PROSOFT DEVELOPMENT INC, S-1/A, 1996-09-16

PROSOFT DEVELOPMENT INC
S-1/A, 1996-09-16
EDUCATIONAL SERVICES

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<PAGE>

As filed with the Securities and Exchange Commission on September 16, 1996
Registration No. 333-11247

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
PROSOFT DEVELOPMENT, INC.
(Exact Name of Registrant as Specified in Its Charter)

7100 KNOTT AVENUE
BUENA PARK, CALIFORNIA 90620
(714) 562-8282
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Executive Offices)

<TABLE>
<S> <C> <C>
NEVADA 8243 87-0448639
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
Incorporation or Organization) Classification Code Number)
</TABLE>

KEITH D. FREADHOFF
CHIEF EXECUTIVE OFFICER
PROSOFT DEVELOPMENT, INC.
7100 KNOTT AVENUE
BUENA PARK, CALIFORNIA 90620
(714) 562-8282
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
____________________
COPY TO:
WILLIAM L. TWOMEY
HEWITT & MCGUIRE, LLP
19900 MACARTHUR BOULEVARD, SUITE 1050
IRVINE, CALIFORNIA 92612
____________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the Registration Statement becomes effective.
____________________
If only the securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]

If this Form is filed to register additional securities for an Offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same Offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same Offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT
TO SAID SECTION 8(a), MAY DETERMINE.
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered. All of the amounts
shown are estimates, except the Securities and Exchange Commission registration
and NASDAQ filing fees.

Securities and Exchange Commission
registration fee....................... $22,193
NASDAQ listing fee...................... $ *
Accounting fees and expenses............ $ *
Printing and engraving expenses......... $ *
Transfer agent and registrar (fees and
expenses).............................. $ *
Blue sky fees and expenses (including
counsel fees).......................... $ *
Other legal fees and legal expenses..... $ *
Miscellaneous expenses.................. $ *
Total.............................. $ *
- --------------------
* To be supplied by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Nevada Private Corporation Law ("NPCL") provides that a corporation may
indemnify any person who was or is a party or is threatened to be made a party,
by reason of the fact that such person was an officer or director of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, to (x) any action or suit by or in the right
of the corporation against expenses, including amounts paid in settlement and
attorneys' fees, actually and reasonably incurred, in connection with the
defense or settlement believed to be in, or not opposed to, the best interests
of the corporation, except that indemnification may not be made for any claim,
issue or matter as to which such a person has been adjudged by a court of
competent jurisdiction to be liable to the corporation or for amounts paid in
settlement to the corporation and (y) any other action or suit or proceeding
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement, actually and reasonably incurred, if he or she acted in good
faith and in a manner which he or she reasonably believed to be in, or not
opposed to, reasonable cause to believe his or her conduct was unlawful. To the
extent that a director, officer, employee or agent has been "successful on the
merits or otherwise" the corporation must indemnify such person. The articles
of incorporation or bylaws may provide that the expenses of officers and
directors incurred in defending any such action must be paid as incurred and in
advance of the final disposition of such action. The

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<PAGE>

NPCL also permits the corporation to purchase and maintain insurance on behalf
of the corporation's Directors and officers against any liability arising out of
their Status as such, whether or not the corporation would have the power to
indemnify him against such liability. These provisions may be sufficiently broad
to indemnify such persons for liabilities arising under the Securities Act.

The Company's Restated Articles of Incorporation provide that the Company
shall indemnify any director or officer of the Company in connection with
certain actions, suits or proceedings, against expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred. The Company is also required to pay any expenses incurred by a
director or officer in defending the Company or its stockholders for damages for
breach of fiduciary duty as a director or officer, provided that such a
provision must not eliminate or limit the liability of a director or officer
for: (a) acts or omissions which involve intentional misconduct, fraud or a
knowing violation of law; or (b) the payment of illegal distributions. The
Company's Restated Articles of Incorporation include a provision eliminating the
personal liability of directors for breach of fiduciary duty except that such
provision will not eliminate or limit any liability which may not be so
eliminated or limited under applicable law.

The Company's Bylaws generally require the Company to indemnify, as well as to
advance expenses, to its directors and its officers to the fullest extent
permitted by Nevada Law upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it should be ultimately determined
that they are not entitled to indemnification by the Company. The Company has
also entered into indemnification agreements with its directors and officers
which similarly provide for the indemnification and advancement of expenses by
the Company.

The Company maintains liability insurance for its directors and officers
covering, subject to certain exceptions, any actual or alleged negligent act,
error, omission, misstatement, misleading statement, neglect or breach of duty
by such directors or officers, individually or collectively, in the discharge of
their duties in their capacity as directors or officers of the Company.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

The following securities of the Company have been sold by the Company during
the past three years without registration under the Securities Act of 1933, as
amended (the "Act").

In February 1995, the Company issued 100,000 shares for $1,500 to one
investor. No commissions were paid in connection with this issuance. The
Company believes the foregoing sale was exempt from the registration
requirements of the Act in reliance on the exemption contained in Section 4(2)
of the Act.

In March 1996, the Company entered into the Reorganization Agreement with Old
ProSoft and the Old ProSoft stockholders. Under the terms of the Reorganization
Agreement, Old ProSoft stockholders received one share of Common Stock of the
Company in exchange for each of their shares of Old ProSoft, and Old ProSoft
became a wholly-owned subsidiary of the Company. An aggregate of 4,726,250
shares were issued to the 76 Old ProSoft stockholders in the Reorganization and
the Old ProSoft stockholders ended up owning approximately 90% of the Company
immediately after the Reorganization. No commissions were paid in connection
with such issuance. The

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<PAGE>

Company believes that the issuance of Common Stock to the Old ProSoft
stockholders was exempt from the registration requirements of the Act in
reliance on the exemption contained in Section 4(2) of the Act.

In March 1996, the Company issued 25,000 shares to a consultant in
consideration for services rendered. The Company believes the foregoing
issuance was exempt from the registration requirements of the Act in reliance on
the exemption contained in Section 4(2) of the Act.

In April and May of 1996, the Company issued and sold 430,462 shares of Common
Stock at $3.50 per share and warrants to purchase 143,473 shares of Common Stock
at $5.00 per share to 30 investors in a private offering (the "$3.50 Private
Placement"). This offering was made on a private basis only to persons who were
"accredited investors" as defined in Securities Act Rule 501(a). No commissions
were paid in connection with the $3.50 Private Placement. The Company believes
the foregoing sales were exempt from the registration requirement of the Act in
reliance on the exemption contained in Section 4(2) of the Act and/or Regulation
D promulgated thereunder.

In connection with the $3.50 Private Placement, the Company issued warrants to
purchase an aggregate of 22,988 shares to two sophisticated individuals as
payment of finders' fees. The Company believes that the foregoing issuances
were exempt from the registration requirement of the Act in reliance on the
exemption contained in Section 4(2) of the Act.

In June and July of 1996, an aggregate of 840,000 shares were issued to 26
stockholders of the Company upon exercise of warrants to purchase Common Stock
by those stockholders. The warrants were originally acquired by the
stockholders in a private placement by Old ProSoft and became warrants to
purchase Common Stock of the Company as part of the Reorganization. Each of the
individuals exercising warrants was an accredited investor. The Company
believes the foregoing sales were exempt from the registration requirements of
the Act in reliance on the exemption contained in Section 4(2) of the Act.

In June 1996, 50,000 shares of Common Stock were issued to a stockholder of
the Company upon exercise of a warrant which was originally received by the
stockholder in consideration for services performed for Old ProSoft. The
warrant became a warrant to purchase Common Stock of the Company as part of the
Reorganization. The Company believes the foregoing issuance was exempt from the
registration requirements of the Act in reliance on the exemption contained in
Section 4(2) of the Act.

In June through August 1996, the Company issued an aggregate of 71,832 shares
to 16 stockholders of the Company upon exercise of warrants acquired in the
$3.50 Private Placement. Each of the individuals exercising warrants was an
accredited investor. The Company believes the foregoing sales were exempt from
the registration requirements of the Act in reliance on the exemption contained
in Section 4(2) of the Act.

During April 1996 through July 1996, the Company, pursuant to its 1996 Stock
Option Plan, issued options to purchase 667,500 shares of Common Stock to
certain of its employees and consultants, with exercise prices ranging from
$3.50 to $20.00 per share. None of these options has

II-3
<PAGE>

been exercised. The Company believes the foregoing issuances were exempt from
the registration requirements of the Act in reliance on the exemption contained
in Section 4(2) of the Act and by virtue of Rule 701 promulgated under the Act.

In July through August 1996, the Company issued and sold 727,000 shares of
Common Stock at $10.00 per share to 35 investors in a private offering (the
"$10.00 Private Placement"). This offering was made on a private basis only to
persons who were "accredited investors" as defined in Securities Act Rule
501(a). No commissions were paid in connection with the $10.00 Private
Placement. The Company believes the foregoing sales were exempt from the
registration requirement of the Act in reliance on the exemption contained in
Section 4(2) of the Act and/or Regulation D promulgated thereunder.

In connection with the $10.00 Private Placement, in August 1996 the Company
issued a warrant to purchase an aggregate of 120,000 shares to one sophisticated
individual as payment of finders' fees. The Company believes that the foregoing
issuance was exempt from the registration requirement of the Act in reliance on
the exemption contained in Section 4(2) of the Act.

In August 1996, the Company issued an option to purchase 50,000 shares to a
consultant to the Company. The Company believes that the foregoing issuance was
exempt from the registration requirement of the Act in reliance on the exemption
contained in Section 4(2) of the Act.

In August 1996, 1,200 shares were issued to a stockholder of the Company at
$5.00 per share upon exercise of a warrant issued in the $3.50 Private
Placement. The individual exercising the warrant was an accredited investor.
The Company believes the foregoing sale was exempt from the registration
requirement of the Act in reliance on the exemption contained in Section 4(2) of
the Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Index of Exhibits

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<PAGE>

<TABLE>
<CAPTION>
Exhibit No. Description of Exhibits
- ----------- ---------------------------------------
<S> <C>
10.5 Form of Registration and Lock-Up Agreement, dated September __,
1996, between the Company and certain of the Selling
Stockholders/*/
10.6 Microsoft\Internet Contract Teaching Agreement dated as of
April 29, 1996 between the Company and Merisel, Inc.
10.7 Strategic Relationship Agreement dated as of June 25, 1996
between the Company and Innovus Corporation
10.8 Lease dated September 29, 1995 between Douglas E. Hartman dba
Professional Development Institute and Steven R. Layton, as
Receiver
10.9 Xerox Order Agreement dated September 26, 1995 between
Professional Development Institute and Xerox Corporation
10.10 Term Lease Master Agreement dated as of April 19, 1996 between
Pro-Soft Development Corp. and IBM Credit Corporation
10.11 Lease Agreement dated as of June 21, 1996 between Pro-Soft
Development Corp. and Sanwa Leasing Corporation
10.12 Promissory Notes dated July 3, 1996 and July 31, 1996 made by
Keith Freadhoff in favor of the Company**
10.13 Form of Indemnification Agreement between the Company and its
Directors and Officers**
21 Subsidiaries of the Company**
23.1 Consent of Ernst & Young, LLP**
23.2 Consent of Kelly & Company**
23.3 Consent of Hewitt & McGuire, LLP (included in the opinion filed
as Exhibit 5)*
24 Power of Attorney**
27 Financial Data Schedule**
</TABLE>

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:

(i) To include any Prospectus required by section
10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the Prospectus any facts or
events arising after the effective date of the
Registration Statement (or the most recent
post-effective amendment

- --------------------
* To be filed by amendment.

** Previously filed.
II-5
<PAGE>

thereof) which, individually, or in the
aggregate, represent a fundamental change in
the information set forth in the Registration
Statement; notwithstanding the foregoing, any
increase or decrease in volume of securities
offered (if the total dollar value of
securities offered would not exceed that which
was registered) and any deviation from the low
or high end of the estimated maximum Offering
range may be reflected in the form of
prospectus filed with the Commission pursuant
to Rule 424(b) (230.424(b) of this Chapter) if,
in the aggregate, the changes in volume and
price represent no more than a 20% change in
the maximum aggregate Offering price set forth
in the "Calculation of Registration Fee" table
in the effective registration statement; and

(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the Offering of such
securities at that time shall be deemed to be the initial bona
fide Offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the Offering.

Insofar as indemnification for liabilities arising from the Securities Act of
1933 (the "Act") may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

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<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this Amendment to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Buena Park,
State of California on the 16th day of September, 1996.

PROSOFT DEVELOPMENT, INC.

By: /s/ Keith D. Freadhoff
-----------------------------
Keith D. Freadhoff,
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment to
Registration Statement has been signed below by the following persons on behalf
of the Company in the capacities and on the dates indicated.

Signature Capacity Date
--------- -------- ----
<S> <C> <C>

/s/ Keith D. Freadhoff*
- ----------------------------- Chief Executive Officer and September 16, 1996
Keith D. Freadhoff Chairman of the Board
(Principal Executive Officer)

/s/ Donald L. Danks*
- ----------------------------- President and Director September 16, 1996
Donald L. Danks

/s/ Brooks A. Corbin*
- ----------------------------- Chief Financial Officer September 16, 1996
Brooks A. Corbin (Principal Financial and
Accounting Officer)

/s/ William E. Richardson*
- ----------------------------- Director September 16, 1996
William E. Richardson
</TABLE>

*By /s/ Eric E. Richardson
- -----------------------------
Eric E. Richardson
Attorney-in-fact

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<PAGE>

EXHIBIT INDEX

Exhibit No. Description of Exhibits
- ----------- ---------------------------------------
<S> <C>
2 Agreement and Plan of Reorganization, dated March 26, 1996,
between the Company, Pro-Soft Development Corp. and the
shareholders of Pro-Soft Development Corp.
3.1 Restated Articles of Incorporation of the Company**
3.2 Bylaws of the Company**
4 Specimen Stock Certificate**
5 Opinion of Hewitt & McGuire, LLP*
10.1 Pro-Soft Development Corp. 1996 Stock Option Plan**
10.2 ProSoft Development, Inc. 1996 Stock Option Plan**
10.3 Stock and Warrant Purchase Agreement, dated April 15, 1996, by
and among the Company, Donald L. Danks, Keith D. Freadhoff,
Douglas Hartman and various investors**
10.4 Form of Subscription Agreement, entered into in July and August
1996, between the Company and various investors**
10.5 Form of Registration and Lock-Up Agreement, dated September __,
1996, between the Company and certain of the Selling
Stockholders/*/
10.6 Microsoft\Internet Contract Teaching Agreement dated as of
April 29, 1996 between the Company and Merisel, Inc.
10.7 Strategic Relationship Agreement dated as of June 25, 1996
between the Company and Innovus Corporation
10.8 Lease dated September 29, 1995 between Douglas E. Hartman dba
Professional Development Institute and Steven R. Layton, as
Receiver
10.9 Xerox Order Agreement dated September 26, 1995 between
Professional Development Institute and Xerox Corporation
10.10 Term Lease Master Agreement dated as of April 19, 1996 between
Pro-Soft Development Corp. and IBM Credit Corporation
10.11 Lease Agreement dated as of June 21, 1996 between Pro-Soft
Development Corp. and Sanwa Leasing Corporation
10.12 Promissory Notes dated July 3, 1996 and July 31, 1996 made by
Keith Freadhoff in favor of the Company**
10.13 Form of Indemnification Agreement between the Company and its
Directors and Officers**
21 Subsidiaries of the Company**
23.1 Consent of Ernst & Young, LLP**
23.2 Consent of Kelly & Company**
23.3 Consent of Hewitt & McGuire, LLP (included in the opinion filed
as Exhibit 5)*
24 Power of Attorney**
27 Financial Data Schedule**
</TABLE>

- --------------------
* To be filed by amendment.

** Previously filed.

<PAGE>

EXHIBIT 2

AGREEMENT AND PLAN OF REORGANIZATION

This Agreement and Plan of Reorganization ("the Agreement"), dated as of
the 26th day of March, 1996, by and between Tel-Fed, Inc., a Nevada corporation
("Tel-Fed") and ProSoft Development Corp., a California corporation ("ProSoft")
and the shareholders of ProSoft ("Shareholders"), set forth on Exhibit A of this
Agreement and the Investment Letter as set forth in Exhibit B of this Agreement,
with reference to the following:

A. Tel-Fed is a Nevada corporation organized on May 14, 1985. Tel-
Fed has authorized capital stock of 50,000,000 shares, $.001 par value, of
which 7,200,000 shares are outstanding. Tel-Fed conducted a public
offering in which it sold 2,500,000 shares of its previously authorized,
but unissued common stock, pursuant to an offering under Section 3(a)(11)
and Rule 147, promulgated under the Securities Act of 1933. The common
shares of Tel-Fed are traded on the OTC Bulletin Board under the symbol
TLFD.

B. ProSoft is a privately held corporation organized under the laws
of the state of California, in December 1995.

C. The respective Boards of Directors of Tel-Fed and ProSoft have
deemed it advisable and in the best interests of Tel-Fed and ProSoft that
ProSoft be acquired by Tel-Fed, pursuant to the terms and conditions set
forth in this Agreement.

D. Tel-Fed and ProSoft propose to enter into this Agreement which
provides among other things that all of the outstanding shares of ProSoft
be acquired by Tel-Fed, in exchange for shares of Tel-Fed as more fully
described in the Agreement.

E. The parties desire the transaction to qualify as a tax-free
reorganization under Section 368 (a)(1)(B) of the Internal Revenue Code of
1986, as amended.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE 1
THE ACQUISITION

1.01 At the Closing, up to a total of 4,473,500 common shares, which
represents all of the outstanding shares of ProSoft, shall be acquired by Tel-
Fed in exchange for 4,473,500 shares. All shares of Tel-Fed shall be issued to
ProSoft shareholders as directed by ProSoft at the Closing.

1.02 At the Closing, ProSoft shareholders will deliver certificates for
the outstanding shares of ProSoft, duly endorsed so as to make Tel-Fed the sole
holder thereof, free and clear

<PAGE>

of all claims and encumbrances and Tel-Fed shall deliver a transmittal letter
directed to the transfer agent of Tel-Fed directing the issuance of shares to
the shareholders of ProSoft as set forth on the signature page of this
Agreement.

1.03 Following the reorganization, and reverse split of shares, there will
be a total of 5,068,750 shares, $.001 par value, issued and outstanding in Tel-
Fed.

ARTICLE 2
THE CLOSING

2.01 The consummation of the transactions contemplated by this Agreement
(the "Closing") shall take place in the offices of ProSoft Development Corp.,
7100 Knott Avenue, Buena Park, California 90620, at 10:00 a.m., on, March __,
1996 (the "Closing Date") or at such other place or date and time as may be
agreed to in writing by the parties hereto.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF TEL-FED

Tel-Fed and its officers and directors hereby represent and warrant to
ProSoft as follows:

3.01 Tel-Fed shall deliver to ProSoft, on or before Closing, each of the
following:

(a) Financial Statements. Audited financial statements of Tel-Fed
including, but not limited to, balance sheets and profit and loss
statements as of December 31, 1993 and through December 31, 1995 prepared
in accordance with generally accepted accounting principles which fairly
present the financial condition of Tel-Fed at the dates thereof. (Schedule
A.)

(b) Property. An accurate list and description of all property, real
or personal, owned by Tel-Fed of a value equal to or greater than
$1,000.00. (Schedule B.)

(c) Liens and Liabilities. A complete and accurate list of all
material liens, encumbrances, easements, security interests or similar
interests in or on any of the assets listed on Schedule A. (Schedule C.)
A complete and accurate list of all debts, liabilities and obligations of
Tel-Fed incurred or owing as of the date of this Agreement. (Schedule
C.1.)

(d) Leases and Contracts. A complete and accurate list describing
all material terms of each lease (whether of real or personal property) and
each contract, promissory note, mortgage, license, franchise, or other
written agreement to which Tel-Fed is a party which involves or can
reasonably be expected to involve aggregate future payments or receipts by
Tel-Fed (whether by the terms of such lease, contract, promissory note,

2
<PAGE>

license, franchise or other written agreement or as a result of a guarantee
of the payment of or indemnity against the failure to pay same) of
$1,000.00 or more annually during the twelve-month period ended December
31, 1995, or any consecutive twelve-month period thereafter, except any of
said instruments which terminate or are cancelable without penalty during
such twelve-month period. (Schedule D.)

(e) Loan Agreements. Complete and accurate copies of all loan
agreements and other documents with respect to obligations of Tel-Fed for
the repayment of borrowed money. (Schedule E.)

(f) Consents Required. A complete list of all agreements wherein
consent to the transaction herein contemplated is required to avoid a
default thereunder; or where notice of such transaction is required at or
subsequent to closing, or where consent to an acquisition, consolidation,
or sale of all or substantially all of the assets is required to avoid a
default thereunder. (Schedule F.)

(g) Articles and Bylaws. Complete and accurate copies of the
Certificate and Articles of Incorporation and Bylaws of Tel-Fed together
with all amendments thereto to the date hereof. (Schedule G.)

(h) Shareholders. A complete list of all persons or entities holding
capital stock of Tel-Fed or any rights to subscribe for, acquire, or
receive shares of the capital stock of Tel-Fed (whether warrants, calls,
options, or conversion rights), including copies of all stock option plans
whether qualified or nonqualified, and other similar agreements. (Schedule
H.)

(i) Officers and Directors. A complete and current list of all
officers and Directors of Tel-Fed. (Schedule I.)

(j) Salary Schedule. A complete and accurate list (in all material
respects) of the names and the current salary rate for each present
employee of Tel-Fed who received $1,000.00 or more in aggregate
compensation from Tel-Fed whether in salary, bonus or otherwise, during the
year 1995, or who is presently scheduled to receive from Tel-Fed a salary
in excess of $1,000.00 during the year ending December 1996, including in
each case the amount of compensation received or scheduled to be received,
and a schedule of the hourly rates of all other employees listed according
to departments. (Schedule J.)

(k) Litigation. A complete and accurate list (in all material
respects) of all material civil, criminal, administrative, arbitration or
other such proceedings or investigations (including without limitations
unfair labor practice matters, labor organization activities, environmental
matters and civil rights violations) pending or, to

3
<PAGE>

the knowledge of Tel-Fed threatened, which may materially and adversely
affect Tel-Fed. (Schedule K.)

(l) Tax Returns. Accurate copies of all Federal and State tax
returns for Tel-Fed for the last fiscal year. (Schedule L.)

(m) Agency Reports. Copies of all material reports or filings (and a
list of the categories of reports or filings made on a regular basis) made
by Tel-Fed under ERISA, EEOC, FDA and all other governmental agencies
(federal, state or local) during the last fiscal year. (Schedule M.)

(n) Banks. A true and complete list (in all material respects), as
of the date of this Agreement, showing (1) the name of each bank in which
Tel-Fed has an account or safe deposit box, and (2) the names and addresses
of all signatories. (Schedule N.)

(o) Jurisdictions Where Qualified. A list of all jurisdictions
wherein Tel-Fed is qualified to do business and is in good standing.
(Schedule O.)

(p) Subsidiaries. A complete list of all subsidiaries of Tel-Fed.
(Schedule P.) The term "Subsidiary" or "Subsidiaries" shall include
corporations, unincorporated associations, partnerships, joint ventures, or
similar entities in which Tel-Fed has an interest, direct or indirect.

(q) Union Matters. An accurate list and description (in all material
respects) of all union contracts and collective bargaining agreements of
Tel-Fed, if any. (Schedule Q.)

(r) Employee and Consultant Contracts. A complete and accurate list
of all employee and consultant contracts which Tel-Fed may have, other than
those listed in the schedule on Union Matters. (Schedule R.)

(s) Employee Benefit Plans. Complete and accurate copies of all
salary, stock options, bonus, incentive compensation, deferred
compensation, profit sharing, retirement, pension, group insurance,
disability, death benefit or other benefit plans, trust agreements or
arrangements of Tel-Fed in effect on the date hereof or to become effective
after the date thereof, together with copies of any determination letters
issued by the Internal Revenue Service with respect thereto. (Schedule S.)

(t) Insurance Policies. A complete and accurate list (in all
material respects) and a description of all material insurance policies
naming Tel-Fed as an insured or beneficiary or as a loss payable payee or
for which Tel-Fed has paid all or part of the premium in force on the date
hereof, specifying any notice or other information

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possessed by Tel-Fed regarding possible claims thereunder, cancellation
thereof or premium increases thereon, including any policies now in effect
naming Tel-Fed as beneficiary covering the business activities of Tel-Fed.
(Schedule T.)

(u) Customers. A complete and accurate list (in all material
respects) of the customers of Tel-Fed, including all presently effective
contracts of Tel-Fed, accounting for the principle revenues of Tel-Fed,
indicating the dollar amounts of gross revenues of each such customer for
the period ending December 31, 1995. (Schedule U.)

(v) Licenses and Permits. A complete list of all licenses, permits
and other authorizations of Tel-Fed. (Schedule U.)

3.02 Organization, Standing and Power. Tel-Fed is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada with all requisite corporate power to own or lease its properties and
carry on its businesses as are now being conducted.

3.03 Qualification. Tel-Fed is duly qualified and is licensed as a
foreign corporation authorized to do business in each jurisdiction wherein it
conducts its business operations. Such jurisdictions, which are the only
jurisdictions in which Tel-Fed is duly qualified and licensed as a foreign
corporation, are shown in Schedule O.

3.04 Capitalization of Tel-Fed. The authorized capital stock of Tel-Fed
consists of 50,000,000 shares of Common Stock, $.001 par value, of which the
only shares issued and outstanding are 7,200,000 issued to shareholders listed
on Schedule H, which shares were duly authorized, validly issued and fully paid
and nonassessable. There are no preemptive rights with respect to the Tel-Fed
stock.

3.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate actions, including but not limited to duly and
validly authorized action and approval by the Board of Directors, on the part of
Tel-Fed. This Agreement constitutes the valid and binding obligation of Tel-Fed
enforceable against it in accordance with its terms, subject to the principles
of equity applicable to the availability of the remedy of specific performance.
This Agreement has been duly executed by Tel-Fed and the execution and delivery
of this Agreement and the consummation of the transactions contemplated by this
Agreement shall not result in any breach of any terms or provisions of Tel-Fed's
Certificate and Articles of Incorporation or Bylaws or of any other agreement,
court order or instrument to which Tel-Fed is a party or bound by.

3.06 Absence of Undisclosed Liabilities. Tel-Fed has no material
liabilities of any nature, whether fixed, absolute, contingent or accrued, which
were not reflected on the financial statements set forth in Schedule A or
otherwise disclosed in this Agreement or any of the

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Schedules or Exhibits attached hereto. As of the Closing, Tel-Fed shall have no
assets or liabilities other than those resulting from the acquisition of
ProSoft.

3.07 Absence of Changes. Since December 31, 1995 there has not been any
material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business of Tel-Fed, except for changes resulting from
completion of those transactions described in Section 5.01.

3.08 Tax Matters. All taxes and other assessments and levies which Tel-
Fed is required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper government authorities or are
held by Tel-Fed in separate bank accounts for such payment or are represented by
depository receipts, and all such withholdings and collections and all other
payments due in connection therewith (including, without limitation, employment
taxes, both the employee's and employer's share) have been paid over to the
government or placed in a separate and segregated bank account for such purpose.
There are no known deficiencies in income taxes for any periods and further, the
representations and warranties as to absence of undisclosed liabilities
contained in Section 3.06 includes any and all tax liabilities of whatsoever
kind or nature (including, without limitation, all federal, state, local and
foreign income, profit, franchise, sales, use and property taxes) due or to
become due, incurred in respect of or measured by Tel-Fed's income or business
prior to the Closing Date.

3.09 Options, Warrants, etc. Except as otherwise described in Schedule H,
there are no outstanding options, warrants, calls, commitments or agreements of
any character to which Tel-Fed or its shareholders are a party or by which Tel-
Fed or its shareholders are bound, or are a party, calling for the issuance of
shares of capital stock of Tel-Fed or any securities representing the right to
purchase or otherwise receive any such capital stock of Tel-Fed.

