written notice to Tenant,
within  thirty (30) days after receipt by Landlord of knowledge of the existence of such  Hazardous  Materials,  of
Landlord's  desire to terminate  this Lease as of the date sixty (60) days  following  the date of such notice.  In
the event Landlord  elects to give such a termination  notice,  Tenant may, within ten (10) days  thereafter,  give
written  notice to Landlord of Tenant's  commitment to pay the amount by which the cost of the  remediation of such
Hazardous  Materials  exceeds an amount equal to twelve (12) times the then Basic Rent,  in which case Tenant shall
provide  Landlord  with such funds or  satisfactory  assurance  thereof  within  thirty  (30) days  following  such
commitment.  In such event,  this Lease shall  continue in full force and effect,  and  Landlord  shall  proceed to
make such  remediation as soon as reasonably  possible  after the required funds are available.  If Tenant does not
give such notice and provide the required funds or assurance  thereof  within the time  provided,  this Lease shall
terminate  as  the  date  specified  in  Landlord's  termination  notice.  Notwithstanding  the  forgoing,  if  the
remediation  or the existence of the Hazardous  Materials not caused or permitted by Tenant or Tenant  Parties will
prevent the conduct of Tenant’s  business  within the Premises for more than one hundred eighty (180) days,  Tenant
may terminate this Lease by giving Landlord 60 days prior written notice.

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8875 Aero Drive
Midland Credit Management, Inc.

6.5      Refuse and Sewage.  Tenant  agrees not to keep any trash,  garbage,  waste or other refuse on the Premises
except in sanitary  containers and agrees to regularly and frequently  remove same from the Premises.  Tenant shall
keep all  containers  or other  equipment  used for storage of such  materials in a clean and  sanitary  condition.
Tenant  shall  properly  dispose  of all  sanitary  sewage  and shall not use the  sewage  disposal  system for the
disposal  of  anything  except  sanitary  sewage.  Landlord  shall  keep the  sewage  disposal  system  free of all
obstructions  and in  good  operating  condition  (however,  Tenant  shall  be  responsible  for  any  repair  work
necessitated  by  Tenant's  misuse of the  sewage  disposal  system).  If the  volume  of  Tenant's  trash  becomes
excessive in Landlord's  judgment,  Landlord  shall have the right to charge Tenant for  additional  trash disposal
services and/or to require that Tenant contract  directly for additional  trash disposal  services at Tenant's sole
cost and expense.

6.6      Pest Control.  Tenant shall, at its own cost, retain a licensed,  bonded  professional pest and sanitation
control  service to perform  inspections of the Premises not less  frequently  than once every ninety (90) days for
the purpose of eliminating  infestation by and  controlling  the presence of insects,  rodents and vermin and shall
promptly  cause any  corrective or  extermination  work  recommended  by such service to be performed  (except that
Landlord shall, at its sole cost,  promptly cause any corrective or extermination  work recommended by such service
to be  performed  if such  recommendation  is made  before the  Commencement  Date).  Such work shall be  performed
pursuant to a written contract, a copy of which shall be delivered to Landlord by Tenant upon request.

6.7      Extraordinary  Services.  If  Landlord  incurs  Operating  Expenses  or other  costs for any  increase  in
services  provided to or for the benefit of Tenant above those services  normally provided by Landlord to the other
tenants in the Project  and such  increased  services or costs  result  from any act,  conduct,  extraordinary  use
and/or special request by Tenant or its employees or customers,  Tenant agrees to reimburse  Landlord for the costs
of such  extraordinary  services,  within  thirty  (30) days of  delivery  to Tenant of  written  invoice  for such
extraordinary  services.  By way of  example  only,  if Tenant  should  request  extraordinary  security  services,
lighting,  cleaning  and/or repair,  such  extraordinary  services may be billed  directly to Tenant as provided in
this Section 6.7 and shall be reimbursed by Tenant to Landlord as provided herein.

7.       Payments and Notices.  All rent and other sums  payable by Tenant to Landlord  hereunder  shall be paid to
Landlord at the address  designated in  Section 1.1  of the Summary,  or to such other persons and/or at such other
places as Landlord may  hereafter  designate  in writing.  Any notice  required or permitted to be given  hereunder
must be in writing and may be given by personal delivery  (including  delivery by nationally  recognized  overnight
courier or express  mailing  service),  or by  registered  or  certified  mail,  postage  prepaid,  return  receipt
requested,  addressed to Tenant at the address(es)  designated in Section 1.2 of the Summary, or to Landlord at the
address(es)  designated in  Section 1.1 of the Summary.  Either party may, by written notice to the other,  specify
a different  address for notice  purposes.  Notice given in the  foregoing  manner  shall be deemed given  (i) when
actually  received or refused by the party to whom sent if delivered by a carrier or  personally  served or (ii) if
mailed,  on the day of actual  delivery or refusal as shown by the certified  mail return receipt or the expiration
of three (3) business days after the day of mailing,  whichever  first occurs.  For purposes of this  Section 7,  a
"business day" is Monday through Friday, excluding holidays observed by the United States Postal Service.

8.       Brokers.  Landlord has entered into an agreement  with the real estate  broker  specified in  Section 1.13
of the Summary as  representing  Landlord  ("Landlord's  Broker"),  and Landlord shall pay any  commissions or fees
that are payable to Landlord's  Broker with respect to this Lease in accordance  with the  provisions of a separate
commission  contract.  Landlord shall have no further or separate  obligation for payment of commissions or fees to
any other real estate  broker,  finder or  intermediary.  Tenant  represents  that it has not had any dealings with
any real estate broker,  finder or intermediary  with respect to this Lease,  other than Landlord's  Broker and the
broker  specified in Section 1.13 of the Summary as representing  Tenant  ("Tenant's  Broker").  Any commissions or
fees payable to Tenant's  Broker with respect to this Lease shall be paid  exclusively by Landlord's  Broker.  Each
party  represents  and  warrants  to the  other,  that,  to  its  knowledge,  no  other  broker,  agent  or  finder
(a) negotiated  or was instrumental in negotiating or consummating  this Lease on its behalf, or (b) is or might be
entitled to a commission or compensation in connection with this Lease.  Tenant shall  indemnify,  protect,  defend
(by counsel  reasonably  approved in writing by Landlord) and hold  Landlord  harmless from and against any and all
claims,  judgments,  suits, causes of action, damages, losses,  liabilities and expenses (including attorneys' fees
and  court  costs)  resulting  from any  breach  by  Tenant of the  foregoing  representation,  including,  without
limitation,  any claims that may be asserted against Landlord by any broker,  agent or finder undisclosed by Tenant
herein.  Landlord shall indemnify,  protect,  defend (by counsel reasonably approved in writing by Tenant) and hold
Tenant  harmless  from and  against  any and all  claims,  judgments,  suits,  causes of action,  damages,  losses,
liabilities and expenses  (including  attorneys' fees and court costs) resulting from any breach by Landlord of the
foregoing  representation,  including,  without  limitation,  any claims that may be asserted against Tenant by any
broker,  agent or finder  undisclosed by Landlord herein.  The foregoing  indemnities  shall survive the expiration
or earlier termination of this Lease.

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Midland Credit Management, Inc.

9.       Surrender; Holding Over.

9.1      Surrender of Premises.  Upon the expiration or sooner  termination of this Lease,  Tenant shall  surrender
all keys for the Premises to Landlord,  and Tenant shall deliver  exclusive  possession of the Premises to Landlord
broom clean and good  condition and repair,  reasonable  wear and tear excepted  (and casualty  damage  excepted if
this Lease is terminated as a result thereof pursuant to Section 18),  with all of Tenant's  personal property (and
those items,  if any, of Tenant  Improvements  and Tenant Changes  identified by Landlord  pursuant to Section 12.2
below) removed  therefrom and all damage caused by such removal  repaired,  as required  pursuant to  Sections 12.2
and 12.3  below.  If,  for any  reason,  Tenant  fails to  surrender  the  Premises  on the  expiration  or earlier
termination of this Lease (including upon the expiration of any subsequent  month-to-month  tenancy consented to by
Landlord pursuant to Section 9.2 below), with such removal and repair obligations  completed,  then, in addition to
the  provisions  of  Section 9.3  below  and  Landlord's  rights  and  remedies  under  Section 12.4  and the other
provisions of this Lease,  Tenant shall indemnify,  protect,  defend (by counsel reasonably  approved in writing by
Landlord)  and hold  Landlord  harmless from and against any and all claims,  judgments,  suits,  causes of action,
damages,  losses,  liabilities and expenses (including attorneys' fees and court costs) resulting from such failure
to  surrender,  including,  without  limitation,  any  claim  made by any  succeeding  tenant  based  thereon.  The
foregoing indemnity shall survive the expiration or earlier termination of this Lease.

9.2      Holding  Over.  If Tenant  holds  over after the  expiration  or earlier  termination  of the Lease  Term,
Tenant shall become a tenant at sufferance  only,  upon the terms and  conditions set forth in this Lease so far as
applicable  (including  Tenant's  obligation  to pay all Common Area Expenses and any other  additional  rent under
this Lease),  but at a Basic Rent equal to:  (a) one  hundred ten percent  (110%) of the Basic Rent  applicable  to
the Premises  immediately  prior to the date of such  expiration or earlier  termination  with respect to the first
two (2) months of such  holdover and (b) one  hundred  fifty  percent  (150%) of the Basic Rent  applicable  to the
Premises  immediately  prior to the date of such  expiration or  termination  with respect to subsequent  months of
such holdover.  Acceptance by Landlord of rent after such  expiration or earlier  termination  shall not constitute
a consent to a hold over  hereunder  or result in an extension  of this Lease.  Tenant shall pay an entire  month's
Basic Rent calculated in accordance  with this  Section 9.2 for any portion of a month it holds over and remains in
possession of the Premises pursuant to this Section 9.2.
9.3      No Effect on  Landlord's  Rights.  The foregoing  provisions of this  Section 9 are in addition to, and do
not affect,  Landlord's  right of re-entry or any other rights of Landlord  hereunder or otherwise  provided at law
or in equity.

10.      Taxes.

10.1     Real  Property  Taxes.  Tenant shall pay Tenant's  Share of Real  Property  Taxes in  accordance  with the
provisions of Section 4.  "Real Property  Taxes" mean,  collectively,  all general and special real property taxes,
assessments,  and any similar  impositions  in-lieu of other impositions now or previously within the definition of
real property  taxes or  assessments  which may be levied or assessed by any lawful  authority  against the Project
applicable  to the period from the  Commencement  Date until the  expiration or sooner  termination  of this Lease.
Real Property  Taxes are included  within  Operating  Expenses,  as set forth in  Section 4.4.  “Real Estate Taxes”
does not include  Landlord’s  federal or state income,  franchise,  gross  receipts,  inheritance  or estate taxes,
capital, stock,  succession,  gift, estate tax; any item to the extent otherwise included in Operating Expenses, or
reserves  for future Real Estate  Taxes.  Landlord  shall  reimburse  Tenant for any amount paid by Tenant for Real
Estate Taxes that is later refunded to Landlord or otherwise  reduced after first deducting  Landlord’s  reasonable
costs of prosecution (which obligation  survives  termination of this Lease).  During the Term, Tenant may contest,
in good faith, the existence,  amount or validity thereof,  the amount of the damages caused thereby, or the extent
of its or Landlord’s  liability  related to Real Estate Taxes by  appropriate  proceedings,  and Landlord shall use
reasonable  efforts to cooperate  with  Tenant’s  efforts  related to same.  Such contest will not excuse  Tenant’s
obligations  to continue to pay all Real Estate Taxes to Landlord as required  under this Lease.  Each such contest
shall be promptly and diligently  prosecuted by Tenant to a final  conclusion,  except that Tenant,  so long as the
conditions of this Section are at all times complied  with,  has the right to attempt to settle or compromise  such
contest  through  negotiations.  Tenant shall pay any and all losses,  judgments,  decrees and costs in  connection
with any such contest and shall,  promptly after the final  determination of such contest,  fully pay and discharge
the amounts  which  shall be levied,  assessed,  charged or imposed or be  determined  to be payable  therein or in
connection  therewith,  together with all penalties,  fines, interest and costs thereof or in connection therewith,
and perform all acts the  performance  of which shall be ordered or decreed as a result  thereof.  No such  contest
shall  subject  Landlord to the risk of any civil or  criminal  liability  or to any  potential  increases  in Real
Estate Taxes.

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10.2     Personal  Property  Taxes.  Tenant  shall be liable for, and shall pay before  delinquency,  all taxes and
assessments  (real and personal) levied against (a) any personal  property or trade fixtures placed by Tenant in or
about the Premises  (including  any increase in the assessed value of the Premises based upon the value of any such
personal  property or trade  fixtures),  (b) any  Tenant  Improvements  or  alterations  in the  Premises  (whether
installed  and/or paid for by Landlord or Tenant) and  (c) this  transaction  or any  document to which Tenant is a
party creating or  transferring  an interest in the Premises.  If any such taxes or assessments  are levied against
Landlord or  Landlord's  property,  Landlord  may,  after  written  notice to Tenant (and under  proper  protest if
requested by Tenant) pay such taxes and assessments,  and Tenant shall reimburse  Landlord therefor within ten (10)
business days after demand by Landlord;  provided,  however,  Tenant, at its sole cost and expense,  shall have the
right, with Landlord's  cooperation,  to bring suit in any court of competent jurisdiction to recover the amount of
any such taxes and assessments so paid under protest.

11.      Possession; Condition of Premises; Repairs.

11.1     Delivery  of  Possession.  Landlord  will  deliver  possession  of the  Premises to Tenant on the date set
forth in Section 1.7 of the Summary;  however,  if Landlord cannot deliver  possession of the Premises to Tenant by
such date because of  Tenant-caused  delays or Force Majeure Delays,  this Lease will not be void or voidable,  nor
will  Landlord be liable to Tenant for any loss or damage  resulting  from such delay.  If the delay in  possession
is caused by Tenant  (including  delays caused by Tenant's  failure to supply any item referred to in the following
sentence),  then the Term and Tenant's  obligation to pay rent will commence as of the date the  Commencement  Date
would have occurred but for Tenant's delay,  even though Tenant does not yet have possession.  Notwithstanding  the
foregoing,  Landlord  will not be obligated  to deliver  possession  of the  Premises to Tenant until  Landlord has
received from Tenant all of the  following:  (i) a copy of this Lease fully executed by Tenant;  (ii) the  Security
Deposit and the first  installment  of Basic Rent;  and  (iii) copies  of policies  of  insurance  or  certificates
thereof as required under  Section 20 of this Lease.  Further,  notwithstanding  the  foregoing,  if Landlord shall
fail to deliver the Premises by June 1,  2004,  for any reason other than a Force Majeure Delay or delays caused by
Tenant's  failure to supply any item referred to in the preceding  sentence,  and provided  Tenant has obtained all
building permits required for the Tenant  Improvement  Work, then Tenant shall be entitled to one and one-half (1½)
days of free rent for each day that  Landlord is late in so  delivering  the Premises  (which is in addition to the
rent abatement provided  elsewhere in this Lease),  and if such delivery has not occurred by July 1,  2004, for any
reason other than a Force  Majeure  Delay or delays  caused by Tenant's  failure to supply any item  referred to in
the preceding  sentence,  and provided Tenant has obtained all building permits required for the Tenant Improvement
Work,  then Tenant may terminate this Lease by delivering  written notice to Landlord prior to Landlord's  delivery
of the Premises,  in which event Landlord shall return to Tenant  advance rent and any other sums  previously  paid
to Landlord,  and  Landlord  and Tenant shall  thereafter  have no  obligation  under this Lease,  except for those
obligations that expressly  survive  termination.  If Landlord shall fail to perform  Landlord's Work in accordance
with  Landlord's  Work  Schedule  for any reason  other than a Force  Majeure  Delay or delays  caused by an act or
omission of Tenant or any of Tenant's  Parties,  and as the result thereof Tenant has been unable to  substantially
complete the Tenant  Improvements  by the date that is four (4) months  following  the Delivery  Date,  then Tenant
shall be  entitled  to one and  one-half  (1½) days of free rent for each day that  substantial  completion  of the
Tenant  Improvements  is so delayed beyond four (4) months  following the Delivery  Date.  The foregoing  abatement
and  termination  rights  shall be Tenant's  sole remedy for a delay in delivery of  possession,  unless such delay
arises from the intentional acts or omissions of Landlord.