3.10 Title to Assets. Except for liens set forth in Schedule C, Tel-Fed
is the sole unconditional owner of, with good and marketable title to, all
assets listed in the schedules as owned by it and all other property and assets
are free and clear of all mortgages, liens, pledges, charges or encumbrances of
any nature whatsoever.

3.11 Agreements in Force and Effect. Except as set forth in Schedules D
and E, all material contracts, agreements, plans, promissory notes, mortgages,
leases, policies, licenses, franchises or similar instruments to which Tel-Fed
is a party are valid and in full force and effect on the date hereof, and Tel-
Fed has not breached any material provision of, and is not in default in any
material respect under the terms of, any such contract, agreement, plan,
promissory note, mortgage, lease, policy, license, franchise or similar
instrument which breach or default would have a material adverse effect upon the
business, operations or financial condition of Tel-Fed.

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<PAGE>

3.12 Legal Proceedings, Etc. Except as set forth in Schedule K, there are
no civil, criminal, administrative, arbitration or other such proceedings or
investigations pending or, to the knowledge of either Tel-Fed or the
shareholders thereof, threatened, in which, individually or in the aggregate, an
adverse determination would materially and adversely affect the assets,
properties, business or income of Tel-Fed. Tel-Fed has substantially complied
with, and is not in default in any material respect under, any laws, ordinances,
requirements, regulations or orders applicable to its businesses.

3.13 Governmental Regulation. To the knowledge of Tel-Fed and except as
set forth in Schedule K, Tel-Fed is not in violation of or in default with
respect to any applicable law or any applicable rule, regulation, order, writ or
decree of any court or any governmental commission, board, bureau, agency or
instrumentality, or delinquent with respect to any report required to be filed
with any governmental commission, board, bureau, agency or instrumentality which
violation or default could have a material adverse effect upon the business,
operations or financial condition of Tel-Fed.

3.14 Brokers and Finders. Tel-Fed shall be solely responsible for payment
to any broker or finder retained by Tel-Fed for any brokerage fees, commissions
or finders' fees in connection with the transactions contemplated herein.

3.15 Accuracy of Information. No representation or warranty by Tel-Fed
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to ProSoft pursuant hereto or in
connection with the transactions contemplated hereby (including without
limitation all Schedules and exhibits hereto) contains or will contain any
untrue statement of material fact or omits or will omit to state any material
fact necessary in order to make the statements contained herein or therein not
misleading.

3.16 Subsidiaries. Except as listed in Schedule P, Tel-Fed does not have
any other subsidiaries or own capital stock representing ten percent (10%) or
more of the issued and outstanding stock of any other corporation.

3.17 Consents. Except as listed in Schedule F, no consent or approval of,
or registration, qualification or filing with, any governmental authority or
other person is required to be obtained or accomplished by Tel-Fed or any
shareholder thereof in connection with the consummation of the transactions
contemplated hereby.

3.18 Improper Payments. Neither Tel-Fed, nor any person acting on behalf
of Tel-Fed has made any payment or otherwise transmitted anything of value,
directly or indirectly, to (a) any official or any government or agency or
political subdivision thereof for the purpose of influencing any decision
affecting the business of Tel-Fed (b) any customer, supplier or competitor of
Tel-Fed or employee of such customer, supplier or competitor, for the purpose of
obtaining, retaining or directing business for Tel-Fed or (c) any political
party or any

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<PAGE>

candidate for elective political office nor has any fund or other asset of Tel-
Fed been maintained that was not fully and accurately recorded on the books of
account of Tel-Fed.

3.19 Copies of Documents. Tel-Fed has made available for inspection and
copying by ProSoft and its duly authorized representatives, and will continue to
do so at all times, true and correct copies of all documents which it has filed
with the Securities and Exchange Commission and all other governmental agencies
which are material to the terms and conditions contained in this Agreement.
Furthermore, all filings by Tel-Fed with the Securities and Exchange Commission,
and all other governmental agencies, including but not limited to the Internal
Revenue Service, have contained information which is true and correct, to the
best knowledge of the Board of Directors of Tel-Fed, in all material respects
and did not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements made therein not misleading or
which could have any material adverse effect upon the financial condition or
operations of Tel-Fed or adversely effect the objectives of this Agreement with
respect to ProSoft including, but not limited to, the issuance and subsequent
trading of the shares of common stock of Tel-Fed to be received hereby, subject
to compliance by the shareholders of ProSoft with applicable law.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
PROSOFT DEVELOPMENT CORP.

ProSoft hereby represent and warrant to Tel-Fed as follows:

4.01 ProSoft shall deliver to Tel-Fed, on or before Closing, the
following:

(a) Financial Statements. Audited financial statements of
Professional Development Institute including, but not limited to, balance
sheets and profit and loss statements for the period from inception through
December 31, 1995 (Schedule AA.)

(b) Property. An accurate list and description of all property, real
or personal owned by ProSoft of a value equal to or greater than $1,000.00.
(Schedule BB.)

(c) Liens and Liabilities. A complete and accurate list of all
material liens, encumbrances, easements, security interests or similar
interests in or on any of the assets listed on Schedule AA. (Schedule CC.)
A complete and accurate list of all debts, liabilities and obligations of
ProSoft incurred or owing as of the date of this Agreement. (Schedule
CC.1.)

(d) Leases and Contracts. A complete and accurate list describing
all material terms of material leases (whether of real or personal
property) and each contract, promissory note, mortgage, license, franchise,
or other written agreement to which

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ProSoft is a party which involves or can reasonably be expected to involve
aggregate future payments or receipts by ProSoft (whether by the terms of
such lease, contract, promissory note, license, franchise or other written
agreement or as a result of a guarantee of the payment of or indemnity
against the failure to pay same) of $1,000.00 or more annually during the
twelve-month period ended December 31, 1996 or any consecutive twelve-month
period thereafter, except any of said instruments which terminate or are
cancelable without penalty during such twelve-month period. (Schedule DD.)

(e) Loan Agreements. Complete and accurate copies of all loan
agreements and other documents with respect to obligations of ProSoft for
the repayment of borrowed money. (Schedule EE.)

(f) Consents Required. A complete list of all agreements wherein
consent to the transaction herein contemplated is required to avoid a
default hereunder; or where notice of such transaction is required at or
subsequent to closing, or where consent to an acquisition, consolidation,
or sale of all or substantially all of the assets is required to avoid a
default thereunder. (Schedule FF.)

(g) Articles and Bylaws. Complete and accurate copies of the
Articles of Incorporation and Bylaws of ProSoft, together with all
amendments thereto to the date hereof. (Schedule GG.)

(h) Shareholders. A complete list of all persons or entities holding
capital stock of ProSoft or any rights to subscribe for, acquire, or
receive shares of the capital stock of ProSoft (whether warrants, calls,
options, or conversion rights), including copies of all stock option plans
whether qualified or nonqualified, and other similar agreements. (Schedule
HH.)

(i) Officers and Directors. A complete and current list of all
officers and Directors of ProSoft. (Schedule II.)

(j) Salary Schedule. A complete and accurate list (in all material
respects) of the names and the current salary rate or each present employee
of ProSoft who received $1,000 or more in aggregate compensation from
ProSoft whether in salary, bonus or otherwise, during the year 1995, or who
is presently scheduled to receive from ProSoft a salary in excess of
$1,000.00 during the year ending December 31, 1996, including in each case
the amount of compensation received or scheduled to be received, and a
schedule of the hourly rates of all other employees listed according to
departments. (Schedule JJ.)

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<PAGE>

(l) Tax Returns. Accurate copies of all Federal and State tax
returns for ProSoft, if any. (Schedule LL.)

(m) Agency Reports. Copies of all material reports or filings (and a
list of the categories of reports or filings made on a regular basis) made
by ProSoft under ERISA, EEOC, FDA and all other governmental agencies
(federal, state or local). (Schedule MM.)

(n) Banks. A true and complete list (in all material respects), as
of the date of this Agreement, showing (1) the name of each bank in which
ProSoft has an account or safe deposit box, and (2) the names and addresses
of all signatories. (Schedule NN.)

(o) Jurisdictions Where Qualified. A list of all jurisdictions
wherein ProSoft is qualified to do business and is in good standing.
(Schedule OO.)

(p) Subsidiaries. A complete list of all subsidiaries of ProSoft.
(Schedule PP.) The term "Subsidiary" or "Subsidiaries" shall include
corporations, unincorporated associations, partnerships, joint ventures, or
similar entities in which ProSoft has an interest, direct or indirect.

(q) Union Matters. An accurate list and description (in all material
respects) of all union contracts and collective bargaining agreements of
ProSoft, if any. (Schedule QQ.)

(r) Employee and Consultant Contracts. A complete and accurate list
of all employee and consultant contracts which ProSoft may have, other than
those listed in the schedule on Union Matters. (Schedule RR.)

(s) Employee Benefit Plans. Complete and accurate copies of all
salary, stock option, bonus, incentive compensation, deferred compensation,
profit sharing, retirement, pension, group insurance, disability, death
benefit or other benefit plans, trust agreements or arrangements of ProSoft
in effect on the date hereof or to become effective after the date thereof,
together with copies of any determination letters issued by the Internal
Revenue Service with respect thereto. (Schedule SS.)

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<PAGE>

(t) Insurance Policies. A complete and accurate list (in all
material respects) and description of all material insurance policies
naming ProSoft as an insured or beneficiary or as a loss payable payee or
for which ProSoft has paid all or part of the premium in force on the date
hereof, specifying any notice or other information possessed by ProSoft
regarding possible claims thereunder, cancellation thereof or premium
increases thereon, including any policies now in effect naming ProSoft as
beneficiary covering the business activities of ProSoft. (Schedule TT.)

(u) Customers. A complete and accurate list (in all material
respects) of the customers of ProSoft, including all presently effective
contracts of ProSoft accounting for the principle revenues of ProSoft,
indicating the dollar amounts of gross revenues of each such customer for
the period ended December 31, 1995. (Schedule UU.)

(v) Licenses and Permits. A complete list of all licenses, permits
and other authorizations of ProSoft. (Schedule VV.)

4.02 Organization, Standing and Power. ProSoft is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California with all requisite corporate power to own or lease its properties and
carry on its business as is now being conducted.

4.03 Qualification. ProSoft is duly qualified and licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it conducts
business operations. Such jurisdictions, which are the only jurisdictions in
which ProSoft is duly qualified and licensed as a foreign corporation, is shown
in Schedule OO.

4.04 Capitalization of ProSoft. The authorized capital stock of ProSoft
consists of 10,000,000 shares of Common Stock, of which 4,473,500 shares are
issued and outstanding and up to 750,000 additional shares are being offered by
ProSoft prior to the Closing. All shares issued to the shareholders listed on
Schedule HH were duly authorized, validly issued and fully paid and
nonassessable. There are no preemptive rights with respect to the ProSoft
stock.

4.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate action, including but not limited to duly and validly
authorized action and approval by the Board of Directors, on the part of
ProSoft. This Agreement constitutes the valid and binding obligation of
ProSoft, enforceable against it in accordance with its terms, subject to the
principles of equity applicable to the availability of the remedy of specific
performance. This Agreement has been duly executed by ProSoft and the execution
and delivery of this Agreement and the consummation of the transactions
contemplated by this Agreement shall not result in any breach of any terms or
provisions of ProSoft's Articles of Incorporation or Bylaws or of any other
agreement, court order or instrument to which ProSoft is a party or bound.

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<PAGE>

4.06 Absence of Undisclosed Liabilities. ProSoft has no material
liabilities of any nature, whether fixed, absolute, contingent or accrued, which
were not reflected on the financial statements set forth in Schedule AA or
otherwise disclosed in this Agreement or any of the Schedules or Exhibits
attached hereto.

4.07 Absence of Changes. Since December 31, 1995, there has not been any
material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business of ProSoft, except for the acquisition of the
assets and liabilities of Professional Development Institute and changes
resulting from completion of those transactions described in Section 5.01.

4.08 Tax Matters. All taxes and other assessments and levies which
ProSoft is required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper government authorities or are
held by ProSoft in separate bank accounts for such payment or are represented by
depository receipts, and all such withholdings and collections and all other
payments due in connection therewith (including, without limitation, employment
taxes, both the employee's and employer's share) have been paid over to the
government or placed in a separate and segregated bank account for such purpose.
There are no known deficiencies in income taxes for any periods and further, the
representations and warranties as to absence of undisclosed liabilities
contained in Section 4.06 includes any and all tax liabilities of whatsoever
kind or nature (including, without limitation, all federal, state, local and
foreign income, profit, franchise, sales, use and property taxes) due or to
become due, incurred in respect of or measured by ProSoft income or business
prior to the Closing Date.

4.09 Options, Warrants, etc. Except as otherwise described in Schedule
HH, there are no outstanding options, warrants, calls, commitments or agreements
of any character to which ProSoft or its shareholders are a party or by which
ProSoft or its shareholders are bound, or are a party, calling for the issuance
of shares of capital stock of ProSoft or any securities representing the right
to purchase or otherwise receive any such capital stock of ProSoft.

4.10 Title to Assets. Except for liens set forth in Schedule CC, ProSoft
is the sole and unconditional owner of, with good and marketable title to, all
the assets listed in the schedules as owned by them and all other property and
assets are free and clear of all mortgages, liens, pledges, charges or
encumbrances of any nature whatsoever.

4.11 Agreements in Force and Effect. Except as set forth in Schedules DD
and EE, all material contracts, agreements, plans, promissory notes, mortgages,
leases, policies, licenses, franchises or similar instruments to which ProSoft
is a party are valid and in full force and effect on the date hereof, and
ProSoft has not breached any material provision of, and is not in default in any
material respect under the terms of, any such contract, agreement, plan,
promissory note, mortgage, lease, policy, license, franchise or similar
instrument which breach or default would have a material adverse effect upon the
business, operations or financial condition of ProSoft.

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<PAGE>

4.12 Legal Proceedings, Etc. Except as set forth in Schedule KK, there
are no civil, criminal, administrative, arbitration or other such proceedings or
investigations pending or, to the knowledge of ProSoft, threatened, in which,
individually or in the aggregate, an adverse determination would materially and
adversely affect the assets, properties, business or income of ProSoft. ProSoft
has substantially complied with, and is not in default in any material respect
under, any laws, ordinances, requirements, regulations or orders applicable to
its businesses.

4.13 Governmental Regulation. To the knowledge of ProSoft and except as
set forth in Schedule KK, ProSoft is not in violation of or in default with
respect to any applicable law or any applicable rule, regulation, order, writ or
decree of any court or any governmental commission, board, bureau, agency or
instrumentality, or delinquent with respect to any report required to be filed
with any governmental commission, board, bureau, agency or instrumentality which
violation or default could have a material adverse effect upon the business,
operations or financial condition of ProSoft.

4.14 Broker and Finders. ProSoft shall be solely responsible for payment
to any broker or finder retained by ProSoft for any brokerage fees, commissions
or finders' fees in connection with the transactions contemplated herein.

4.15 Accuracy of Information. No representation or warranty by ProSoft
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to Tel-Fed pursuant hereto or in
connection with the transactions contemplated hereby (including without
limitation all Schedules and Exhibits hereto) contains or will contain any
untrue statement of a material fact or omits or will omit to state any material
fact necessary in order to make the statements contained herein or therein not
misleading.

4.16 Subsidiaries. Except as listed in Schedule PP, ProSoft does not have
any other subsidiaries or own capital stock representing ten percent (10%) or
more of the issued and outstanding stock of any other corporation.

4.17 Consents. Except as listed in Schedule FF, no consent or approval
of, or registration, qualification or filing with, any other governmental
authority or other person is required to be obtained or accomplished by ProSoft
or any shareholder thereof, in connection with the consummation of the
transactions contemplated hereby.

4.18 Improper Payments. No person acting on behalf of ProSoft has made
any payment or otherwise transmitted anything of value, directly or indirectly,
to (a) any official or any government or agency or political subdivision thereof
for the purpose of influencing any decision affecting the business of ProSoft
(b) any customer, supplier or competitor of ProSoft, or employee of such
customer, supplier or competitor, for the purposes of obtaining, retaining or
directing business for ProSoft, or (c) any political party or any candidate for
elective political office, nor has any fund or other asset of ProSoft been
maintained that was not fully and

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<PAGE>

accurately recorded on the books of account of ProSoft.

4.19 Copies of Documents. ProSoft has made available for inspection and
copying by Tel-Fed and its duly authorized representatives, and will continue to
do so at all times, true and correct copies of all documents which it has filed
with any governmental agencies which are material to the terms and conditions
contained in this Agreement. Furthermore, all filings by ProSoft with
governmental agencies, including but not limited to the Internal Revenue
Service, have contained information which is true and correct in all material
respects and did not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements made therein not
misleading or which could have any material adverse effect upon the financial
condition or operations of ProSoft or adversely affect the objectives of this
Agreement.

4.20 Investment Intent of Shareholders. Each shareholder of ProSoft
represents and warrants to Tel-Fed that the shares of Tel-Fed being acquired
pursuant to this Agreement are being acquired for his own account and for
investment and not with a view to the public resale or distribution of such
shares and further acknowledges that the shares being issued have not been
registered under the Securities Act and are "restricted securities" as that term
is defined in Rule 144 promulgated under the Securities Act and must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available.

ARTICLE 5
CONDUCT AND TRANSACTIONS PRIOR TO THE
EFFECTIVE TIME OF THE ACQUISITION

5.01 Conduct and Transactions of Tel-Fed. During the period from the date
hereof to the date of Closing, Tel-Fed shall:

(a) Conduct its operations in the ordinary course of business,
including but not limited to, paying all obligations as they mature,
complying with all applicable tax laws, filing all tax returns required to
be filed and paying all taxes due;

(b) Maintain its records and books of account in a manner that fairly
and correctly reflects its income, expenses, assets and liabilities.

Tel-Fed shall not during such period, except in the ordinary course of
business, without the prior written consent of ProSoft:

(a) Except as otherwise contemplated or required by this Agreement,
sell, dispose of or encumber any of its properties or assets;

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<PAGE>

(b) Declare or pay any dividends on shares of its capital stock or
make any other distribution of assets to the holders thereof;

(c) Issue, reissue or sell, or issue options or rights to subscribe
to, or enter into any contract or commitment to issue, reissue or sell, any
shares of its capital stock or acquire or agree to acquire any shares of
its capital stock except, the issuance of options for 100,000 shares at an
exercise price of $1.00 per share to consultants of Tel-Fed;

(d) Except as otherwise contemplated and required by this Agreement,
amend its Articles of Incorporation or merge or consolidate with or into
any other corporation or sell all or substantially all of its assets or
change in any manner the rights of its capital stock or other securities;

(e) Except as contemplated or required by this Agreement, pay or
incur any obligation or liability, direct or contingent of more than
$1,000;

(f) Incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise become responsible for obligations of any other party,
or make loans or advances to any other party;

(g) Make any material change in its insurance coverage;

(h) Increase in any manner the compensation, direct or indirect, of
any of its officers or executive employees; except in accordance with
existing employment contracts;

(i) Enter into any agreement or make any commitment to any labor
union or organization;

(j) Make any capital expenditures.

5.02 Conduct and Transactions of ProSoft. During the period from the date
hereof to the date of Closing, ProSoft shall:

(a) Obtain an investment letter from each shareholder of ProSoft in a
form substantially like that attached hereto as Exhibit B.

(b) Conduct the operations of ProSoft in the ordinary course of
business.

ProSoft shall not during such period, except in the ordinary course of
business, without the prior written consent of Tel-Fed:

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<PAGE>

(a) Except as otherwise contemplated or required by this Agreement,
sell, dispose of or encumber any of the properties or assets of ProSoft;

(b) Declare or pay any dividends on shares of its capital stock or
make any other distribution of assets to the holders thereof;

(e) Except as otherwise contemplated and required by this Agreement,
pay or incur any obligation or liability, direct or contingent;

(f) Incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise become responsible for obligations of any other party,
or make loans or advances to any other party;

(g) Make any material change in its insurance coverage;

(h) Increase in any manner the compensation, direct or indirect, of
any of its officers or executive employees; except in accordance with
existing employment contracts;

(i) Enter into any agreement or make any commitment to any labor
union or organization;

(j) Make any material capital expenditures.

(k) Allow any of the foregoing actions to be taken by any subsidiary
of ProSoft.

ARTICLE 6
RIGHTS OF INSPECTION

6.01 During the period from the date of this Agreement to the date of
Closing of the acquisition, Tel-Fed and ProSoft agree to use their best efforts
to give the other party, including its representatives and agents, full access
to the premises, books and records of each of the entities, and to furnish the
other with such financial and operating data and other information

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<PAGE>

including, but not limited to, copies of all legal documents and instruments
referred to on any schedule or exhibit hereto, with respect to the business and
properties of Tel-Fed or ProSoft, as the case may be, as the other shall from
time to time request; provided, however, if there are any such investigations:
(1) they shall be conducted in such manner as not to unreasonably interfere with
the operation of the business of the other parties and (2) such right of
inspection shall not affect in any way whatsoever any of the representations or
warranties given by the respective parties hereunder. In the event of
termination of this Agreement, Tel-Fed and ProSoft will each return to the other
all documents, work papers and other materials obtained from the other party in
connection with the transactions contemplated hereby, and will take such other
steps necessary to protect the confidentiality of such material.

ARTICLE 7
CONDITIONS TO CLOSING

7.01 Conditions to Obligations of ProSoft. The obligation of ProSoft to
perform this Agreement is subject to the satisfaction of the following
conditions on or before the Closing unless waived in writing by ProSoft.

(a) Representations and Warranties. There shall be no information
disclosed in the schedules delivered by Tel-Fed which in the opinion of
ProSoft would materially adversely affect the proposed transaction and
intent of the parties as set forth in this Agreement. The representations
and warranties of Tel-Fed set forth in Article 3 hereof shall be true and
correct in all material respects as of the date of this Agreement and as of
the Closing as though made on and as of the Closing, except as otherwise
permitted by this Agreement.

(b) Performance of Obligations. Tel-Fed shall have in all material
respects performed all agreements required to be performed by it under this
Agreement and shall have performed in all material respects any actions
contemplated by this Agreement prior to or on the Closing and Tel-Fed shall
have complied in all material respects with the course of conduct required
by this Agreement.

(c) Corporate Action. Tel-Fed shall have furnished minutes,
certified copies of corporate resolutions and/or other documentary evidence
satisfactory to counsel for ProSoft that Tel-Fed has submitted with this
Agreement and any other documents required hereby to such parties for
approval as provided by applicable law.

(d) Consents. Execution of this Agreement by the shareholders of
ProSoft and any consents necessary for or approval of any party listed on
any Schedule delivered by Tel-Fed whose consent or approval is required
pursuant thereto shall have been obtained.

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<PAGE>

(e) Financial Statements. ProSoft shall have been furnished with
audited financial statements of Tel-Fed including, but not limited to,
balance sheets and profit and loss statements as of December 31, 1993 and
through December 31, 1995. Such financial statements shall have been
prepared in conformity with generally accepted accounting principles on a
basis consistent with those of prior periods and fairly present the
financial position of Tel-Fed as of December 31, 1995.

(f) Statutory Requirements. All statutory requirements for the valid
consummation by Tel-Fed of the transactions contemplated by this Agreement
shall have been fulfilled.

(g) Governmental Approval. All authorizations, consents, approvals,
permits and orders of all federal and state governmental agencies required
to be obtained by Tel-Fed for consummation of the transactions contemplated
by this Agreement shall have been obtained.

(h) Changes in Financial Condition of Tel-Fed. There shall not have
occurred any material adverse change in the financial condition or in the
operations of the business of Tel-Fed, except expenditures in furtherance
of this Agreement.

(i) Absence of Pending Litigation. Tel-Fed is not engaged in or
threatened with any suit, action, or legal, administrative or other
proceedings or governmental investigations pertaining to this Agreement or
the consummation of the transactions contemplated hereunder.

(j) Authorization for Issuance of Stock. ProSoft shall have received
in form and substance satisfactory to Counsel for ProSoft a letter
instructing and authorizing the Registrar and Transfer Agent for the shares
of common stock of Tel-Fed to issue stock certificates representing
ownership of Tel-Fed common stock to ProSoft shareholders in accordance
with the terms of this Agreement and a letter from said Registrar and
Transfer Agent acknowledging receipt of the letter of instruction and
stating to the effect that the Registrar and Transfer Agent holds adequate
supplies of stock certificates necessary to comply with the letter of
instruction and the terms and conditions of this Agreement.

(k) Shareholder Approval. Tel-Fed shareholders shall have (i)
approved a one for fifteen share reverse split of its outstanding shares,
prior to issuance of shares to ProSoft under Section 1.01; (ii) approved a
change of the name of Tel-Fed to ProSoft Development Corp.; (iii) elected
the following persons to the Board of Directors of Tel-Fed: William
Richardson, Keith D. Freadhoff, and Donald Danks; (iv) approved the
Agreement and Plan of Reorganization.

18
<PAGE>

7.02 Conditions to Obligations of Tel-Fed. The obligation of Tel-Fed to
perform this Agreement is subject to the satisfaction of the following
conditions on or before the Closing unless waived in writing by Tel-Fed.

(a) Representations and Warranties. There shall be no information
disclosed in the schedules delivered by ProSoft, which in the opinion of
Tel-Fed, would materially adversely affect the proposed transaction and
intent of the parties as set forth in this Agreement. The representations
and warranties of ProSoft set forth in Article 4 hereof shall be true and
correct in all material respects as of the date of this Agreement and as of
the Closing as though made on and as of the Closing, except as otherwise
permitted by this Agreement.

(b) Performance of Obligations. ProSoft shall have in all material
respects performed all agreements required to be performed by it under this
Agreement and shall have performed in all material respects any actions
contemplated by this Agreement prior to or on the Closing and ProSoft shall
have complied in all respects with the course of conduct required by this
Agreement.

(c) Corporate Action. ProSoft shall have furnished minutes,
certified copies of corporate resolutions and/or other documentary evidence
satisfactory to Counsel for Tel-Fed that ProSoft has submitted with this
Agreement and any other documents required hereby to such parties for
approval as provided by applicable law.

(d) Consents. Any consents necessary for or approval of any party
listed on any Schedule delivered by ProSoft, whose consent or approval is
required pursuant thereto, shall have been obtained.

(e) Financial Statements. Tel-Fed shall have been furnished with
audited financial statements of ProSoft including, but not limited to,
balance sheets and profit and loss statements from inception through
January 1, 1996.

(f) Statutory Requirements. All statutory requirements for the valid
consummation by ProSoft of the transactions contemplated by this Agreement
shall have been fulfilled.

(g) Governmental Approval. All authorizations, consents, approvals,
permits and orders of all federal and state governmental agencies required
to be obtained by ProSoft for consummation of the transactions contemplated
by this Agreement shall have been obtained.

(h) Employment Agreements. Existing ProSoft employment agreements
will have been delivered to Counsel for Tel-Fed.

19
<PAGE>

(i) Changes in Financial Condition of Tel-Fed. There shall not have
occurred any material adverse change in the financial condition or in the
operations of the business of Tel-Fed, except expenditures in furtherance
of this Agreement.

(j) Absence of Pending Litigation. Tel-Fed is not engaged in or
threatened with any suit, action, or legal, administrative or other
proceedings or governmental investigations pertaining to this Agreement or
the consummation of the transactions contemplated hereunder.

(k) Shareholder Approval. The Tel-Fed shareholders shall have (i)
approved a one for fifteen share reverse split of its outstanding shares,
prior to issuance of shares to ProSoft under Section 1.01; (ii) approved a
change of the name of Tel-Fed to ProSoft Development Corp.; (iii) elected
the following persons to the Board of Directors of Tel-Fed: William
Richardson, Keith D. Freadhoff, and Donald Danks; (iv) approved the
Agreement and Plan of Reorganization.

ARTICLE 8
MATTERS SUBSEQUENT TO CLOSING

8.01 Covenant of Further Assurance. The parties covenant and agree that
they shall, from time to time, execute and deliver or cause to be executed and
delivered all such further instruments of conveyance, transfer, assignments,
receipts and other instruments, and shall take or cause to be taken such further
or other actions as the other party or parties to this Agreement may reasonably
deem necessary in order to carry out the purposes and intent of this Agreement.

ARTICLE 9
NATURE AND SURVIVAL OF REPRESENTATIONS

9.01 All statements contained in any written certificate, schedule,
exhibit or other written instrument delivered by Tel-Fed or ProSoft pursuant
hereto, or otherwise adopted by Tel-Fed by its written approval, or by ProSoft
by its written approval, or in connection with the transactions contemplated
hereby, shall be deemed representations and warranties by Tel-Fed or ProSoft as
the case may be. All representations, warranties and agreements made by either
party shall survive for the period of the applicable statute of limitations and
until the discovery of any claim, loss, liability or other matter based on
fraud, if longer.

ARTICLE 10
TERMINATION OF AGREEMENT AND
ABANDONMENT OF REORGANIZATION

10.01 Termination. Anything herein to the contrary notwithstanding, this
Agreement and any agreement executed as required hereunder and the acquisition
contemplated hereby may

20
<PAGE>

be terminated at any time before the Closing as follows:

(a) By mutual written consent of the Boards of Directors of Tel-Fed
and ProSoft.

(b) By the Board of Directors of Tel-Fed if any of the conditions set
forth in Section 7.02 shall not have been satisfied by the Closing Date.

(c) By the Board of Directors of ProSoft if any of the conditions set
forth in Section 7.01 shall not have been satisfied by the Closing Date.

10.02 Termination of Obligations and Waiver of Conditions; Payment of
Expenses. In the event this Agreement and the acquisition are terminated and
abandoned pursuant to this Article 10 hereof, this Agreement shall become void
and of no force and effect and there shall be no liability on the part of any of
the parties hereto, or their respective directors, officers, shareholders or
controlling persons to each other. Each party hereto will pay all costs and
expenses incident to its negotiation and preparation of this Agreement and any
of the documents evidencing the transactions contemplated hereby, including
fees, expenses and disbursements of counsel.

ARTICLE 11
EXCHANGE OF SHARES; FRACTIONAL SHARES

11.01 Exchange of Shares. At the Closing, Tel-Fed shall issue a letter to
the transfer agent of Tel-Fed with a copy of the resolution of the Board of
Directors of Tel-Fed authorizing and directing the issuance of Tel-Fed shares as
set forth on the signature page of this Agreement.

11.02 Restrictions on Shares Issued to ProSoft. Due to the fact that
ProSoft will receive shares of Tel-Fed common stock in connection with the
acquisition which have not been registered under the 1933 Act by virtue of the
exemption provided in Section 4(2) of such Act, those shares of Tel-Fed will
contain the following legend:

The shares represented by this certificate have not been
registered under the Securities Act of 1933. The shares have been
acquired for investment and may not be sold or offered for sale in the
absence of an effective Registration Statement for the shares under
the Securities Act of 1933 or an opinion of counsel to the Corporation
that such registration is required.

21
<PAGE>

ARTICLE 12
MISCELLANEOUS

12.01 Construction. This Agreement shall be construed and enforced
in accordance with the laws of the State of California excluding the conflicts
of laws.

12.02 Notices. All notices necessary or appropriate under this
Agreement shall be effective when personally delivered or deposited in the
United States mail, postage prepaid, certified or registered, return receipt
requested, and addressed to the parties last known address which addresses are
currently as follows:

<S> <C>

If to "Tel-Fed" If to "ProSoft"

Tel-Fed, Inc. ProSoft Development Corp.
8 West 38th Street 7100 Knott Avenue
9th Floor Buena Park, California 90620
New York, New York 10018

With copies to:

Ronald L. Poulton, Esq. William L. Twomey, Esq.
4 Triad Center, Suite 500-A 19000 MacArthur Blvd., Suite 1050
Salt Lake City, Utah 84180 Irvine, California 92612

</TABLE>
12.03 Amendment and Waiver. The parties hereby may, by mutual
agreement in writing signed by each party, amend this Agreement in any respect.
Any term or provision of this Agreement may be waived in writing at any time by
the party which is entitled to the benefits thereof, such waiver right shall
include, but not be limited to, the right of either party to:

(a) Extend the time for the performance of any of the obligations of
the other;

(b) Waive any inaccuracies in representations by the other contained
in this Agreement or in any document delivered pursuant hereto;

(c) Waive compliance by the other with any of the covenants contained
in this Agreement, and performance of any obligations by the other; and

(d) Waive the fulfillment of any condition that is precedent to the
performance by the party so waiving of any of its obligations under this
Agreement. Any writing on the part of a party relating to such amendment,
extension or waiver as provided in this

22
<PAGE>

Section 12.03 shall be valid if authorized or ratified by the Board of
Directors of such party.

12.04 Remedies not Exclusive. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise. The election of any one or more remedies by Tel-Fed or
ProSoft shall not constitute a waiver of the right to pursue other available
remedies.

12.05 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

12.06 Benefit. This Agreement shall be binding upon, and inure to the
benefit of, the respective successors and assigns of Tel-Fed and ProSoft and its
shareholders.

12.07 Entire Agreement. This Agreement and the Schedules and Exhibits
attached hereto, represent the entire agreement of the undersigned regarding the
subject matter hereof, and supersedes all prior written or oral understandings
or agreements between the parties.

12.08 Each Party to Bear its Own Expense. Tel-Fed and ProSoft shall each
bear their own respective expenses incurred in connection with the negotiation,
execution, closing, and performance of this Agreement, including counsel fees
and accountant fees.

12.09 Captions and Section Headings. Captions and section headings used
herein are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.

Executed as of the date first written above.

<S> <C>

"Tel-Fed" "ProSoft"

Tel-Fed, Inc., ProSoft Development Corp.,
a Nevada corporation a California corporation

By: By:
------------------------ -----------------------------
Jeffrey Brown, President Keith D. Freadhoff, President

</TABLE>

23
<PAGE>

"Shareholders"

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

<PAGE>

EXHIBIT 10.6

MERISEL EDUCATIONAL SERVICES
MICROSOFT/INTERNET CONTRACT TEACHING AGREEMENT

1. PARTIES

The parties to this agreement shall be PROSOFT (hereinafter referred to
-------
as Trainer) and Merisel, Inc. (hereinafter referred to as Center).

2. COVENANTS

Whereas trainer is or employs a Microsoft Certified Trainer who is
authorized to teach all of the courses outlined in Section 3.1, and

Whereas Center desires to hold Microsoft Authorized Classes taught by a
Microsoft Authorized Trainer, and

Whereas Trainer desires and is Certified to teach said classes.

Now, therefore, in view of the mutual covenants herein contained and the
agreement hereunder taken, the parties hereto agree as follows:

3. CLASSES TO BE HELD AND TAUGHT

3.1 The following classes will be held and taught either at Trainer's
BUENA PARK, PALMDALE, AND NORTH HOLLYWOOD,CA facilities or at Center's
--------------------------------------------
educational facilities:

NON-CENTER SPONSORED COURSES**
------------------------------
(COURSES REGULARLY SCHEDULED AT TRAINER'S FACILITIES):

<TABLE>
<CAPTION>
<S> <C>
COURSE TITLE LENGTH
ATEC COURSES
729 Expert Series Bundle 5 days
540 Supporting Microsoft Windows 95 5 days
505 Supporting Microsoft Windows NT 3.51 5 days
659 Supporting Microsoft Windows NT Server 5 days
472 Internetworking TCP/IP on Microsoft Windows NT 4 days
673 Installing Microsoft Internet Information Server 1 day
662 Supporting Microsoft Internet Information Server 3 days
574 System Administration or Microsoft SQL Server 6 5 days
576 Implementing a Database Design on SQL Server 6 5 days
646 Supporting Microsoft Systems Management Server 1.1 5 days
MICROSOFT INTERNET COURSES
677 Mastering Internet Development Using Internet Tools 5 days
484 Microsoft Windows Operating Systems and Serv. Arch 3 days
403 Fundamentals of Microsoft visual Basic 4.0 3 days
404 Programming with Microsoft Visual Basic 4.0 5 days
455 Programming in Visual FoxPro 3.0 5 days
INTERNET COURSES
Exploring the Internet: Hands-On 1 day (2 nights)
Basic Web Authoring: Hands-On 1 day (2 nights)
Advanced Web Authoring: Hands-On 1 day (2 nights)
Building Web Sites with Microsoft Front Page: Hands-On 2 days

</TABLE>

<PAGE>

MERISEL EDUCATIONAL SERVICES MICROSOFT/INTERNET TEACHING AGREEMENT
PAGE 2

SEMINAR SERIES (90-minute satellite broadcast or full day tracks)
Executive Series
Growing Your VAR Business with Microsoft's Internet Solutions
How VARs Are Successfully Conducting Business on the Internet
Intranet Deployments-Profit Opportunities for VARs
End-User Series
Options for Connecting to the Internet
Exploring the Internet Effectively: Part 1
Exploring the Internet Effectively: Part 2
Creating Great Web Pages with Microsoft Products
Systems Engineer Series
Developing Internet and Intranet Servers with Microsoft Products
Microsoft Windows NT 4.0-The best Choice for Internet Platforms
Internet Security Solutions and Microsoft Products
Solution Developer Series
Microsoft ActiveX-The Key to Great Internet Solutions
Using Visual Basic for Internet/Intranet Development
Building Interactive Internet Solutions

**Trainer will provide student materials

3.2. Center shall be solely responsible for providing the following to the
trainer:

* Pre-paid registered students.
* Notifying Trainer of student "no-show" status by the end of the first
day of each course.

* Course cancellation will be made by a Registration Specialist.

3.3. Trainer shall provide the following:

* One person, who has been certified by Microsoft, to teach the course
being given by the Trainer.

* The instructor materials as provided by Microsoft.
* Training facilities which meet Microsoft's specifications for
conducting Microsoft authorized courses.
* One set of student materials, as provided by Trainer for Non-Center
sponsored courses to each student.
* Cancellation and/or Reschedule notice of Non-Center Sponsored
classes, two weeks prior to scheduled course start date. If less than
two weeks notice is given, trainer is responsible for providing
compensation to student for unrecoverable expenses incurred by
students with confirmed/paid enrollment in canceled or rescheduled
class.
* Notifying center of student "no show" status by the end of the first
day of each course.
* One Microsoft student certificate upon each student's successful
completion of class.
* Notification should be made to a Registration Specialist.

3.4. Trainer agrees to conduct specified classes on behalf of Center and is
prohibited from using Center name in any other capacity without the
express written consent of Center. Further, Trainer agrees not to solicit
students provided by Center for additional training classes in any way
(including mailing lists, etc.) without the written consent of Center.

<PAGE>

MERISEL EDUCATIONAL SERVICES MICROSOFT/INTERNET TEACHING AGREEMENT
PAGE 3

4. PAYMENT

4.1 Center agrees to compensate the Trainer for services provided as follows by
Trainer under this contract:

NON-CENTER SPONSORED COURSES TAUGHT AT TRAINER'S FACILITIES

* 60% of registration fees collected by Center (the amount of such
fees to be based on the Trainer's suggested pricing), providing the
total number of Center Sponsored students in class equals the
registration fees collected and the completed course evaluations sent
to Center by Trainer. 60% of registration fees collected for "no
shows." Final "no show" determination will be made by an Educational
Services Representative taking extenuating circumstances into
consideration. If student is allowed to reschedule, Trainer will
receive 60% of students' registration fee upon completion of class as
outlined above.

4.2 Further, Trainer will provide Center (Operations) with an invoice at the
end of each class reflecting total amount due Trainer based on the per
student fees outlined above. A completed course evaluation for each student
who attended courses (excluding "no-shows") must he attached to invoice as
verification of attendance.

4.3. Upon receipt of above items, Center will issue a check to Trainer
within 30 working days.

5. CUSTOMER SATISFACTION

Trainer will offer a satisfaction guarantee. In the event that a student
feels that the defined Microsoft course objectives are not met, student may
submit a written request to Trainer within 5 working days following said
course either for re-training or some other arrangement that assures
customer satisfaction. It is the Trainer's responsibility to provide for
the customer's satisfaction.

6. AUDITING

Trainer courses may be audited without notification by a Center or
Microsoft official. The audit may include the following:

* A written critique covering the certified instructor's product
knowledge and presentation skills.
* A written checklist of facility and equipment conditions.
* A written checklist of documentation and audiovisual materials used
for each course.

7. DEFAULT AND TERMINATION

7.1. Trainer shall be in default under this contract if any of the following
occur:
(i) Trainer breaches any material term of this Agreement.
(ii) Trainer loses their appropriate Microsoft authorization.
Center shall be in default under this contract if any of the following
occur:
(i) Center breaches any material term of this Agreement.

<PAGE>

MERISEL EDUCATIONAL SERVICES MICROSOFT/INTERNET TEACHING AGREEMENT
PAGE 4

7.2. NOTICE OF TERMINATION

The party not in default may terminate this contact by written notice to
the other party, if the other party has failed to cure a default under this
contract within ten (10) business days after receiving written notice
specifically setting forth such default. Upon termination, the terminating
party shall have all rights under the Uniform Commercial Code or otherwise,
whether at law or in equity, that may be available to it. The election of
one remedy shall not exclude the election of another.

8. GOVERNING LAW

This contract shall be governed by the law of the State of Massachusetts.

9. ASSIGNMENT

Trainer may assign this contract to another Microsoft authorized entity
only with prior written permission from the Center. Either party may assign
their part of this agreement as part of a corporate reorganization,
however, the terms of this agreement will remain in effect and the party
will be notified in writing prior to the reassignment of this agreement.

10. CONFIDENTIALITY

Trainer acknowledges that by reason of its relationship to Center hereunder
it will have access to certain information and materials concerning
Center's business, plans, customers, technology, and products that are
confidential and of substantial value to Center which value would be
impaired if such information were disclosed to third parties. Trainer
agrees that neither it (nor its employees and agents) will use in any way
for its own account or the account of any third party, nor disclose to any
third party any such confidential information or any other information
regarding Trainer's business relationship with Center, including the
existence of Trainer's business relationship with Center. Trainer shall
take every reasonable precaution to protect the confidentiality of such
information. (The obligation of Trainer under this paragraph shall survive
termination of this Agreement.)

11. NON-COMPETE TERMS

Under the terms of this agreement, Trainer agrees not to enter into similar
agreements with Ingram Micro, Tech Data, or other of Center's competitors
in the VAR wholesale business. Center agrees that it will not enter into
similar agreements with other Internet training providers nationwide, and
that Trainer will have first right of refusal on all Microsoft ATEC
training that is resells in the cities in which Trainer has established a
Microsoft ATEC.

12. SIGNATURES

IN WITNESS WHEREOF, the parties have caused this agreement to be executed
by their duly authorized representatives.

PROSOFT MERISEL, INC.

By: /s/ KEITH D. FREADHOFF By: /S/ DREW BOYD
------------------------ ------------------------
Name: Keith D. Freadhoff Name: Drew Boyd
Title: Chairman & CEO Title: Director, Education Services
Date: 4/29/96 Date: April 29, 1996
-------

<PAGE>

EXHIBIT 10.7

STRATEGIC RELATIONSHIP AGREEMENT
SOFTWARE TRAINING

This Strategic Relationship Agreement (the "Agreement") between
ProSoft Corporation, a Nevada corporation ("ProSoft"), and Innovus Corporation,
a Delaware corporation ("Innovus") is entered into as of June 25, 1996.

Whereas, ProSoft is in the business of conducting training
programs instructing persons in the use of various software programs and systems
in various types of computer hardware; and

Whereas, Innovus is in the business of developing and marketing
multimedia development software and applications for businesses and multimedia
communication; and

Whereas, ProSoft desires to include Innovus developed software and
applications as subjects of its training courses, and ProSoft is willing to
commit to provide such training courses in exchange for Innovus' commitments set
forth herein.

Now, therefore, in consideration of the aforesaid and the mutual
agreements set forth below, ProSoft and Innovus agree as follows:

1. Training Agent. ProSoft shall act as the exclusive training
--------------
agent to train persons in the use of Innovus software and applications during
the term of this Agreement and pursuant to the provisions hereof, except that
Innovus will have the right to train or designate other trainers for (i) major
Innovus customers which Innovus determines, in its sole discretion, require
direct training by Innovus or in-house corporate or institutional staff;
(ii) value added resellers ("VAR's") located in cities or surrounding
metropolitan areas in which ProSoft had no training facilities at the time
Innovus first designated an alternative trainer for such area, and (iii) any
distribution partners of Innovus which require, as a condition to acting as such
distribution partner, their own training programs.

2. ICP Certification.
-----------------
(a) ProSoft and Innovus shall jointly develop the industry
standard "Innovus Certified Professional" or "ICP" through the development of
technical curriculum (as defined below) and courseware (as defined below) for
the training of persons in Innovus applications and software. This technical
curriculum and software will be developed from and based upon the existing
Innovus training procedures and courseware. Although both parties will be
collaborating in the development of the technical curriculum and courseware,
Innovus shall retain all rights to the technical curriculum, and ProSoft shall
have the rights to the courseware, subject to Innovus' rights under Paragraph 4
hereof.

<PAGE>

(b) As used herein, the "technical curriculum" for the ICP
certification program shall refer to the compilation of substantive and
procedural knowledge which must be attained by a trainee in order to be
qualified as an ICP professional. As used herein, "courseware" shall refer to
the particular manuals, software or combination thereof which conveys the
technical curriculum to the trainee.

(c) ProSoft shall incorporate the ICP training program into
its existing vocational training tracks that currently provide training for a
Microsoft Certified Professional (MCP) and a Certified Internet Trainer (CIT).
ProSoft and Innovus shall jointly consider the development of an extended ICP
program independent of the MCP and CIT programs that ProSoft could market as a
six to eight week ICP program for persons with limited prior experience in the
field. ProSoft and Innovus, in considering whether to develop such a program
shall consider only the demand for such program and the cost involved in its
development.

(d) ProSoft shall begin offering the ICP training program
prior to 9/30/96.

3. Initial Training. Innovus will train at Innovus' Salt
----------------
Lake City, Utah facility and certify up to four trainers designated by ProSoft
in INNOVUS Multimedia technologies at Innovus' own expense; provided that
ProSoft will bear the travel, food and lodging expenses of such designated
trainers. These trainers will then be responsible for developing and certifying
the remainder of the ProSoft training staff at ProSoft's own expense.

4. Distribution and Use of Courseware. ProSoft shall be
----------------------------------
responsible for working with Innovus to keep the courseware content current and
consistent with the technical curriculum in all training environments. Innovus
shall have the right to use, copy and distribute the courseware without license
fees or other compensation to ProSoft in connection with training provided by
Innovus or its affiliates. If Innovus designates other trainers pursuant to
Paragraph 1 hereof, ProSoft shall offer to sell copies of the courseware to such
designated trainers. The price and licensing terms for such courseware sales
shall be competitive with other similar courseware. However, if the price or
licensing terms established for the courseware by Prosoft is not competitive, in
Innovus' reasonable judgement, and if the dispute cannot be settled through
negotiation, the parties agree first to try in good faith to settle the dispute
by mediation administered by the American Arbitration Association ("AAA") under
its Commercial Mediation Rules before resorting to arbitration, litigation, or
some other dispute resolution procedure. The mediator chosen shall be
experienced in the computer software industry. Unless otherwise agreed by the
parties, the mediation shall take place in Salt Lake City, Utah. If the disputed
terms are monetary (including license fees) and if the parties are unable to
agree on a settlement amount through mediation, the parties shall submit their
dispute to a neutral person appointed by the AAA who shall select between their
final negotiated positions, that selection being binding on the parties.

2
<PAGE>

5. Training Classes Schedule. ProSoft, with the approval of
-------------------------
Innovus, shall develop and publish a schedule of commercial Innovus end-user and
VAR certification training classes [and/or accommodate closed and customized
training classes for Innovus clients.] ProSoft will use its best efforts to
provide sufficient training sessions to meet the demand for such classes as it
arises. ProSoft and Innovus will consult regularly to determine the magnitude of
such demand. Notwithstanding the above, there will be at least one training
program on both the East and the West coasts that begins in each month during
the term of this Agreement.

6. CBT Materials for ProSoft. Innovus will work with ProSoft
-------------------------
to develop computer based training ("CBT") materials for all of ProSoft's
training programs. The exact nature of this arrangement will be the subject of a
separate agreement to be executed as soon as reasonably practicable following
the date of the execution of this Agreement. ProSoft will use its best efforts
to develop CBT materials using Innovus software and applications for all of
ProSoft's current and future Internet/Microsoft-based curricula for use in
commercial training.

7. Limitation on ProSoft. During the term of this
---------------------
Agreement, ProSoft will not contract with nor deliver training in any multimedia
authoring or development tool designed for business applications directly
competitive with INNOVUS Multimedia.

8. Providing Information. ProSoft will regularly provide
---------------------
Innovus with the names, addresses, company affiliation and [other information?]
of all persons taking any ProSoft training course providing instruction in
Innovus software or applications. Innovus can use this information for mailings
and other marketing purposes. The information shall be supplied in such
electronic format as may be reasonably requested by Innovus.

9. Compensation.
------------
(a) The parties acknowledge that Innovus will be compensated for
its activities hereunder by the increased exposure for its products provided by
ProSoft and the reduced need for in-house training personnel. The parties
acknowledge that ProSoft will be compensated for its activities hereunder by
receipt of tuition and fees from persons desiring training in Innovus products.

(b) Innovus shall have the right to enroll persons for training in
ProSoft operated training courses and shall be compensated for such enrollment
by receiving from ProSoft twenty-five percent (25%) of the gross tuition
received by ProSoft from such person. ProSoft shall pay such compensation by the
15th of each calendar month with respect to tuition received by ProSoft during
the immediately preceding calendar month. ProSoft will allow Innovus the right
to inspect ProSoft's books and records as may be reasonably necessary to verify
the accuracy of such payments.

10. Term. This Agreement shall take effect immediately upon
----
execution and continue in effect until the first anniversary of the date first
written above, upon which date this

3
<PAGE>

Agreement shall be extended for an additional one-year period, and shall
continue to be so extended on each following anniversary date, until or unless
either party hereto provides written notice to the other 120 days before the
applicable anniversary date that it wishes to terminate this Agreement, in which
case such termination shall occur upon the following anniversary date.

11. Early Termination. Innovus shall have the right to terminate this
-----------------
Agreement at any time "for cause" if (i) the initial ICP course is not offered
by the date specified in Paragraph 2(d) hereof, or (ii) less than seventy-five
percent (75%) of the trainees having taken ProSoft sponsored ICP courses in any
month do not obtain a passing grade based upon the test results data base
provided to Innovus by ProSoft. ProSoft shall provide Innovus with such data
base for the preceding month by the tenth business day of the next month.

12. Modification, Amendment and Waiver. This Agreement may be modified
----------------------------------
or amended only with the written consent of both the parties hereto, and any
waiver of a provision hereof must be in writing and signed by any party which is
to be held to have waived any rights hereunder.

13. Entire Agreement. This Agreement constitutes the entire agreement
----------------
among the parties hereto with respect to the subject matter hereof and
supersedes any prior agreement understanding among them with respect to such
subject matter.

14. Severability. If any provision of this Agreement, or the application
------------
of such provision to any person or circumstance, shall be held invalid, the
remainder of this Agreement or the application of such provision to other
persons or circumstances shall not be affected thereby, provided that both
--------
parties shall negotiate in good faith with respect to an equitable modification
of the provision or application thereof held to be invalid.

15. Notices. All notices, requests, demands, consents and other
-------
communications required or permitted hereunder shall be by telecopy or in
writing and shall be deemed to have been duly given and received when personally
delivered to an officer of each party hereto, or transmitted by telecopier,
confirmation received, to the telephone number specified below, or five business
days after such notice is mailed, certified mail return receipt requested,
first-class postage prepaid, or the next day after such notice is sent by
commercial courier, to the intended recipient at the address specified below:

Innovus Corporation
2060 E. 2100 South
Salt Lake City, Utah 84109
Fax: 80l-484-956l

ProSoft Corporation
7100 Knott Avenue
Buena Park, California 90620

4
<PAGE>

or to such other address or telephone number as any party hereto shall have last
designated by notice to the other parties.

16. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
--------------
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF UTAH WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREE TO SUBMIT TO
THE JURISDICTION OF ANY FEDERAL OR STATE COURT IN THE STATE OF UTAH, AND TO
VENUE IN THE CITY AND COUNTY OF SALT LAKE FOR ALL MATTERS CONCERNING THE
INTERPRETATION, CONSTRUCTION OR ENFORCEMENT OF THIS AGREEMENT OR FOR ANY OTHER
MATTERS CONCERNING OR ARISING OUT OF THIS AGREEMENT.

17. Binding Agreement. Except as otherwise specifically provided
-----------------
herein, this Agreement shall be binding upon and inure to the benefit of both
parties hereto, and their legal representatives, successors and assigns.

18. Counterparts. This Agreement may be executed in one or more
------------
counterparts, and by telecopied facsimile of the signature on behalf of a party
hereto, all of which shall constitute one and the same instrument.

19. Headings and Number. The paragraph headings in this Agreement are
-------------------
for convenience of reference only and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.

20. Limited Benefit. None of the provisions of this Agreement shall be
---------------
for the benefit of or enforceable by any person not a party hereto or the legal
representatives, successors and assigns of such parties.

21. No Offset. No party hereto shall be entitled to offset against any
---------
of its financial obligations under this Agreement any obligation owed to it or
any of its Affiliates by any other party hereto or any of such other party's
Affiliates.

22. Further Assurance. Each party hereof shall execute, acknowledge,
-----------------
deliver, file and record such other certificates, agreements, instruments and
documents, and take such other actions, as may reasonably be necessary or
advisable to carry out the intent and purposes of this Agreement.

23. Pronouns, Number. All pronouns and any variations thereof shall
----------------
be deemed to refer to the masculine, feminine, neuter, singular, or plural as
the identity of the person or persons may require, and both plural and singular
forms of defined terms shall apply equally.

5
<PAGE>

24. Confidentiality. The parties and their respective
---------------
subsidiaries, directors, officers, agents and employees shall keep the terms of
this Agreement, and any related document confidential, except as the disclosure
thereof may be required by law, including the filing of this Agreement as an
exhibit to a registration statement filed with the Securities and Exchange
Commission and state securities agencies. Any press release concerning the
subject matter of this Agreement must first be jointly approved by both parties
hereto.

6
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.