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11.2     Condition of Premises.  Tenant  acknowledges that, except as otherwise  expressly set forth in this Lease,
neither  Landlord nor any agent of Landlord has made any  representation  or warranty with respect to the Premises,
the  Building or the Project or their  condition,  or with  respect to the  suitability  thereof for the conduct of
Tenant's  business and Tenant shall accept the Premises in their as-is  condition.  Notwithstanding  the  forgoing,
Landlord shall complete  Landlord's Work (as defined in Schedule 2 to the attached  Exhibit “C”) at Landlord’s sole
cost,  which is not part of the Tenant  Improvements  contemplated  by the  attached  Exhibit “C”.  Landlord  will
warrant  Landlord’s  Work to be free from  construction  or design  defects for a period of one (1) year  following
Substantial Completion of Landlord's Work.

11.3     Landlord's  Repair  Obligations.  Landlord  shall, at Landlord's sole cost and expense (and not as part of
Operating  Expenses),  repair,  maintain and replace, as necessary,  the shell and other structural portions of the
Building and other structures on the Project (including the structural  components of the roof,  exterior walls and
interior structural walls,  concrete subflooring,  and foundations) and underground utility facilities.  Subject to
Section 11.5,  Landlord  shall,  as part of the Operating  Expenses,  repair,  maintain and replace,  as necessary,
(a) the basic  plumbing,  heating,  ventilating,  air  conditioning,  sprinkler and  electrical  systems within the
Building  core,  and for the first two (2) years of the initial  Term the HVAC  equipment  installed as part of the
Tenant Improvements,  and (b) the Common Areas of the Project;  provided,  however, to the extent such maintenance,
repairs or  replacements  are  required  as a result of any act,  neglect,  fault or  omission  of Tenant or any of
Tenant's agents, employees,  contractors,  licensees or invitees, Tenant shall pay to Landlord, as additional rent,
the costs of such  maintenance,  repairs or  replacements.  Landlord  shall not be liable to Tenant for  failure to
perform  any  such  repairs,  maintenance  or  replacements,  unless  Landlord  shall  fail to make  such  repairs,
maintenance or  replacements  and such failure shall  continue for an  unreasonable  time following  written notice
from Tenant to Landlord of the need therefor.  Without limiting the foregoing,  but subject to Section 11.7  below,
Tenant waives the right to make repairs at  Landlord's  expense or terminate  this Lease under any law,  statute or
ordinance now or hereafter in effect  (including the provisions of California Civil Code  Sections 1932(1)  or 1942
and any successor sections or statutes of a similar nature).

11.4     Tenant's  Repair  Obligations.  Except for Landlord's  obligations  specifically  set forth in this Lease,
Tenant shall at all times and at Tenant's sole cost and expense,  keep,  maintain,  clean,  repair and preserve and
replace, as necessary,  the Premises and all parts thereof including,  without limitation,  all Tenant Improvements
(except that Tenant is not responsible  for the repair or replacement of the HVAC equipment  included in the Tenant
Improvements  during the first two (2) years of the  initial  Term),  Tenant  Changes,  utility  meters,  pipes and
conduits,  all fixtures,  furniture and equipment,  locks,  closing  devices,  security  devices,  windows,  window
sashes,  casements  and frames,  floors and floor  coverings,  shelving,  restrooms,  if any, and any  alterations,
additions and other property  located within the Premises in good  condition and repair,  reasonable  wear and tear
excepted.  Tenant  shall  replace,  at its  expense,  any and all plate and other  glass in the  Premises  which is
damaged or broken from any cause whatsoever  except due to the gross negligence or willful  misconduct of Landlord,
its agents or employees.  Such  maintenance  and repairs shall be performed with due diligence,  lien-free and in a
good and  workmanlike  manner,  by licensed  contractor(s)  which are  selected by Tenant and approved by Landlord,
which approval Landlord shall not unreasonably  withhold or delay.  Except as otherwise  expressly provided in this
Lease, Landlord shall have no obligation to alter, remodel,  improve, repair, renovate,  redecorate or paint all or
any part of the Premises.

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11.5     Landlord's  Warranty.  For a period of five (5) years following the Commencement  Date,  Landlord warrants
the roof to be free from leaks and  defects,  and  Landlord  shall (as  Tenant's  sole and  exclusive  remedy for a
breach of such warranty)  repair or replace,  at Landlord's  cost and not as part of Operating  Expenses,  any such
defect  arising  during  such  five (5) year  period.  In  addition,  Landlord  warrants  that,  as of  Substantial
Completion  of  Landlord's  Work,  Landlord's  Work  and the  Common  Area  shall  be in  compliance  with all laws
applicable  thereto  (including  the ADA),  and Landlord  shall (as Tenant's sole and exclusive  remedy  therefor),
correct any breach of such warranty,  at Landlord's cost and not as part of Operating Expenses,  promptly following
receipt of written notice thereof from Tenant.

11.6     Building  Repainting.  Landlord  shall,  promptly  following the expiration of the fifth (5th) year of the
initial Term,  repaint the exterior of the Building  using  Project  standard  paint and colors,  the cost of which
shall not be included in Operating Expenses.

11.7     Self-Help by Tenant.  Notwithstanding  any provision set forth herein to the contrary,  if Tenant provides
written  notice  to  Landlord  and any  mortgagee  of  Landlord  (of  whom  Tenant  is  notified),  of an  event or
circumstance  which  requires the action of Landlord  pursuant to  Section 11.3  or 11.5 and which if not performed
will  materially and adversely  interfere with Tenant’s  occupancy and Landlord fails to provide such action within
a  reasonable  period of time,  given the  circumstances,  after the  receipt of such  notice (but in any event not
later than thirty  (30) days after  receipt of such  notice,  unless such  repair  would  normally  take longer and
Landlord has commenced  said repair work within said thirty (30) day period and  continued to  diligently  complete
the repair),  then Tenant may proceed to take the required  action upon delivery of an additional five (5) business
days notice to Landlord and any mortgagee of Landlord (of whom Tenant is notified)  (which  additional  notice must
clearly  specify that Tenant is taking such required  action),  and if such action was required  under the terms of
the Lease to be taken by Landlord  and was not taken or  commenced  by Landlord  within such five (5)  business day
period,  then Tenant shall be entitled to prompt  reimbursement by Landlord of Tenant's actual  reasonable costs in
taking  such  action.  In the event  Tenant  takes  such  action,  and such work will  affect  the  Systems  or the
structural  integrity of the  Building,  Tenant shall use only those  contractors  used by Landlord in the Building
for work on such Systems or structural  components  unless such contractors are unwilling or unable to perform,  or
timely  perform,  such work (or Landlord  fails to identify such  contractors  within five (5) days after  Tenant’s
written request),  in which event Tenant may utilize the services of any other qualified  contractor which normally
and regularly  performs  similar work in similar  buildings.  Within thirty (30) days after receipt of a reasonably
particularized  invoice from Tenant of its costs of taking  action which  Tenant  claims  should have been taken by
Landlord,  Landlord shall reimburse  Tenant the amount set forth in such invoice.  If, however,  Landlord  delivers
to Tenant  within thirty (30) days after receipt of Tenant's  invoice,  a written  objection to the payment of such
invoice,  setting forth with  reasonable  particularity  Landlord's  reasons for its claim that such action did not
have to be taken by Landlord  pursuant to the terms of this Lease or that the charges are  excessive (in which case
Landlord  shall pay the amount it contends  would not have been  excessive),  then Tenant  shall not be entitled to
such  reimbursement,  but as Tenant's  sole  remedy,  Tenant may proceed to claim a default by Landlord  under this
Lease

12.      Alterations.

12.1     Tenant Changes; Conditions.

(a)      Tenant  shall  not  make  any  alterations,   additions,  improvements  or  decorations  to  the  Premises
         (collectively,  "Tenant  Changes,"  and  individually,  a "Tenant  Change")  unless  Tenant first  obtains
         Landlord's  prior written  approval  thereof,  which approval  Landlord shall not  unreasonably  withhold.
         Tenant's request for approval may also include  Tenant's request that Landlord  identify which, if any, of
         the  Tenant  Changes  Landlord  will  require  to be  removed  before  the  termination  of this Lease (as
         contemplated under Section 12.2  below).  Notwithstanding  the foregoing,  Landlord's prior approval shall
         not be required for any Tenant  Change which  satisfies  all of the following  conditions  (hereinafter  a
         "Pre-Approved  Change"):  (i) the  costs of such  Tenant  Change  does not exceed  Five  Thousand  Dollars
         ($5,000.00)  individually;  (ii) the  costs of such Tenant  Change when  aggregated  with the costs of all
         other Tenant  Changes made by Tenant during the prior 12 months does not exceed Fifteen  Thousand  Dollars
         ($15,000.00);  (iii) Tenant  delivers to Landlord  final plans,  specifications  and working  drawings for
         such Tenant  Change at least ten (10) days prior to  commencement  of the work  thereof;  (iv) the  Tenant
         Change does not affect the mechanical,  electrical,  plumbing or life safety systems of the Premises,  the
         Building  and/or the Project  (collectively,  the  "Systems"),  the roof or  structural  components of the
         Premises or the exterior of the Premises;  (v) the  Tenant  Change does not trigger any legal  requirement
         which would require  Landlord to make any alteration or improvement to the Premises,  Building or Project;
         and  (vi) Tenant  and such  Tenant  Change  otherwise  satisfy  all  other  conditions  set  forth in this
         Section 12.1.

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(b)      After  Landlord  has  approved  the Tenant  Changes and the plans,  specifications  and  working  drawings
         therefor (or is deemed to have approved the Pre-Approved  Changes as set forth in Section 12.1(a)  above),
         Tenant shall:  (i) enter  into an agreement for the  performance  of such Tenant Changes with licensed and
         bondable  contractors  and  subcontractors  selected by Tenant and  approved by Landlord,  which  approval
         shall not be unreasonably  withheld;  (ii) before proceeding with any Tenant Change, provide Landlord with
         ten (10) days' prior  written  notice  thereof;  and  (iii) pay  to  Landlord,  within ten (10) days after
         written  demand,  the costs of any  increased  insurance  premiums  incurred by  Landlord to include  such
         Tenant Changes in the fire and extended  coverage  insurance  obtained by Landlord  pursuant to Section 21
         below,  if Landlord  elects in writing to insure such Tenant  Changes;  provided,  however,  that Landlord
         shall not be required to include  the Tenant  Changes  under such  insurance.  If such Tenant  Changes are
         not  included  in  Landlord's  insurance,  Tenant  shall  insure the  Tenant  Changes  under its  casualty
         insurance  pursuant to  Section 20.1(a)  below.  In addition,  before  proceeding  with any Tenant Change,
         Tenant's  contractors  shall obtain,  on behalf of Tenant and at Tenant's  sole cost and expense:  (A) all
         necessary  governmental  permits and approvals for the  commencement and completion of such Tenant Change;
         and (B) at Landlord's  request,  if the cost of work exceeds Two Hundred Fifty Thousand and No/100 Dollars
         ($250,000.00),  a completion and lien indemnity  bond, or other surety,  satisfactory to Landlord for such
         Tenant  Change.  Landlord's  approval  of any  contractor(s)  and  subcontractor(s)  of  Tenant  shall not
         release Tenant or any such  contractor(s)  and/or  subcontractor(s)  from any liability for any conduct or
         acts of such contractor(s)  and/or  subcontractor(s).  Further,  Landlord's approval of Tenant Changes and
         the plans  therefor  will  create no  liability  or  responsibility  on  Landlord's  part  concerning  the
         completeness of same or their design sufficiency or compliance with laws.

(c)      All Tenant Changes shall be performed:  (i) in  accordance  with the approved  plans,  specifications  and
         working  drawings;  (ii) lien-free  and in a good and  workmanlike  manner;  (iii) in  compliance with all
         laws, rules and regulations of all governmental  agencies and authorities  including,  without limitation,
         applicable   building  permit  requirements  and  the  provisions  of  Title III  of  the  Americans  with
         Disabilities  Act of 1990;  (iv) in such a manner so as not to  unreasonably  interfere with the occupancy
         of any other  tenant in the Building or any other  building  located  within the  Project,  nor impose any
         additional  expense upon nor delay Landlord in the  maintenance and operation of the Building or any other
         building  located within the Project;  and (v) at such times, in such manner and subject to such rules and
         regulations as Landlord may from time to time reasonably designate.

(d)      Throughout  the  performance  of the Tenant  Changes,  Tenant shall obtain,  or cause its  contractors  to
         obtain,  workers compensation  insurance and commercial general liability insurance in compliance with the
         provisions of Section 20 of this Lease.

12.2     Removal  of  Tenant  Changes  and  Tenant  Improvements.   All  Tenant  Changes  and  the  initial  Tenant
Improvements in the Premises  (whether  installed or paid for by Landlord or Tenant),  shall become the property of
Landlord  and  shall  remain  upon and be  surrendered  with  the  Premises  at the end of the Term of this  Lease;
provided,  however,  Landlord may, by written  notice  delivered on or before the  expiration of the Lease Term (or
upon any sooner  termination  of this  Lease,  identify  those items of the Tenant  Changes  which  Landlord  shall
require  Tenant to remove  at the end of the Term of this  Lease;  provided,  however,  if at the time of  Tenant's
request for  Landlord's  approval to a Tenant  Change,  Tenant also  requests  Landlord to identify  whether or not
Landlord  will  require the removal  thereof,  Landlord  will make such  identification  at the time of  Landlord's
consent (and Landlord's  failure to do so shall  constitute  Landlord's  election not to require such removal).  If
Landlord  requires Tenant to remove any such items as described above,  Tenant shall, at its sole cost,  remove the
identified  items on or before  the  expiration  or sooner  termination  of this Lease and repair any damage to the
Premises caused by such removal.

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12.3     Removal of Personal  Property.  All articles of personal  property  owned by Tenant or installed by Tenant
at its expense in the Premises  (including  business and trade fixtures,  furniture and movable  partitions)  shall
be, and remain,  the property of Tenant,  and shall be removed by Tenant from the  Premises,  at Tenant's sole cost
and  expense,  on or before the  expiration  or sooner  termination  of this Lease.  Tenant shall repair any damage
caused by such removal.

12.4     Tenant's  Failure to Remove.  If Tenant fails to remove by the  expiration or sooner  termination  of this
Lease all of its personal  property,  or any items of Tenant  Improvements or Tenant Changes identified by Landlord
for removal  pursuant to  Section 12.2  above,  Landlord may,  (without  liability to Tenant for loss thereof),  at
Tenant's sole cost and in addition to Landlord's  other rights and remedies under this Lease,  at law or in equity:
(a) remove and store such items in accordance  with  applicable law; and/or (b) upon ten (10) days' prior notice to
Tenant,  sell all or any such items at private or public  sale for such price as Landlord  may obtain as  permitted
under  applicable  law.  Landlord  shall apply the  proceeds of any such sale to any amounts due to Landlord  under
this Lease from Tenant  (including  Landlord's  attorneys'  fees and other costs  incurred in the removal,  storage
and/or sale of such items), with any remainder to be paid to Tenant.

12.5     Elevator and Fire Exit  Stairways.  Subject to coordination  with the tenant under the BofA Lease,  Tenant
shall have access to the Building's  freight  elevator  during normal  business hours and for moving into or out of
the  Premises.  Subject to  compliance  with the  provisions of  Section 12.1  above,  Tenant may install an access
control  system in the freight  elevator in order to secure the Premises  from the  remainder of the  Building.  In
addition,  Tenant may also use the fire exit  stairways  of the  Building  for  employee  ingress and egress to the
Premises which,  subject to compliance with the provisions of Section 12.1  above,  may be integrated into Tenant's
access control card reader system.

12.6     Battery  Cabinet.  Tenant  desires  to  install a battery  cabinet  that  provides  DC power for  Tenant's
telephone  system,  which is  approximately  thirty-six  inches  (36') by thirty  inches  (30') with a heavy weight
load. If Landlord or Tenant  determines that, due to the weight load of the battery  cabinet,  it is inadvisable to
install the battery  cabinet in the Premises,  Landlord will locate space on a ground floor of the Building  within
which Tenant may install the battery cabinet.  For purposes of  Sections 11.4,  17 and 20, the battery cabinet will
be deemed to  constitute a portion of the Premises  although it is not located  within the  Premises,  and the same
shall constitute a Tenant Change.

12.7     Telecommunications  Conduit  and  Cabling.  Subject to  compliance  with  Section 12.1  above,  Tenant may
install  underground  conduit  and cabling  from the street to the  Building,  and  conduit and cabling  within the
risers of the Building to the Premises, for purposes of providing telecommunications service to the Premises.