INNOVUS CORPORATION,
a Delaware corporation

By: /s/
-------------------------------

Title: President
----------------------------

PROSOFT CORPORATION,
a Nevada corporation

By: /s/
------------------------------

Title: President
---------------------------

<PAGE>

EXHIBIT 10.8

[LOGO OF AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION]

STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET

(Do not use this form for Multi-Tenant Property)

1. BASIC PROVISIONS ("BASIC PROVISIONS")

1.1 PARTIES: This Lease ("LEASE"), dated for reference purposes only,
September 29, l9 95, is made by and between Steven R. Layton solely in his
- ------------ -- ------------------------------
capacity as Court Appointed Receiver of 7100 Knott Avenue, Buena Park,
- --------------------------------------------------------------------------
California ("LESSOR") AND Douglas E. Hartman dba The Professional Development
- ----------- ----------------------------------------------------
Institute ("LESSEE"), (collectively the "PARTIES," or individually a "PARTY").
- ---------
1.2 PREMISES: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, and commonly
known by the street address of 7100 Knott Avenue, Buena Park
located in the County of Orange , State of California
--------------- ---------------------------,
and generally described as (describe briefly the nature of the property)
an approximately 22,757 square foot freestanding, 2-story office building
- -------------------------------------------------------------------------------
situated on a 1.68 acre parcel with approximately 97 parking spaces
- --------------------------------------------------------------------------------
(See Exhibit A attached hereto) ("PREMISES").
- ------------------------------------------------------------------
(See Paragraph 2 for further provisions.)
1.3 TERM: 0 years and 9 months ("ORIGINAL TERM") commencing
------- -------
October 1, 1995 ("COMMENCEMENT DATE") and ending June 30, 1996 ("EXPIRATION
- --------------- -------------
DATE"). (See Paragraph 3 for further provisions.)
1.4 EARLY POSSESSION: October 1, 1995 ("Early Possession Date").
----------------
(See Paragraphs 3.2 and 3.3 for further provisions.)
1.5 BASE RENT: $12,500.00 per month ("BASE RENT"), payable on the
--------------
first (1st) day of each month commencing December 1, 1995. The months of
- -------------- --------------------------------
October 1995 (Base Rent = $3,000.00) and November 1995 (Base Rent = $8,000.00)
- ------------------------------------------------------------------------------
shall be paid at the execution of the lease. See Paragraph 1.6 Base Rent Paid
- ------------------------------------------------------------------------------
Upon Execution and Paragraph 49 Rent Adjustments
- ------------------------------------------------------------------------------
(See Paragraph 4 for further provisions.) [_] If this box is checked, there
are provisions in this Lease for the Base Rent to be adjusted.
1.6 BASE RENT PAID UPON EXECUTION: $ 11,000.00
------------------------------------
as Base Rent for the period of October 1-31, 1995 ($3,000) and November 1-30,
------------------------------------------------
1995 ($8,000)
- ------------------------------------------------------------------------------
1.7 SECURITY DEPOSIT: $25,000.00 (See Paragraph 52) ("SECURITY DEPOSIT").
-----------------------------
(See Paragraph 5 for further provisions.)
1.8 PERMITTED USE: Office, school, training and related legal uses.
-----------------------------------------------------
(See Paragraph 6 for further provisions.)
1.9 INSURING PARTY: Lessor is tile "INSURING PARTY" unless otherwise
stated herein. (See Paragraph 8 for further provisions.)
1.10 REAL ESTATE BROKERS: The following real estate brokers (collectively,
the "BROKERS") and brokerage relationships exist in this transaction and are
consented to by the Parties (check applicable boxes):
Voit Commercial Brokerage (Louis Tomaselli/Mitch Zehner) represents
- --------------------------------------------------------------------
[_] Lessor exclusively ("LESSOR'S BROKER"); [X] both Lessor and Lessee, and

- --------------------------------------------------------------------- represents
[_] Lessee exclusively ("LESSEE'S BROKER"); [X] both Lessee and Lessor. (See
Paragraph 15 for further provisions.)
1.11 GUARANTOR. The obligations of the Lessee under this Lease are to be
guaranteed by Douglas E. Hartman (Attached hereto) ("GUARANTOR").
-----------------------------------------
(See Paragraph 37 for further provisions.)
1.12 ADDENDA. Attached hereto is an Addendum or Addenda consisting of
Paragraphs 49 through 52 and Exhibits "A" and "B" all of which constitute a
---- ---- ------------
part of this Lease.
2. PREMISES.
2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of square footage set forth in this Lease, or that may
have been used in calculating rental, is an approximation which Lessor and
Lessee agree is reasonable and the rental based thereon is not subject to
revision whether or not the actual square footage is more or less.
2.2 CONDITION. Lessor shall deliver the Premises to Lessee clean and free
of debris on the Commencement Date and warrants to Lessee that the existing
plumbing, fire sprinkler system lighting, air conditioning, heating, and loading
doors, if any, in the Premises, other than those constructed by Lessee, shall be
in good operating condition on the Commencement Date. If a non-compliance with
said warranty exists as of the Commencement Date, Lessor shall, except as
otherwise provided in this Lease, promptly after receipt of written notice from
Lessee setting forth with specificity the nature and extent of such non-
compliance, rectify same at Lessor's expense. If Lessee does not give Lessor
written notice of a non-compliance with this warranty within thirty (30) days
after the Commencement Date, correction of that non-compliance shall be the
obligation of Lessee at Lessee's sole cost and expense.
2.3 COMPLIANCE WITH COVENANTS, RESTRICTIONS AND BUILDING CODE.
Lessor warrants to Lessee that the improvements on the Premises comply with all
applicable covenants or restrictions of record and applicable building codes,
regulations and ordinances in effect on the Commencement Date. Said warranty
does not apply to the use to which Lessee will put the Premises or to any
Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to
be made by Lessee. If the Premises do not comply with said warranty, Lessor
shall, except as otherwise provided in this Lease, promptly after receipt of
written notice from Lessee setting forth with specificity the nature and extent
of such non-compliance, rectify the same at Lessor's expense. If Lessee does not
give Lessor written notice of a non-compliance with this warranty within six
(6) months following the Commencement Date, correction of that non-compliance
shall be the obligation of Lessee at Lessee's sole cost and expense.
2.4 ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a) that it has
been advised by the Brokers to satisfy itself with respect to the condition of
the Premises (including but not limited to the electrical and fire sprinkler
systems, security, environmental aspects, compliance with Applicable Law, as
defined in Paragraph 6.3) and the present and future suitability of the Premises
for Lessee's intended use, (b) that Lessee has made such investigation as it
deems necessary with reference to such matters and assumes all responsibility
therefor as the same relate to Lessee's occupancy of the Premises and/or the
term of this Lease, and (c) that neither Lessor, nor any of Lessor's agents, has
made any oral or written representations or warranties with respect to the said
matters other than as set forth in this Lease.
2.5 LESSEE PRIOR OWNER/OCCUPANT. The warranties made by Lessor in this
Paragraph 2 shall be of no force or effect if immediately prior to the date set
forth in Paragraph 1.1 Lessee was the owner or occupant of the Premises. In
such event, Lessee shall, at Lessee's sole cost and expense, correct any
non-compliance of the Premises with said warrants.
3. TERM.
3.1 TERM. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.
3.2 EARLY POSSESSION. If Lessee totally or partially occupies the Premises
prior to the Commencement Date, the obligation to pay Base Rent shall be
abated for the period of such early possession. All other terms of this Lease,
however, (including but not limited to the obligations to pay Real Property
Taxes and insurance premiums and to maintain the Premises) shall be in effect
during such period. Any such early possession shall not affect nor advance the
Expiration Date of the Original Term.

Initials
---------
PAGE 1 ---------
NET

1990 - AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION FORM 204N-R-12/91
<PAGE>

3.3 DELAY IN POSSESSION. If for any reason Lessor cannot deliver
possession of the Premises to Lessee as agreed herein by the Early Possession
Date, if one is specified in Paragraph 1.4, or, if no Early Possession Date is
specified, by the Commencement Date, Lessor shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease, or
the obligations of Lessee hereunder, or extend the term hereof, but in such
case, Lessee shall not, except as otherwise provided herein, be obligated to pay
rent or perform any other obligation of Lessee under the terms of this Lease
until Lessor delivers possession of the Premises to Lessee. If possession of the
Premises is not delivered to Lessee within sixty (60) days after the
Commencement Date, Lessee may at its option, by notice in writing to Lessor
within ten (10) days thereafter, cancel this Lease, in which event the Parties
shall be discharged from all obligations hereunder; provided, however, that if
such written notice by Lessee is not received by Lessor within said ten (10) day
period, Lessee's right to cancel this Lease shall terminate and be of no further
force or effect. Except as may be otherwise provided, and regardless of when the
term actually commences, if possession is not tendered to Lessee when required
by this Lease and Lessee does not terminate this Lease, as aforesaid, the period
free of the obligation to pay Base Rent, if any, that Lessee would otherwise
have enjoyed shall run from the date of delivery of possession and continue for
a period equal to what Lessee would otherwise have enjoyed under the terms
hereof, but minus any days of delay caused by the acts, changes or omissions of
Lessee.

4. RENT.
4.1 BASE RENT. Lessee shall cause payment of Base Rent and other rent or
charges, as the same may be adjusted from time to time, to be received by Lessor
in lawful money of the United States, without offset or deduction, on or before
the day on which it is due under the terms of this Lease. Base Rent and all
other rent and charges for any period during the term hereof which is for less
than one (1) full calendar month shall be prorated based upon the actual number
of days of the calendar month involved. Payment of Base Rent and other charges
shall be made to Lessor at its address stated herein or to such other persons or
at such other addresses as Lessor may from time to time designate in writing to
Lessee.

5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof
the Security Deposit set forth in Paragraph 1.7 as security for Lessee's
faithful performance of Lessee's obligations under this Lease. If Lessee fails
to pay Base Rent or other rent or charges due hereunder, or otherwise Defaults
under this Lease (as defined in Paragraph 13.l), Lessor may use, apply or retain
all or any portion of said Security Deposit for the payment of any amount due
Lessor or to reimburse or compensate Lessor for any liability, cost, expense,
loss or damage (including attorneys' fees) which Lessor may suffer or incur by
reason thereof. If Lessor uses or applies all or any portion of said Security
Deposit, Lessee shall within ten (10) days after written request therefor
deposit moneys with Lessor sufficient to restore said Security Deposit to the
full amount required by this Lease. Any time the Base Rent increases during the
term of this Lease, Lessee shall, upon written request from Lessor, deposit
additional moneys with Lessor sufficient to maintain the same ratio between the
Security Deposit and the Base Rent as those amounts are specified in the Basic
Provisions. Lessor shall not be required to keep all or any part of the Security
Deposit separate from its general accounts. Lessor shall, at the expiration or
earlier termination of the term hereof and after Lessee has vacated the
Premises, return to Lessee (or, at Lessor's option, to the last assignee, if
any, of Lessee's interest herein), that portion of the Security Deposit not used
or applied by Lessor. Unless otherwise expressly agreed in writing by Lessor, no
part of the Security Deposit shall be considered to be held in trust, to bear
interest or other increment for its use, or to be prepayment for any moneys to
be paid by Lessee under this Lease.

6. USE.
6.1 USE. Lessee shall use and occupy the Premises only for the purposes set
forth in Paragraph 1.8, or any other use which is comparable thereto, and for no
other purpose. Lessee shall not use or permit the use of the Premises in a
manner that creates waste or a nuisance, or that disturbs owners and/or
occupants of, or causes damage to, neighboring premises or properties. Lessor
hereby agrees to not unreasonably withhold or delay its consent to any written
request by Lessee, Lessees assignees or subtenants, and by prospective assignees
and subtenants of the Lessee, its assignees and subtenants, for a modification
of said permitted purpose for which premises may be used or occupied, so long as
the same will not impair structural integrity of the improvements on the
Premises, the mechanical or electrical systems therein, is not significantly
more burdensome to the Premises and the improvements thereon, and is otherwise
permissible pursuant to this Paragraph 6. If Lessor elects to withhold such
consent, Lessor shall within five (5) business days give a written notification
of the same, which notice shall include an explanation of Lessor's reasonable
objections to the change in use.
6.2 HAZARDOUS SUBSTANCES.
(a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS SUBSTANCE" as
used in this Lease shall mean any product, substance, chemical, material or
waste whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially injurious to the public health, safety or welfare, the
environment or the Premises, (ii) regulated or monitored by any governmental
authority, or (iii) a basis for liability of Lessor to any governmental agency
or third party under any applicable statute or common law theory. Hazardous
Substance shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, crude oil or any products, by-products or fractions thereof. Lessee
shall not engage in any activity in, on or about the Premises which constitutes
a Reportable Use (as hereinafter defined) of Hazardous Substances without the
express prior written consent of Lessor and compliance in a timely manner (at
Lessee's sole cost and expense) with all Applicable Law (as defined in Paragraph
6.3). "REPORTABLE USE" shall mean (i) the installation or use of any above or
below ground storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous Substance that requires a permit
from, or with respect to which a report, notice, registration or business plan
is required to be filed with, any governmental authority. Reportable Use shall
also include Lessee's being responsible for the presence in, on or about the
Premises of a Hazardous Substance with respect to which any Applicable Law
requires that a notice be given to persons entering or occupying the Premises or
neighboring properties. Notwithstanding the foregoing, Lessee may, without
Lessor's prior consent, but in compliance with all Applicable Law, use any
ordinary and customary materials reasonably required to be used by Lessee in the
normal course of Lessee's business permitted on the Premises, so long as such
use is not a Reportable Use and does not expose the Premises or neighboring
properties to any meaningful risk of contamination or damage or expose Lessor to
any liability therefor. In addition, Lessor may (but without any obligation to
do so) condition its consent to the use or presence of any Hazardous Substance,
activity or storage tank by Lessee upon Lessee's giving Lessor such additional
assurances as Lessor, in its reasonable discretion, deems necessary to protect
itself, the public, the Premises and the environment against damage,
contamination or injury and/or liability therefrom or therefor, including, but
not limited to, the installation (and removal on or before Lease expiration or
earlier termination) of reasonably necessary protective modifications to the
Premises (such as concrete encasements) and/or the deposit of an additional
Security Deposit under Paragraph 5 hereof.
(b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable cause to
believe, that a Hazardous Substance, or a condition involving or resulting
from same, has come to be located in, on, under or about the Premises, other
than as previously consented to by Lessor, Lessee shall immediately give written
notice of such fact to Lessor. Lessee shall also immediately give Lessor a copy
of any statement, report, notice, registration, application, permit, business
plan, license, claim, action or proceeding given to or received from any
governmental authority or private party, or persons entering or occupying the
Premises, concerning the presence, spill, release, discharge of, or exposure to,
any Hazardous Substance or contamination in, on, or about the Premises,
including but not limited to all such documents as may be involved in any
Reportable Uses involving the Premises.
(c) INDEMNIFICATION. Lessee shall indemnify, protect, defend, and hold
Lessor, its agents, employees, lenders and ground lessor, if any, and the
Premises, harmless from and against any and all loss of rents and/or damages,
liabilities, judgments, costs, claims, liens, expenses, penalties, permits and
attorney's and consultant's fees arising out of or involving any Hazardous
Substance or storage tank brought onto the Premises by or for Lessee or under
Lessee's control. Lessee's obligations under this Paragraph 6 shall include, but
not be limited to, the effects of any contamination or injury to person,
property or the environment created or suffered by Lessee, and the cost of
investigation (including consultant's and attorney's fees and testing), removal,
remediation, restoration and/or abatement thereof, or of any contamination
therein involved, and shall survive the expiration or earlier termination of
this Lease. No termination, cancellation or release agreement entered into by
Lessor and Lessee shall release Lessee from its obligations under this Lease
with respect to Hazardous Substances or storage tanks, unless specifically so
agreed by Lessor in writing at the time of such agreement.
6.3 LESSEE'S COMPLIANCE WITH LAW. Except as otherwise provided in this
Lease, Lessee, shall, at Lessee's sole cost and expense, fully, diligently and
in a timely manner, comply with all "APPLICABLE LAW," which term is used in this
Lease to include all laws, rules regulations, ordinances, directives,
covenants, easements and restrictions of record, permits, the requirements of
any applicable fire insurance underwriter or rating bureau, and the
recommendations of Lessor's engineers and/or consultants, relating to any manner
to the Premises including but not limited to matters pertaining to (i)
industrial hygiene, (ii) environmental conditions on, in, under or about the
Premises, including soil and groundwater conditions, and (iii) the use,
generation, manufacture, production, installation, maintenance, removal,
transportation, storage, spill or release of any Hazardous Substance or storage
tank), now in effect or which may hereafter come into effect, and whether or not
reflecting a change in policy from any previously existing policy. Lessee shall,
within five (5) days after receipt of Lessor's written request, provide Lessor
with copies of all documents and information, including, but not limited to,
permits, registrations, manifests, applications, reports and certificates,
evidencing Lessee's compliance with and Applicable Law specified and shall
immediately upon receipt, notify Lessor in writing (with copies of any documents
involved) of any threatened or actual claim, notice, citation, warning,
complaint or report pertaining to or involving failure by Lessee or the Premises
to comply with any Applicable Law.
6.4 INSPECTION; COMPLIANCE. Lessor and Lessor's Lender(s) (as defined in
Paragraph 8.3(a)) shall have the right to enter the Premises at any
time, in the case of an emergency, and otherwise at reasonable times, for the
purpose of inspecting the condition of the Premises and for verifying
compliance by Lessee with this Lease and all Applicable laws (as defined in
Paragraph 6.3), and to employ experts and/or consultants in connection therewith
and/or to advise Lessor with respect to Lessee's activities, including but
not limited to the installation, operation, use, monitoring, maintenance, or
removal of any Hazardous Substance or storage tank on or from the Premises. The
costs and expenses of any such inspections shall be paid by the party requesting
same, unless a Default or Breach of this Lease, violation of Applicable Law, or
a contamination, caused or materially contributed to by Lessee is found to
exist or be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination. In any such case, Lessee shall upon request reimburse Lessor
or Lessor's Lender, as the case may be, for the costs and expenses of such
inspections.

7. MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.
7.1 LESSEE'S OBLIGATIONS.
(a) Subject to the provisions of Paragraphs 2.2 (Lessor's warranty as
to condition), 2.3 (Lessor's warranty as to compliance with covenants, etc). 7.2
(Lessor's obligations to repair), 9 (damage and destruction), and 14
(condemnation), Lessee shall, at Lessee's sole cost and expense and at all
times, keep the Premises and every part thereof in good order, condition and
repair, structural and non-structural (whether or not such portion of the
Premises requiring repairs, or the means of repairing the same are reasonably or
readily accessible to Lessee, and whether or not the need for such repairs
occurs as a result of
Initials
--------
NET --------
PAGE 2

<PAGE>

Lessee's use, any prior use, the elements or the age of such portion of the
Premises), including, without limiting the generality of the foregoing, all
equipment or facilities serving the Premises, such as plumbing, heating, air
conditioning, ventilating, electrical, lighting facilities, boilers, fired or
unfired pressure vessels, fire sprinkler and/or standpipe and hose or other
automatic tire extinguishing system, including fire alarm and/or smoke detection
systems and equipment fire hydrants, fixtures, walls (interior and exterior),
foundations, ceilings, roots, floors, windows, doors, plate glass, skylights,
landscaping, driveways, parking lots, fences, retaining walls, signs, sidewalks
and parkways located in, on, about, or adjacent to the Premises. Lessee shall
not cause or permit any hazardous Substance to be spilled or released in, on,
under or about the Premises (including through the plumbing or sanitary sewer
system) and shall promptly, at Lessee's expense, take all investigatory and/or
remedial action reasonably recommended, whether or not formally ordered or
required for the cleanup of any contamination of and for the maintenance,
security and/or monitoring of the Premises, the elements surrounding same, or
neighboring properties, that was caused or materially contributed to by Lessee,
or pertaining to or involving any Hazardous Substance and/or storage tank
brought onto the Premises by or for Lessee or under its control. Lessee, in
keeping the Premises in good order. Condition and repair, shall exercise and
perform good maintenance practices. Lessee's obligations shall include
restorations, replacements or renewals when necessary to keep the Premises and
all Improvements thereon or a part thereof in good Order. condition and state of
repair. If Lessee Occupies the Premises for seven (7) years or more, Lessor may
require Lessee to repaint the exterior of the buildings on the Premises as
reasonably required, but not more frequently than Once every seven (7) years.
(b) Lessee shall, at Lessee's sole cost and expense, procure and maintain
contracts, with copies to Lessor, in customary form and substance for, and with
contractors specializing and experienced in the inspection, maintenance and
service of the following equipment and improvements, if any, located on the
Premises: (i) heating, air conditioning and ventilation equipment. (ii) boiler,
fired or unfired pressure vessels, (iii) fire sprinkler and/or standpipe and
hose or other automatic tire extinguishing systems, including fire alarm and/or
smoke detection, (iv) landscaping and irrigation systems, (v) roof covering and
drain maintenance and (vi) asphalt and parking lot maintenance.
7.2 LESSOR'S OBLIGATIONS. Except for the warranties and agreements of
Lessor contained in Paragraphs 2.2 (relating to condition of the Premises), 2.3
(relating to compliance with covenants. restrictions and building code), 9
(relating to destruction of the Premises) and 14 (relating to condemnation of
the Premises), it is intended by the Parties hereto that Lessor have no
obligation in any manner whatsoever, to repair and maintain the Premises, the
improvements located thereon, or the equipment therein, whether structural or
non structural. all of which obligations are intended to be that of the Lessee
under Paragraph 7.1 hereof. It is the intention of the Parties that the terms of
this Lease govern the respective obligations of the Parties as to maintenance
and repair of the Premises. Lessee and Lessor expressly waive the benefit of any
statute now or hereafter in effect to the extent it is inconsistent with the
terms of this Lease with respect to, or which affords Lessee the right to make
repairs at the expense of Lessor or to terminate this Lease by reason of, any
needed repairs.
7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.
(a) DEFINITIONS; CONSENT REQUIRED. The term "UTILITY INSTALLATIONS" is
used in this Lease to refer to all carpeting, window coverings. air lines, power
panels, electrical distribution, security, fire protection systems,
communication systems, lighting fixtures, heating, ventilating, and air
conditioning equipment, plumbing, and fencing in, on, or about the Premises. The
term "TRADE FIXTURES" shall mean Lessee's machinery and equipment that can be
removed without doing material damage to the Premises The term "ALTERATIONS"
shall mean any modification of the improvements on the Premises from that which
are provided by Lessor under the terms of this Lease other than Utility
Installations or Trade Fixtures. whether by addition or deletion. "LESSEE OWNED
ALTERATIONS AND/OR UTILITY INSTALLATIONs" are defined as Alterations and/or
Utility Installations made by lessee that are not yet owned by Lessor as defined
in Paragraph 7.4(a) Lessee shall not make any Alteration or Utility
Installations in. on. under or about the Premises without Lessor's prior written
consent. Lessee may. however. make non-structural Utility Installations to the
interior of the Premises (excluding the roof), as long as they are not visible
from the outside, do not involve puncturing, relocating or removing the roof or
any existing walls and the cumulative cost thereof during the term of this Lease
as extended does not exceed $25,000.
(b) CONSENT. Any Alterations or Utility installations that Lessee shall
desire to make and which require the consent of the Lessor shall be presented to
Lessor in written form with proposed detailed plans. All consents given by
Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific
consent, shall be deemed conditioned upon: (i) Lessee's acquiring all applicable
permits required by governmental authorities, (ii) the furnishing of copies of
such permits together with a copy of the plans and specifications for the
Alteration or Utility Installation to Lessor prior to commencement of the work
thereon. and (iii) the compliance by Lessee with all conditions of said permits
in a prompt and expeditious manner. Any Alterations or Utility Installations by
Lessee during the term of this Lease shall be done in a good and workmanlike
manner, with good and sufficient materials, and in compliance with all
Applicable Law. Lessee shall promptly upon completion thereof furnish lessor
with as-built plans and specifications thereto. Lessor may (but without
Obligation to do so) condition its consent to any requested Alteration or
Utility Installation that costs $10,000 or more upon Lessee's providing Lessor
with a lien and completion bond in an amount equal to One and one-half times the
estimate cost of such Alteration or Utility Installation and/or upon Lessee's
posting an additional Security Deposit with Lessor under Paragraph 36 hereof.
(c) INDEMNIFICATION. Lessee shall pay when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or
for use on the Premises, which claims are or may be secured by any mechanics or
materialmen's lien against the Premises or any interest therein. Lessee
shall give Lessor not less than ten (10) days' notice prior to the commencement
of any work in, on or about the Premises, and Lessor shall have the right to
post notices of non-responsibility in or on the Premises as provided by law. If
Lessee shall, in good faith, contest the validity of any such lien, claim or
demand then Lessee shall, at its sole expense defend and protect itself.
Lessor and the Premises against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement thereof
against the Lessor or the Premises. If Lessor shall require, Lessee Shall
furnish to Lessor a surety bond satisfactory to Lessor in an amount equal to One
and a half times the amount of such contested lien or claim or demand,
indemnifying Lessor, against liability for the same. as required by law for the
holding of the Premises free from the effect of such lien or claim. In addition,
Lessor may require Lessee to pay Lessor's attorney's fees and costs in
participating in such action if Lessor shall decide it is to its best interest
to do so.
7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
(a) OWNERSHIP. Subject to Lessors right to require their removal or
become the owner thereof as hereinafter provided in this Paragraph 7.4. all
Alterations and Utility Additions made to the Premises by Lessee Shall be the
property of and owned by Lessee. but considered a part of the Premises. Lessor
may, at any time and at its option, elect in writing to Lessee to be the owner
of all Or any specified part of the Lessee Owned Alterations and Utility
Installations Unless otherwise instructed per subparagraph 7.4(b) hereof, all
Lessee Owned Alterations and Utility Installations shall at the expiration or
earlier termination of this Lease, become the property of Lessor and remain upon
and be surrendered by Lessee with the Premises.
(b) REMOVAL. Unless otherwise agreed in writing, Lessor may require
that any or all Lessee Owned Alterations or Utility Installations be removed by
the expiration or earlier termination of this Lease, notwithstanding their
Installation may have been consented to by Lessor. Lessor may require the
removal at any time of all Or any part of any Lessee owned Alterations or
Utility Installations made without the required consent of Lessor.
(c) SURRENDER/RESTORATION. Lessee Shall surrender the Premises by the
end of the last day of the Lease term or any earlier termination date. with all
Of the improvements, parts and surfaces thereof clean and free of debris and in
good operating order, condition and State of repair, ordinary wear and tear
excepted. "ORDINARY WEAR AND TEAR" shall not include any damage or deterioration
that would have been prevented by good maintenance practice Or by Lessee
performing all of its Obligations under this lease Except as otherwise agreed or
specified in writing by Lessor. the Premises, as Surrendered, shall include the
Utility Installations. The obligation of Lessee shall include the repair of any
damage occasioned by the installation. maintenance Or removal of Lessee's Trade
Fixtures, furnishings, equipment. and Alterations and/or Utility Installations.
as well as the removal of any storage tank installed by Or for Lessee, and the
removal, replacement, or remediation of any soil, material or ground water
contaminated by Lessee, all as may then be required by Applicable Law and/or
good practice. Lessee's Trade Fixtures shall remain the property of Lessee and
shall he removed by Lessee subject to its obligation to repair and restore the
Premises per this Lease.