13.      Liens.  Tenant shall not permit any  mechanic's,  materialmen's  or other liens to be filed against all or
any part of the Project,  the Building or the Premises,  nor against Tenant's  leasehold  interest in the Premises,
by reason  of or in  connection  with any  repairs,  alterations,  improvements  or other  work  contracted  for or
undertaken by Tenant or any other act or omission of Tenant or Tenant's agents, employees,  contractors,  licensees
or invitees.  Tenant shall, at Landlord's  request,  provide Landlord with enforceable,  conditional and final lien
releases (and other  reasonable  evidence  reasonably  requested by Landlord to demonstrate  protection from liens)
from all persons  furnishing  labor and/or  materials  with respect to the Premises.  Landlord shall have the right
at all  reasonable  times to post on the  Premises  and record any  notices  of  non-responsibility  which it deems
necessary  for  protection  from  such  liens.  If any such  liens  are  filed,  Tenant  shall,  at its sole  cost,
immediately  cause such lien to be released of record or bonded so that it no longer  affects title to the Project,
the Building or the  Premises.  If Tenant fails to cause such lien to be so released or bonded  within  twenty (20)
days after  filing  thereof,  Landlord  may,  without  waiving its rights and remedies  based on such  breach,  and
without  releasing  Tenant from any of its  obligations,  cause such lien to be released by any means it shall deem
proper,  including  payment in  satisfaction  of the claim  giving rise to such lien.  Tenant shall pay to Landlord
within  five (5) days after  receipt of invoice  from  Landlord,  any sum paid by  Landlord  to remove  such liens,
together  with  interest at the Interest  Rate from the date of such  payment by  Landlord.  Notice is hereby given
that Landlord shall not be liable for any labor,  services or materials  furnished or to be furnished to Tenant, or
to anyone holding the Premises  through or under Tenant,  and that no mechanics' or other liens for any such labor,
services or materials shall attach to or affect the interest of Landlord in the Premises.

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14.      Assignment and Subletting.

14.1     Restriction  on  Transfer.  Tenant will not assign  this Lease in whole or in part,  nor sublet all or any
part of the  Premises  (collectively  and  individually,  a  "Transfer"),  without  the prior  written  consent  of
Landlord,  which consent  Landlord will not unreasonably  withhold.  In no event may Tenant encumber or hypothecate
this Lease.  The consent by  Landlord to any  Transfer  shall not  constitute  a waiver of the  necessity  for such
consent  to any  subsequent  Transfer.  This  prohibition  against  Transfers  shall  be  construed  to  include  a
prohibition  against any assignment or subletting by operation of law. If this Lease is  transferred by Tenant,  or
if the  Premises or any part thereof are  transferred  or occupied by any person or entity other than Tenant or its
Permitted  Transferee,  Landlord may collect  rent from the  assignee,  subtenant  or  occupant,  and apply the net
amount  collected to the rent herein  reserved,  but no such  Transfer,  occupancy or collection  shall be deemed a
waiver on the part of Landlord,  or the acceptance of the assignee,  subtenant or occupant as Tenant,  or a release
of Tenant from the  further  performance  by Tenant of  covenants  on the part of Tenant  herein  contained  unless
expressly made in writing by Landlord.  Irrespective  of any Transfer,  Tenant shall remain fully liable under this
Lease and shall not be  released  from  performing  any of the  terms,  covenants  and  conditions  of this  Lease.
Without limiting in any way Landlord's right to withhold its consent on any reasonable  grounds,  it is agreed that
Landlord will not be acting  unreasonably in refusing to consent to a Transfer if, in Landlord's  opinion,  (i) the
proposed  assignee or subtenant does not have the financial  capability to fulfill the  obligations  imposed by the
Transfer,  (ii) the  proposed Transfer involves a change of use of the Premises from that specified herein or would
violate any  exclusive  use covenant to which  Landlord is bound,  or (iii) the  proposed  assignee or subtenant is
not, in Landlord's reasonable opinion, of reputable or good character.

14.2     Transfer  Notice.  If Tenant  desires to effect a Transfer,  then at least fourteen (14) days prior to the
date when Tenant  desires the Transfer to be effective  (the  "Transfer  Date"),  Tenant  agrees to give Landlord a
notice (the  "Transfer  Notice"),  stating the name,  address and business of the proposed  assignee,  sublessee or
other  transferee  (sometimes  referred  to  hereinafter  as  "Transferee"),   reasonable   information  (including
references) concerning the character,  ownership, and financial condition of the proposed Transferee,  the Transfer
Date, any ownership or commercial  relationship between Tenant and the proposed  Transferee,  and the consideration
and all other  material  terms and  conditions  of the  proposed  Transfer,  all in such  detail  as  Landlord  may
reasonably  require.  The Transfer  Notice may include a reminder to Landlord  that  Landlord's  failure to respond
within seven (7) business days of Landlord's receipt of the Transfer Notice  constitutes  Landlord's consent to the
proposed Transfer (as contemplated under Section 14.3 below).

14.3     Landlord's  Options.  Within seven (7) business days of  Landlord's  receipt of any Transfer  Notice,  and
any additional  information  requested by Landlord concerning the proposed Transferee's  financial  responsibility,
Landlord  will notify  Tenant of its election to do one of the  following:  (i) consent  to the  proposed  Transfer
subject to such  reasonable  conditions  as Landlord may impose in providing  such  consent;  or  (ii) refuse  such
consent with an  explanation,  which  refusal  shall be on  reasonable  grounds.  Landlord’s  failure to respond in
writing within the seven (7) day period  constitutes  Landlord’s  consent to the proposed  Transfer,  provided that
the  Transfer  Notice  informs  Landlord  that  Landlord's  failure to respond  within such period will  constitute
Landlord's consent.

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14.4     Additional  Conditions.  A  condition  to  Landlord's  consent to any  Transfer  of this Lease will be the
delivery  to  Landlord  of a true copy of the fully  executed  instrument  of  assignment,  sublease,  transfer  or
hypothecation,  in form and substance  reasonably  satisfactory to Landlord.  Tenant agrees to pay to Landlord,  as
additional rent, fifty percent (50%) of all sums and other  consideration  payable to and for the benefit of Tenant
by the Transferee  (other than a Permitted  Transferee) in excess of the rent payable under this Lease for the same
period and portion of the  Premises.  In  calculating  excess rent or other  consideration  which may be payable to
Landlord under this Section 14.4,  Tenant will be entitled to deduct commercially  reasonable third party brokerage
commissions,  tenant  improvement  costs, and attorneys' fees and other amounts reasonably and actually expended by
Tenant in connection  with such  assignment or subletting if acceptable  written  evidence of such  expenditures is
provided to Landlord.  Except as otherwise  provided in  Section 14.6,  no Transfer will release Tenant of Tenant's
obligations  under this Lease or alter the  primary  liability  of Tenant to pay the rent and to perform  all other
obligations  to be  performed by Tenant  hereunder.  Landlord may require  that any  Transferee  remit  directly to
Landlord on a monthly  basis,  all monies due Tenant by said  Transferee,  and each sublease  shall provide that if
Landlord  gives the  sublessee  written  notice that  Tenant is in default  under this Lease,  the  sublessee  will
thereafter  make all payments due under the sublease  directly to or as directed by Landlord,  which  payments will
be credited against any payments due under this Lease.  Tenant hereby  irrevocably and  unconditionally  assigns to
Landlord  as  security  for  Tenant’s  obligations  under  this Lease all rents and other  sums  payable  under any
sublease of the  Premises;  provided,  however,  that  Landlord  hereby grants Tenant a license to collect all such
rents and other  sums so long as Tenant is not in default  under this  Lease.  Tenant  shall,  within ten (10) days
after the  execution  and delivery of any  assignment  or sublease,  deliver a duplicate  original  copy thereof to
Landlord.  Consent by  Landlord to one  Transfer  will not be deemed  consent to any  subsequent  Transfer.  In the
event of default by any  Transferee  of Tenant or any  successor of Tenant in the  performance  of any of the terms
hereof,  Landlord may proceed  directly  against Tenant without the necessity of exhausting  remedies  against such
Transferee  or  successor.  If Tenant  effects a Transfer  or requests  the  consent of  Landlord  to any  Transfer
(whether or not such  Transfer is  consummated),  then,  upon demand,  and as a condition  precedent to  Landlord's
consideration  of  the  proposed   assignment  or  sublease,   Tenant  agrees  to  pay  Landlord  a  non-refundable
administrative fee of Five Hundred Dollars ($500.00),  plus Landlord's  reasonable  attorneys' fees and other costs
incurred by Landlord in  reviewing  such  proposed  assignment  or sublease  (whether  attributable  to  Landlord's
in-house  attorneys  or  paralegals  or  otherwise),  but not to exceed One Thousand  Dollars and No/100  ($1,000).
Acceptance of the Five Hundred Dollar ($500.00)  administrative fee and/or  reimbursement of Landlord's  attorneys'
and/or  paralegal fees shall in no event  obligate  Landlord to consent to any proposed  Transfer.  Notwithstanding
any contrary  provision of this Lease, if Tenant or any proposed  Transferee  claims that Landlord has unreasonably
withheld  or delayed its consent to a proposed  Transfer or  otherwise  has  breached  its  obligations  under this
Section 14,  Tenant's and such Transferee's  only remedy shall be to seek a declaratory  judgment and/or injunctive
relief,  and Tenant,  on behalf of itself and, to the extent permitted by law, such proposed  Transferee waives all
other remedies against Landlord,  including without limitation,  the right to seek monetary damages or to terminate
this Lease;  provided,  however,  (i) the  foregoing  waiver shall not apply if Landlord's  conduct has been in bad
faith and (ii) if such  injunctive  or  declaratory  relief is not  available  within thirty (30) days after Tenant
files the appropriate legal action, Tenant may seek monetary damages against Landlord.

14.5     Permitted  Transfers.  Notwithstanding  the  provisions of this  Section 14  to the  contrary,  Tenant may
assign  this Lease or sublet the  Premises  or any  portion  thereof  (herein,  a  "Permitted  Transfer"),  without
Landlord's  consent to any entity  that  controls,  is  controlled  by or is under  common  control  with Tenant or
Guarantor,  or to any entity  resulting from a merger or consolidation  with Tenant or Guarantor,  or to any person
or entity which acquires all the assets of Tenant's  business as a going concern (each, a "Permitted  Transferee"),
provided  that:  (a) at least twenty (20) days prior to such  assignment or sublease,  Tenant  delivers to Landlord
the financial  statements and other financial and background  information of the assignee or sublessee as described
in Section 14.2 above;  (b) in the case of an assignment,  the assignee assumes, in full, the obligations of Tenant
under this Lease (or if a sublease,  the  sublessee  of a portion of the  Premises or Term  assumes,  in full,  the
obligations  of Tenant with respect to such  portion,  other than the payment of rent)  pursuant to a  commercially
reasonable  assumption  agreement,  a fully executed copy of which is delivered to Landlord within twenty (20) days
following the effective date of such  assignment or subletting;  (c) Tenant  remains fully liable under this Lease;
and (d) such  transaction  is not entered into as a subterfuge  to avoid the  restrictions  and  provisions of this
Section 14.  The parties  acknowledge  that Tenant  intends for Guarantor to occupy a portion of the Premises,  and
such arrangement  requires no further consent or  documentation  for so long as Guarantor agrees to be bound by the
provisions of Section 17, 20 and 22 as if Guarantor were Tenant.

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14.6     Release  of Tenant and  Guarantor.  In the event of an  assignment  and  assumption  of this Lease that is
consented  to by  Landlord  or that  satisfies  the  requirements  of  Section 14.5,  and  provided  that as of the
effective  date of such  assignment  and  assumption  (i) the  Minimum  Financial  Criteria (as defined  below) are
satisfied,  (ii) no default exists under this Lease and (iii) no  circumstance  exists that would,  with the giving
of notice,  the passage of time,  or both,  constitute a default  under this Lease,  then the  original  Tenant and
Guarantor shall be released from all  obligations  first arising under this Lease from and after the effective date
of such assignment and assumption.  The "Minimum  Financial  Criteria" means (a) the assuming assignee has the same
or  greater  tangible  net worth and EBITDA as of the  effective  date of such  assignment  and  assumption  as the
original  Tenant and  Guarantor  collectively  had as of the date hereof and a  debt-to-equity  ratio not exceeding
3-to-1 as of the effective date of such assignment and assumption and  (b) Landlord  has determined,  in Landlord's
sole and  absolute  discretion,  that the  assuming  assignee's  tangible  net worth and EBITDA for the  reasonably
foreseeable  future after the effective date of such  assignment  and  assumption  will continue to be no less than
its  tangible  net worth  and  EBITDA as of the  effective  date of such  assignment  and  assumption  and that its
debt-to-equity  ratio will not exceed 3-to-1 for the  reasonably  foreseeable  future after the  effective  date of
such assignment and assumption.  Tangible net worth,  EBITDA and the  debt-to-equity  ratio under this Section 14.6
shall be  determined in  accordance  with  generally  accepted  accounting  principles,  consistently  applied,  as
disclosed by audited  financial  statements  reasonably  acceptable to Landlord.  "EBITDA"  means  earnings  before
interest, taxes, depreciation and amortization.

15.      Entry by Landlord.  Landlord and its  employees  and agents shall at all  reasonable  times have the right
to enter the  Premises  to inspect the same,  to supply any  service  required to be provided by Landlord to Tenant
under this Lease,  to exhibit the Premises to  prospective  lenders or  purchasers  (or during the last year of the
Term,  to  prospective  tenants),  to post notices of  non-responsibility,  and/or to alter,  improve or repair the
Premises or any other  portion of the  Building,  all without  being  deemed  guilty of or liable for any breach of
Landlord's  covenant of quiet  enjoyment or any eviction of Tenant,  and without  abatement of rent.  In exercising
such entry rights,  Landlord shall endeavor to minimize,  to the extent  reasonably  practicable,  the interference
with Tenant's  business,  and shall provide Tenant with reasonable  advance written notice of such entry (except in
emergency  situations and for providing scheduled  services,  if any). Landlord shall have the means which Landlord
may deem proper to open  Tenant's  doors in an  emergency in order to obtain  entry to the  Premises.  Any entry to
the Premises in  accordance  with this Section 15 obtained by Landlord by any of said means or otherwise  shall not
under any  circumstances  be  construed  or deemed to be a forcible or unlawful  entry into,  or a detainer of, the
Premises,  or an eviction of Tenant from the  Premises or any  portion  thereof,  or grounds for any  abatement  or
reduction of rent and Landlord  shall not have any  liability to Tenant for any damages or losses on account of any
such entry by Landlord  except,  subject to the  provisions  of  Section 22.1,  to the extent of  Landlord's  gross
negligence or willful misconduct.

16.      Utilities and Services.

16.1     Tenant  Responsibilities.  Tenant shall be solely  responsible  for and shall promptly pay all charges for
heat, air conditioning,  water, gas,  electricity or any other utility used,  consumed or provided in, furnished to
or attributable to the Premises at the rates charged by the supplying  utility  companies and/or  Landlord.  Should
Landlord  elect  to  supply  any or all of such  utilities,  Tenant  agrees  to  purchase  and pay for the  same as
additional  rent as  apportioned  by  Landlord.  The rate to be charged to Landlord to Tenant  shall not exceed the
rate  charged to Landlord  by any  supplying  utility.  Tenant  shall  reimburse  Landlord  within ten (10) days of
billing for fixture  charges  and/or water tariffs,  if applicable,  which are charged to Landlord by local utility
companies.  Landlord  will notify Tenant of this charge as soon as it becomes  known.  This charge will increase or
decrease with current  charges  being levied  against  Landlord,  the Premises or the Building by the local utility
company,  and will be due as additional  rent.  Except as provided  below, in no event shall Landlord be liable for
any interruption or failure in the supply of any such utility services to Tenant.

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An  "Abatement  Event"  shall be defined as an event that  prevents  Tenant from using the  Premises or any portion
thereof,  as a result of any failure of utility service to the Premises  provided by Landlord,  where  (i) Tenant’s
occupancy of the Premises is materially  and adversely  affected and (ii) such  failure is caused by a circumstance
within the  reasonable  control of  Landlord or the  negligence  or willful  misconduct  of  Landlord,  its agents,
employees or  contractors.  Tenant shall give  Landlord and any  mortgagee of Landlord (of whom Tenant is notified)
notice  ("Abatement  Notice")  of any such  Abatement  Event,  and if such  Abatement  Event  continues  beyond the
"Eligibility  Period"  (as that  term is  defined  below),  then the Basic  Rent and  Tenant's  Share of  Operating
Expenses shall be abated entirely or reduced,  as the case may be, after  expiration of the Eligibility  Period for
such time that  Tenant’s  occupancy  is so  affected,  in the  proportion  that the  rentable  area of the affected
portion of the Premises  bears to the total  rentable area of the  Premises.  The term  "Eligibility  Period" shall
mean a period of forty-eight (48) hours after Landlord's  receipt of the applicable  Abatement  Notice.  Such right
to abate Basic Rent and Tenant's  Share of Operating  Expenses  shall be Tenant's sole and exclusive  remedy at law
or in equity for an Abatement  Event,  except if the Abatement Event continues for more than sixty (60) consecutive
days  after the  Eligibility  Period and  affects a material  portion  of the  Premises,  in which case  Tenant may
terminate  this Lease by written  notice to  Landlord  at any time the  Abatement  Event  continues  to exist.  The
provisions  of this  Section 16.1  shall not apply in the event of a casualty,  as  Section 18.1  governs  Tenant's
rights in the event of a casualty.





16.2     Electrical  Capacity and  Demising  Walls.  Landlord  represents  and  warrants to Tenant that,  as of the
Commencement  Date, the  electrical  systems  serving the Premises  shall have the capacity to provide  three-phase
four-wire  480-volt  1,000-amp  service to the Premises and that such capacity shall not be utilized by Landlord to
service the Building's  central HVAC system or other general  Building  systems.  Landlord  represents and warrants
to Tenant that the  existing  demising  walls  within the  Premises are  non-structural  and can be  demolished  to
accommodate Tenant’s space plan for the Premises.

16.3     Emergency  Generator.  Tenant  acknowledges  that the existing 750 KW emergency diesel powered  electrical
generator  services the entire  Building and that Tenant's use thereof shall be in common with the other tenants of
the Building  throughout  the entire Term.  Notwithstanding  the existence of such emergency  generator,  except as
expressly provided in Section 16.1  above,  Landlord shall not liable for any failure of the emergency generator to
provide emergency power to the Premises.

17.      Indemnification and Exculpation.

17.1     Tenant's  Assumption  of Risk  and  Waiver.  Except  to the  extent  such  matter  is not  covered  by the
insurance  required  to be  maintained  by Tenant  under this Lease and such  matter is  attributable  to the gross
negligence or willful  misconduct or breach of this Lease by Landlord or any of the Landlord  Indemnified  Parties,
Landlord shall not be liable to Tenant,  Tenant's employees,  agents or invitees for: (i) any damage to property of
Tenant,  or of others,  located in, on or about the Premises,  (ii) the loss of or damage to any property of Tenant
or of others by theft or  otherwise,  (iii) any  injury or damage to  persons  or  property  resulting  from  fire,
explosion,  falling plaster,  steam, gas,  electricity,  water, rain or leaks from any part of the Premises or from
the pipes,  appliance  of plumbing  works or from the roof,  street or  subsurface  or from any other  places or by
dampness or by any other cause of  whatsoever  nature,  or (iv) any  such damage caused by other tenants or persons
in the  Premises,  occupants  of  adjacent  property of the  Project,  or the public,  or caused by  operations  in
construction  of any private,  public or  quasi-public  work. All property of Tenant kept or stored on the Premises
shall be so kept or stored at the sole risk of Tenant  and  Tenant  shall hold  Landlord  harmless  from any claims
arising  out of damage to the same,  unless  such  damage  shall be  caused  by the  gross  negligence  or  willful
misconduct  of  Landlord.  Landlord  or its  agents  shall not be liable for  interference  with the light or other
intangible  rights.  Similarly,  Tenant shall not be liable to Landlord  for any matter that is covered  Landlord’s
insurance, or would be covered by insurance required to be maintained by Landlord under this Lease.

17.2     Indemnification.  Tenant shall be liable for, and shall indemnify,  defend,  protect and hold the Landlord
Indemnified Parties harmless from and against,  any and all claims,  damages,  judgments,  suits, causes of action,
losses, liabilities and expenses,  including attorneys' fees and court costs (collectively,  "Indemnified Claims"),
arising or resulting from (a) any  occurrence at the Premises  following the date Landlord  delivers  possession of
the Premises to Tenant,  unless  caused by the gross  negligence  or willful  misconduct of Landlord or its agents,
employees  or  contractors,  (b) any  negligent  or willful act or  omission of Tenant or any of Tenant's  Parties;
(c) the use of the Premises and Common  Areas and conduct of Tenant's  business by Tenant or any Tenant's  Parties,
or any other activity,  work or thing done,  permitted or suffered by Tenant or any Tenant's  Parties,  in or about
the Premises,  the Building or elsewhere on the Project;  and/or  (d) any  default by Tenant of any  obligations on
Tenant's part to be performed  under the terms of this Lease.  In case any action or proceeding is brought  against
Landlord or any Landlord  Indemnified  Parties by reason of any such Indemnified  Claims,  Tenant, upon notice from
Landlord,  shall defend the same at Tenant's  expense by counsel  approved in writing by Landlord,  which  approval
shall not be unreasonably  withheld.  Conversely,  Landlord shall  indemnify,  defend,  protect and hold Tenant and
the Tenant  Indemnified  Parties  harmless from and against all  Indemnified  Claims  arising or resulting from any
negligent  or willful  act or  omission of  Landlord  or any of the  Landlord  Indemnified  Parties or any of their
agents,  employees,  contractors,  or invitees or any default by Landlord of any  obligations on Landlord’s part to
be performed  under the terms of this Lease.  In case any action or  proceeding  is brought  against  Tenant or any
Tenant  Indemnified  Parties by reason of any such Indemnified  Claims,  Landlord,  upon notice from Tenant,  shall
defend the same at  Landlord’s  expense by counsel  approved  in  writing by Tenant,  which  approval  shall not be
unreasonably  withheld.  The  parties'  indemnification  obligations  under this  Section 17.2  are  subject to the
waivers contained in Section 22.

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17.3     Survival;  No Release of Insurers.  The parties’  indemnification  obligation  under  Section 17.2,  shall
survive  the  expiration  or  earlier   termination  of  this  Lease.  The  parties’   covenants,   agreements  and
indemnification  in Sections 17.1  and 17.2 above, are not intended to and shall not relieve any insurance  carrier
of its  obligations  under  policies  required to be carried by Tenant or Landlord,  pursuant to the  provisions of
this Lease.

18.      Damage or Destruction.

18.1     Landlord's  Rights and  Obligations.  In the event the Premises  are damaged by fire or other  casualty to
an extent not exceeding  twenty-five percent (25%) of the full replacement cost thereof, and Landlord's  contractor
estimates  in a  writing  delivered  to the  parties  that the  damage  thereto  is such that the  Premises  may be
repaired,  reconstructed or restored to  substantially  its condition  immediately  prior to such damage within one
hundred eighty (180) days from the date of such casualty,  and Landlord will receive insurance proceeds  sufficient
to cover the  costs of such  repairs,  reconstruction  and  restoration  (including  proceeds  from  Tenant  and/or
Tenant's insurance which Tenant is required to deliver to Landlord pursuant to Section 18.2  below),  then Landlord
shall  commence and proceed  diligently  with the work of repair,  reconstruction  and  restoration  and this Lease
shall  continue  in full  force  and  effect.  If,  however,  the  Premises  are  damaged  to an  extent  exceeding
twenty-five percent (25%) of the full replacement cost thereof, or Landlord's  contractor  estimates that such work
of repair,  reconstruction  and restoration will require longer than one hundred eighty (180) days to complete,  or
Landlord will not receive insurance  proceeds (and/or proceeds from Tenant, as applicable)  sufficient to cover the
costs of such repairs, reconstruction and restoration, then Landlord may elect to either:

(a)      repair,  reconstruct  and restore the portion of the  Premises  damaged by such  casualty  (including  the
         Tenant  Improvements,  the Tenant Changes that Landlord elects to insure pursuant to Section 12.1(b)  and,
         to the extent of  insurance  proceeds  received  from  Tenant,  the Tenant  Changes  that  Tenant  insures
         pursuant to  Section 12.1(b)  and/or  20.1(a)),  in which case this Lease shall continue in full force and
         effect; or

(b)      terminate  this  Lease  effective  as of the date  which is thirty  (30) days  after  Tenant's  receipt of
         Landlord's election to so terminate.

For purposes of determining  whether Landlord will receive insurance proceeds  sufficient to cover the cost of such
repairs,  reconstruction  and  restoration,  any deductible  amounts  carried by Landlord will be deemed  insurance
proceeds,  and if Landlord has failed to maintain the  insurance  required of Landlord  under this Lease,  Landlord
will be deemed to have received sufficient insurance proceeds.

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Under any of the  conditions of this  Section 18.1,  Landlord  shall give written notice to Tenant of its intention
to repair or  terminate  within  thirty  (30) days  after the  occurrence  of such  casualty.  Notwithstanding  the
forgoing,  if the expected period of completion of the  restoration  exceeds one hundred eighty (180) days from the
date of the casualty,  Tenant may terminate this Lease by giving Landlord notice of termination  within thirty (30)
days after Tenant learns of the expected period of re-construction.

18.2     Tenant's  Costs and Insurance  Proceeds.  In the event of any damage or  destruction of all or any part of
the Premises,  Tenant shall  immediately:  (a) notify  Landlord thereof;  and (b) deliver to Landlord all insurance
proceeds  received by Tenant with  respect to the Tenant  Improvements  and Tenant  Changes in the  Premises to the
extent such items are not covered by  Landlord's  casualty  insurance  obtained by Landlord  pursuant to Section 21
below (excluding  proceeds for Tenant's  furniture and other personal  property) and Landlord is reconstructing the
Tenant  Improvements  and Tenant Changes,  whether or not this Lease is terminated as permitted in this Section 18,
and Tenant hereby assigns to Landlord all rights to receive such insurance  proceeds;  provided,  however,  if this
Lease is  terminated  as the result of the  casualty,  Tenant  will be  entitled  to all  insurance  proceeds  from
Tenant’s  insurance on account of Tenant  Changes and any portion of the Tenant  Improvements  funded from Tenant’s
own funds (rather than from the Improvement Allowance).

18.3     Abatement  of Rent.  In the  event  that as a result of any such  damage,  repair,  reconstruction  and/or
restoration  of the Premises,  Tenant’s use of any portion of the Premises is  substantially  impaired,  and Tenant
does not use the  Premises or the portion  thereof,  then the rent shall be abated or reduced,  as the case may be,
during the period that Tenant  continues  to be so affected and does not use the  Premises or portion  thereof,  in
the  proportion  that the  rentable  square feet of the affected  portion of the Premises  that Tenant does not use
bears to the total  rentable  square feet of the Premises.  Notwithstanding  the foregoing to the contrary,  if the
damage is due to the willful  misconduct  of Tenant or any Tenant's  Parties,  there shall be no abatement of rent.
Except for abatement of rent as provided  hereinabove,  Tenant shall not be entitled to any compensation or damages
for loss  of,  or  interference  with,  Tenant's  business  or use or  access  of all or any  part of the  Premises
resulting from any such damage, repair, reconstruction or restoration.

18.4     Inability  to  Complete.  Notwithstanding  anything  to the  contrary  contained  in this  Section 18,  if
Landlord  is  obligated  or elects to repair,  reconstruct  and/or  restore  the  damaged  portion of the  Premises
pursuant to  Section 18.1  above,  but is delayed from completing such repair,  reconstruction  and/or  restoration
beyond  the date  which is the  forty-five  (45) days  after  later to occur of the date  estimated  by  Landlord's
contractor for completion  thereof  pursuant to  Section 18.1  or one hundred eighty (180) days after the casualty,
by reason of any causes beyond the reasonable control of Landlord  (including,  without  limitation,  any delay due
to Force Majeure Delays as defined in  Section 32.16,  and delays caused by Tenant or any Tenant's  Parties),  then
either  party may elect to  terminate  this  Lease  upon  thirty  (30)  days'  prior  written  notice to the other;
provided,  however,  Tenant  may not so elect to  terminate  this  Lease if the reason for such delay was caused by
Tenant or any of Tenant's Parties.

18.5     Damage to the Project.  If there is a total  destruction  of the Project or a partial  destruction  of the
Project,  the cost of  restoration  of which would  exceed  one-third  (1/3) of the then  replacement  value of the
Project,  by any cause whatsoever,  whether or not insured against and whether or not the Premises are partially or
totally  destroyed,  Landlord  may within a period of thirty (30) days after the  occurrence  of such  destruction,
notify  Tenant in writing that it elects not to so  reconstruct  or restore the Project,  in which event this Lease
shall cease and terminate as of the date of such destruction.

18.6     Damage  Near End of Term.  In  addition  to their  termination  rights in  Sections 18.1  and 18.4  above,
Landlord and Tenant shall have the right to terminate  this Lease if any damage to the Building or Premises  occurs
during  the last  twelve  (12)  months  of the Term of this  Lease (as it may have been  extended)  and  Landlord's
contractor  estimates in a writing delivered to the parties that the repair,  reconstruction or restoration of such
damage  cannot be  completed  within  the  earlier of  (a) the  scheduled  expiration  date of the Lease  Term,  or
(b) thirty (30) days after the date of such casualty.

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18.7     Waiver of  Termination  Right.  This Lease sets forth the terms and  conditions  upon which this Lease may
terminate  in the event of any damage or  destruction.  Accordingly,  the parties  hereby waive the  provisions  of
California Civil Code  Section 1932,  Subsection 2,  and  Section 1933,  Subsection 4  (and any successor  statutes
thereof permitting the parties to terminate this Lease as a result of any damage or destruction).

19.      Eminent Domain.

19.1     Substantial  Taking.  Subject to the provisions of Section 19.4  below, in case the whole of the Premises,
or such part  thereof  as shall  substantially  interfere  with  Tenant's  use and  occupancy  of the  Premises  as
reasonably  determined  by Tenant,  shall be taken for any public or  quasi-public  purpose by any lawful  power or
authority  by exercise of the right of  appropriation,  condemnation  or eminent  domain,  or sold to prevent  such
taking,  either party shall have the right to terminate this Lease  effective as of the date possession is required
to be surrendered to said authority.

19.2     Partial  Taking;  Abatement of Rent. In the event of a taking of a portion of the Premises  which does not
substantially  interfere  with the  conduct  of  Tenant's  business,  then  neither  party  shall have the right to
terminate this Lease and Landlord shall  thereafter  proceed to make a functional unit of the remaining  portion of
the Premises (but only to the extent Landlord receives proceeds therefor from the condemning  authority),  and rent
shall be abated  with  respect to the part of the  Premises  which  Tenant  shall be so deprived on account of such
taking.

19.3     Condemnation  Award.  Subject to the provisions of  Section 19.4  below,  in connection with any taking of
the Premises or the  Building,  Landlord  shall be entitled to receive the entire  amount of any award which may be
made or given in such  taking or  condemnation,  and  Tenant  shall not assert any claim  against  Landlord  or the
taking authority for any compensation  because of such taking;  provided,  however,  if any portion of the Premises
is taken,  Tenant shall be granted the right to recover from the  condemning  authority (but not from Landlord) any
compensation  as may be  separately  awarded  or  recoverable  by  Tenant  for the  taking of  Tenant's  furniture,
fixtures,  equipment and other personal property within the Premises,  for Tenant's  relocation  expenses,  and for
any loss of goodwill or other  damage to Tenant's  business by reason of such  taking.  Landlord  and Tenant  shall
equally share that portion of the condemnation award attributable to any bonus or excess value of this Lease.

19.4     Temporary  Taking.  In the  event of a taking of the  Premises  or any part  thereof  for  temporary  use,
(a) this Lease shall be and remain  unaffected  thereby and rent shall not abate,  and (b) Tenant shall be entitled
to receive  for itself such  portion or  portions of any award made for such use with  respect to the period of the
taking which is within the Term,  provided  that if such taking shall remain in force at the  expiration or earlier
termination of this Lease,  Tenant shall perform its  obligations  under Section 9 with respect to surrender of the
Premises  and shall pay to Landlord  the portion of any award  which is  attributable  to any period of time beyond
the Term expiration  date. For purpose of this  Section 19.4,  a temporary  taking shall be defined as a taking for
a period of one hundred eighty (180) days or less.

19.5     Waiver of  Termination  Right.  This Lease sets forth the terms and  conditions  upon which this Lease may
terminate  in the event of a taking.  Accordingly,  the parties  waive the  provisions  of the  California  Code of
Civil Procedure  Section 1265.130  and any successor or similar  statutes  permitting the parties to terminate this
Lease as a result of a taking.

20.      Tenant's Insurance.

20.1     Types of  Insurance.  On or before the  earlier of the  Commencement  Date or the date  Landlord  delivers
possession of the Premises to Tenant,  and continuing  thereafter  until the  expiration of the Term,  Tenant shall
obtain and keep in full force and effect, the following insurance:

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(a)      Special  Form  (fka  All  Risk)  insurance,  including  fire and  extended  coverage,  sprinkler  leakage,
         vandalism,  malicious  mischief upon property of every description and kind owned by Tenant and located in
         the  Premises or the  Building,  or for which  Tenant is legally  liable or  installed  by or on behalf of
         Tenant  including,  without  limitation,  furniture,  equipment and any other personal  property,  and any
         Tenant  Changes (but  excluding the Tenant  Improvements  and any Tenant  Changes that Landlord  elects to
         insure  pursuant  to  Section 12.1(b)  above),  in an  amount  not less  then the  full  replacement  cost
         thereof.  In the event that there shall be a dispute as to the amount  which  comprises  full  replacement
         cost, the decision of Landlord or the mortgagees of Landlord shall be presumptive.