8. INSURANCE; INDEMNITY.
8.1 PAYMENT FOR INSURANCE. Regardless of whether the Lessor or Lessee is
the insuring Party. Lessee shall pay for all insurance required under this
Paragraphs except to the extent of the cost attributable to liability insurance
carried by Lessor in excess of $1,000,000 per Occurrence. Premiums for policy,
periods commencing prior to or extending beyond the Lease tern shall be
prorated to correspond to the lease term. Payment shall be make by Lessee to
Lessor within ten (10) days following receipt of an invoice for any amount due.
8.2 LIABILITY INSURANCE.
(a) CARRIED BY LESSEE. Lessee shall obtain and keep in force during
the term of this Lease a Commercial General Liability policy of insurance
protecting Lessee and Lessor (as an additional insured) against claims for
bodily injury personal injury and property damage based upon, involving or
arising out of the ownership, use, occupancy or maintenance of the Premises and
all areas appurtenant thereto. Such insurance shall be or, an occurrence basis
providing single limit coverage in an amount nor less than $1,000,000 per
Occurrence with an "Additional Insured-Managers or Lessors of Premises"
Endorsement and contain the "Amendment of the Pollution Exclusion" for damages
caused by heat, smoke or fumes from a hostile fire. The policy shall not contain
any intra-insured exclusions as between insured persons or organizations but
shall include coverage for liability assumed under this Lease as an "insured
contract" for the performance of Lessee's indemnity obligations under this
Lease. The limits of said insurance required by this Lease or as carried by
Lessee shall not, however, limit the liability of Lessee nor relieve Lessee of
any obligation hereunder. All insurance to be carried by Lessee shall be primary
to and not contributory with any similar insurance carried by Lessor, whose
insurance shall be considered excess insurance only.
(b) CARRIED BY LESSOR. In the event Lessor is the insuring Party,
Lessor shall also maintain liability insurance described in Paragraph 82(a),
above, in addition to, and not in lieu of, the insurance required to be
maintained by Lessee . Lessee shall not be named as an additional insured
therein.
8.3 PROPERTY INSURANCE-BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(a) BUILDING AND IMPROVEMENTS. The Insuring Party shall obtain and
keep in force during the term of this Lease a policy or policies in the name of
Lessor, with loss payable to Lessor and to the holder's of any mortgages, deeds
of trust or ground leases On the Premises (`Lender(s)"). insuring loss or

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damage to the Premises. The amount of such insurance shall be equal to the
full replacement cost of the Premises, as the same shall exist from time to
time, or the amount required by Lenders, but in no event more than the
commercially reasonable and available insurable value thereof if, by reason of
the unique nature or age of the improvements involved, such latter amount is
less than full replacement cost. If Lessor is the Insuring Party, however,
Lessee Owned Alterations and Utility Installations shall be insured by Lessee
under Paragraph 8.4 rather than by Lessor. If the coverage is available and
commercially appropriate, such policy or policies shall insure against all risks
of direct physical loss or damage (except the perils of flood and/or earthquake
unless required by a Lender). Including coverage for any additional costs
resulting from debris removal and reasonable amounts of coverage for the
enforcement of an ordinance or law regulating the reconstruction or replacement
of any undamaged sections of the Premises required to be demolished or removed
by reason of the enforcement of any building, zoning, safety or land use laws as
the result of a covered cause of loss, Said policy or policies shall also
contain an agreed valuation provision in lieu of any coinsurance clause, waiver
of subrogation, and Inflation guard protection causing an Increase in the annual
property insurance coverage amount by a factor of not less than the adjusted
U.S. Department of Labor Consumer Price Index for All Urban Consumers for the
city nearest to where the Premises are located, If such insurance coverage has a
deductible clause, the deductible amount shall not exceed $1,000 per occurrence,
and Lessee Shall be liable for Such deductible amount In the event of an Insured
Loss, as defined in Paragraph 9.1(c).
(b) RENTAL VALUE. The Insuring Party shall, in addition. obtain
and keep in force during the term Of this Lease a policy or policies in the
name of Lessor. with loss payable to Lessor and Lender(s), insuring the loss of
the full rental and other charges payable by Lessee to Lessor under this Lease
for one (1) year (including all real estate taxes, insurance costs, and any
scheduled rental Increases). Said Insurance Shall provide that in the event the
Lease is terminated by reason of an insured loss, the period of indemnity for
such coverage shall be extended beyond the date of the completion of repairs or
replacement of the Premises to provide for one full year's loss of rental
revenues from the date of any such loss. Said insurance shall contain an agreed
valuation provision in lieu of any coinsurance clause and the amount of
coverage shall be adjusted annually to reflect the projected rental income,
property taxes, insurance premium costs and other expenses, if any, otherwise
payable by Lessee, for the next twelve (12) month period, Lessee shall be liable
for any deductible amount in the event of such loss.
(c) ADJACENT PREMISES. If the Premises are part of a larger
building, or if the Premises are part of a group of buildings owned by Lessor
which are adjacent to the Premises, the Lessee shall pay for any increase in the
premiums for the property insurance of such building or buildings if said
increase is caused by Lessee's acts. omissions, use or occupancy of the
Premises.
(d) TENANT'S IMPROVEMENTS. If the Lessor is the Insuring Party.
the Lessor shall not be required to insure Lessee Owned Alterations and Utility
Installations unless the item in question has become the property of Lessor
under the terms of this Lease, If Lessee is the Insuring Party, the policy
carried by Lessee under this Paragraph 3,3 shall insure Lessee Owned Alterations
and Utility Installations.
8.4 LESSEE'S PROPERTY INSURANCE. Subject to the requirements of
Paragraph 8.5, Lessee at its cost shall either by separate policy or, at
Lessor's option, by endorsement to a policy already carried, maintain insurance
coverage on all of Lessee's personal property, Lessee Owned Alterations and
Utility Installations in, on, or about the Premises similar in coverage to that
carried by the Insuring Party under Paragraph 8,3, Such insurance shall be full
replacement cost coverage with a deductible of not to exceed $1,000 per
occurrence. The proceeds from any such insurance shall be used by Lessee for the
replacement of personal property or the restoration of Lessee Owned
Alterations and Utility installations. Lessee shall be the Insuring Party with
respect to the insurance required by this Paragraph S.4 and shall provide
Lessor with written evidence that such insurance is in force.
8.5 INSURANCE POLICIES. Insurance required hereunder shall be in
companies duly licensed to transact business in the state where the Premises
are located, and maintaining during the policy term a "General Policyholders
Rating" of at least B+, V, or such other rating as may be required by a Lender
having a lien on the Premises, as set forth in the most current issue of "Best's
Insurance Guide." Lessee shall not do or permit to be done anything which shall
invalidate the insurance policies referred to in this Paragraph a. If Lessee is
the Insuring Party, Lessee shall cause to be delivered to Lessor certified
copies of policies of such insurance or certificates evidencing the existence
and amounts of such insurance with the insureds and loss payable clauses as
required by this Lease, No such policy shall be cancellable or subject to
modification except after thirty (30) days prior written notice to Lessor,
Lessee shall at least thirty (30) days prior to the expiration of such policies,
furnish Lessor with evidence of renewals or "insurance binders" evidencing
renewal thereof, or Lessor may order such insurance and charge the cost thereof
to Lessee, which amount shall be payable by Lessee to Lessor upon demand. If the
Insuring Party Shall fail to procure and maintain the insurance required to be
carried by the insuring Party under this Paragraph 8, the Other Party may, but
shall not be required to procure and maintain the same, but at Lessee's expense.
8.6 WAVER OF SUBROGATION. Without affecting any other rights or
remedies, Lessee and Lessor ("WAIVING PARTIES") each hereby release and relieve
the other, and waive their entire right to recover damages (whether in
contract or in tort) against the other. for loss of or damage to the Waiving
Party's property arising out of or incident to the perils required to br
insured against under Paragraph 8. The effect of such releases and waivers of
the right to recover damages shall not be limited by the amount of insurance
carried or required, or by any deductibles applicable thereto.
8.7 INDEMNITY. Except for Lessor's negligence and/or breach of
express warranties, Lessee Shall indemnify, Protect, defend and hold harmless
the Premises, Lessor and its agents, Lessor's master or ground lessor,
partners and Lenders, from and against any and all claims, loss of rents and/or
damages, costs, liens, judgments, penalties, permits, attorney's and
consultant's fees, expenses and/or liabilities arising out of, involving, or in
dealing with. The occupancy of the Premises by Lessee, the conduct of Lessee's
business, any act, omission or neglect of Lessee, its agents, contractors,
employees or invitees, and out of any Default or Breach by Lessee in the
performance in a timely manner of any obligation on Lessee's part to be
performed under this Lease. The foregoing shall include, but not be limited to,
the defense or pursuit of any claim or any action or proceeding involved
therein, and whether or not (in the case of claims made against Lessor)
litigated and/or reduced to judgment, and whether well founded or not. In case
any action or proceeding be brought against Lessor by reason of any of the
foregoing matters, Lessee upon notice from Lessor shall defend the same at
Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall
cooperate with Lessee in such defense. Lessor need not have first paid arty such
claim in order to be so indemnified.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable
for injury or damage to the person or goods, wares, merchandise or other
property of Lessee, Lessee's employees, contractors, invitees, customers, or
any other person in or about the Premises, whether such damage or injury is
caused by or results from fire, Steam, electricity, gas, water or rain, or from
the breakage, leakage, obstruction or other defects Of pipes. fire Sprinklers,
wires. Appliances, plumbing, air conditioning or lighting fixtures, or from any
other cause, whether the said injury or damage results from conditions arising
upon the Premises or upon other portions of the building of which the Premises
are a part, or from other sources or places, and regardless of whether the cause
of such damage or injury or the means of repairing the same is accessible or
not. Lessor shall not be liable for any damages arising from any act or neglect
of any other tenant of Lessor, Notwithstanding Lessor's negligence or breach of
this Lease, Lessor shall under no circumstances be liable for injury to Lessee's
business or for any loss of income or profit therefrom.

9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction
to the improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations, the repair cost of which damage or destruction is less
than 50% of the then Replacement Cost of the Premises immediately prior to Such
damage or destruction, excluding from such calculation the value of the land and
Lessee Owned Alterations and Utility Installations.
(b) "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to
the Premises, other than Lessee Owned Alterations and Utility Installations the
repair cost of which damage or destruction is 50% or more of the then
Replacement Cost of the Premises immediately prior to such damage or
destruction. excluding from Such calculation the value of the land and Lessee
Owned Alterations and Utility Installations.
(c) "INSURED LOSS" shall mean damage or destruction to
improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations, which was caused by an event required to be covered by the
insurance described in Paragraph 3.3(a), irrespective of any deductible amounts
or coverage limits involved,
(d) "REPLACEMENT COST" shall mean the cost to repair or rebuild
the improvements owned by Lessor at the time of the occurrence to their
condition existing immediately prior thereto, including demolition, debris
removal and upgrading required by the operation of applicable building codes,
ordinances or laws, and without deduction for depreciation.
(e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by,
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.
9.2 PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage
that is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair
Such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and
Utility Installations) as soon as reasonably possible and this Lease shall
continue in full force and effect; provided, however, that Lessee shall, at
Lessor's election, make the repair of any damage or destruction the total cost
to repair of witch is $10,000 or less, and, in such event Lessor shall make the
insurance proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the
insurance proceeds are not sufficient to effect such repair, the insuring party
shall promptly contribute the shortage in proceeds (except as to the deductible
which is Lessee's responsibility) as and when required to complete said repairs.
In the event, however, the shortage in proceeds was due to the fact that, by
reason of the unique nature of the improvements, full replacement cost insurance
coverage was not commercially reasonable and available, Lessor shall have no
obligation to pay for the shortage in insurance proceeds or to fully restore the
unique aspects of the Premises unless Lessee provides Lessor with the funds to
cover same, or adequate assurance thereof, within ten (10) days following
receipt of written notice of such shortage and request therefor. If Lessor
receives said funds or adequate assurance thereof within said ten (10) day
period, the party responsible for making the repairs shall complete them as soon
as reasonably possible and this Lease shall remain in full force and effect. If
Lessor does not receive such funds or assurance within said period, Lessor may
nevertheless elect by written notice to Lessee within ten (10) days thereafter
to make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in full
force and effect. If in such case Lessor does not so elect, then this Lease
shall terminate sixty (60) days following the occurrence of the damage or
destruction, Unless otherwise agreed. Lessee shall in no event have any right to
reimbursement from Lessor for any funds contributed by Lessee to repair any Such
damage or destruction. Premises Partial Damage due to flood or earthquake shall
be subject to Paragraph 9.3 rather than Paragraph 9.2, notwithstanding that
there may be some insurance coverage, but the net proceeds of any such insurance
shall be made available for the repairs if made by either Party.

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9.3 PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense and
this Lease shall continue in full force and effect, but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option, either: (i) repair
such damage as soon as reasonably possible at Lessor's expense, in which event
this Lease shall continue in full force and effect, or (ii) give written notice
to Lessee within thirty (30) days after receipt by Lessor of knowledge of the
occurrence of such damage of Lessor's desire to terminate this Lease as of the
date sixty (60) days following the giving of such notice. In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of such notice to
give written notice to Lessor of Lessee's commitment to pay for the repair of
such damage totally at Lessee's expense and without reimbursement from Lessor.
Lessee shall provide Lessor with the required funds or satisfactory assurance
thereof within thirty (30) days following Lessee's said commitment. In such
event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible and the required
funds are available. If Lessee does not give such notice and provide the funds
or assurance thereof within the times specified above, this Lease shall
terminate as of the date specified in Lessor's notice of termination.
9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following the date of such Premises Total Destruction, whether or not the damage
or destruction is an Insured Loss or was caused by a negligent or willful act of
Lessee. In the event, however, that the damage or destruction was caused by
Lessee, Lessor shall have the right to recover Lessor's damages from Lessee
except as released and waived in Paragraph 8.6.
9.5 DAMAGE NEAR END OF TERM. If at any time during the last six (6) months
of the term of this Lease there is damage for which the cost to repair
exceeds one (1) month's Base Rent, whether or not an Insured Loss, Lessor may,
at Lessor's option, terminate this Lease effective sixty (60) days following the
date of occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within thirty (30) days after the date of occurrence of such
damage. Provided, however, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this
Lease by, within twenty (20) days following the occurrence of the damage, or
before the expiration of the time provided in such option for its exercise,
whichever is earlier ("EXERCISE PERIOD"),(i) exercising such option and (ii)
providing Lessor with any shortage in insurance proceeds (or adequate assurance
thereof) needed to make the repairs. If Lessee duly exercises such option during
said Exercise Period and provides Lessor with funds (or adequate assurance
thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor's
expense repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option and
provide such funds or assurance during said Exercise Period, then Lessor may
at Lessor's option terminate this Lease as of the expiration Of said sixty (60)
day period following the occurrence of such damage by giving written notice to
Lessee of Lessor's election to do so within ten (10) days after the expiration
of the Exercise Period, notwithstanding any term or provision in the grant of
option to the contrary.
9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) In the event of damage described in Paragraph 9.2 (Partial Damage--
Insured), whether or not Lessor or Lessee repairs or restores the Premises, the
Base Rent, Real Property Taxes, insurance premiums, and other charges, if any,
payable by Lessee hereunder for the period during which such damage,
its repair or the restoration continues (not to exceed the period for which
rental value insurance is required under Paragraph 8.3(b)), shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired.
Except for abatement of Base Rent, Real Property Taxes, insurance premiums, and
other charges, if any, as aforesaid, all other obligations of Lessee hereunder
shall be performed by Lessee, and Lessee shall have no claim against Lessor to
any damage suffered by reason of any such repair or restoration.
(b) If Lessor shall be obligated to repair or restore the Premises
under the provisions of this Paragraph 9 and shall not commence. in a
substantial and meaningful way, the repair or restoration of the Premises within
ninety (90) days after such obligation shall accrue, Lessee may, at any time
prior to the commencement of such repair or restoration, give written notice to
Lessor and to any Lenders of which Lessee has actual notice of Lessee's election
to terminate this Lease on a date not less than sixty (60) days following the
giving of such notice. If Lessee gives such notice to Lessor and such Lenders
and such repair or restoration is not commenced within thirty (30) days after
receipt of such notice, this Lease shall terminate as of the date specified in
said notice if Lessor or a Lender commences the repair or restoration of the
Premises within thirty (30) days after receipt of such notice, this Lease shall
continue in full force and effect. "COMMENCE" as used in this Paragraph shall
mean either the unconditional authorization of the preparation of the required
plans. or the beginning of the actual work on the premises, whichever first
occurs.
9.7 HAZARDOUS SUBSTANCE CONDITIONS. If a Hazardous Substance Condition
occurs, unless Lessee is legally responsible therefor (in which case Lessee
shall make the investigation and redemption thereof required by Applicable Law
and this Lease shall continue in full force and effect, but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option either (i) investigate
and remediate such Hazardous Substance Condition, if required, as soon as
reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) if the estimated cost to investigate
and remediate such condition exceeds twelve (12) times the then monthly Base
Rent or $100,000, whichever is greater, give written notice to Lessee within
thirty (30) days after receipt by Lessor of knowledge of the occurrence of such
Hazardous Substance Condition of Lessor's desire to terminate this Lease as of
the date sixty (60) days following the giving of such notice. In the event
Lessor elects to give such notice of Lessor's intention to terminate this Lease,
Lessee shall have the right within ten (10) days after the receipt of such
notice to give written notice to Lessor of Lessee's commitment to pay for the
investigation and remediation of such Hazardous Substance Condition totally at
Lessee's expense and without reimbursement from Lessor except to the extent of
an amount equal to twelve (12) times the then monthly Base Rent or $100,000,
whichever is greater. Lessee shall provide Lessor with the funds required of
Lessee or satisfactory assurance thereof within thirty (30) days following
Lessee's said commitment. In such event this Lease shall continue in full force
and effect, and Lessor shall proceed to make such investigation and remediation
as soon as reasonably possible and the required funds are available. If Lessee
does not give such notice and provide the required funds or assurance thereof
within the times specified above, this Lease shall terminate as of the date
specified in Lessor's notice of termination. If a Hazardous Substance Condition
occurs for which Lessee is not legally responsible, there shall be abatement of
Lessee's obligation under this Lease to the same extent as provided in Paragraph
9.6(a) for a period of not to exceed twelve (12) months.
9.8 TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease pursuant to
this Paragraph 9, an equitable adjustment shall be made concerning advance Base
Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's Security Deposit as has not been,
or is not then required to be, used by Lessor under the terms of this Lease.
9.9 WAIVE STATUTES. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
respect to the termination of this Lease and hereby waive the provisions of any
present or future Statute to the extent inconsistent herewith.

10. REAL PROPERTY TAXES.
10.1 (a) PAYMENT OF TAXES. Lessee shall pay the Real Property Taxes, as
defined in Paragraph 10.2. applicable to the Premises during the term of this
Lease. Subject to Paragraph 10.1(b), all such payments shall be made at least
ten (10) days prior to the delinquency date of the applicable installment.
Lessee shall promptly furnish Lessor with satisfactory evidence that such taxes
have been paid. If any such taxes to be paid by Lessee shall cover any period of
time prior to or after the expiration or earlier termination of the term hereof,
Lessee's share of such taxes shall be equitably prorated to cover only the
period of time within the tax fiscal year this Lease is in effect, and Lessor
shall reimburse Lessee for any overpayment after such proration. If Lessee shall
fail to pay any Real Property Taxes required by this Lease to be paid by
Lessee, Lessor shall have the right to pay the same, and Lessee shall reimburse
Lessor therefor upon demand.
(b) ADVANCE PAYMENT. In order to insure payment when due and before
delinquency of any or all Real Property Taxes, Lessor reserves the right, at
Lessor's option, to estimate the current Real Property Taxes applicable to the
Premises, and to require such current year's Real Property Taxes to be paid in
advance to Lessor by Lessee, either: (i) in a lump sum amount equal to the
installment due, at least twenty (20) days prior to the applicable delinquency
date or (ii) monthly in advance with the payment of the Base Rent. If Lessor
elects to require payment monthly in advance, the monthly payment shall be that
equal monthly amount which, over the number of months remaining before the month
in which the applicable tax installment would become delinquent (and without
interest thereon), would provide a fund large enough to fully discharge before
delinquency the estimated installment Of taxes to be paid. When the actual
amount of the applicable tax bill is known, the amount of such equal monthly
advance payment shall be adjusted as required to provide the fund needed to pay
the applicable taxes before delinquency. If the amounts paid to Lessor by Lessee
under the provisions of this Paragraph are insufficient to discharge the
obligations of Lessee to pay such Real Property Taxes as the same become due,
Lessee shall pay to Lessor, upon Lessor's demand, such additional sums as are
necessary to pay such obligations. All moneys paid to Lessor under this
Paragraph may be intermingled with other moneys of Lessor and shall not bear
interest. In the event of a Breach by Lessee in the performance of the
obligations of Lessee under this Lease, then any balance of funds paid to Lessor
under the provisions of this Paragraph may, subject to proration as provided in
Paragraph 10.1(a), at the option of Lessor, be treated as an additional Security
Deposit under Paragraph 5.
10.2 DEFINITION OF "REAL PROPERTY TAXES." As used herein, the term "REAL
PROPERTY TAXES" shall include any form of real estate tax or assessment general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance personal income
or estate taxes) imposed upon the Premises by any authority having the direct or
indirect power to tax, including any city, state or federal government, or any
school, agricultural, sanitary, fire, street, drainage or other improvement
district thereof, levied against any legal or equitable interest of Lessor in
the Premises or in the real property of which the Premises are a part, Lessor's
right to rent or other income therefrom, and/or Lessor's business or leasing the
Premises. The term "REAL PROPERTY TAXES" shall also include any tax, fee, levy,
assessment or charge, or any increase therein, imposed by reason of events
occurring, or changes in applicable law taking effect, during the term of this
Lease, including but not limited to a change in the ownership of the Premises or
in the improvements thereon, the execution of this Lease, or any modification,
amendment or transfer thereof, and whether or not contemplated by the Parties.
10.3 JOINT ASSESSMENT. If the Premises are not separately assessed, Lessee's
liability shall be an equitable proportion of the Real Property Taxes for all
of the land and improvements included within the tax parcel assessed, such
proportion to be determined by Lessor from the respective valuations assigned in
the assessor's work sheets or such other information as may be reasonably
available. Lessor's reasonable determination thereof, in good faith, shall be
conclusive.

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10.4 PERSONAL PROPERTY TAXES. Lessee shall pay prior to delinquency
all taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or elsewhere. When possible, Lessee shall
cause its Trade Fixtures, furnishings, equipment and all other personal property
to be assessed and billed separately from the real property of Lessor. If any of
Lessee's said personal property shall be assessed with Lessor's real property,
Lessee shall pay Lessor the taxes attributable to Lessee within ten (10) days
after receipt of a written statement setting forth the taxes applicable to
Lessee's property or, at Lessor's option, as provided In Paragraph 10.1(b).

11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. If any such services are not
separately metered to Lessee, Lessee shall pay a reasonable proportion, to be
determined by Lessor, of all charges jointly metered with other premises.

12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED.
(a) Lessee Shall not voluntarily or by operation of law assign, transfer,
mortgage or otherwise transfer or encumber (collectively, "ASSIGNMENT") or
sublet all or any part of Lessee's interest in this Lease or in the Premises
without lessor's prior written consent given under and subject to the terms of
Paragraph 36.
(b) A change in the control of Lessee shall constitute an assignment
requiring Lessor's consent. The transfer, on a cumulative basis, of twenty-five
percent (25%) or more of the voting control of Lessee shall constitute a change
in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or series
of transactions (by way of merger, sale, acquisition, financing, refinancing
transfer, leveraged buy-out or otherwise), whether or not a formal assignment or
hypothecation of this Lease or Lessee's assets occurs, which results or will
result in a reduction of the Net Worth of Lessee, as hereinafter defined, by an
amount equal to or greater than twenty-five percent (25%) of such Net Worth of
Lessee as it was represented to Lessor at the time of the execution by Lessor of
this Lease or at the time of the most recent assignment to which Lessor has
consented, or as it exists immediately prior to said transaction or transactions
constituting such reduction, at whichever time said Net Worth of Lessee was or
is greater, shall be considered an assignment of this Lease by Lessee to which
Lessor may reasonably withhold its consent. "NET WORTH OF LESSEE" for purposes
of this Lease shall be the net worth of Lessee (excluding any guarantors)
established under generally accepted accounting principles consistently applied.
(d) An assignment or subletting of Lessee's interest in this Lease without
Lessor's specific prior written consent shall, at Lessor's option, be a Default
curable after notice per Paragraph 13.1(c), or a noncurable Breach without the
necessity of any notice and grace period. If Lessor elects to treat such
unconsented to assignment or subletting as a noncurable Breach, Lessor shall
have the right to either: (i) terminate this Lease, or (ii) upon thirty (30)
days written notice ("Lessor's Notice"), increase the monthly Base Rent to fair
market rental value or one hundred ten percent (110%) of the Base Rent then in
effect whichever is greater. Pending determination of the new fair market rental
value, if disputed by Lessee, Lessee shall pay the amount set forth in Lessor's
Notice with any overpayment credited against the next installment(s) of Base
Rent coming due, and any underpayment for the period retroactively to the
effective date of the adjustment being due and payable immediately upon the
determination thereof. Further, in the event of such Breach and market value
adjustment (i) the purchase price of any option to purchase the Premises held by
Lessee shall be subject to similar adjustment to the then fair market value
(without the Lease being considered an encumbrance or any deduction for
depreciation or obsolescence and considering the Premises at its highest and
best use and in good condition), or one hundred ten percent (110%) of the price
previously in effect, whichever is greater. (ii) any index-oriented rental or
price adjustment formulas contained in this Lease shall be adjusted to require
that the base index be determined with reference to the index applicable to the
time of such adjustment, and (iii) any fixed rental adjustments scheduled during
the remainder of the Lease term shall be increased in the same ratio as the new
market rental bears to the Base Rent in effect immediately prior to the market
value adjustment.
(e) Lessee's remedy for any breach of this Paragraph 12.1 by Lessor shall
be limited to compensatory damages and injunctive relief.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, any assignment or subletting shall not:
(i) be effective without the express written assumption by such assignee or
sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of
any obligations hereunder, or (iii) alter the primary liability of Lessee for
the payment of Base Rent and other sums due Lessor hereunder or for the
performance of any other obligations to be performed by Lessee under this Lease.
(b) Lessor may accept any rent or performance of Lessee's obligations from
any person other than Lessee pending approval or disapproval of an assignment.
Neither a delay in the approval or disapproval of such assignment nor the
acceptance of any rent or performance shall constitute a waiver of estoppel of
Lessor's right to exercise its remedies for the Default or Breach by Lessee of
any of the terms, covenants or conditions of this Lease.
(c) The consent of Lessor to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Lessee or to
any subsequent or successive assignment or subletting by the sublessee. However,
Lessor may consent to subsequent sublettings and assignments of the sublease or
any amendments or modifications thereto without notifying Lessee or anyone else
liable on the Lease or sublease and without obtaining their consent, and such
action shall not relieve such persons from liability under this Lease or
sublease.
(d) In the event of any Default or Breach of Lessee's obligations under
this Lease. Lessor may proceed directly against Lessee, any Guarantors or any
one else responsible for the performance of the Lessee's obligations under this
Lease, including the sublessee, without first exhausting Lessor's remedies
against any other person or entity responsible therefor to Lessor, or any
security held by lessor or Lessee.
(e) Each request for consent to an assignment or subletting shall be in
writing, accompanied by information relevant to Lessor's determination as to
the financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a non-refundable
deposit of $1,000 or ten percent (10%) of the current monthly Base Rent
whichever is greater, as reasonable consideration for Lessor's considering and
processing the request for consent. Lessee agrees to provide Lessor with such
other or additional information and/or documentation as may be reasonably
requested by Lessor.
(f) Any assignee of, or sublessee under, this Lease shall, by reason of
accepting such assignment or entering into such sublease, be deemed, for the
benefit of Lessor, to have assumed and agreed to conform and comply with each
and every term, covenant, condition and obligation herein to be observed or
performed by Lessee during the term of said assignment or sublease, other than
such obligations as are contrary to or inconsistent with provisions of an
assignment or sublease to which Lessor has specifically consented in writing.
(g) The occurrence of a transaction described in Paragraph 12.1(c) shall
give Lessor the right (but not the obligation) to require that the Security
Deposit be increased to an amount equal to six (6) times the then monthly Base
Rent, and Lessor may make the actual receipt by Lessor of the amount required to
establish such Security Deposit a condition to Lessor's consent to such
transaction.
(h) Lessor, as a condition to giving its consent to any assignment or
subletting, may require that the amount and adjustment structure of the rent
payable under this Lease be adjusted to what is then the market value and/or
adjustment structure for property similar to the Premises as then constituted
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The following
terms and conditions shall apply to any subletting by Lessee of all or any part
of the Premises and shall be deemed included in all subleases under this Lease
whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest
in all rentals and income arising from any sublease of all or a portion of that
Premises heretofore or hereafter made by Lessee, and Lessor may collect such
rent and income and apply same toward Lessee's obligations under this Lease
provided, however, that until a Breach (as defined in Paragraph 13.1) shall
occur in the performance of Lessee's obligations under this Lease. Lessee may
except as otherwise provided in this Lease, receive, collect and enjoy the rents
accruing under such sublease. Lessor shall not, by reason of this or any other
assignment of such Sublease to Lessor nor by reason of the collection of the
rents from a sublessee, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee's obligations to such sublessee
under such sublease. Lessee hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice from Lessor stating that a Breach
exists in the performance of Lessee's obligations under this Lease, to pay to
Lessor the rents and other charges due and to become due under the sublease.
Sublessee shall rely upon any such statement and request from Lessor and shall
pay such rents and other charges to Lessor without any obligation or right to
inquire as to whether such Breach exists and notwithstanding any notice from or
claim from Lessee to the contrary. Lessee shall have no right or claim against
said sublessee, or, until the Breach has been cured, against Lessor for any such
rents and other charges so paid by said sublessee to Lessor.
(b) In the event of a Breach by Lessee in the performance of its obligations
under this Lease, Lessor, at its option and without any obligation to do so
may require any sublessee to attorn to Lessor, in which event Lessor shall
undertake the obligations of the sublessor under such sublease from the time of
the exercise of said option to the expiration of Such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security deposit
paid by such sublessee to such sublessor or for any other prior Defaults or
Breaches of such sublessor under such sublease.
(c) Any matter or thing requiring the consent of the sublessor under a
sublease shall also require the consent of Lessor herein.
(d) No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent
(e) Lessor shall deliver a copy of any notice of Default or Breach by
Lessee to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall
have a right of reimbursement and offset from and against Lessee for any such
Defaults cured by the sublessee.