(b)      Commercial  general  liability  insurance  coverage,  on an occurrence basis,  including  personal injury,
         bodily  injury  (including  wrongful  death),  broad form  property  damage,  operations  hazard,  owner's
         protective  coverage,  contractual  liability (including Tenant's  indemnification  obligations under this
         Lease,  including  Section 17  hereof),  liquor  liability  (if Tenant  serves  alcohol on the  Premises),
         products  and  completed  operations  liability,  and  owned/non-owned  auto  liability,  with  a  general
         aggregate of not less than Two Million  Dollars  ($2,000,000)  and with  "umbrella" or "excess  liability"
         coverage  of not less than Seven  Million  Dollars  ($7,000,000).  The limits of such  commercial  general
         liability  insurance  shall be  increased  every five (5) years during the Term of this Lease to an amount
         reasonably required by Landlord.

(c)      Worker's  compensation and employer's liability insurance,  in statutory amounts and limits,  covering all
         persons  employed  in  connection  with any work done in, on or about the  Premises  for which  claims for
         death or bodily injury could be asserted against Landlord, Tenant or the Premises.

(d)      Loss of income,  extra  expense and business  interruption  insurance  in such  amounts as will  reimburse
         Tenant for direct or indirect loss of earnings  attributable  to all perils  commonly  insured  against by
         prudent  tenants or  attributable  to prevention of access to the Premises,  Tenant's  parking areas or to
         the  Building as a result of such  perils.  Tenant may elect to  self-insure  the risks  described in this
         Section 20.1(d),  in which event the  provisions of  Section 20.2  below shall not apply to such insurance
         but the  waivers  provided  in  Section 22  shall  apply  as if  Tenant  obtained  such  insurance  from a
         third-party.

Notwithstanding  the foregoing,  if Tenant provides  evidence  reasonably  satisfactory to Landlord that any of the
insurance  required in this  Section 20.1 is no longer generally  available in the  marketplace,  the parties shall
cooperate  with  each  other to  modify  the  requirements  of this  Section 20.1  in order to  provide  reasonable
substitute insurance coverage that is generally available in the marketplace.

20.2     Requirements.  Each policy required to be obtained by Tenant  hereunder  shall:  (a) be issued by insurers
which are approved by Landlord  and/or  Landlord's  mortgagees  and are  authorized  to do business in the state in
which  the  Building  is  located  and  rated not less than  financial  class VII,  and not less than  policyholder
rating A- in the most recent version of Best's Key Rating Guide;  (b) be in form reasonably  satisfactory from time
to time to Landlord;  (c) name  Tenant as named  insured  thereunder  and shall name  Landlord  and, at  Landlord's
request,  such other  persons or entities of which  Tenant has been  informed in writing,  as  additional  insureds
thereunder,  all as their respective  interests may appear;  (d) not have a deductible  amount exceeding that which
is commercially  reasonable,  which deductible amount shall be deemed self-insured with full waiver of subrogation;
(e) specifically  provide that the insurance  afforded by such policy for the benefit of additional  insureds shall
be  primary,  and  any  insurance  carried  by the  additional  insureds  shall  be  excess  and  non-contributing;
(f) contain  an endorsement  that the insurer  waives its right to  subrogation  as described in Section 22  below;
(g) require the insurer to notify Landlord and the other  additional  insureds in writing not less than thirty (30)
days prior to any material change,  reduction in coverage,  cancellation or other termination thereof;  (h) contain
a cross  liability or severability of interest  endorsement;  (i) be in amounts  sufficient at all times to satisfy
any coinsurance  requirements  thereof and (j) provide that any loss otherwise payable  thereunder shall be payable
notwithstanding  any act or omission  of  Landlord  or Tenant  which  might,  absent  such  provision,  result in a
forfeiture  of all or a part  of  such  insurance  payment.  Tenant  agrees  to  deliver  to  Landlord,  as soon as
practicable  after the placing of the  required  insurance,  but in no event later than the date Tenant is required
to obtain such insurance as set forth in Section 20.1  above,  certificates from the insurance  company  evidencing
the existence of such insurance and Tenant's  compliance with the foregoing  provisions of this Section 20.  Tenant
shall cause  replacement  certificates  to be  delivered  to  Landlord  not less than thirty (30) days prior to the
expiration  of any such policy or  policies.  If any such initial or  replacement  certificates  are not  furnished
within the time(s)  specified  herein,  and such failure is not cured within ten (10) days following written notice
thereof to Tenant,  Tenant shall be deemed to be in material  default under this Lease,  without the benefit of any
additional  notice or cure period provided in Section 23.1  below,  and Landlord shall have the right,  but not the
obligation, to procure such policies and certificates at Tenant's expense.

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20.3     Effect on  Insurance.  Tenant  shall  not do or  permit to be done  anything  which  will  (a) violate  or
invalidate  any insurance  policy  maintained by Landlord or Tenant  hereunder,  or  (b) increase  the costs of any
insurance  policy  maintained by Landlord  pursuant to Section 21 or otherwise  with respect to the Building or the
Project.  If Tenant's  conduct of its  business in or on the  Premises  (as  opposed to the mere  occupancy  of the
Premises)  results in any increase in premiums for any  insurance  carried by Landlord with respect to the Building
or the  Project,  Tenant  shall pay such  increase  as  additional  rent  within ten (10) days after  being  billed
therefor by Landlord.  If any insurance  coverage  carried by Landlord  pursuant to  Section 21  or otherwise  with
respect to the Building or the Project shall be cancelled or reduced (or  cancellation  or reduction  thereof shall
be  threatened)  by reason of the conduct of Tenant’s  business or the conduct by anyone  permitted by Tenant to be
upon the  Premises,  and if Tenant  fails to remedy  such  condition  within ten (10)  business  days after  notice
thereof,  Tenant shall be deemed to be in default under this Lease,  without the benefit of any  additional  notice
or cure period  specified in Section 23.1  below,  and Landlord shall have all remedies  provided in this Lease, at
law or in equity,  including,  without  limitation,  the right (but not the  obligation) to enter upon the Premises
and attempt to remedy such condition at Tenant's cost.

21.      Landlord's  Insurance.  During  the  Term,  Landlord  shall  insure  the  Common  Area  improvements,  the
Building,  the Premises,  Landlord’s Work, and the Tenant  Improvements  (excluding,  however,  Tenant's furniture,
equipment and other personal  property and Tenant Changes,  unless Landlord  otherwise  elects to insure the Tenant
Changes pursuant to  Section 12.1(b)  above) against damage by fire and standard  extended coverage perils and with
vandalism and malicious  mischief  endorsements,  and up to one year’s rental loss coverage.  At Landlord's option,
Landlord may procure,  earthquake  damage  coverage,  and such  additional  coverage as Landlord  reasonably  deems
appropriate.  Landlord shall also carry commercial  general  liability  insurance,  in such reasonable  amounts and
with such  reasonable  deductibles  as would be carried by a prudent  owner of a similar  building  in the state in
which the  Building is located.  At  Landlord's  option,  all such  insurance  may be carried  under any blanket or
umbrella  policies  which  Landlord has in force for other  buildings and projects.  Landlord may, but shall not be
obligated to, carry at Landlord’s  sole cost any other form or forms of insurance as Landlord or the  mortgagees or
ground  lessors of Landlord may  reasonably  determine  is  advisable.  The cost of insurance  obtained by Landlord
pursuant to this  Section 21  (including  commercially  reasonable  deductibles)  shall be  included  in  Operating
Expenses.

22.      Waivers of Subrogation.

22.1     Mutual  Waiver of Parties.  Notwithstanding  anything in this Lease to the  contrary,  Landlord and Tenant
hereby  waive their  rights  against each other with respect to any claims or damages or losses which are caused by
or result  from  (a) occurrences  insured  against  under any  insurance  policy  (other  than  commercial  general
liability  insurance)  carried by Landlord or Tenant (as the case may be) pursuant to the  provisions of this Lease
and  enforceable  at the time of such damage or loss,  or  (b) occurrences  which would have been covered under any
insurance (other than commercial  general liability  insurance)  required to be obtained and maintained by Landlord
or Tenant (as the case may be) under  Sections 20  and 21 of this Lease (as  applicable)  had such  insurance  been
obtained and maintained as required  therein.  The foregoing  waivers shall be in addition to, and not a limitation
of, any other  waivers or  releases  contained  in this  Lease,  and shall  include  deductibles  and  self-insured
retentions.

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22.2     Waiver of  Insurers.  Each  party  shall  cause each  insurance  policy  (other  than  commercial  general
liability  insurance)  required to be obtained by it pursuant to  Sections 20  and 21 to provide,  that the insurer
waives all rights of recovery  by way of  subrogation  against  either  Landlord or Tenant,  as the case may be, in
connection  with any claims,  losses and damages  covered by such  policy.  If either  party fails to maintain  any
such insurance required  hereunder,  such insurance shall be deemed to be self-insured with a deemed full waiver of
subrogation as set forth in the immediately preceding sentence.

23.      Tenant's Default and Landlord's Remedies.

23.1     Tenant's  Default.  The occurrence of any one or more of the following  events shall  constitute a default
under this Lease by Tenant:

(a)      the failure by Tenant to make any payment of rent or additional  rent or any other payment  required to be
         made by Tenant  hereunder,  where such failure  continues for three (3) days after written  notice thereof
         from Landlord that such payment was not received;

(b)      the failure by Tenant to observe or perform  any of the  express or implied  covenants  or  provisions  of
         this Lease to be observed or performed  by Tenant,  other than as  specified  in  Sections 23.1(a)  or (b)
         above,  where such failure shall  continue for a period of thirty (30) days after written  notice  thereof
         from Landlord to Tenant;  provided,  however,  that if the nature of Tenant's  default is such that it may
         be cured but more than thirty (30) days are  reasonably  required  for its cure,  then Tenant shall not be
         deemed to be in  default  if Tenant  shall  commence  such cure  within  said  thirty  (30) day period and
         thereafter diligently prosecute such cure to completion;

(c)      (i) the  making by Tenant of any general  assignment for the benefit of creditors,  (ii) the  filing by or
         against  Tenant of a petition to have  Tenant or any  guarantor  hereof  adjudged a bankrupt or a petition
         for  reorganization  or  arrangement  under  any law  relating  to  bankruptcy  (unless,  in the case of a
         petition  filed against  Tenant or any guarantor  hereof,  the same is dismissed  within sixty (60) days),
         (iii) the  appointment  of a trustee or  receiver  to take  possession  of  substantially  all of Tenant's
         assets  located  at the  Premises  or of  Tenant's  interest  in this  Lease  or of  substantially  all of
         guarantor's  assets,  where  possession is not restored to Tenant or guarantor  within sixty (60) days, or
         (iv) the  attachment,  execution or other judicial seizure of substantially all of Tenant's assets located
         at the Premises or of Tenant's  interest in this Lease where such seizure is not  discharged  within sixty
         (60) days;

(d)      any material  representation  or warranty made by Tenant in this Lease or any other document  delivered in
         connection  with the  execution  and  delivery  of this  Lease or  pursuant  to this  Lease  proves  to be
         incorrect in any material respect; or

(e)      Tenant  shall  be  liquidated  or  dissolved  or  shall  begin  proceedings  towards  its  liquidation  or
         dissolution.

Any notice sent by Landlord to Tenant  pursuant to this  Section 23.1  shall be in lieu of, and not in addition to,
any notice required under California Code of Civil Procedure Section 1161.

23.2     Landlord's  Remedies;  Termination.  In the event of any such default by Tenant,  in addition to any other
remedies  available to Landlord under this Lease, at law or in equity,  Landlord shall have the immediate option to
terminate  this Lease and all rights of Tenant  hereunder.  In the event that Landlord  shall elect to so terminate
this Lease, then Landlord may recover from Tenant:

(a)      the worth at the time of award of any unpaid rent which had been  earned at the time of such  termination;
         plus

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(b)      the worth at the time of the 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  rental  loss that  Tenant  proves
         could have been reasonably avoided; plus

(c)      the worth at the time of award of the  amount by which the unpaid  rent for the  balance of the term after
         the time of award exceeds the amount of such rental loss that Tenant  proves could be reasonably  avoided;
         plus

(d)      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  including,  but not  limited  to:  unamortized  Tenant  Improvement  costs;
         attorneys' fees;  unamortized brokers' commissions;  the costs of refurbishment,  alterations,  renovation
         and repair of the Premises;  and removal  (including  the repair of any damage caused by such removal) and
         storage (or  disposal)  of  Tenant's  personal  property,  equipment,  fixtures,  Tenant  Changes,  Tenant
         Improvements and any other items which Tenant is required under this Lease to remove but does not remove.

As used in  Sections 23.2(a)  and 23.2(b) above, the "worth at the time of award" is computed by allowing  interest
at the Interest Rate set forth in  Section 1.14 of the Summary.  As used in  Section 23.2(c)  above,  the "worth at
the time of award" 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%).

23.3     Landlord's  Remedies;  Re-Entry  Rights.  In the event of any such  default by Tenant,  in addition to any
other  remedies  available to Landlord under this Lease,  at law or in equity,  Landlord shall also have the right,
with or without  terminating  this Lease,  to re-enter the  Premises  and remove all persons and property  from the
Premises;  such property may be removed,  stored and/or  disposed of pursuant to  Section 12.4 of this Lease or any
other  procedures  permitted  by  applicable  law.  No re-entry or taking  possession  of the  Premises by Landlord
pursuant to this  Section 23.3,  and no acceptance of surrender of the Premises or other action on Landlord's part,
shall be  construed as an election to terminate  this Lease unless a written  notice of such  intention be given to
Tenant or unless the termination thereof be decreed by a court of competent jurisdiction.

23.4     Landlord's  Remedies;  Continuation of Lease.  In the event of any such default by Tenant,  in addition to
any other remedies  available to Landlord under this Lease,  at law or in equity,  Landlord shall have the right to
continue  this Lease in full force and  effect,  whether or not Tenant  shall  have  abandoned  the  Premises.  The
foregoing  remedy shall also be available to Landlord  pursuant to  California  Civil Code  Section 1951.4  and any
successor  statute  thereof  in the event  Tenant has  abandoned  the  Premises.  In the event  Landlord  elects to
continue this Lease in full force and effect  pursuant to this  Section 23.4,  then  Landlord  shall be entitled to
enforce all of its rights and  remedies  under this Lease,  including  the right to recover rent as it becomes due.
Landlord's  election not to terminate this Lease pursuant to this  Section 23.4  or pursuant to any other provision
of this Lease,  at law or in equity,  shall not preclude  Landlord  from  subsequently  electing to terminate  this
Lease or pursuing any of its other remedies.

23.5     Landlord's Right to Perform.  Except as specifically  provided  otherwise in this Lease, all covenants and
agreements  by Tenant under this Lease shall be  performed by Tenant at Tenant's  sole cost and expense and without
any  abatement  or offset of rent.  If Tenant shall fail to pay any sum of money (other than Basic Rent) or perform
any other act on its part to be paid or  performed  hereunder  and such failure  shall  continue for three (3) days
with respect to monetary  obligations  (or ten (10) days with respect to non-monetary  obligations  (except in case
of emergencies,  in which such case, such shorter period of time as is reasonable under the  circumstances))  after
Tenant's  receipt of written notice thereof from Landlord,  Landlord may,  without waiving or releasing Tenant from
any of Tenant's  obligations,  make such  payment or perform  such other act on behalf of Tenant.  All sums so paid
by Landlord  and all  necessary  incidental  costs  incurred by  Landlord  in  performing  such other acts shall be
payable by Tenant to Landlord within five (5) days after demand therefor as additional rent.

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23.6     Interest.  If any monthly  installment of Basic Rent or Common Area Expenses,  or any other amount payable
by Tenant  hereunder is not received by Landlord by the date when due, it shall bear  interest at the Interest Rate
set forth in  Section 1.14  of the  Summary  from the date due  until  paid.  All  interest,  and any late  charges
imposed pursuant to Section 23.7  below, shall be considered  additional rent due from Tenant to Landlord under the
terms of this Lease.