13. DEFAULT; BREACH; REMEDIES.

13.1 DEFAULT; BREACH. Lessor and Lessee agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence
for legal services and costs in the preparation and service of a notice of
Default, and that Lessor may include the cost of such services and costs in said
notice as rent due and payable to cure said Default. A "Default" is defined as a
failure by the Lessee to observe, comply with or perform any of the terms,
covenants, conditions or rules applicable to Lessee under this Lease. A "Breach"
is defined as the occurrence of any one or more of the following Defaults, and,
where a grace period for cure after notice is specified herein, the failure by
Lessee to cure such Default prior to the expiration of the applicable grace
period, shall entitle Lessor to pursue the remedies set forth in Paragraphs 13.2
and/or 13.3:
(a) The vacating of the Premises without the intention to reoccupy same, or
the abandonment of the Premises.
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(b) Except as expressly otherwise provided in this Lease, the failure by
Lessee to make any payment of Base Rent or any other monetary payment required
to be made by lessee hereunder, whether to Lessor or to a third party, as and
when due, the failure by Lessee to provide Lessor with reasonable evidence of
insurance or surety bond required under this Lease, or the failure of Lessee to
fulfill any obligation under this Lease which endangers or threatens life or
property, where such failure continues for a period of three (3) days following
written notice thereof by or on behalf of Lessor to Lessee.
(c) Except as expressly otherwise provided in this Lease, the failure by
Lessee to provide Lessor with reasonable written evidence (in duly executed
original form, if applicable) of (i) compliance with Applicable Law per
Paragraph 6.3, (ii) the inspection, maintenance and service contracts required
under Paragraph 7.1(b), (iii) the recission of an unauthorized assignment or
subletting per Paragraph 12.1(b), (iv) a Tenancy Statement per Paragraphs 16 or
37, (v) the subordination or non-subordination of this Lease per Paragraph 30,
(vi) the guaranty of the performance of Lessee's obligations under this Lease
required under Paragraphs 1.11 and 37, (vii) the execution of any document
requested under Paragraph 42 (easements), or (viii) any other documentation of
information which Lessor may reasonably require of Lessee under the terms of
this Lease, where any such failure continues for a period of ten (10) days
following written notice by or on behalf of Lessor to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or provisions
of this Lease, or of the rules adopted under Paragraph 40 hereof, that are to be
observed, complied with or performed by Lessee, other than those described in
subparagraphs (a), (b) or (c) above, where such Default continues for period of
thirty (30) days after written notice thereof by or on behalf of Lessor to
Lessee: provided, however, that if the nature of Lessee's Default is such that
more than thirty (30) days are reasonably required for its cure, then it shall
not be deemed to be a Breach of this Lease by Lessee If Lessee commences such
cure within said thirty (30) day period and thereafter diligently prosecutes
such cure to completion.
(e) The occurrence of any of the following events: (i) The making by Lessee
of any general arrangement or assignment for the benefit of creditors: (ii)
Lessee's becoming a "debtor" as defined in 11 U.S.C. (S)101 or any successor
statute thereto (unless, in the case of a petition filed against Lessee, the
same dismissed within sixty (60) days); (iii) the appointment of a trustee or
receiver to take possession of substantially all of Lessee's assets located at
the Premise or of Lessee's interest in this Lease, where possession is not
restored to Lessee within thirty (30) days: or (iv) the attachment, execution or
other judicial seizure of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in this Lease, where such seizure is not
discharged within thirty (30) days provided, however, in the event that any
provision of this subparagraph (e) is contrary to any applicable law, such
provision shall be of no force or effect, and not affect the validity of the
remaining provisions.
(f) The discovery by Lessor that any financial Statement given to Lessor by
Lessee or any Guarantor of Lessee's obligations hereunder was materially false.
(g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a guarantor, (ii) the termination of a guarantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty, (iii) a guarantor's becoming insolvent or the subject of a
bankruptcy filing (iv) a guarantor's refusal to honor the guaranty, or (v) a
guarantor's breach of its guaranty obligation on an anticipatory breach basis,
and Lessee's failure within sixty (60) days following written notice by or on
behalf of Lessor to Lessee of any such event, to provide Lessor with written
alternative assurance of security, which, when coupled with the then existing
resources of Lessee equal or exceeds the combined financial resources of Lessee
and the guarantor that existed at the time of execution of this Lease.
13.2 REMEDIES. If Lessee fails to perform any affirmative duty or obligation
of Lessee under this Lease, within ten (10) days after written notice to Lessee,
(or in case of an emergency, without notice), Lessor may at its option (but
without obligation to do so), perform such duty or obligation on Lessee's behalf
including but not limited to the obtaining of reasonably required bonds,
insurance policies, or governmental licenses, permits or approvals. The Costs
and expenses of any Such performance by Lessor shall be due and payable by
Lessee to Lessor upon invoice therefor. If any check given to Lessor by Lessee
shall not be honored by the bank upon which it is drawn, Lessor, at its option,
may require all future payments to be made under this Lease by Lessee to be made
only by cashier's check. In the event of a Breach of this Lease by Lessee, as
defined in Paragraph 13.1, with or without further notice or demand, and without
limiting Lessor in the exercise of any right or remedy which Lessor may have by
reason of such Breach, Lessor may:
(a) Terminate Lessee's right to possession of the Premises by any lawful
means, in which case this Lease and the term hereof shall terminate and Lessee
shall immediately surrender possession of the Premises to Lessor. In Such event
Lessor shall be entitled to recover from Lessee: (i) the worth at the time of
the award of the unpaid rent which had been earned at the time of termination,
(ii) the worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that the Lessee proves could have beer reasonably
avoided: (iii) 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 the Lessee proves could be reasonably avoided; and (iv)
any other amount necessary to compensate Lessor for all the detriment
proximately caused by the Lessee'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 the cost of recovering possession of the
Premises, expenses of reletting, including necessary renovation and alteration
of the Premises, reasonable attorneys' fees, and that portion of the leasing
commission paid by Lessor applicable to the unexpired term of this Lease. The
worth at the time of award of the amount referred to in provision (iii) of the
prior sentence shall be computed by discounting Such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%). Efforts by Lessor to mitigate damages caused by Lessee's Default
or Breach of this Lease shall nor waive Lessor's right to recover damages under
this Paragraph. If termination of this Lease is obtained through the provisional
remedy of unlawful detainer, Lessor shall have the right to recover in such
proceeding the unpaid rent and damages as are recoverable therein, or Lessor may
reserve therein the right to recover all or any part thereof in a separate suit
for such rent and/or damages. If a notice and grace period required under
subparagraphs 13.1 (b), (c) or (d) was not previously given, a notice to pay
rent or quit, or to perform or quit, as the case may be, given to Lessee under
any statute authorizing the forfeiture of leases for unlawful detainer shall
also constitute the applicable notice for grace period purposes required by
subparagraphs 13.1(b), (c) or (d). In such case, the applicable grace period
under subparagraphs 13.1(b), (c) or (d) and under the unlawful detainer statute
shall run concurrently after the one such statutory notice, and the failure of
Lessee to cure the Default within the greater of the two such grace periods
shall constitute both an unlawful detainer and a Breach of this Lease entitling
Lessor to the remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession in effect (in
California under California Civil Code Section 1951.4) after Lessee's Breach and
abandonment and recover the rent as it becomes due, provided Lessee has the
right to sublet or assign, subject only to reasonable limitations. See
Paragraphs 12 and 36 for the limitations on assignment and subletting which
limitations Lessee and Lessor agree are reasonable. Acts of maintenance or
preservation, efforts to relet the Premises, or the appointment of a receiver to
protect the Lessor's interest under the Lease, shall not constitute a
termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available to Lessor under the
laws or judicial decisions of the state wherein the Premises are located.
(d) The expiration or termination of this Lease and/or the termination of
Lessee's right to possession shall not relieve Lessee from liability under an
indemnity provisions of this Lease as to matters occurring or accruing during
the term hereof or by reason of Lessee's Occupancy of the Premises.
13.3 INDUCEMENT RECAPTURE IN EVENT OF BREACH. Any agreement by Lessor for
free or abated rent or other charges applicable to the Premises or to the
giving or paying by Lessor to or for Lessee of any cash or other bonus,
inducement or consideration for Lessee's entering into this Lease, all of which
concessions are hereinafter referred to as "INDUCEMENT PROVISIONS," shall be
deemed conditioned upon Lessee's full and faithful performance of all of the
terms, covenants and conditions of this Lease to be performed or observed by
Lessee during the term hereof as the same may be extended. Upon the occurrence
of a Breach of this Lease by Lessee, as defined in Paragraph 13.1, any such
inducement Provision shall automatically be deemed deleted from this Lease and
of no further force or effect, and any rent, other charge, bonus, inducement or
consideration theretofore abated, given or paid by Lessor under such an
inducement provision shall be immediately due and payable by Lessee to Lessor,
and recoverable by Lessor as additional rent due under this Lease
notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which initiated the operation of this
Paragraph shall not be deemed a waiver by Lessor of the provisions of this
Paragraph unless specifically so stated in writing by Lessor at the time of such
acceptance.
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee to
Lessor of rent and other sums due hereunder will cause Lessor to include costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed upon Lessor by the
terms of any ground lease, mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Lessee shall
not be received by Lessor or Lessor's designee within five (5) days after such
amount shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to six percent (6%) of such overdue
amount. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of that payment by
Lessee. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent Lessor from exercising any of the other rights and remedies granted
hereunder. In the event that a late charge is payable hereunder whether or not
collected, for three (3) consecutive installments of Base Rent, then
notwithstanding Paragraph 4.1 or any other provision of this Lease to the
contrary, Base Rent shall, at Lessor's option, become due and payable quarterly
in advance.
13.5 BREACH BY LESSOR. Lessor shall not be deemed in breach of this Lease
unless lessor fails within a reasonable time to perform an obligation required
to be performed by Lessor. For purpose of this Paragraph 13.5 a reasonable time
shall in no event be less than thirty (30) days after receipt by Lessor, and by
the holders of any ground lease, mortgage or deed of trust covering the Premises
whose name and address shall have been furnished Lessee in writing for such
purpose, of written notice specifying wherein such obligation of Lessor has not
been performed; provided, however, that if the nature of Lessor's obligation is
such that more than thirty (30) days after such notice are reasonably required
for its performance, then Lessor shall not be in breach of this Lease if
performance is commenced within such thirty (30) day period and thereafter
diligently pursued to completion.

14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(all of which are herein called "CONDEMNATION"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than ten percent (10%) of the floor
area of the Premises, or more than twenty-five percent (25%) of the land area
not occupied by any building, is taken by condemnation, Lessee may, at Lessee's
option, to be exercised in writing within ten (10) days after Lessor shall have
given Lessee written notice of such taking (or in the absence of such notice,
within ten (10) days after the condemning authority shall have taken possession.

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terminate this Lease as of the date the condemning authority takes such
possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced in the same
proportion as the rentable floor area of the Premises taken bears to the total
rentable floor area of the building located on the Premises. No reduction of
Base Rent shall occur if the only portion of the Premises taken is land on which
there is no building. Any award for the taking of all or any part of the
Premises under the power of eminent domain or any payment made under threat of
the exercise of such power shall be the property of Lessor, whether such award
shall be made as compensation for diminution in value of the leasehold or for
the taking of the fee, or as severance damages; provided, however, that Lessee
shall be entitled to any compensation separately awarded to Lessee for Lessee's
relocation expenses and/or loss of Lessee's Trade Fixtures. In the event that
this Lease is not terminated by reason of such condemnation, Lessor shall to the
extent of its net severance damages received, over and above the legal and other
expenses incurred by Lessor in the condemnation matter, repair any damage to the
Premises caused by such condemnation, except to the extent that Lessee has been
reimbursed therefor by the condemning authority. Lessee shall be responsible for
the payment of any amount in excess of such net severance damages required to
complete such repair.

15. BROKER'S FEE (n/a)

16. TENANCY STATEMENT.
16.1 Each Party (as "RESPONDING PARTY") shall within ten (10) days after
written notice from the other Party (the "REQUESTING PARTY") execute,
acknowledge and deliver to the Requesting Party a statement in writing in form
similar to the then most current "Tenancy Statement" form published by the
American Industrial Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonably requested by the Requesting
Party.
16.2 If Lessor desires to finance, refinance, or sell the Premises, any
part thereof, or the building of which the Premises are a part, Lessee and all
Guarantors of Lessee's performance hereunder shall deliver to any potential
lender or purchaser designated by Lessor such financial statements of Lessee and
such Guarantors as may be reasonably required by such lender or purchaser,
including but not limited to Lessee's financial statements for the past three
(3) years. All such financial statements shall be received by Lessor and such
lender or purchaser in confidence and shall be used only for the purposes herein
set forth.

17. LESSOR'S LIABILITY. The term "LESSOR" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises, or, if this
is a sublease, of the Lessee's interest in the prior lease in the event of a
transfer of Lessor's title or interest in the Premises or in this Lease. Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor at the time of such transfer or assignment,
except as provided in Paragraph 15, upon such transfer or assignment and
delivery of the Security Deposit, as aforesaid, the prior Lessor shall be
relieved of all liability with respect to the obligations and/or covenants under
this Lease thereafter to be performed by the Lessor. Subject to the foregoing,
the obligations and/or covenants in this Lease to be performed by the Lessor
shall be binding only upon the Lessor as hereinabove defined.

18. SEVERABILITY. The invalidity of any provision of this lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.

19. INTEREST ON PAST-DUE OBLIGATIONS. Any monetary payment due Lessor
hereunder other than late charges, not received by Lessor within thirty (30)
days following the date on which it was due, shall bear interest from the
thirty-first (31st) day after it was due at the rate of 12% per annum, but not
exceeding the maximum rate allowed by law, in addition to the late charge
provided for in Paragraph 13.4.

20. TIME OF ESSENCE. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.

21. RENT DEFINED. All monetary obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.

22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party.

23. NOTICES.
23.1 All notices required or permitted by this ease shall be in writing and
may be delivered in person (by hand or by messenger or courier service) or may
be sent by regular, certified or registered mail or U.S. Postal Service Express
Mail, with postage prepaid, or by facsimile transmission, and shall be deemed
sufficiently given if served in a manner specified in this Paragraph 23. The
addresses noted adjacent to a Party's signature on this Lease shall be that
Party's address for delivery or mailing of notice purposes. Either Party may by
written notice to the other specify a different address for notice purposes,
except that upon Lessee's taking possession of the Premises, the Premises shall
constitute Lessee's address for the purpose of mailing or delivering notices to
Lessee. A copy of all notices required or permitted to be given to Lessor
hereunder shall be concurrently transmitted to such party or parties at such
addresses as Lessor may from time to time hereafter designate by written notice
to Lessee.
23.2 Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt
card, or if no delivery date is shown, the postmark thereon. If sent by regular
mail the notice shall be deemed given forty-eight (48) hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantees next day
delivery shall be deemed given twenty-four (24) hours after delivery of the same
to the United States Postal Service or courier. If any notice is transmitted by
facsimile transmission or similar means, the same shall be deemed served or
delivered upon telephone confirmation of receipt of the transmission thereof,
provided a copy is also delivered via delivery or mail. If notice is received on
a Sunday or legal holiday, it shall be deemed received on the next business day.

24. WAIVERS. No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any other
term covenant or condition hereof, or of any subsequent Default or Breach by
Lessee of the same or of any other term, covenant or condition hereof. Lessor's
consent to, or approval of, any act shall not be deemed to render unnecessary
the obtaining of Lessor's consent to, or approval of, any subsequent or similar
act by Lessee or be construed as the basis of an estoppel to enforce the
provision or provisions of this Lease requiring such consent. Regardless of
Lessor's knowledge of a Default or Breach at the time of accepting rent, the
acceptance of rent by Lessor shall not be a waiver of any preceding Default or
Breach by Lessee of any provision hereof, other than the failure of Lessee to
pay the particular rent so accepted. Any payment given Lessor by Lessee may be
accepted by Lessor on account of moneys or damages due lessor, notwithstanding
any qualifying statements or conditions made by Lessee in connection therewith
which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Lessor at or before the
time of deposit of such payment.

25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto.

26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease.

27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall wherever possible, be cumulative with all other remedies at
law or in equity.
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<PAGE>

28. COVENANTS AND CONDITIONS. All provisions on this Lease to
be observed or performed by Lessee are both covenants and conditions.

29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the
parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initiated in the
county in which the Premises are located.

30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
30.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "SECURITY DEVICE"), now or
hereafter placed by Lessor upon the real property of which the Premises are a
part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Lessee
agrees that the Lenders holding any such Security Device shall have no duty,
liability or obligation to perform any of the obligations of Lessor under this
Lease, but that in the event of Lessor's default with respect to any such
obligation, Lessee will give any Lender whose name and address have been
furnished Lessee in writing for such purpose notice of Lessor's default and
allow such Lender thirty (30) days following receipt of such notice for the cure
of said default before invoking any remedies Lessee may have by reason thereof.
If any Lender shall elect to have this Lease and/or any Option granted hereby
superior to the lien of its Security Device and shall give written notice
thereof to Lessee, this Lease and such Options shall be deemed prior to such
Security Device, notwithstanding the relative dates of the documentation or
recordation thereof.
30.2 ATTORNMENT. Subject to the non-disturbance provisions of Paragraph
30.3, Lessee agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Security Device, and
that in the event of such foreclosure, such new owner shall not: (i) be liable
for any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership, (ii) be subject to any offsets or defenses
which Lessee might have against any prior lessor, or (iii) be bound by
prepayment of more than one (1) month's rent.
30.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving assurance (a "NON-DISTURBANCE AGREEMENT") from
the Lender that Lessee's possession and this Lease, including any options to
extend the term hereof, will not be disturbed so long as Lessee is not in Breach
hereof and attorns to the record owner of the Premises.
30.4 SELF-EXECUTING. The agreements contained in this Paragraph 30 shall be
effective without the execution of any further documents; provided,
however, that, upon written request from Lessor or a Lender in connection with a
sale, financing or refinancing of the Premises, Lessee and Lessor shall
execute such further writings as may be reasonably required to separately
document any such subordination or non-subordination, attornment and/or
non-disturbance agreement as is provided for herein.

31. ATTORNEY'S FEES.
If any Party or Broker brings an action or proceeding to enforce the terms
hereof or declare rights hereunder, the Prevailing Party (as hereafter defined)
or Broker in any such proceeding, action, or appeal thereon, shall be entitled
to reasonable attorney's fees. Such fees may be awarded in the same suit or
recovered in a separate suit, whether or not such action or proceeding is
pursued to decision or judgment. The term, "PREVAILING PARTY" shall include,
without limitation, a Party or Broker who substantially obtains or defeats the
relief sought, as the case may be, whether by compromise, settlement, judgment,
or the abandonment by the other Party or Broker of its claim or defense. The
attorney's fees award shall not be computed in accordance with any court fee
schedule, but shall be such as to fully reimburse all attorney's fees reasonably
incurred. Lessor shall be entitled to attorney's fees, costs and expenses
incurred in the preparation and service of notices of Default and consultations
in connection therewith, whether or not a legal action is subsequently commenced
in connection with such Default or resulting Breach.

32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of showing the same
to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or to the
building of which they are a part, as Lessor may reasonably deem necessary.
Lessor may at any time place on or about the Premises or building any ordinary
"For Sale" signs and Lessor may at any time during the last one hundred twenty
(120) days of the term hereof place on or about the Premises any ordinary "For
Lease" signs. All such activities of Lessor shall be without abatement of rent
or liability to Lessee.

33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.

34. SIGNS. Lessee shall not place any sign upon the Premises, except that
Lessee may, with Lessor's prior written consent, install (but not on the roof)
such signs as are reasonably required to advertise Lessee's own business. The
installation of any sign on the Premises by or for Lessee shall be subject to
the provisions of Paragraph 7 (Maintenance, Repairs, Utility Installations,
Trade Fixtures and Alterations). Unless Otherwise expressly agreed herein.
Lessor reserves all rights to the use of the roof and the right to install. and
all revenues from the installation of, such advertising signs on the Premises.
including the roof, as do not unreasonably interfere with the conduct of
Lessee's business.

35. TERMINATION; MERGER. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
terms; provided, however Lessor shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one or all of any
existing subtenancies. Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lesser interest, shall constitute Lessor's election to have such
event constitute the termination of such interest.

36. CONSENTS.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided
herein, wherever in this Lease the consent of a Party is required to an act by
or for the other Party, such consent shall not be unreasonably withheld or
delayed. Lessor's actual reasonable costs and expenses (including but not
limited to architects', attorneys'. engineers' or other consultants' fees)
incurred in the consideration of, or response to, a request by Lessee for any
Lessor consent pertaining to this Lease or the Premises, including but not
limited to consents to an assignment, a subletting or the presence or use of a
Hazardous Substance, practice or storage tank, shall be paid by Lessee to Lessor
upon receipt of an invoice and supporting documentation therefor.
Subject to Paragraph 12.2(e) (applicable to assignment or subletting),
Lessor may, as a condition to considering any such request by Lessee, require
that Lessee deposit with Lessor an amount of money (in addition to the Security
Deposit held under Paragraph 5) reasonably calculated by Lessor to represent the
cost Lessor will incur in considering and responding to Lessee's request. Except
as otherwise provided, any unused portion of said deposit shall be refunded to
Lessee without interest. Lessor's consent to any act, assignment of this Lease
or subletting of the Premises by Lessee shall not constitute an acknowledgement
that no Default or Breach by Lessee of this Lease exists, nor shall such consent
be deemed a waiver of any then existing Default or Breach, except as may be
otherwise specifically stated in writing by Lessor at the time of such consent.
(b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to specify herein any
particular condition to Lessor's consent shall not preclude the imposition by
Lessor at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being
given.

37. GUARANTOR.
37.1 If there are to be any Guarantors of this Lease per Paragraph 1.11,
the form of the guaranty to be executed by each such Guarantor shall be in the
form most recently published by the American Industrial Real Estate Association,
and each said Guarantor shall have the same obligations as Lessee under this
Lease, including but not limited to the obligation to provide the Tenancy
Statement and information called for by Paragraph 16.
37.2 It shall constitute a Default of the Lessee under this Lease if any
such Guarantor fails or refuses, upon reasonable request by Lessor to give: (a)
evidence of the due execution of the guaranty called for by this Lease,
including the authority of the Guarantor (and of the party signing on
Guarantor's behalf) to obligate such Guarantor on said guaranty, and including
in the case of a corporate Guarantor, a certified copy of a resolution of its
board of directors authorizing the making of such guaranty, together with a
certificate of incumbency showing the signature of the persons authorized to
sign on its behalf, (b) current financial statements of Guarantor as may from
time to time be requested by Lessor, (c) a Tenancy Statement, or (d) written
confirmation that the guaranty is still in effect.

38. QUIET POSSESSION. Upon payment by Lessee of the rent for the Premises and
the observance and performance of all of the covenants, conditions and
provisions on Lessee's part to be observed and performed under this Lease,
Lessee shall have quiet possession of the Premises for the entire term hereof
subject to all of the provisions of this Lease

39. OPTIONS.
39.1 DEFINITION. As used in this Paragraph 39 the word "OPTION" has the
following meaning: (a) the right to extend the term of this Lease or to renew
this Lease or to extend or renew any lease that Lessee has on other property of
Lessor; (b) the right of first refusal to lease the Premises or the right of
first offer to lease the Premises or the right of first refusal to lease other
property of Lessor or the right of first offer to lease other property of
Lessor; (c) the right to purchase the Premises, or the right of first refusal to
purchase the Premises, or the right of first offer to purchase the Premises, or
the right to purchase other property of Lessor, or the right of first refusal to
purchase other property of Lessor, or the right of first offer to purchase other
property of Lessor.
39.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Each Option granted to Lessee in
this Lease is personal to the original Lessee named in Paragraph 1.1 hereof, and
cannot be voluntarily or involuntarily assigned or exercised by any person or
entity other than said original Lessee while the original Lessee is in full
and actual possession of the Premises and without the intention of thereafter
assigning or subletting. The Options, if any, herein granted to Lessee are not
assignable, either as a part of an assignment of this Lease or separately or
apart therefrom, and no Option may be separated from this Lease in any manner,
by reservation or otherwise.
39.3 MULTIPLE OPTIONS. In the event that Lessee has any Multiple Options
to extend or renew this Lease, a later Option cannot be exercised unless the
prior Options to extend or renew this Lease have been validly exercised.

Initials
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<PAGE>

39.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary: (i)
during the period commencing with the giving of any notice of Default under
Paragraph 13.1 and continuing until the noticed Default is cured, or (ii)
during the period of time any monetary obligation due Lessor from Lessee is
unpaid (without regard to whether notice thereof is given Lessee), or (iii)
during the time Lessee is in Breach of this Lease, or (iv) in the event that
Lessor has given to Lessee three (3) or more notices of Default under Paragraph
13.1, whether or not the Defaults are cured, during the twelve (12) month
period immediately preceding the exercise of the Option.
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of Lessee's inability to exercise
an Option because of the provisions of Paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due
and timely exercise of the Option, if, after such exercise and during the term
of this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of
Lessee for a period of thirty (30) days after such obligation becomes due
(without any necessity of Lessor to give notice thereof to Lessee), or (ii)
Lessor gives to Lessee three (3) or more notices of Default under Paragraph 13.1
during any twelve (12) month period, whether or not the Defaults are cured, or
(iii) if Lessee commits a Breach of this Lease.

40. MULTIPLE BUILDINGS. If the Premises are part of a group of buildings
controlled by Lessor, Lessee agrees that it will abide by, keep and observe all
reasonable rules and regulations which Lessor may make from time to time for
the management, safety, care, and cleanliness of the grounds, the parking and
unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenants of such other buildings and their
invitees, and that Lessee will pay its fair share of common expenses incurred
in connection therewith.

41. SECURITY MEASURES. Lessee hereby acknowledges that the rental payable
to Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide
same. Lessee assumes all responsibility for the protection of the Premises,
Lessee, its agents and invitees and their property from the ads of third
parties.

42. RESERVATIONS. Lessor reserves to itself the right, from time to time,
to grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of parcel
maps and restrictions, so long as such easements, rights, dedications, maps
and restrictions do not unreasonably interfere with the use of the Premises
by Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to
effectuate any such easement rights, dedication, map or restrictions.

43. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to
any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment and there shall survive the
right on the part of said Party to institute suit for recovery of such sum. If
it shall be adjudged that there was no legal obligation on the part of said
Party to pay such sum or any part thereof, said Party shall be entitled to
recover such sum or so much thereof as it was not legally required to pay under
the provisions of this Lease.

44. AUTHORITY. If either Party hereto is a corporation, trust, or general
or limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.

45. CONFLICT. Any conflict between the printed provisions of this Lease and
the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.

46. OFFER. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to lease to Lessee.
This Lease is not intended to be binding until executed by all Parties hereto.

47. AMENDMENTS. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. The parties shall amend
this Lease from time to time to reflect any adjustments that are made to the
Base Rent or other rent payable under this Lease. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by an institutional, insurance company, or pension plan Lender in
connection with the obtaining of normal financing or refinancing of the property
of which the Premises are a part.

48. MULTIPLE PARTIES. Except as otherwise expressly provided herein, if
more than one person or entity is named herein as either Lessor or Lessee, the
obligations of such Multiple Parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION TO
YOUR ATTORNEY FOR HIS APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED TO
EVALUATE THE CONDITION OF THE PROPERTY AS TO THE POSSIBLE PRESENCE OF
ASBESTOS, STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION OR
RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
OR BY THE REAL ESTATE BROKER(S) OR THEIR AGENTS OR EMPLOYEES AS TO THE
LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEOUENCES OF THIS LEASE OR THE
TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY SOLELY UPON THE
ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
LEASE. IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN
CALIFORNIA, AN ATTORNEY FROM THE STATE WHERE THE PROPERTY IS LOCATED
SHOULD BE CONSULTED.