23.7     Late Charges.  Tenant  acknowledges  that, in addition to interest  costs,  the late payments by Tenant to
Landlord  of any rent or other sums due under this Lease will cause  Landlord to incur  costs not  contemplated  by
this Lease,  the exact amount of such costs being  extremely  difficult  and  impractical  to fix. Such other costs
include,  without  limitation,  processing,  administrative  and  accounting  charges and late  charges that may be
imposed  on  Landlord  by the terms of any  mortgage,  deed of trust or  related  loan  documents  encumbering  the
Premises,  the Building or the Project.  Accordingly,  if any rent or any other amount payable by Tenant  hereunder
is not  received by Landlord  by the due date  thereof,  Tenant  shall pay to  Landlord  an  additional  sum of Two
Thousand Five Hundred and No/100 Dollars  ($2,500.00) as a late charge,  but in no event more than the maximum late
charge allowed by law; provided,  however,  with respect to the first late payment during any consecutive  12-month
period,  Tenant shall not be obligated to pay the foregoing late charge unless  Landlord fails to receive such sums
within  five (5)  business  days  following  Landlord's  delivery  to Tenant of written  notice  that such sums are
delinquent.  The parties agree that such late charge  represents a fair and  reasonable  estimate of the costs that
Landlord  will incur by reason of any late payment as  hereinabove  referred to by Tenant,  and the payment of late
charges and interest are  distinct and separate in that the payment of interest is to  compensate  Landlord for the
use of  Landlord's  money by Tenant,  while the payment of late charges is to  compensate  Landlord for  Landlord's
processing,  administrative  and other costs  incurred by  Landlord  as a result of Tenant's  delinquent  payments.
Acceptance  of a late charge or interest  shall not  constitute  a waiver of Tenant's  default  with respect to the
overdue  amount or prevent  Landlord  from  exercising  any of the other rights and remedies  available to Landlord
under this Lease or at law or in equity now or hereafter in effect.

23.8     Intentionally Omitted.

23.9     Rights  and  Remedies  Cumulative.  All  rights,  options  and  remedies  of  Landlord  contained  in this
Section 23  and elsewhere in this Lease shall be construed and held to be  cumulative,  and no one of them shall be
exclusive of the other,  and Landlord  shall have the right to pursue any one or all of such  remedies or any other
remedy or relief  which may be provided by law or in equity,  whether or not stated in this Lease.  Nothing in this
Section 23  shall be deemed to limit or  otherwise  affect  Tenant's  indemnification  of Landlord  pursuant to any
provision of this Lease.

23.10    Tenant's  Waiver of  Redemption.  Tenant hereby waives and  surrenders  for itself and all those  claiming
under it,  including  creditors of all kinds,  (i) any right and  privilege  which it or any of them may have under
any present or future law to redeem any of the Premises or to have a  continuance  of this Lease after  termination
of this Lease or of  Tenant's  right of  occupancy  or  possession  pursuant  to any court  order or any  provision
hereof,  and (ii) the  benefits of any present or future law which exempts  property from liability for debt or for
distress for rent.

23.11    Costs Upon Default and  Litigation.  Tenant shall pay to Landlord and its  mortgagees as  additional  rent
all the expenses  incurred by Landlord or its mortgagees in connection with any default by Tenant  hereunder or the
exercise of any remedy by reason of any  default by Tenant  hereunder,  including  reasonable  attorneys'  fees and
expenses.  If Landlord or its mortgagees  shall be made a party to any litigation  commenced  against Tenant or any
litigation  pertaining to this Lease or the Premises,  at the option of Landlord and/or its mortgagees,  Tenant, at
its expense,  shall provide  Landlord and/or its mortgagees with counsel approved by Landlord and/or its mortgagees
and shall pay all costs incurred or paid by Landlord and/or its mortgagees in connection with such litigation.

24.      Landlord's  Default.  Landlord shall not be in default in the  performance  of any obligation  required to
be performed by Landlord  under this Lease unless  Landlord  has failed to perform such  obligation  within  thirty
(30) days after the receipt of written  notice  from Tenant  specifying  in detail  Landlord's  failure to perform;
provided  however,  that if the  nature of  Landlord's  obligation  is such that  more  than  thirty  (30) days are
required  for its  performance,  then  Landlord  shall not be deemed in default if it  commences  such  performance
within  such  thirty  (30) day period and  thereafter  diligently  pursues  the same to  completion.  Upon any such
uncured  default  by  Landlord,  Tenant may  exercise  any of its rights  provided  in law or at equity;  provided,
however:  (a) Tenant  shall have no right to offset or abate rent in the event of any  default  by  Landlord  under
this  Lease,  except to the extent  offset  rights are  specifically  provided to Tenant in this Lease or Tenant is
awarded a judgment  against  Landlord (in which event Tenant may offset the amount of such judgment against rent if
Landlord  fails to pay the same  within  thirty  (30) days after such  judgment  is no longer  subject to  appeal);
(b) Tenant  shall have no right to terminate this Lease; and  (c) Tenant's  rights and remedies  hereunder shall be
limited  to the  extent  (i) Tenant  has  expressly  waived in this  Lease any of such  rights or  remedies  and/or
(ii) this Lease  otherwise  expressly  limits  Tenant's rights or remedies,  including the limitation on Landlord's
liability contained in Section 31 hereof.

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Notwithstanding  the  foregoing,  in the event (i) a  court of  competent  jurisdiction  has  determined  (and such
determination is no longer subject to appeal) that Landlord is in default,  (ii) such  default  materially  affects
Tenant's use and enjoyment of the Premises,  and  (iii) Landlord  fails,  within a reasonable period time following
such determination, to remedy such default, Tenant may terminate this Lease upon written notice to Landlord.

25.      Subordination.  At the election of Landlord or any mortgagee of a mortgage or a  beneficiary  of a deed of
trust now or hereafter  encumbering all or any portion of the Building or the Project,  or any lessor of any ground
or master lease now or hereafter  affecting all or any portion of the Building or the Project,  this Lease shall be
subject  and  subordinate  at all times to such  ground or master  leases (and such  extensions  and  modifications
thereof),  and to the lien of such mortgages and deeds of trust (as well as to any advances made  thereunder and to
all renewals,  replacements,  modifications and extensions thereof); provided, however, as a condition precedent to
such  subordination  to a future  mortgage,  deed of trust or ground or master lease,  Tenant shall have received a
commercially  reasonable  non-disturbance  agreement  from  the  holder  of such  instrument.  Notwithstanding  the
foregoing,  Landlord shall have the right to subordinate  or cause to be  subordinated  any or all ground or master
leases  or the lien of any or all  mortgages  or deeds of trust to this  Lease.  In the  event  that any  ground or
master lease  terminates  for any reason or any mortgage or deed of trust is  foreclosed or a conveyance in lieu of
foreclosure  is made for any reason,  at the election of Landlord's  successor in interest,  Tenant shall attorn to
and become the tenant of such  successor.  Tenant  hereby  waives its rights  under any current or future law which
gives or purports to give Tenant any right to terminate this Lease and the  obligations of Tenant  hereunder as the
consequence  of any such  foreclosure  proceeding  or sale.  Tenant  covenants and agrees to execute and deliver to
Landlord  within ten (10) days after receipt of written demand by Landlord and in the form  reasonably  required by
Landlord,  any  additional  documents  evidencing the priority or  subordination  of this Lease with respect to any
such ground or master  lease or the lien of any such  mortgage or deed of trust or  Tenant's  agreement  to attorn.
Should Tenant fail to sign and return any such  documents  within said ten (10) day period,  and if such failure is
not cured  within an  additional  ten (10) days  following  written  notice  thereof,  Tenant  shall be in  default
hereunder without the benefit of any additional notice or cure periods specified in Section 23.1 above.

26.      Estoppel Certificate.

26.1     Obligations.  Within ten (10) days  following  Landlord's  or Tenant’s  written  request,  the other party
shall execute and deliver to the requesting party an estoppel  certificate,  in a form substantially similar to the
form of Exhibit "F"  attached  hereto  (modified as appropriate if Landlord is the certifying  party),  certifying:
(a) the  Commencement  Date of this Lease;  (b) that this Lease is unmodified  and in full force and effect (or, if
modified,  that this  Lease is in full  force and  effect as  modified,  and  stating  the date and  nature of such
modifications);  (c) the  date to which the rent and other sums payable  under this Lease have been paid;  (d) that
there are not, to the best of the certifying  party’s  knowledge,  any defaults under this Lease by either Landlord
or Tenant,  except as specified in such certificate;  and (e) such other matters as are reasonably requested by the
requesting  party.  Any such estoppel  certificate  delivered  pursuant to this  Section 26.1 may be relied upon by
any mortgagee,  beneficiary,  purchaser or prospective  purchaser of any portion of the Project, or any beneficiary
designated by Tenant, as well as their assignees.

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26.2     Failure to Deliver.  If Tenant or Landlord  fails to deliver such estoppel  certificate  within such time,
and such  failure is not cured within ten (10) days  following  written  notice  thereof,  then such failure  shall
constitute  a  default  hereunder,  without  the  applicability  of  the  notice  and  cure  periods  specified  in
Section 23.1  above,  and shall be conclusive upon the defaulting  party that:  (a) this Lease is in full force and
effect without  modification,  except as may be represented by the non-defaulting  party;  (b) there are no uncured
defaults in Landlord's or Tenant's  performance  (other than the defaulting party’s failure to deliver the estoppel
certificate); and (c) not more than one (1) month's rental has been paid in advance.

27.      Intentionally Omitted.

28.      Modification and Cure Rights of Landlord's Mortgagees and Lessors.

28.1     Modifications.  If, in  connection  with  Landlord's  obtaining or entering  into any  financing or ground
lease for any portion of the Building or the Project,  the lender or ground lessor shall request  modifications  to
this  Lease,  Tenant  shall,  within ten (10) days after  request  therefor,  execute  an  amendment  to this Lease
including such  modifications,  provided such  modifications  are  reasonable,  do not increase the  obligations of
Tenant  hereunder,  or adversely  affect the leasehold estate created hereby or Tenant's rights  hereunder,  all as
determined in Tenant's reasonable judgment.

28.2     Cure Rights.  In the event of any default on the part of Landlord,  Tenant will give notice by  registered
or certified  mail to any  beneficiary  of a deed of trust or mortgagee  covering the Premises or ground  lessor of
Landlord whose address shall have been furnished to Tenant,  and shall offer such beneficiary,  mortgagee or ground
lessor a reasonable opportunity to cure the default as Landlord.

29.      Quiet  Enjoyment.  Landlord  covenants  and agrees with Tenant  that,  upon Tenant  performing  all of the
covenants  and  provisions on Tenant's part to be observed and  performed  under this Lease  (including  payment of
rent  hereunder),  Tenant shall and may peaceably and quietly have,  hold and enjoy the Premises in accordance with
and  subject to the terms and  conditions  of this Lease as  against  all  persons  claiming  by,  through or under
Landlord.

30.      Transfer of  Landlord's  Interest.  The term  "Landlord"  as used in this Lease,  so far as  covenants  or
obligations  on the part of the  Landlord  are  concerned,  shall be limited to mean and include  only the owner or
owners,  at the time in  question,  of the fee title to, or a lessee's  interest in a ground lease of, the Project.
In the event of any  transfer or  conveyance  of any such title or interest  (other  than a transfer  for  security
purposes  only),  the transferor  shall be  automatically  relieved of all covenants and obligations on the part of
Landlord  contained in this Lease.  Landlord  and  Landlord's  transferees  and  assignees  shall have the absolute
right to transfer  all or any portion of their  respective  title and interest in the Project,  the  Building,  the
Premises  and/or this Lease without the consent of Tenant,  and such transfer or subsequent  transfer  shall not be
deemed a violation on Landlord's part of any of the terms and conditions of this Lease.

31.      Limitation  on Landlord's  Liability.  Notwithstanding  anything  contained in this Lease to the contrary,
the  obligations  of Landlord  under this Lease  (including any actual or alleged breach or default by Landlord) do
not constitute personal  obligations of the individual  partners,  directors,  officers or shareholders of Landlord
or Landlord's  partners,  and Tenant shall not seek recourse against the individual partners,  directors,  officers
or  shareholders  of Landlord or Landlord's  partners,  or any of their  personal  assets for  satisfaction  of any
liability with respect to this Lease. In addition,  in consideration of the benefits  accruing  hereunder to Tenant
and  notwithstanding  anything  contained in this Lease to the  contrary,  Tenant  hereby  covenants and agrees for
itself and all of its  successors and assigns that the liability of Landlord for its  obligations  under this Lease
(including any liability as a result of any actual or alleged  failure,  breach or default  hereunder by Landlord),
shall be limited  solely to, and  Tenant's and its  successors'  and assigns'  sole and  exclusive  remedy shall be
against, Landlord's interest in the Project, and no other assets of Landlord.

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32.      Miscellaneous.

32.1     Governing  Law.  This Lease  shall be governed  by, and  construed  pursuant  to, the laws of the state in
which the Premises are located.

32.2     Successors and Assigns.  Subject to the provisions of Section 30  above, and except as otherwise  provided
in this Lease,  all of the  covenants,  conditions  and  provisions of this Lease shall be binding upon,  and shall
inure to the benefit of, the parties hereto and their  respective  heirs,  personal  representatives  and permitted
successors  and  assigns;  provided,  however,  no rights  shall inure to the benefit of any  Transferee  of Tenant
unless the Transfer to such Transferee is made in compliance with the provisions of Section 14.

32.3     No Merger.  The  voluntary  or other  surrender  of this Lease by Tenant or a mutual  termination  thereof
shall not work as a merger  and  shall,  at the  option  of  Landlord,  either  (a) terminate  all or any  existing
subleases, or (b) operate as an assignment to Landlord of Tenant's interest under any or all such subleases.

32.4     Professional  Fees. If either  Landlord or Tenant should bring suit or arbitration  against the other with
respect to this Lease,  including for unlawful  detainer or any other relief against the other hereunder,  then all
costs  and  expenses  incurred  by  the  prevailing  party  therein  (including,  without  limitation,  its  actual
appraisers',  accountants',  attorneys' and other  professional fees,  expenses and court costs),  shall be paid by
the other party.

32.5     Waiver.  The waiver by either  party of any breach by the other party of any term,  covenant or  condition
herein  contained  shall  not be  deemed to be a waiver  of any  subsequent  breach of the same or any other  term,
covenant and condition  herein  contained,  nor shall any custom or practice which may become  established  between
the parties in the  administration  of the terms  hereof be deemed a waiver of, or in any way affect,  the right of
any party to insist  upon the  performance  by the other in strict  accordance  with said  terms.  No waiver of any
default of either party  hereunder  shall be implied from any  acceptance by Landlord or delivery by Tenant (as the
case may be) of any rent or other  payments due hereunder or any omission by the  non-defaulting  party to take any
action on account of such  default if such  default  persists or is  repeated,  and no express  waiver shall affect
defaults  other than as specified in said waiver.  The  subsequent  acceptance of rent  hereunder by Landlord shall
not be deemed to be a waiver of any  preceding  breach by Tenant of any term,  covenant or  condition of this Lease
other than the failure of Tenant to pay the  particular  rent so accepted,  regardless of  Landlord's  knowledge of
such preceding breach at the time of acceptance of such rent.

32.6     Terms and  Headings.  The words  "Landlord"  and "Tenant" as used herein shall  include the plural as well
as the singular.  Words used in any gender  include  other  genders.  The Section  headings of this Lease are not a
part of this Lease and shall  have no effect  upon the  construction  or  interpretation  of any part  hereof.  Any
deletion of language  from this Lease prior to its  execution  by Landlord  and Tenant  shall not be  construed  to
raise any presumption,  canon of construction or implication,  including,  without limitation, any implication that
the parties  intended  thereby to state the converse of the deleted  language.  Whenever the consent or approval of
a party is required under this Lease,  such party may not unreasonably  withhold,  delay, or condition its approval
or consent, unless a different standard is specified.

32.7     Time.  Time is of the essence with respect to performance  of every  provision of this Lease in which time
or  performance is a factor.  All  references in this Lease to "days" shall mean calendar days unless  specifically
modified herein to be "business" days.

32.8     Prior  Agreements;  Amendments.  This Lease,  including  the Summary and all Exhibits and Riders  attached
hereto contains all of the covenants,  provisions,  agreements,  conditions and understandings between Landlord and
Tenant  concerning the Premises and any other matter covered or mentioned in this Lease,  and no prior agreement or
understanding,  oral or written,  express or implied,  pertaining to the Premises or any such other matter shall be
effective  for any  purpose.  No  provision  of this  Lease may be amended  or added to except by an  agreement  in
writing signed by the parties  hereto or their  respective  successors in interest.  The parties  acknowledge  that
all prior  agreements,  representations  and negotiations  are deemed  superseded by the execution of this Lease to
the extent they are not expressly incorporated herein.

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32.9     Separability.  The  invalidity  or  unenforceability  of any  provision of this Lease (except for Tenant's
obligation to pay Basic Rent and Operating  Expenses under Sections 3 and 4 hereof) shall in no way affect,  impair
or  invalidate  any other  provision  hereof,  and such other  provisions  shall remain valid and in full force and
effect to the fullest extent permitted by law.

32.10    Recording.  Neither  Landlord  nor Tenant  shall  record this Lease,  but Tenant and  Landlord  shall,  at
either  party's  request,  cause a  Memorandum  of this Lease to be  promptly  executed  and  recorded  in the real
property  records of San Diego  County,  California.  The party  requesting  recordation  of a Memorandum  shall be
responsible  for all recording fees incurred in connection  therewith.  If a Memorandum is recorded,  Tenant shall,
upon the  expiration  or earlier  termination  of this Lease,  execute,  acknowledge  and deliver to Landlord  such
instruments as Landlord may require in order to release the Memorandum of record,  which  obligation  shall survive
the expiration or termination of this Lease.

32.11    Exhibits  and Riders.  All  Exhibits  and Riders  attached to this Lease are hereby  incorporated  in this
Lease for all purposes as though set forth at length herein.

32.12    Auctions.  Tenant  shall have no right to conduct any auction in, on or about the  Premises,  the Building
or the Project.

32.13    Accord and  Satisfaction.  No payment by Tenant or receipt by  Landlord  of a lesser  amount than the rent
payment herein  stipulated  shall be deemed to be other than on account of the rent,  nor shall any  endorsement or
statement  on any  check  or any  letter  accompanying  any  check or  payment  as rent 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 rent or pursue any other remedy  provided in this Lease.  Tenant  agrees that each of the foregoing
covenants  and  agreements  shall be  applicable to any covenant or agreement  either  expressly  contained in this
Lease or imposed by any statute or at common law.

32.14    Financial  Statements.  Upon thirty (30) days prior  written  request from  Landlord  (which  Landlord may
make at any time  during  the Term but no more often  than once in any  calendar  year),  Tenant  shall  deliver to
Landlord  a  current  financial  statement  of  Tenant.  Such  statements  shall be  prepared  in  accordance  with
generally  acceptable  accounting  principles.  Notwithstanding  the  foregoing,  Tenant  shall not be  required to
provide any such financial statements so long as its financial statements are publicly available.

32.15    No  Partnership.  Landlord  does not,  in any way or for any  purpose,  become a partner  of Tenant in the
conduct of its business,  or otherwise,  or joint venturer or a member of a joint  enterprise with Tenant by reason
of this Lease.

32.16    Force  Majeure.  In the event that either party  hereto shall be delayed or hindered in or prevented  from
the  performance  of any act  required  hereunder by reason of strikes,  lock-outs,  labor  troubles,  inability to
procure materials,  failure of power,  governmental  moratorium or other governmental action or inaction (including
failure, refusal or delay in issuing permits,  approvals and/or authorizations),  injunction or court order, riots,
insurrection,  war,  fire,  earthquake,  flood or other  natural  disaster or other reason of a like nature not the
fault of the  party  delaying  in  performing  work or doing  acts  required  under the  terms of this  Lease  (but
excluding delays due to financial  inability) (herein  collectively,  "Force Majeure Delays"),  then performance of
such act shall be excused for the period of the delay and the period for the  performance  of any such act shall be
extended for a period  equivalent  to the period of such delay.  The  provisions  of this  Section 32.16  shall not
apply to nor operate to excuse  Tenant from the payment of Basic Rent,  Operating  Expenses,  percentage  rent,  if
any,  additional  rent or any other  payments  strictly in accordance  with the terms of this Lease.  Force Majeure
Delays  shall not include any delay  resulting  from the failure of the  existing  tenant of the Premises to vacate
the Premises by June 1, 2004.

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32.17    Counterparts.  This Lease may be executed in one or more  counterparts,  each of which shall constitute an
original and all of which shall be one and the same agreement.

32.18    Non-Discrimination.  Tenant  acknowledges  and agrees that there shall be no  discrimination  against,  or
segregation of, any person,  group of persons,  or entity on the basis of race, color, creed,  religion,  age, sex,
marital status,  national origin,  or ancestry in the leasing,  subleasing,  transferring,  assignment,  occupancy,
tenure, use, or enjoyment of the Premises, or any portion thereof.

33.      Lease Execution.

33.1     Tenant's  Authority.  If  Tenant  or  Landlord  executes  this  Lease  as  a  limited  liability  company,
partnership  or  corporation,  then Tenant or Landlord,  as applicable,  represents and warrants that:  (a) it is a
duly organized and validly  existing limited  liability  company,  partnership or corporation,  as the case may be,
and is qualified to do business in the state in which the Premises are located;  (b) such  persons and/or  entities
executing  this Lease are duly  authorized  to execute and deliver this Lease on Tenant's or  Landlord’s  behalf in
accordance  with the Tenant's or Landlord’s  operating  agreement  (if a limited  liability  company),  Tenant's or
Landlord’s  partnership  agreement (if a partnership),  or a duly adopted resolution of Tenant's board of directors
and Tenant's or Landlord’s  by-laws (if a  corporation);  and (c) this  Lease is binding upon Tenant or Landlord in
accordance with its terms.  Concurrently  with the mutual  execution of this Lease,  the parties shall provide each
other  with a copy of any  documents  reasonably  requested  by the  other  party  evidencing  such  qualification,
organization, existence and authorization.

33.2     Joint and Several  Liability.  If more than one person or entity  executes this Lease as Tenant:  (a) each
of them is and shall be jointly and severally  liable for the covenants,  conditions,  provisions and agreements of
this Lease to be kept,  observed and  performed by Tenant;  and (b) the act or signature  of, or notice from or to,
any one or more of them with  respect to this Lease shall be binding  upon each and all of the persons and entities
executing  this  Lease as Tenant  with the same force and effect as if each and all of them had so acted or signed,
or given or received such notice.

33.3     No Option.  The  submission  of this Lease for  examination  or execution by Tenant does not  constitute a
reservation  of or option for the Premises  and this Lease shall not become  effective as a Lease until it has been
executed by Landlord and delivered to Tenant.

33.4     Guaranty.  Concurrently  with Tenant's  execution of this Lease,  Tenant shall cause  Guarantor to execute
and deliver to Landlord a Lease Guaranty in the form and substance of Exhibit "H" attached hereto.

34.      Waiver  of Jury  Trial.  Each  Party  hereby  waives  any right to a trial by jury in any  action  seeking
specific  performance  of any  provision of this Lease,  for damages for any breach under this Lease,  or otherwise
for enforcement of any right or remedy hereunder.

35.      Tenant's  Exclusive  Right.  Except as  provided  in this  Section 35,  from and  after  the date  hereof,
Landlord  agrees not to enter into any lease for space in the Project,  or sell any  building in the Project,  to a
Competitor.  A  "Competitor"  means any entity whose primary  business at the Project is consumer debt  collection.
The foregoing  restriction  will not apply to a lease or sale to a Competitor who has been permitted to do so based
upon or as a result of an action or order by a court or a subletting or  assignment of an existing  lease that does
not give Landlord the right to disapprove of the  subletting or assignment  based on this  provision or the sale of
any  building in the Project  subsequent  to its sale by Landlord or a renewal,  extension or amendment of the BofA
Lease.  The exclusive right granted under this Section 35 shall  automatically  terminate and become void and of no
further  force or effect  (a) upon the  occurrence of a default by Tenant under this Lease that is not cured within
the applicable  notice and cure period,  (b) if Tenant or a Permitted  Transferee ceases to conduct a consumer debt
collection  business within the entire Premises,  excluding  cessations due to Force Majeure Delays or (c) if there
is an assignment or subletting other than pursuant to Section 14.5.

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36.      Communication  Equipment.  Subject to all governmental  laws,  rules and regulations,  Tenant and Tenant's
contractors  (which shall first be  reasonably  approved by  Landlord)  shall have the right and access to install,
repair,  replace,  remove,  operate and maintain  satellite  dishes or other similar  devices,  such as antennae or
similar devices,  together with all cable,  wiring,  conduits and related equipment  (collectively,  "Communication
Equipment"),  for  the  purpose  of  receiving  and  sending  radio,  television,   computer,  telephone  or  other
communication  signals to and from the Premises in connection  with Tenant's use of the Premises,  at a location on
the roof of the Building  designated  by Landlord and  reasonably  acceptable  to Tenant.  Such use of the roof for
Communication  Equipment  shall be at no  additional  charge to Tenant  during  the Lease  Term and any  extensions
thereof.  Tenant shall ensure that any  Communication  Equipment  installed by Tenant does not  interfere  with any
equipment  installed on the roof of the Building prior to Tenant's  installation  of its  Communication  Equipment.
Tenant shall retain  Landlord's  designated  roofing  contractor to make any necessary  penetrations and associated
repairs to the roof in order to preserve  Landlord's  roof  warranty.  Tenant's  installation  and operation of the
Communication Equipment shall be governed by the following terms and conditions:

36.1     Tenant's right to install,  replace,  repair,  remove,  operate and maintain the  Communication  Equipment
shall be subject to all  governmental  laws, rules and regulations and Landlord makes no  representation  that such
laws, rules and regulations  permit such  installation and operation.  Further,  Tenant's  Communication  Equipment
shall not  cause the  Building  rooftop  to  violate  any  laws,  rules  and/or  regulations  and  Tenant  shall be
responsible for ensuring that its use does not cause such a violation.

36.2     All plans and  specifications  for the Communication  Equipment shall be subject to Landlord's  reasonable
approval.

36.3     All costs of  installation,  operation and  maintenance of the  Communication  Equipment and any necessary
related equipment (including,  without limitation,  costs of obtaining any necessary permits and connections to the
Building's  electrical  system) shall be borne by Tenant.  Landlord agrees to cooperate (at no expense to Landlord)
with Tenant in obtaining such permits and connections.

36.4     It is  expressly  understood  that  Landlord  retains  the right to use the roof of the  Building  for any
purpose  whatsoever  provided  that Landlord  shall not unduly  interfere  with  Tenant's use of the  Communication
Equipment.

36.5     Tenant  shall  use the  Communication  Equipment  so as not to cause any  interference  or danger to other
tenants in the Building or with any other  tenant's or  licensee's  communication  equipment  installed on the roof
prior to Tenant's  installation of its  Communication  Equipment,  and not to damage the Building or interfere with
the normal operation of the Building.

36.6     Landlord shall not have any obligations  with respect to the  Communication  Equipment.  Landlord makes no
representation that the Communication  Equipment will be able to receive or transmit  communication signals without
interference or disturbance  (whether or not by reason of the  installation  or use of similar  equipment by others
on the roof of the Building) and Tenant agrees that Landlord shall not be liable to Tenant therefor.

36.7     Tenant shall (i) be solely  responsible for any damage caused as a result of the Communication  Equipment,
(ii) promptly pay any tax,  license or permit fees charged  pursuant to any laws or regulations in connection  with
the  installation,  maintenance  or use of  the  Communication  Equipment  and  comply  with  all  precautions  and
safeguards  recommended  by all  governmental  authorities,  and (iii) be  responsible  for any necessary  repairs,
replacements to or maintenance of the Communication Equipment.

36.8     The  Communication  Equipment  shall  remain  the  sole  property  of  Tenant.  Tenant  shall  remove  the
Communication  Equipment  and related  equipment at Tenant's  sole cost and expense upon the  expiration  or sooner
termination of this Lease or upon the imposition of any  governmental  law or regulation which may require removal,
and shall repair the Building  upon such  removal to the extent  required by such work of removal.  If Tenant fails
to remove the  Communication  Equipment  and repair the Building  within  thirty (30) days after the  expiration or
earlier  termination of this Lease,  Landlord may do so at Tenant's  expense.  The provisions of this  Section 36.8
shall survive the expiration or earlier termination of this Lease.

-38-

8875 Aero Drive
Midland Credit Management, Inc.

36.9     The  Communication  Equipment  shall be deemed to  constitute  a portion of the  Premises  for purposes of
Sections 17 and 20 of this Lease.

36.10    Tenant shall be entitled,  at no additional  charge,  to use its pro rata share of the existing  risers of
the Building to install its  Communications  Equipment;  provided that Landlord makes no  representation  regarding
the capacity of such risers.  In the event  additional  capacity is needed,  Tenant shall have the right to provide
such  additional  capacity,  subject to Landlord's  prior  written  approval of the methods and manner of providing
such additional capacity, which consent may be withheld in Landlord's reasonable discretion.

36.11    Tenant  hereby  agrees  to  comply  with all  regulations,  laws and  codes  applicable  to the use of its
Communications  Equipment,  including,  without  limitation,  FCC and OSHA regulations  relating to radio frequency
("RF")  emissions.  Further,  Tenant  represents  and warrants that the operation of the  Communications  Equipment
will not cause the Building  rooftop to violate the maximum  permissible  exposure  rules  established  by OSHA. At
Landlord's option based on reasonable  evidence of Tenant’s  violation of this paragraph,  Tenant shall (i) pay the
cost of a study of the Building  rooftop to ensure that  Tenant's use  pursuant to this  Section 36  will not cause
the rooftop to be in  violation of any RF  emissions  requirements,  which study shall be performed by a contractor
reasonably  approved by Landlord,  and (ii) take any steps required by any applicable  laws to cause the use of the
Communications  Equipment  to comply  with such  laws,  including  implementation  of an RF  safety  program  which
complies with all OSHA and FCC regulations.

37.      Tenant's Conditions  Precedent.  Tenant's  obligations under this Lease are subject to the satisfaction of
the following conditions by the following dates:

37.1     Title Policy.  Tenant's  receipt,  within five (5) business days following the full execution and delivery
of this Lease and a memorandum  thereof,  of a standard  coverage title insurance  policy from First American Title
Insurance Company insuring Tenant's  leasehold  interest in the Premises subject only to the exceptions  identified
on  Exhibit "I"  attached  hereto and such other matters that are  reasonably  acceptable  to Tenant.  Tenant shall
exercise its best efforts to cause the satisfaction of this condition by such date.

37.2     BofA  Consent.  Landlord  shall have  delivered  to Tenant,  by April 16, 2004,  evidence  that the tenant
under the BofA Lease has confirmed that the following  will not violate the  provisions of the BofA Lease:  (i) the
use of the Premises as a call center,  and the  operation  of a training  facility as a minor  component of another
primary use of the Premises and (ii) exterior signage using the name or logo of Tenant or Guarantor.

If either of the foregoing  conditions is not satisfied by the applicable date,  Tenant may terminate this Lease by
giving  Landlord  written  notice  thereof  within five (5) business  days  following  such date,  but prior to the
satisfaction of the applicable condition.

-39-

8875 Aero Drive
Midland Credit Management, Inc.

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

"TENANT"                                             MIDLAND CREDIT MANAGEMENT, INC.,
                                                     a Kansas corporation


                                                     * By:  /s/ Carl C. Gregory, III
                                                           Print Name:  Carl C. Gregory, III
                                                           Print Title: President


                                                       By:  /s/ Robin R. Pruitt
                                                           Print Name:  Robin R. Pruitt
                                                           Print Title: Sr. V.P. and General Counsel




"LANDLORD"                                           LBA REALTY FUND-HOLDING CO. I., LLC,
                                                     a Delaware limited liability company


                                                     By: /s/ Phil A. Belling
                                                          Print Name:  Phil A. Belling
                                                          Print Title: Authorized Signatory








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

*        NOTE:
If Tenant is a California corporation, then one of the following alternative requirements must be satisfied:
(A)      This Lease must be signed by two (2) officers of such corporation:  one being the chairman of the board,
         the president or a vice president, and the other being the secretary, an assistant secretary, the chief
         financial officer or an assistant treasurer.  If one (1) individual is signing in two (2) of the
         foregoing capacities, that individual must indicate the two (2) capacities.
(B)      If the requirements of (A) above are not satisfied, then Tenant shall deliver to Landlord a certified
         copy of a corporate resolution in the form reasonably acceptable to Landlord authorizing the
         signatory(ies) to execute this Lease.


If Tenant is a corporation  incorporated in a state other than California,  then Tenant shall deliver to Landlord a
certified  copy  of a  corporate  resolution  in  the  form  reasonably  acceptable  to  Landlord  authorizing  the
signatory(ies) to execute this Lease.

-40-

8875 Aero Drive
Midland Credit Management, Inc.

                                            ACKNOWLEDGMENT BY GUARANTOR

         By its  execution  hereof,  the  undersigned  agrees that,  with  respect to the periods  during which the
undersigned  occupies the Premises,  the provisions of  Sections 17,  20 and 22 of this Lease shall be binding upon
the undersigned as if the undersigned were Tenant.