The parties hereto have executed this Lease at the place on the dates
specified above to their respective signatures.
<TABLE>

<C> <C>
Executed at Executed at
--------------------------------------- -----------------------------------------
on on
----------------------------------------------- -------------------------------------------------
by LESSOR: Steven R. Layton solely in his capacity by LESSOR: Douglas E. Hartman dba The Professional
---------------------------------------- ------------------------------------------
as Court Appointed Receiver of 7100 Knott Ave. Development Institute
- --------------------------------------------------- -----------------------------------------------------
By /s/ STEVEN R. LAYTON By /s/ DOUGLAS E. HARTMAN
------------------------------------------------ --------------------------------------------------
Name Printed: Steven R. Layton Name Printed: Douglas E. Hartman dba The Professional
------------------------------------- ---------------------------------------
Title: Title:
-------------------------------------------- ----------------------------------------------

By By
------------------------------------------------ --------------------------------------------------
Name Printed: Name Printed:
------------------------------------- ---------------------------------------
Title: Title:
-------------------------------------------- ----------------------------------------------
Address: 4740 East Bryan Street Address: 333 North Wilshire Avenue
------------------------------------------ --------------------------------------------
Anaheim, CA 92807 Anaheim, CA 92801-5846
- --------------------------------------------------- -----------------------------------------------------
Tel. No. (714)693-3191 Fax No. (714)693-3197 Tel. No. (714)778-1723 Fax No. (714)518-5944
----------------- ----------------------- ----------------- ------------------------

</TABLE>
PAGE 10
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NOTICE: These forms are often modified to meet changing requirements of law and
industry needs. Always write or call to make sure you are utilizing the
most current form: American Industrial Real Estate Association, 345
South Figueroa Street, Suite M-1, Los Angeles, CA 90071. (213) 687-
8777. Fax. No. (213)687-8616.

FORM 204N-R-12/91

<PAGE>

2) In any event, the new MRV shall not be less than the rent payable
for the month immediately preceding the date for rent adjustment.

b) Upon the establishment of each new Market Rental Value as described in
paragraph AII:

1) the monthly rental sum so calculated for each term as specified in
paragraph AII(a) will become the new "Base Rent" for the purpose of calculating
any further Cost of Living Adjustments as specified in paragraph AI(a) above and
2) the first month of each Market Rental Value term as specified in
paragraph AII(a) shall become the new "Base Month" for the purpose of
calculating any further Cost of Living Adjustments as specified in paragraph
AI(b).

[X} III. FIXED RENTAL ADJUSTMENT(S) (FRA)

The monthly rent payable under paragraph 1.5 ("Base Rent") of the attached Lease
shall be increased to the following amounts on the dates set forth below:

On (Fill in FRA Adjustment Date(s)): The New Base Rental shall be:

February 1, 1996 $ 15,000.00
--------------------------------------- ---------------------
April 1, 1996 $ 18,000.00
--------------------------------------- ---------------------
May 1, 1996 $ 25,000.00
--------------------------------------- ---------------------
$
--------------------------------------- ---------------------

B. NOTICE: Unless specified otherwise herein, notice of any escalations other
than Fixed Rental Adjustment(s) shall be made as specified in paragraph 23 of
the attached Lease.

C. BROKER'S FEE:

The Real Estate Brokers specified in paragraph 1.10 of the attached Lease
shall be paid a Brokerage Fee for each adjustment specified above in
accordance with paragraph 15 of the attached Lease.

Initials: Initials:
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---------- ----------

RENT ADJUSTMENT(S)
PAGE 2 OF 2

[LOGO]

RENT ADJUSTMENT(S)
ADDENDUM TO
STANDARD LEASE

DATED September 29, 1995

BY AND BETWEEN (LESSOR) Steven R. Layton solely in his capacity as
Court Appointed Receiver of 7100 Knott Avenue,
Buena Park, California

(LESSEE) Douglas E. Hartman dba The Professional
Development Institute

PROPERTY ADDRESS: 7100 Knott Ave., Buena Park, California

Paragraph 49

A. RENT ADJUSTMENTS:

The monthly rent for each month of the adjustment period(s) specified below
shall be increased using the method(s) indicated below:

(Check Method(s) to be Used and Fill in Appropriately)

[ ] I. COST OF LIVING ADJUSTMENT(S) (COL)

(a) On (Fill in COL Adjustment Date(s):
-----------------------------------
- --------------------------------------------------------------------------------
the monthly rent payable under paragraph 1.5 ("Base Rent") of the attached Lease
shall be adjusted by the change, if any, from the Base Month specified below, in
the Consumer Price Index of the Bureau of Labor Statistics of the U.S.
Department of Labor for (select one): [ ] CPI W (Urban Wage Earners and Clerical
Workers) or [ ] CPI U (All Urban Consumers), for (Fill in Urban Area):
----------
, All Items
- ---------------------------------------------------------------------
(1982-1984 = 100), herein referred to as "C.P.I."

(b) The monthly rent payable in accordance with paragraph Al (a) of this
Addendum shall be calculated as follows: the Base Rent set forth in paragraph
1.5 of the attached Lease, shall be multiplied by a fraction the numerator of
which shall be the C.P.I. If the calendar month 2 (two) months prior to the
month(s) specified in paragraph AI (a) above during which the adjustment is to
take effect. and the denominator of which shall be the C.P.I. of the calendar
month which is two (2) months prior to (select one): [ ] the first month of the
term of this Lease as set forth in paragraph 1.3 ("Base Month") or [ ] (Fill in
Other "Base Month"): ________________________. The sum so calculated shall
constitute the new monthly rent hereunder, but in no event, shall any such new
monthly rent be less than the rent payable for the month immediately preceding
the date for rent adjustment.

(c) In the event the compilation and/or publication of the C.P.I. shall be
transferred to any other governmental department or bureau or agency or shall be
discontinued, then the index most nearly the same as the C.P.I. shall be used to
make such calculation. In the event that Lessor and Lessee cannot agree on such
alternative index, then the matter shall be submitted for decision to the
American Arbitration Association in accordance with the then rules of said
association and the decision of the arbitrators shall be binding upon the
parties. The cost of said Arbitrators shall be paid equally by Lessor and
Lessee.

[ ] II. MARKET RENTAL VALUE ADJUSTMENT(S) (MRV)

(a) On (Fill in MRV Adjustment Date(s):
----------------------------------
- --------------------------------------------------------------------------------
the monthly rent payable under paragraph 1.5 ("Base Rent") of the attached
Lease shall be adjusted to the "Market Rental Value" of the property as follows:

1) Four months prior to the Market Rental Value (MRV) Adjustment
Date(s) described above, Lessor and Lessee shall meet to establish an agreed
upon new MRV for the specified term. If agreement cannot be reached, then:

i) Lessor and Lessee shall immediately appoint a mutually acceptable
appraiser or broker to establish the new MRV within the next 30 days. Any
associated costs will be split equally between the parties, or

ii) Both Lessor and Lessee shall each immediately select and pay the
appraiser or broker of their choice to establish a MRV within the next 30 days.
If, for any reason, either one of the appraisals is not completed within the
next 30 days, as stipulated, then the appraisal that is completed at that time
shall automatically become the new MRV. If both appraisals are completed and the
two appraisers/brokers cannot agree on a reasonable average MRV then they shall
immediately select a third mutually acceptable appraiser/broker to establish a
third MRV within the next 30 days. The average of the two appraisals closest in
value shall then become the new MRV. The costs of the third appraisal will be
split equally between the parties.

Initials: Initials:
--------------- --------------
--------------- --------------
RENT ADJUSTMENT(S)
Page 1 of 2

NOTICE: These forms are often modified to meet changing requirements of law and
industry needs. Always write or call to make sure you are utilizing the
most current form; American Industrial Real Estate Association, 345
South Figueroa Street, Suite M-1, Los Angeles, CA 90071. (213) 687-8777.
Fax No. (213) 687-8616.

GUARANTY OF LEASE [LOGO]

AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

WHEREAS, Steven R. Layton solely in his capacity as Court Appointed
Receiver of 7100 Knott Ave., hereinafter referred to as "Lessor", and Douglas E.
Hartman dba The Professional Dev. Institute, hereinafter referred to as
"Lessee", are about to execute a document entitled "Lease" dated September 19,
1995 concerning the premises commonly known as 7100 Knott Ave., Buena Park,
California wherein Lessor will lease the premises to Lessee, and

WHEREAS, Douglas E. Hartman hereinafter referred to as "Guarantors" have a
financial interest in Lessee, and

WHEREAS, Lessor would not execute the Lease if Guarantors did not execute
and deliver to Lessor this Guarantee of Lease.

NOW THEREFORE, for and in consideration of the execution of the foregoing
Lease by Lessor and as a material inducement to Lessor to execute said Lease,
Guarantors hereby jointly, severally, unconditionally and irrevocably guarantee
the prompt payment by Lessee of all rentals and all other sums payable by Lessee
under said Lease and the faithful and prompt performance by Lessee of each and
every one of the terms, conditions and covenants of said Lease to be kept and
performed by Lessee.

It is specifically agreed and understood that the terms of the foregoing
Lease may be altered, affected, modified or changed by agreement between Lessor
and Lessee, or by a course of conduct, and said Lease may be assigned by Lessor
or any assignee of Lessor without consent or notice to Guarantors and that this
Guaranty shall thereupon and thereafter guarantee the performance of said Lease
as so changed, modified, altered or assigned.

This Guaranty shall not be released, modified or affected by failure or
delay on the part of Lessor to enforce any of the rights or remedies of the
Lessor under said Lease, whether pursuant to the terms thereof or at law or in
equity.

No notice of default need be given to Guarantors, it being specifically
agreed and understood that the guarantee of the undersigned is a continuing
guarantee under which Lessor may proceed forthwith and immediately against
Lessee or against Guarantors following any breach or default by Lessee or for
the enforcement of any rights which Lessor may have as against Lessee pursuant
to or under the terms of the within Lease or at law or in equity.

Lessor shall have the right to proceed against Guarantors hereunder
following any breach or default by Lessee without first proceeding against
Lessee and without previous notice to or demand upon either Lessee or
Guarantors.

Guarantors hereby waive (a) notice of acceptance of this Guaranty, (b)
demand of payment, presentation and protest, (c) all right to assert or plead
any state of limitations as to or relating to this Guaranty and the Lease, (d)
any right to require the Lessor to proceed against the Lessee or any other
Guarantor or any other person or entity liable to Lessor, (e) any right to
require Lessor to apply to any default any security deposit or other security it
may hold under the Lease, (f) any right to require Lessor to proceed under any
other remedy Lessor may have before proceeding against Guarantors, (g) any right
of subrogation.

Guarantors do hereby subrogate all existing or future indebtedness of
Lessee to Guarantors to the obligations owed to Lessor under the Lease and this
Guaranty.

Any married woman who signs this Guaranty expressly agrees that recourse
may be had against her separate property for all of her obligations hereunder.

The obligations of Lessee under the Lease to execute and deliver estoppel
statements and financial statements, as therein provided, shall be deemed to
also require the Guarantors hereunder to do and provide the same relative to
Guarantors.

The term "Lessor" whenever hereinabove used refers to and means the Lessor
in the foregoing Lease specifically named and also any assignee of said Lessor,
whether by outright assignment or by assignment for security, and also any
successor to the interest of said Lessor or of any assignee in such Lease or any
part thereof, whether by assignment or otherwise. So long as the Lessor's
interest in or to the leased premises or the rents, issues and profits
therefrom, or in, to or under said Lease, are subject to any mortgage or deed of
trust or assignment for security, no acquisition by Guarantors of the Lessor's
interest in the leased premises or under said Lease shall affect the continuing
obligation of guarantors under this Guaranty which shall nevertheless continue
in full force and effect for the benefit of the mortgagee, beneficiary, trustee
or assignee under such mortgage, deed of trust or assignment, of any purchase at
sale by judicial foreclosure or under private power of sale, and of the
successors and assigns of any such mortgagee, beneficiary, trustee, assignee or
purchaser.

The term "Lessee" whenever hereinabove used refers to and means the Lessee
in the foregoing Lease specifically named and also any assignee or sublessee of
said Lease and also any successor to the interests of said Lessee assignee or
sublessee of such Lease or any part thereof, whether by assignment, sublease or
otherwise.

In the event any action be brought by said Lessor against Guarantors
hereunder to enforce the obligation of Guarantors hereunder, the unsuccessful
party in such action shall pay to the prevailing party therein a reasonable
attorney's fee which shall be fixed by the court.

IT THIS FORM HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION
TO YOUR ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION
IS MADE BY THE REAL ESTATE BROKER OR IT AGENTS OR EMPLOYEES AS TO THE
LEGAL SUFFICIENCY; LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS FORM OR
THE TRANSACTION RELATING THERETO.

Executed at /s/ Douglas E. Hartman
----------------------------- -------------------------------
on Douglas E. Hartman
-------------------------------------- -------------------------------
Address
--------------------------------- -------------------------------

- ---------------------------------------- "GUARANTORS"

NOTE: These forms are often modified to meet changing requirements of law and
needs of the industry. Always write or call to make sure you are utilizing the
most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 345 So.
Figueroa St., M-1, Los Angeles, CA 90071. (213) 687-8777.
<PAGE>

EXHIBIT "A"

[MAP]

<PAGE>

EXHIBIT "B"

[MAP]

<PAGE>

ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL SINGLE - TENANT LEASE - NET

By and Between Douglas E. Hartman dba The Professional Development Institute
(Lessee) and Steven R. Layton solely in his capacity as Court Appointed Receiver
of 7100 Knott Avenue, Buena Park, California (Lessor).

Dated September 29, 1995
- --------------------------------------------------------------------------------

50 LANDLORD IMPROVEMENTS
---------------------
Lessor will cause the following repairs to be made to the Premises prior to
Lessee's occupancy of the Premises.

(1) Repair or replace the HVAC system in the approximately 6,500 square
foot first floor area and the approximately 6,500 square foot second
floor expansion areas designated on Exhibit "B" hereto; and

(2) Repair or replace the electrical system as necessary in the premises.
Lessee's occupancy of the Premises shall constitute its acceptance and
approval of all such repairs and of Lessor's performance of Paragraph 2.2
hereof. The Parties acknowledge that the HVAC system will otherwise not
be operational. Lessor shall use its best efforts to repair the HVAC
system for the balance of the building when, and if, Lessee provides
written notice to Lessor that Lessee's $25,000 security deposit is non-
refundable as set forth in Paragraph 52 below. Lessor shall not be
required, however, to expend more the $25,000 for any additional repairs
to the HVAC system.

51 TENANT IMPROVEMENTS
-------------------
Notwithstanding the previous Paragraph 50, Landlord Improvements, Tenant
shall accept the premises in its as is where is condition with no
representations or warranties expressed or implied by Landlord or Brokers and
Paragraph 2.3, Compliance, with Covenants Restrictions and Building Code,
shall be the sole and absolute responsibility of the Lessee at the Lessee's
sole cost and expense.

52 LEASE TERM
----------
The Lessee is simultaneously entering an agreement with American Recreational
Properties Development, Inc. entitled "Standard Offer Agreement and Escrow
Instructions for Purchase of Real Estate" (the "Offer Agreement"). The Lessor
is not a party to the Offer Agreement. If on or before December 31, 1995,
Lessee gives written notice to Lessor that Lessee waived all contingencies of
the Offer Agreement on or before December 15, 1995, then Lessee's $25,000
security deposit paid to Lessor pursuant to paragraph 1.7 and 5 hereof will
become the property of the Lessor and will not be refunded to Lessee under
any circumstances. If on or before December 31, 1995, Lessee gives written
notice to Lessor that Lessee did not waive all contingencies under the Offer
Agreement on or before December 15, 1995, then the term of this Lease shall
become month to month as of January 1, 1996. In the event that the term of
this Lease becomes month to month, all other provisions of the Lease
(including, without limitation, Paragraphs 1.7, 5 and 49) shall remain in
full force and effect except that either Party may cancel the Lease upon
delivery to the other Party of 30 day's written notice.

<PAGE>

EXHIBIT 10.9

PROFESSIONAL DEVELOPMENT INSTITUTE

SUMMARY OF LEASE AND MAINTENANCE

DOCUTECH WITH NETWORK SERVER

Lease Payments months 1-12 $5,683.65
Lease Payments months 13-72 $6,908.65

Months 1-12 includes warranty. No maintenance bills!!!

After month 12 PDI will need to select a maintenance plan.

Option 1
Volume Plan
Base maintenance $475/mo. each copy billed @ $.0088
Option 2
High volume plan
Base maintenance $2,995/mo. each copy billed @ $.004

(2) Xerox 5334ZTASF
60 month lease payments $297.61/mo. each
Each copy is billed @ $.0129

1
<PAGE>

This Xerox Order Agreement covers transaction(s) checked below and incorporates
the General Terms and Conditions on the reverse side of the Customer copy and
other documents referenced below.
[_] Equipment Purchase (for Add-On)
[X] Term Lease (or Add-on)
[_] XLA
[_] Maintenance Only (including Price Plan Conversion)
[_] Maintenance
[_] Trial
[_] Supplies and Maintenance (SAM)
- --------------------------------------------------------------------------------
CUSTOMER NAME Professional Development Institute
- --------------------------------------------------------------------------------
PARENT COMPANY (IF DIFFERENT)
- --------------------------------------------------------------------------------
STREET ADDRESS 7100 Knott Blvd.
- --------------------------------------------------------------------------------
BOX NUMBER/ROUTING
- --------------------------------------------------------------------------------
CITY Buena Park, STATE CA ZIP 92801
- --------------------------------------------------------------------------------
INSTALLED AT, CUSTOMER NAME
- --------------------------------------------------------------------------------
NAME OVERFLOW
- --------------------------------------------------------------------------------
FLOOR, ROOM ROUTING
- --------------------------------------------------------------------------------
STREET ADDRESS
- --------------------------------------------------------------------------------
CITY STATE ZIP
- --------------------------------------------------------------------------------
COUNTY INSTALLED IN
- --------------------------------------------------------------------------------
Xerox Equipment Order Information
- --------------------------------------------------------------------------------
Qty Xerox Product (Existing Serial # if in place.
Price Plan Conversion, or add-on)
- --------------------------------------------------------------------------------
1 NP1352
- --------------------------------------------------------------------------------
1 NServ
- --------------------------------------------------------------------------------
1 JM-1
- --------------------------------------------------------------------------------
Meter Read

1________ 2_________
- --------------------------------------------------------------------------------
EQUIPMENT PURCHASE
- --------------------------------------------------------------------------------
Less Deductions
List Price Trade-in Other Net Price
- --------------------------------------------------------------------------------

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

- --------------------------------------------------------------------------------
Totals: Total Net Price (Exclusive of Sales/Use
Tax Maintenance and Supply Charges)
- --------------------------------------------------------------------------------
Financial Interactive Communication:[_]Yes [X]No Metered Supplies:[_]yes [X]no
- --------------------------------------------------------------------------------
Term of Agreement Total Prepaid ????????
72 months 0
- --------------------------------------------------------------------------------
Total Monthly Minimum Lease Payment $6,908.00
(Exclusive of Sales/Use Tax)
- --------------------------------------------------------------------------------
Purchase Option Amount: $8,600.00
- --------------------------------------------------------------------------------
Description of Maintenance Plan included in Total Monthly Lease Payment:
Unbundled
- --------------------------------------------------------------------------------
Copy Charges will be billed separately in accordance with the Maintenance Price
List indicated
- --------------------------------------------------------------------------------
K-16 Summer
Copy Allowance Option Code
------------------- ------------------------
Excess Meter
Copy Change MTR 1 Bill Code
------------------- ------------------------
Copy Change MTR 2
-------------------
Shift Coverage: Hours:
------------------- ------------------------
95 #
- --------------------------------------------------------------------------------
The interest payable for State/Local Government Term Lease subject to this order
is $__________ (For Term Lease this assumes this option to purchase is exercised
at end of lease period) at a rate of _________%.
- --------------------------------------------------------------------------------
Complete This Section for Maintenance
Unless modified by the customer in writing within 30 days of the contract
expiration date, this contract will automatically be approved
- --------------------------------------------------------------------------------
Hardware Price
Plan Description:______Initial Term:_____?? Code_____Shift Coverage____Hours____
- --------------------------------------------------------------------------------
CPO ( ) Monthly Minimum___Copy Allowance___Excess Rate___Meter 1___Meter 2___
- --------------------------------------------------------------------------------
Gov't Firm Contract Option_____ Gov't Fiscal Year Option_____
Gov't Fiscal Year Begins__________ K-10 Summer Option Code______
- --------------------------------------------------------------------------------
Requested Delivery Date 10/9/95
-------
- --------------------------------------------------------------------------------
EXISTING XTI, CTI, RST Equipment to be removed
(List serial #'s Cert. Tag #)
- --------------------------------------------------------------------------------
CTI
- --------------------------------------------------------------------------------
Kodak 100
- --------------------------------------------------------------------------------
S/N 387291
- --------------------------------------------------------------------------------
Total Warranty Months
HARDWARE 12
- --------------------------------------------------------------------------------
ADDITIONAL SUPPLIES
- --------------------------------------------------------------------------------
QTY. REORDER # SUPPLY ITEM UNIT PRICE
- --------------------------------------------------------------------------------

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

- --------------------------------------------------------------------------------
Xerox Supply Contract #:
- --------------------------------------------------------------------------------
TAX EXEMPT [_] Yes [X] No
(Attach Exemption Certificates)
- --------------------------------------------------------------------------------
PURCHASE ORDER INFORMATION
Attach original or copy
(Purchase Order References are for Billing Purposes Only)
Customer Requires Purchase Order Number: [_] Yes [X] No
Purchase Order Numbers For This Order:
Equipment: ____________________________________________________________________
Maintenance: __________________________________________________________________
Other: ________________________________________________________________________
- --------------------------------------------------------------------------------
CUSTOMER ACCEPTANCE
- --------------------------------------------------------------------------------
Date Yes
Xerox Price List $65,316 9/95 [X]
------ ----
$ [_]
------ ----
Maintenance Price List $65,316 9/95 [X]
------ ----
Negotiated Contract #
------ ----
Gov't Contract #
------ ----
- --------------------------------------------------------------------------------
Dated Yes No
Equipment Purchase Terms and Conditions: 1/1/95 [_] [_]
------
Maintenance Per Loss Terms and Conditions: 1/1/95 [X] [_]
------
Term Lease Terms and Conditions: 1/1/95 [X] [_]
------
Product Specification Street NP1352 9/95 [X] [_]
------
Equipment Trade-in Agreement 1/1/95 [_] [_]
------
Other: Unbundled [X] [_]
--------- ------
Other: MA-20210 [X] [_]
--------- ------
Other: [_] [_]
--------- ------
- --------------------------------------------------------------------------------
*Customer signatures below acknowledges receipt of documents (???? "yes" above)
for incorporation into this agreement.*

Name Phone
(Please Print) KEITH FREADHOFF Number (714) 578-5945
-------------------------------- --------------
Signature /s/ KEITH FREADHOFF
---------------------------------------------------------
Title President/Ceo Date 9/26/95
--------------------------------------- ---------------
- --------------------------------------------------------------------------------
Sales Rep Sales Rep
Emp. # AG8034 Phone # (714) 541-2200
------------------------------------- --------------------------
Sales Rep Order Acknowledgement Tony S.A. Sanchez
------------------------------------------------
Xerox Corporation
Signature
---------------------------------------------------------------------
Approved For [?????]
Title Date
----------------------------------- ------------------------------
- --------------------------------------------------------------------------------
Form 60900 (1/1/95) XEROX XEROX is a trademark of XEROX CORPORATION

<PAGE>

Effective January 1, 1995 (Supersedes August 1, 1991)

AMENDMENT TO LEASE AGREEMENT
(STANDARD WARRANTY / EXTENDED SERVICE WARRANTY /
FLAT RATE WARRANTY / PARTIAL TERM)

THIS AMENDMENT ("Amendment") modifies Term Lease or Xerox Lease Agreement
No. 95__
("Agreement") previously entered by the parties as specified below.

[_] Standard Warranty
Each at the first ( ) monthly minimum lease payments of $ as
----- ------
shown in the Agreement is changed to $ and there shall be no Excess Copy
-----
or similar charges during this period.

[_] Extended Service
Monthly payments through will be changed to $ to
----------- ---------- ---------
reflect the Extended Service Warranty portion of the Agreement and there shall
be no Excess Copy or similar charges during this period.

[_] Flat Rate Warranty
Monthly payments through will be changed to $ to
----------- --------- ----------
reflect the Flat Rate Warranty portion of the Agreement and there shall be no
Excess Copy or similar charges during this period.

[X] Other
Monthly payments 1 through 12 will be changed to $5,683.65 to reflect
application of an additional payment discount.

Monthly payments l3 through 72 will be changed to the amount shown In the
Agreement, subject, however, to any increase in the Maintenance Component of the
monthly minimum lease payment allowable under the applicable terms and
conditions, and you shall pay for any Excess Copy or similar charges during this
portion of the contract and any renewals thereof.

Except where this Amendment is in conflict with the Agreement, all terms and
conditions of the Agreement shall remain in full force and effect.

THE PERSON SIGNING THIS AMENDMENT WARRANTS THAT HE / SHE IS A DULY AUTHORIZED
REPRESENTATIVE OF YOU AND HAS THE AUTHORITY TO EXECUTE THIS AMENDMENT ON YOUR
BEHALF.

Customer: KEITH FREADHOFF
--------------------
By:
--------------------

/s/ KEITH FREADHOFF
- -----------------------------
Customer's Signature

President/CEO
- -----------------------------
Customer's Title
<PAGE>

January 1, 1995
TRADE-IN TERMS AND CONDITIONS

The following terms and conditions are in addition to the General Terms and
Conditions contained on the reverse side of the Order Agreement.

1. OWNERSHIP. You warrant that you own and have the right to transfer the
Equipment listed below, including current Options and Accessories ("Trade-
in Equipment"), free and clear of all claims, liens and encumbrances. Title
and risk of loss to the Trade-In Equipment shall pass to Xerox upon removal
from your premises. You further warrant that the Trade-In Equipment has
been installed and performing its intended function for the previous year
at the installation address of the replacement Equipment being installed
("Replacement Equipment").
<TABLE>
<CAPTION>
<S> <C>
TRADE-IN EQUIPMENT MANUFACTURER; MODEL AND SERIAL NUMBERS TRADE-IN ALLOWANCE
Kodak 100 $ 7,000
--------------------------------------------------------- -----------------
$
--------------------------------------------------------- -----------------
$
--------------------------------------------------------- -----------------

</TABLE>

2. CONDITION. You warrant that the Trade-In Equipment is in good working order
and has a UL label attached. If the Trade-In Equipment is Xerox
Equipment, you also warrant that it has a Xerox serial number plate
attached and has not been altered from the original manufactured
configuration except for Xerox initiated upgrades or retrofits. If the
Trade-In Equipment is non-Xerox Equipment, you warrant that it has not been
modified, except in accordance with UL approved procedures. You further
warrant that all data files have been deleted or are of a nature which is
not sensitive for disclosure to others. You will maintain the Trade-In
Equipment in substantial its present condition until removal by Xerox, and
will remove all supplies from the Trade-In Equipment prior to removal
Xerox.

3. DELIVERY AND REMOVAL. The Trade-In Equipment must be located at the
installation address of the Replacement Equipment and shall be removed by
Xerox at the same time that you accept delivery of the Replacement
Equipment. The standard removal charge will be waived, except for unusual
expenses.

4. EARLY TERMINATION. If the Trade-In Equipment is Xerox Equipment, any
applicable Xerox Maintenance Plan or Software License will be deemed
terminated asotedate the Trade-In Equipments removed. Early Termination
charges will be waived if the Replacement Equipment is Leased Equipment or
Rental Equipment, or is otherwise subject to a Xerox Maintenance Plan
or express warranty in excess of 12 months.
<TABLE>
<CAPTION>
<S> <C>
5. APPLICATION OF TRADE-IN ALLOWANCE. You may apply the Trade-In Allowance as follow's.