                                                     ENCORE CAPITAL GROUP, INC.,
                                                     a Delaware corporation


                                                     By:  /s/ Carl C. Gregory, III
                                                          Print Name:  Carl C. Gregory, III
                                                          Print Title: CEO and President

-41-

8875 Aero Drive
Midland Credit Management, Inc.

EX-99

                                                                                                                        Exhibit 10.2

                                                            LEASE GUARANTY


         THIS LEASE GUARANTY  ("Guaranty") is made by Encore Capital Group, Inc., a Delaware corporation  ("Guarantor") in favor of LBA
–Realty  Fund–Holding  Co. I, LLC, a Delaware  limited  liability  company  ("Landlord")  in  connection  with that certain  lease dated
April 8, 2004  (the "Lease")  pursuant to which  Landlord is to lease to Midland  Credit  Management,  Inc., a Kansas  corporation
("Tenant") certain premises located in the Building at 8875 Aero Drive in San Diego, California  92123 (the "Premises").

         A.       Landlord  requires this Guaranty as a condition to its execution of the Lease and the  performance of the obligations
to be performed under the Lease by Landlord.

         B.       Guarantor has agreed to provide this Guaranty to induce  Landlord to enter into the Lease with Tenant and perform its
obligations under the Lease.

         In consideration of Landlord's agreement to execute the Lease and for other good and valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, Guarantor does hereby agree with Landlord as follows:

         1.       The Lease is hereby incorporated into and made a part of this Guaranty by this reference.

         2.       Guarantor hereby  unconditionally  guarantees,  as a primary obligor and not as a surety, without deduction by reason
of setoff,  defense or  counterclaim,  the full and punctual  payment of all sums of rent and other amounts payable under the Lease and
the full and punctual  performance  of all terms,  covenants  and  conditions  in the Lease to be kept,  performed  and/or  observed by
Tenant.  Guarantor's obligations under this Guaranty are continuing and unconditional.

         3.       Guarantor  hereby  agrees  that,  without the consent of or notice to  Guarantor  and  without  affecting  any of the
obligations  of  Guarantor  hereunder:  (a) the  Lease may be extended  and any other term,  covenant or  condition of the Lease may be
amended,  compromised,  released or otherwise  altered by Landlord and Tenant,  and Guarantor does guarantee and promise to perform all
the obligations of Tenant under the Lease as so extended, amended,  compromised,  released or altered; (b) any guarantor of or party to
the Lease may be released,  substituted or added;  (c) any right or remedy under the Lease may be exercised,  not exercised,  impaired,
modified,  limited,  destroyed, or suspended;  (d) Landlord or any other person may deal in any manner with Tenant, any guarantor,  any
party to the Lease or any other person;  (e) Landlord  may permit Tenant to holdover the Premises beyond the Lease Term; and (f) all or
any part of the Premises or of Tenant's rights or liabilities  under the Lease may be sublet,  assigned or assumed.  Without in any way
limiting the foregoing,  Guarantor  agrees not to unreasonably  withhold its consent to any sublease,  assignment of the Lease or other
modification of the Lease which is agreed to by Landlord and Tenant.

         4.       Guarantor  hereby waives and agrees not to assert or take advantage of: (a) any right to require  Landlord to proceed
against Tenant, or any other guarantor or person or to pursue any other security or remedy before  proceeding  against  Guarantor;  (b)
any defense based on the genuineness,  validity,  regularity or enforceability of the Lease; (c) any right or defense that may arise by
reason of the incapacity,  lack of authority,  death or disability of Tenant or any other person;  and (d) any right or defense arising
by reason of the absence, impairment,  modification,  limitation,  destruction or cessation (in bankruptcy, by an election of remedies,
or  otherwise)  of the  liability of Tenant,  of the  subrogation  rights of Guarantor or of the right of Guarantor to proceed  against
Tenant for  reimbursement.  Without  limiting the  generality  of the  foregoing,  Guarantor  hereby waives any and all benefits of the
provisions of Sections  2809,  2810 and 2845 of the  California  Civil Code and any similar or analogous  statutes of California or any
other jurisdiction.

-1-

         5.       Guarantor  hereby waives and agrees not to assert or take  advantage of (a) any right or defense based on the absence
of any or all presentments,  demands  (including  demands for  performance),  notices  (including  notices of any adverse change in the
financial status of Tenant,  notices of any other facts which increase the risk to Guarantor,  notices of  non-performance  and notices
of  acceptance of this  Guaranty)  and protests of each and every kind;  (b) the  defense of any statute of  limitations  in any action
under or related to this  Guaranty or the Lease;  (c) any right or defense based on a lack of diligence or failure or delay by Landlord
in enforcing  its rights under this Guaranty or the Lease;  and (d) any  other rights and defenses that are or may become  available to
Guarantor by reason of  Sections 2787  through 2855,  inclusive,  of the  California  Civil Code  (however with respect to  Guarantor's
rights under  Sections 2847,  2848 and 2849, the foregoing waiver shall be applicable only until all of Tenant's obligations under this
Lease are fully performed).

         6.       Guarantor  hereby  waives and agrees not to assert or take  advantage of any right to  (a) exoneration  if Landlord's
actions  shall  impair any  security or  collateral  of  Guarantor;  (b) until  all of Tenant's  obligations  under the Lease are fully
satisfied,  any security or collateral held by Landlord;  (c) require Landlord to proceed against or exhaust any security or collateral
before  proceeding  against  Guarantor;  (d) require  Landlord  to pursue any right or remedy for the  benefit  of  Guarantor.  Without
limiting the  generality of the  foregoing,  Guarantor  hereby waives any and all benefits of the  provisions  of Sections  2819,  2849
(until all of Tenant's  obligations  under the Lease as satisfied) and 2850 of the  California  Civil Code and any similar or analogous
statutes of California or any other jurisdiction.

         7.       Guarantor  shall not,  without the prior  written  consent of  Landlord,  commence,  or join with any other person in
commencing,  any bankruptcy,  reorganization  or insolvency  proceeding  against Tenant.  Guarantor's  obligations  under this Guaranty
shall in no way be affected by any  bankruptcy,  reorganization  or  insolvency  of Tenant or any successor or assignee of Tenant or by
any  disaffirmance  or abandonment of the Lease or any payment under this Guaranty by a trustee of Tenant in any bankruptcy  proceeding
including,  without  limitation,  any  impairment,  limitation,  or  modification of the liability of Tenant or the estate of Tenant in
bankruptcy,  or of any remedy for the enforcement of Tenant's  liability under the Lease resulting from the operation of any present or
future  provision of any federal or state  bankruptcy or insolvency  law or other statute or from the decision of any court.  Guarantor
shall file in any  bankruptcy  or other  proceeding  in which the filing of claims is required  or  permitted  by law all claims  which
Guarantor  may have  against  Tenant  relating to any  indebtedness  of Tenant to  Guarantor  and will assign to Landlord all rights of
Guarantor  thereunder.  Landlord  shall have the sole right to accept or reject any plan  proposed in such  proceeding  and to take any
other action which a party filing a claim is entitled to do. In all such cases,  whether in  administration,  bankruptcy  or otherwise,
the person or persons  authorized  to pay such claim  shall pay to  Landlord  the amount  payable on such claim and, to the full extent
necessary for that purpose,  Guarantor  hereby assigns to Landlord all of Guarantor's  rights to any such payments or  distributions to
which Guarantor would otherwise be entitled;  provided,  however, that Guarantor's  obligations hereunder shall not be satisfied except
to the extent that Landlord  receives  cash by reason of any such payment or  distribution.  If Landlord  receives  anything  hereunder
other than cash, the same shall be held as collateral for amounts due under this Guaranty.

         8.       Until all the  Tenant's  obligations  under the Lease are  fully  performed,  Guarantor:  (a) shall  have no right of
subrogation or  reimbursement  against the Tenant by reason of any payments or acts of  performance  by Guarantor  under this Guaranty;
(b) subordinates  any  liability or  indebtedness  of the Tenant now or hereafter  held by Guarantor to the  obligations  of the Tenant
under,  arising out of or related to the Lease or Tenant's use of the Premises;  and (c) acknowledges  that the actions of Landlord may
affect or eliminate  any rights of  subrogation  or  reimbursement  of Guarantor as against  Tenant  without any  liability or recourse
against  Landlord.  Without  limiting the  generality of the  foregoing,  until all of Tenant's  obligations  under the Lease are fully
satisfied,  Guarantor  hereby  waives any and all benefits of the  provisions  of  Section 2848  of the  California  Civil Code and any
similar or analogous statutes of California or any other jurisdiction.

-2-

         9.       Prior to the  execution  of this  Guaranty  and at any time  during the Term of the Lease upon thirty (30) days prior
written notice from Landlord (but no more often than once in any calendar year),  Guarantor  agrees to provide  Landlord with a current
financial  statement  for  Guarantor.  Guarantor's  financial  statements  are to be prepared in  accordance  with  generally  accepted
accounting  principles.  Guarantor  represents and warrants that all such financial  statements shall be true and correct statements of
Guarantor's  financial  condition.  Notwithstanding  the  foregoing,  Guarantor  shall not be required  to provide  any such  financial
statements so long as its financial statements are publicly available.

         10.      The liability of Guarantor and all rights,  powers and remedies of Landlord  hereunder and under any other  agreement
now or at any time  hereafter in force between  Landlord and Guarantor  relating to the Lease shall be cumulative  and not  alternative
and such rights, powers and remedies shall be in addition to all rights, powers and remedies given to Landlord by law.

         11.      This Guaranty  applies to, inures to the benefit of and binds all parties hereto,  their heirs,  devisees,  legatees,
executors,  administrators,  representatives,  successors  and assigns.  This  Guaranty may be assigned by Landlord  voluntarily  or by
operation of law.

         12.      This Guaranty shall  constitute the entire agreement  between  Guarantor and the Landlord with respect to the subject
matter  hereof.  No provision of this Guaranty or right of Landlord  hereunder may be waived nor may any guarantor be released from any
obligation  hereunder  except by a writing duly  executed by an  authorized  officer,  director or trustee of  Landlord.  The waiver or
failure to enforce any  provision of this  Guaranty  shall not operate as a waiver of any other  breach of such  provision or any other
provisions  hereof.  No course of dealing  between  Landlord and Tenant shall alter or affect the  enforceability  of this  Guaranty or
Guarantor's obligations hereunder.

         13.      Guarantor hereby agrees to indemnify,  protect, defend and hold Landlord harmless from and against, all losses, costs
and expenses including,  without limitation, all interest, default interest,  post-petition bankruptcy interest and other post-petition
obligations,  late  charges,  court  costs and  attorneys'  fees,  which may be suffered  or  incurred  by  Landlord  in  enforcing  or
compromising any rights under this Guaranty or in enforcing or compromising the performance of Tenant's obligations under the Lease.

         14.      The term "Landlord"  whenever  hereinabove used refers to and means the Landlord in the foregoing Lease  specifically
named and also any assignee of said Landlord,  whether by outright assignment or by assignment for security,  and also any successor to
the interest of said  Landlord or of any assignee of such Lease or any part  thereof,  whether by  assignment  or  otherwise.  The term
"Tenant" whenever  hereinabove used refers to and means the Tenant in the foregoing Lease  specifically  named and also any assignee or
subtenant  of said Lease and also any  successor  to the  interests  of said  Tenant,  assignee or  sublessee of such Lease or any part
thereof,  whether by assignment,  sublease or otherwise  including,  without  limitation,  any trustee in bankruptcy and any bankruptcy
estate of Tenant, Tenant's assignee or sublessee.

         15.      If any or all Guarantors  shall become  bankrupt or insolvent,  or any  application  shall be made to have any or all
Guarantors  declared bankrupt or insolvent,  or any or all Guarantors shall make an assignment for the benefit of creditors,  or any or
all  Guarantors  shall enter into a proceeding  for the  dissolution  of marriage,  or in the event of death of any or all  Guarantors,
notice of such  occurrence  or event shall be promptly  furnished to Landlord by such  Guarantor or such  Guarantor's  fiduciary.  This
Guarantee  shall extend to and be binding upon each  Guarantor's  successors and assigns,  including,  but not limited to,  trustees in
bankruptcy and Guarantor's estate.

-3-

         16.      Any notice,  request,  demand,  instruction or other  communication  to be given to any party  hereunder  shall be in
writing and sent by registered or certified  mail,  return  receipt  requested in accordance  with the notice  provisions of the Lease.
The Tenant  shall be deemed  Guarantor's  agent for service of process and notice to  Guarantor  delivered to the Tenant at the address
set forth in the Lease shall  constitute  proper  notice to  Guarantor  for all  purposes.  Notices to Landlord  shall be  delivered to
Landlord's  address set forth in the Lease.  Landlord,  at its election,  may provide an additional  notice to Guarantor at the address
provided under Guarantor's signature below.

         17.      If either party hereto  participates  in an action against the other party arising out of or in connection  with this
Guaranty,  the  prevailing  party shall be entitled to have and recover from the other party  reasonable  attorneys'  fees,  collection
costs and other costs incurred in and in  preparation  for the action.  Guarantor  hereby waives any right to trial by jury and further
waives and  agrees not to assert or take  advantage  of any  defense  based on any claim that any  arbitration  decision  binding  upon
Landlord and Tenant is not binding upon Guarantor.

         18.      Guarantor  agrees that all questions  with respect to this  Guaranty  shall be governed by, and decided in accordance
with, the laws of the State of California.

         19.      Should  any one or more  provisions  of this  Guaranty  be  determined  to be  illegal  or  unenforceable,  all other
provisions shall nevertheless be effective.

         20.      Time is strictly of the essence under this Guaranty and any amendment, modification or revision hereof.

         21.      If more than one person signs this  Guaranty,  each such person shall be deemed a guarantor and the obligation of all
such  guarantors  shall be joint and several.  When the context and  construction  so requires,  all words used in the singular  herein
shall be deemed to have been used in the  plural.  The word  "person"  as used  herein  shall  include an  individual,  company,  firm,
association, partnership, corporation, trust or other legal entity of any kind whatsoever.

         22.      If Guarantor is a corporation,  each individual executing this Guaranty on behalf of said corporation  represents and
warrants  that he is duly  authorized  to execute and deliver this Guaranty on behalf of said  corporation,  in accordance  with a duly
adopted  resolution of the Board of Directors of said corporation or in accordance with the by-laws of said corporation,  and that this
Guaranty is binding upon said  corporation in accordance with its terms. If Guarantor is a corporation,  Landlord,  at its option,  may
require  Guarantor to  concurrently,  with the execution of this Guaranty,  deliver to Landlord a certified copy of a resolution of the
Board of Directors of said corporation authorizing or ratifying the execution of this Guaranty.

-4-

         THE UNDERSIGNED HAS READ AND UNDERSTANDS THE TERMS AND CONDITIONS  CONTAINED IN THIS GUARANTY  INCLUDING,  WITHOUT LIMITATION,
ALL WAIVERS CONTAINED IN THIS GUARANTY.

Executed as of the date of the Lease.

                                                           ENCORE CAPITAL GROUP, INC.,
                                                           a Delaware corporation


                                                           * By:  /s/ Carl C. Gregory, III
                                                                Print Name:  Carl C. Gregory, III
                                                                Print Title: CEO and President


                                                           * By:  /s/ Robin R. Pruitt
                                                                Print Name:  Robin R. Pruitt
                                                                Print Title: Sr. V.P. and General Counsel

                                                           Address of Guarantor:
                                                           Before Tenant’s occupancy of the Premises:
                                                           Encore Capital Group, Inc.
                                                           5775 Roscoe Court
                                                           San Diego, CA  92123
                                                           Attention:  General Counsel

                                                           After Tenant’s occupancy of the Premises:
                                                           Encore Capital Group, Inc.
                                                           8875 Aero Drive
                                                           San Diego, CA  92123
                                                           Attention:  General Counsel






- -------------------------
       **NOTE:
                If Guarantor is a California corporation, then one of the following alternative requirements must be satisfied:
       (A)      This Guaranty must be signed by two (2) officers of such corporation: one being the chairman of the board, the president or
                a vice president, and the other being the secretary, an assistant secretary, the chief financial officer or an assistant
                treasurer.  If one (1) individual is signing in two (2) of the foregoing capacities, that individual must so indicate.
       (B)      If the requirements of (A) above are not satisfied, then Guarantor shall deliver to Landlord evidence reasonably acceptable
                to Landlord that the signatory(ies) is (are) authorized to execute this Guaranty.
       If Guarantor is a corporation incorporated in a state other than California, then Guarantor shall deliver to Landlord evidence
                reasonably acceptable to Landlord that the signatory(ies) is (are) authorized to execute this Guaranty.

-5-