To Unfilled Xerox Finance Agreement on Trade-In Equipment: $
-------------------------------------
To Purchase Price of Replacement* Equipment: $ 7,000
-------------------------------------
To Monthly Invoices Issued for Equipment Services Agreements @ 1/24 per Month: $
-------------------------------------
To Non-Cash Discounts: $
-------------------------------------
</TABLE>

6. PAYMENT OF CARRYING CHARGES. For Trade-In Equipment subject to a Xerox
Finance Agreement (i.e., Equipment purchased on an installment payment
basis or leased from Xerox), you shall pay all maintenance, administrative
and finance charges for the Trade-In Equipment accuring under the Xerox
Finance agreement after monthly payment number through the date title
-----
to the Trade-In Equipment passes to Xerox. Xerox will send you monthly
invoices for these amounts.

<PAGE>

EFFECTIVE MARCH 1, 1995

AMENDMENT TO LEASE AGREEMENT
(MAINTENANCE EXCLUDED)

THIS AMENDMENT ("Amendment") modifies Term Lease or Xerox Lease Agreement
entered by the parties on or about 9/26, 1995 {"Agreement"). Except to the
extent modified by this Amendment, all of the terms and conditions of the
AGreement remain in full force and effect.

1. The Agreement is modified so that your obligation to pay the Maintenance
Component of the monthly lease payments and Xerox obligation to maintain
the Leased Equipment ar eliminated form the agreement.

2. For the during of the Agreement, you shall promtly enter, and maintain
in full force and effect, at your expense, a Maintenance Services
Agreement ("MSA") with Xerox for all of the Leased Equipment subject to
the Agreement,a nd Xerox shall perform the serivces required by the MSA.
A breach of such MSA by you or Xerox will also be deemed a breach of the
Agreement.

3. You and Xerox agree that if you elect to terminate the Agreement in a
manner either (a) specifically permitted without penalty under the
Agreement or (b) deemed acceptable in a writing signed by both parties
which specifically references this Amendment. Xerox shall not assess any
Early Termination Charges otherwise payable under the MSA.

THE PERSON SIGNING THIS AMENDMENT WARRANTS THAT HE/SHE IS A DULY AUTHORIZED
REPRESENTATIVE OF YOU AND HAS THE AUTHORITY TO EXECUTE THIS AMENDMENT ON YOUR
BEHALF.

Customer:
------------------------------

By: KEITH D. FREADHOFF
------------------------------

/s/ KEITH D. FREADHOFF
- ---------------------------------------
Customer's Signature

<PAGE>

EXHIBIT 10.10

IBM CREDIT CORPORATION STAMFORD, CT 06904

TERM LEASE MASTER AGREEMENT

Name and Address of Lessee: PROSOFT DEVELOPMENT CORP Agreement No.7336742
PROSOFT DEV CORP
7100 KNOTT AVE
BUENA PARK, CA 90620-1314 Branch Office No.:PZF

Branch Office Address: S. Calif DMC Customer No. 7336742
2929 N. Central Ave
Phoenix, AZ 85012-2743

The Lessor pursuant to this Term Lease Master Agreement (Agreement) will be (a)
IBM Credit Corporation, or a subsidiary or affiliate thereof, (b) a partnership
in which IBM Credit Corporation is a partner, or (c) a related business
enterprise for whom IBM Credit Corporation is the agent (Lessor). The subject
matter of the lease shall be machines, field installation upgrades, feature
addition or accessories marketed by international Business Machines Corporation
(IBM) and shall be referred to as Equipment. Any lease transaction
requested by Lessee and accepted by Lessor shall be specified in a Term Lease
Supplement (Supplement). A Supplement shall refer to and incorporate by
reference this Agreement and, when signed by the parties, shall constitute the
lease (Lease) for the Equipment specified therein. Additional details
pertaining to a Lease shall be specified in a Supplement. A supplement may also
specify additional terms and conditions as well as other amounts to be financed
(Financing). Financing may include licensed program material charges (LPM
Charges) for licensed programs marketed by IBM under the referenced IBM license
agreement (License Agreement).

1. OPTIONS: The Supplement shall designate various lease and financing
options. Option A is a Lease available only for Modifications (Paragraph 23) to
Equipment under Option A prior to enactment of the Tax Reform Act of 1986.
Option B is a Lease with a fair market purchase option at the end of the Lease.
For Equipment under Option B Prime (B), Lessor assumes for tax purposes that
Lessee is the owner. For financing LPM Charges, Option 5 will apply.
2. CREDIT REVIEW. For each Lease, Lessee consents to any reasonable credit
investigation and review by Lessor.

3. AGREEMENT TERM. This Agreement shall be effective when signed by both
parties and may be terminated by either party upon one month's written notice.
However, each Lease then in effect shall survive any termination of this
Agreement.
4. CHANGES. Lessor may, upon prior written notice, change the terms and
conditions of this Agreement. And changes will apply on the effective date
specified in the notice to Leases which have an Estimated Shipment Date, or
Effective Date for Additional License, one month or more after the date of
notice. By notice to Lessor in writing prior to delivery, or Effective Date for
Additional License, and within 15 days after receipt of such notice, Lessee may
terminate the Lease for an affected item. Otherwise, the change shall apply.
5. ADVANCE RENT. Lessee shall pay to Lessor, prior to Lessor's acceptance
of a Lease, Advance Rent, if specified. Advance Rent shall be refunded if
Lessor for any reason does not accept the Lease or Lessee terminates the Lease
in accordance with Paragraph 4, 12, or 15.
6. SELECTION AND USE OF EQUIPMENT, PROGRAMMING AND LICENSED PROGRAM
MATERIALS. Lessee agrees that it shall be responsible for the selection, use of
and results obtained from, the Equipment, any programming supplied by IBM
without additional charge for use on the Equipment (Programming) licensed
program materials and any other associated equipment, programs or services .
7. ASSIGNMENT TO LESSOR. Lessee hereby assigns, exclusively to Lessor,
Lessee's right to purchase the Equipment from IBM. This assignment is effective
when Lessor accepts the applicable Supplement and Lessor shall then be obligated
to purchase and pay for the Equipment. Other than the obligation to pay the
purchase price, all responsibilities and limitations applicable to Customer as
defined in the referenced IBM purchase agreement in effect at the time the Lease
is accepted by Lessor (Purchase Agreement) shall apply to Lessee.
If the Equipment is subject to a volume procurement amendment to the
Purchase Agreement or to another discount offering (a) Lessor will pay the same
amount for the Equipment that would have been payable by Lessee, and (b) Lessee
will remain responsible to IBM for any late order change charges, settlement
charges, adjustment charges or any other charges incurred under the volume
procurement or other discount offering.
8. LEASE NOT CANCELLABLE: LESSEE'S OBLIGATIONS ABSOLUTE. Lessee's
obligation to pay shall be absolute and unconditional and shall not be subject
to any delay, reduction, set-off, defense, counterclaim or recoupment for any
reason whatsoever, including any failure of the Equipment, Programming or
licensed program materials or any representations by IBM. If the Equipment,
Programming, or licensed program materials are unsatisfactory for any reason,
Lessee shall make any claim solely against IBM and shall, never less, pay Lessor
all amounts payable under the Lease.
9. WARRANTIES Lessor grants to Lessee the benefit of any and all
warranties made available by IBM in the Purchase Agreement. Lessor warrants that
neither Lessor nor anyone acting or claiming through Lessor, by assignment or
otherwise, will interfere with Lessee's quiet enjoyment of the use of the
Equipment so long as no event of default shall have occurred and be continuing.
EXCEPT FOR LESSOR'S WARRANTY OF QUIET ENJOYMENT, LESSOR MAKES NO WARRANTY
EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, BUT NOT LIMITED TO,
THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
AS TO LESSOR, LESSEE LEASES THE EQUIPMENT AND TAKES

THE ADDITIONAL TERMS AND CONDITIONS ON PAGES 2 THROUGH 4 ARE PART OF THIS
AGREEMENT.

LESSEE ACKNOWLEDGES THAT LESSEE HAS READ THIS AGREEMENT AND ITS SUPPLEMENT,
UNDERSTANDS THEM, AND AGREES TO BE BOUND BY THEIR TERMS AND CONDITIONS. FURTHER,
LESSEE AGREES THAT THIS AGREEMENT AND ITS SUPPLEMENT ARE THE COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES, SUPERSEDING ALL
PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS
BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER THEREOF.

[_] INITIAL IF AGREEMENT COVERAGE PAGE IS ATTACHED.
Accepted by:
IBM Credit Corporation PROSOFT DEVELOPMENT CORP
-------------------------------
For or as lessor
By: By: /s/ JAMES P. STAPLETON
---------------------------- ----------------------------
Authorized Signature Authorized Signature
JAMES P. STAPLETON 4-19-96
- -------------------------------- ----------------------------
Name (Type or Print) Date Name (Type or Print) Date

Page 1 of 5
<PAGE>

ANY PROGRAMMING 'AS IS' IN NO EVENT SHALL LESSOR HAVE ANY LIABILITY FOR, NOR
SHALL LESSEE HAVE ANY REMEDY AGAINST LESSOR FOR CONSEQUENTIAL DAMAGES, ANY LOSS
OF PROFITS OR SAVINGS, LOSS OF USE, OR ANY OTHER COMMERCIAL LOSS.

10. LESSEE AUTHORIZATION. So long as Lessee is not in default under the
Lease (a) Lessee is authorized to act on Lessor's behalf concerning delivery and
installation of the Equipment, any IBM warranty service for the Equipment and
any programming services for the Programming and (b) Lessee shall have solely
for these purposes, all rights Lessor may have against IBM under the Purchase
Agreement. The foregoing authorization shall not constitute any surrender of
Lessor's interest in the Equipment.
11. DELIVERY AND INSTALLATION. Lessee shall arrange with IBM for the
delivery of the Equipment and Programming and for installation of the Equipment
at the Equipment Location. Lessee shall pay any delivery and installation
charges. Lessor shall not be liable to Lessee for any delay in or failure of
delivery of the Equipment and Programming. Lessee shall examine equipment and
programming immediately upon delivery. If the equipment is not in good condition
or the equipment or programming does not correspond to IBM's specifications.
Lessee shall promptly give IBM written notice and shall provide IBM reasonable
assistance to cure the detect or discrepancy.
12. LATE DELIVERY. If the equipment or licensed program materials are not
delivered to the equipment location on or before the 15th day after the
estimated shipment date, Lessor may, upon written notice to Lessee, increase the
Lease Rate. Lessee may terminate the Lease for the affected item by giving
Lessor written notice prior to delivery. Otherwise, the rent shall be adjusted
to reflect such increase.
13. RENT COMMENCEMENT DATE. The Rent Commencement Date, unless otherwise
specified in the Supplement, shall be the date payment is due IBM under the
applicable referenced agreement. Lessee shall be notified of the Rent
Commencement Date and the serial numbers of the equipment.
14. LEASE TERM. The lease shall be effective when signed by both parties.
The initial Term of the Lease shall expire at the end of the number of Payment
Periods, specified as "Term" in the Supplement, after the Rent Commencement
Date. However, obligations under the Lease shall continue until they have been
performed in full.
15. RATE PROTECTION. Unless modified pursuant to Paragraph 12, the Rent
shall be based on the Lease Rate specified in the Supplement or such greater
Lease Rate as may be specified by written notice to Lessee more than one month
before the estimated Shipment Date of Effective date for Additional License. By
notice to Lessor in writing prior to delivery, or effective date for additional
license and within 15 days after receipt of such notice Lessee may terminate the
Lease for the affected item. Otherwise the Rent shall be adjusted to reflect the
increase. The Unit Purchase Price and LPM Charges are subject to change in
accordance with the referenced agreements.
16. RENT. During the initial Term, Lessee shall pay Lessor, for each
Payment Period. Rent as determined in Paragraph 15. Lessee's obligation to pay
shall begin on the Rent Commencement Date. Rent will be involved in advance as
of the first day of each Payment Period and will be due on the day following the
last day of the first day of a calendar month and/or when the initial Term does
not expire on the last day of a calendar month, the applicable Rent will be
prorated on the basis of 30-day months. Advance Rent, if any, will be applied to
the initial invoice(s).
17. RENEWAL. If Lessee is not then in default under the Lease. Lessee may
renew the Lease one or more times but not beyond six years from the expiration
of the initial Term. Lessor shall offer renewal Terms of one year and may offer
longer Terms if then generally available. For a renewal Term, upon request by
Lessee, at least five months prior to Lease expiration, Lessor shall notify
Lessee, at least four months prior to Lease expiration. Lessor shall notify
Lessee, at least four months prior to expiration, of the Rent any changes to the
Payment Period and due dates, and of any required. Purchase Option or Renewal
Option Percents not specified in the Supplement. The Rent shall be objectively
determined by Lessor by using the projected fair market rental value of the
equipment as of the commencement of such renewal term. However, for option B,
the Rent shall be as specified in the supplement, Lessee may renew for any
renewal term only by so notifying Lessor in writing at least three months before
expiration.
18. PURCHASE OF EQUIPMENT. If Lessee is not then in default under the
lease, Lessee may, upon three months prior written notice to Lessor, purchase
equipment upon expiration of the determined by Lessor by using the projected
fair market sales value of the equipment as of such expiration date plus for
equipment under Option A a recapture of investment tax credit and shall be an
amount determined by multiplying the unit purchase price by the purchase option
percent for such equipment.
If Lessee purchases any equipment, Lessee shall on or before the date of
purchase, pay to Lessor the purchase price, any applicable taxes, all rent due
throughout the date of purchase transfer to Lessee by bill of sale without
recourse or warranty of any kind, express, or implied all of Lessor's right
title and interest in and to such equipment on an "As Is, Where Is" basis except
that Lessor shall warrant title free and clear of all encumbrances.
19. OPTIONAL EXTENSION. If Lessee has not elected to renew or purchase and
as long as Lessee is not in default under the Lease the Lease will be extended
unless Lessee notifies Lessor in writing not less than three months prior to
Lease expiration that Lessee does not want the extension. The extension will be
under the same terms and conditions then in effect including rent (but for
options A or B not unless than fair market rental value and will continue until
the earlier of termination by either party upon three months prior written
notice or six years after expiration of the initial term.
20. INSPECTION; MARKING; FINANCING STATEMENT. Upon request, lessee shall
make the equipment and its maintenance records available for inspection by
Lessor. Lessee shall execute and deliver to Lessor for filing any uniform
Commercial Code financing statements or similar documents Lessor may reasonably
request.
21. EQUIPMENT USE. Lessee agrees that equipment will be operated by
competent, qualified personnel in accordance with applicable operating
instructions, laws and government regulations and that equipment under option A
will be used only for business purposes.
22. MAINTENANCE. Lessee, at its expense, shall keep the equipment in a
suitable environment as specified by IBM and in good condition and working
order, ordinary wear and tear excepted.
23. ALTERATIONS; MODIFICATIONS; PARTS. Lessee may alter or modify the
equipment only upon written notice to Lessor. Any non-IBM alteration is to be
removed and the equipment restored to its normal, unaltered condition at
Lessee's expires prior to its return to Lessor. At Lessee's option, any IBM
field installable upgrade, feature addition or accessory added to any item of
equipment (Modification) may be removed. If removed, the equipment is to be
restored at Lessee's expense to its normal, unmodified condition. If not
removed, such Modification shall upon return of the equipment become such
Modification shall upon return of the equipment, become, without charge, the
property of Lessor free of all encumbrances. Restoration will include
replacement of any parts removed in connection with the installation of an
alteration or modification. Any part installed in connection with warranty or
maintenance service shall be the property of Lessor.
24. LEASES FOR MODIFICATIONS AND ADDITIONS. Lessor will arrange for
leasing of modifications and additions under terms and conditions then generally
in effect, subject to satisfactory credit review. Additions shall be
machines, or LPM Charges for licensed program materials, which are associated
with the equipment. These modifications and additions must be ordered by Lessee
from IBM. Any lease for modifications shall and any lease for additions may
expire at the same time as the lease for the equipment. The rent shall be
determined by Lessor and specified in a Supplement. If Lessee purchases
equipment prior to Lease expiration. Lessee shall simultaneously purchase any
modifications under the Lease.

25. RETURN OF EQUIPMENT. Upon expiration or termination of the Lease for
any item of equipment, or upon deemed by Lessor pursuant to Paragraph 38, Lessee
shall promptly return the Equipment freight prepaid to a location in the
continental United States specified by Lessor. Except for Casualty Loss, Lessee
shall pay any costs and expenses incurred by Lessor to inspect and

Page 2 of 5
<PAGE>

$4/nofolio

qualify the equipment for IBM's maintenance agreement service. Any parts removed
in connection therewith shall become Lessor's property.

26. CASUALTY INSURANCE; LOSS OR DAMAGE. Lessor will maintain at is own
expense, insurance covering loss of or damage to the equipment (but excluding
any modifications not subject to a lease and any non-IBM alterations) with a
$5,000 deductible per incident. If any item of equipment shall be lost, stolen,
destroyed or irreparably damaged by any cause whatsoever (casualty loss) before
the date of installation as defined in the purchase agreement, the lease for
that item shall terminate. If any item of equipment suffers casualty loss, or
shall be otherwise damaged, on or after the date of installation, lessee shall
promptly inform lessor. If lessor determines that the item can be economically
repaired. Lessee shall place the item in good condition and working order and
lessor will reimburse lessee the reasonable cost of such repair less the
deductible. If not so repairable, lessee shall pay lessor the lesser of $5,000
or the fair market value of the equipment immediately prior to the casualty
loss. Upon Lessor's receipt of payment the lease for that item shall terminate.
27. TAXES. Lessee shall promptly reimburse Lessor for, or shall pay
directly if so requested by Lessor as additional rent, all taxes, charges, and
fees imposed or levied by any governmental body or agency upon or in connection
with the purchase, ownership leasing possession, use or relocation of the
equipment or programming or in connection with the financing of LPM charges or
otherwise in connection with the transactions contemplated by the lease
excluding however, all taxes on or measured by the net income of Lessor. Upon
request, Lessee will provide proof of payment. Any other taxes, charges and fees
relating to the licensing possession or use of licensed program materials will
be governed by the license agreement.
28. LESSOR'S PAYMENT. If Lessee fails to perform its obligations under
Paragraph 27 or 31 or to discharge any encumbrances created by Lessee, Lessor
shall have the right to substitute performance, in which case, Lessee shall pay
Lessor the cost thereof.
29. TAX INDEMNIFICATION (APPLIES ONLY FOR EQUIPMENT UNDER OPTIONS A OR B).
The lease is entered into on the basis that under the Internal Revenue Code of
1986, as amended (Code), Lessor shall be entitled to (1) maximum Accelerated
Cost Recovery System (ACRS) deductions for 5-year property and (2) deductions
for interest expense incurred to finance purchase of the equipment. The Bulletin
Lessor's Tax Assumption will be given to Lessee on request.
Lessee represents, warrants and covenants that at all times during the
Lease:
a) no item of equipment will constitute public utility property as defined
in the Code;
b) Lessee will not make any election under the Code or take any action, or
fail to act would cause any item of equipment to cease to be eligible for any
ACRS deductions or interest deductions;
c) Lessee will keep and make available to Lessor the records required to
establish the matters referred to in this paragraph 29; and
d) for equipment located in a United States possession, Lessee represents
that Lessee is a tax exempt entity as defined in the Code.
Furthermore, if Lessee is a tax exempt entity, Lessee covenants that it
will not renew or extend the Lease if such action shall cause Lessor a Tax Loss
as described below.
If, as a result of any act, failure to act, misrepresentation, inaccuracy
or breach of any warranty or covenant or default under the Lease by Lessee, an
affiliate of Lessee, or any person who shall obtain the use of possession of any
item of equipment through Lessee, Lessor shall lose the right to claim or shall
suffer any disallowance or recapture of all or any portion of any ACRS
deductions or interest deductions (tax loss) with respect to any item of
equipment, then, promptly upon written notice to Lessee that a Tax Loss has
occurred, Lessee shall reimburse Lessor that amount determined below.
The reimbursement shall be an amount that, in the reasonable opinion of
Lessor, shall make Lessor's after-tax rate of return and cash flows (Financial
Returns) over the term of the Lease for such item of equipment, equal to the
expected Financial Returns that would have been otherwise available. The
reimbursement shall take into account the effects of any interest, penalties and
additions to taxes required to be paid by Lessor as a result of any payments
pursuant to this paragraph. Financial Returns shall be based on economic and
tax assumptions used by Lessor in entering into the Lease.
All the rights and privileges of Lessor arising from this Paragraph 29
shall survive the expiration of termination of the Lease.
For purposes of determining tax effects under Paragraphs 12, 27, 29, and 30
the term "Lessor" shall include, to the extent of interests, any partner in
Lessor and any affiliated group of corporations and each member thereof, at
which Lessor or any such partner is or shall become a member and with which
Lessor or any such partner joins in the filling of consolidated or combined
returns.
30. GENERAL INDEMNITY. This lease is a net lease. Therefore, Lessee shall
indemnify lessor against and hold Lessor harmless from any and all claims,
actions, damages, obligations, liabilities and liens; and all costs and
expenses, including legal fees, incurred by Lessor in connection therewith
arising out of the Lease including without limitation, the purchase, ownership,
lease, licensing, possession, maintenance, condition, use or return of the
equipment, programming or licensed program materials; or arising by operation of
law; excluding, however, any of the foregoing which result from the sole
negligence or willful misconduct of lessor, Lessee agrees that upon written
notice by lessor of the assertion of any claim, action, damage, obligation,
liability or lien, Lessee shall assume full responsibility for the defense
thereof. Any payment pursuant to this paragraph shall be of such amount as shall
be necessary so that after payment of any taxes required to be paid thereon by
lessor, including taxes on or measured by the net income of Lessor, the balance
will equal the amount due hereunder. Lessee's obligations under this paragraph
shall not constitute a guarantee of the residual value or useful life of any
item of equipment of a guarantee of any debt of Lessor. The provisions of this
paragraph with regard to matters arising during the lease shall survive the
expiration or termination of the Lease.
31. LIABILITY INSURANCE. Lessee shall obtain and maintain comprehensive
general liability insurance in an amount of $1,000,000 or more for each
occurrence with an insurer having a "Best Policyholders" rating of B+ or better.
The policy shall name Lessor as an additional insured as Lessor's interest may
appear and shall contain a clause requiring the insurer to give Lessor at least
one month's prior written notice of the cancellation, or any alteration the
terms, of the policy. Lessee shall furnish to Lessor upon request, evidence
that such insurance coverage is in effect.
32. SUBLEASE AND RELOCATION OF EQUIPMENT; ASSIGNMENT BY LESSEE. Upon
Lessor's prior written consent which will not be unreasonably withheld. Lessee
may sublet the equipment or relocate it from the equipment location. No sublease
or relocation shall relieve Lessee of its obligations under the Lease. In no
event shall Lessee remove the equipment from the United States. Lessee shall not
assign, transfer, or otherwise dispose of the Lease or equipment or any interest
thereof except those created by Lessor .
33. ASSIGNMENT BY LESSOR. Lessee acknowledges and understands that the
terms and conditions of the lease have been fixed to enable Lessor to sell and
assign its interest of grant a security interest or interests in the Lease and
the equipment individually or together, in whole or in part for the purpose of
securing loans to Lessor or otherwise. If Lessee is given written notice of any
assignment, it shall promptly acknowledge receipt thereof in writing. Each such
assignee shall have all of the rights of Lessor under the Lease. Lessee shall
not assert against any such assignee any set-off defense or counterclaim that
lessee may have against Lessor or any other person. Lessor shall not be relieved
of its obligations hereunder as a result of any such assignment unless Lessee
expressly consents thereto.
34. FINANCING. If the Lease provides for financing of LPM Charges, Lessor
will pay such Charges directly to IBM. Any other charges due IBM under the
License Agreement shall be paid directly to IBM by Lessee. Lessee's obligation
to pay rent shall not be affected by any discontinuance, return or destruction
of any license or licensed program materials in accordance with the terms of the
License Agreement prior to the date LPM Charges are due the financing of
affected LPM charges shall be canceled.

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<PAGE>

35. FINANCING PREPAYMENT (DOES NOT APPLY FOR ITEMS OF EQUIPMENT). Lessee
may terminate an item of Financing (but not an item of equipment) by prepaying
its remaining rent. Lessee shall provide Lessor with notice of the intended
prepayment date which shall be at least one month after the date of the notice.
Lessor may, depending on market conditions at the time, make an adjustment in
the remaining rent to reflect such prepayment and shall advise Lessee of the
balance to be paid. If, prior to Lease expiration, Lessee purchases the
equipment or if the lease is terminated, Lessee shall at the same time prepay
any related financing including that for programs licensed to the equipment.
36. DELINQUENT PAYMENTS. If any amount to be paid to Lessor is not paid on
or before its due date, lessee shall pay lessor on demand 2% of such late
payment for each month of part thereof from the due date until the date paid or,
if less, the maximum allowed by law.
37. DEFAULT; NO WAIVER. Lessee shall be in default under the lease upon the
occurrence of any of the following events; (a) Lessee fails to pay when due any
amount required to be paid by Lessee under the lease and such failure shall
continue for a period of seven days after the due date; (b) Lessee fails to
perform any other provisions under the lease or violates any of the covenants or
representations made by Lessee in the lease or lessee fails to perform any of
its obligations under any other lease entered into pursuant to this agreement
and such failure or breach shall continue unremedied for a period of 15 days
after written notice is received by Lessee from Lessor; (c) lessee violates any
of the convenants or representations made by lessee in any application for
licensed program materials of fails to perform any provision In any such
agreement (except the obligation to pay the purchase price or LPM Charges); (d)
lessee makes an assignment for the benefit of creditors, whether voluntary or
involuntary, or consents to the appointment of a trustee or receiver or it
either shall be appointed for Lessee or for a substantial part of its property
without its consent; (e) any petition or proceeding if filed by or against
lessee under any Federal or State bankruptcy or insolvency code or similar law;
or (f) if applicable, lessee makes a bulk transfer subject to the provisions of
the Uniform Commercial Code.
Any failure of Lessor to require strict performance by Lessee or any waiver
by Lessor of any provision in the Lease shall not be construed as a consent or
waiver of any other breach of the same or of any other provision.
38. REMEDIES. If lessee is in default under the lease, lessor shall have
the right in its sole discretion to exercise any one of more of the following
remedies in order to protect its interests reasonably expected profits and
economic benefits. Lessor may (a) declare any lease entered into pursuant to
this agreement to be in default (b) terminate in whole or in part any Lease (c)
recover from Lessee any and all amounts then due and to become due (d) take
possession of any or all items of equipment, whenever located, without demand or
notice, without any court order or other process of law; and (e) demand that
Lessee return any or all such terms of equipment to lessor in accordance with
Paragraph 25 and for each day that lessee shall fail to return any item of
equipment, lessor may demand an amount equal to the rent, prorated on the basis
of a 30-day month, in effect immediately prior to such default. Upon
repossession or return of such item or items of equipment, lessor shall sell
lease or otherwise dispose of such item or items in a commercially reasonable
manner, with or without notice and on public or private bid, and apply the net
proceeds thereof towards the amounts due under the lease but only after
deducting (i) in the case of sale the estimated fair market value of such item
or items as of the scheduled expiration of the lease; or (ii) in the case of any
replacement lease, the rent due for any period beyond the scheduled expiration
of the lease for such item or items (iii) in either case, all expenses,
including legal fees, incurred in connection therewith; and (iv) where
appropriate, any amount in accordance with Paragraph 29. Any excess net proceeds
are to be retained by Lessor. Lessor may pursue any other remedy available at
law or in equity, including but not limited to, seeking damages specific
performance and an injunction.
No right or remedy is exclusive of any other provided herein or permitted
by law or equity. All such rights and remedies shall be cumulative and may be
enforced concurrently or individually from time to time.
39. LESSORS' EXPENSE. Lessee shall pay lessor on demand all costs and
expense, including legal and collection fees incurred by lessor in enforcing the
terms conditions or provisions of the lease or in protecting lessor's rights and
interest in the lease and the equipment.
40. OWNERSHIP; PERSONAL PROPERTY; LICENSED PROGRAM MATERIALS. The
equipment under lease is and shall be the property of lessor. Lessee shall have
no right, title, or interest therein except as set forth in the lease. The
Equipment is and shall at all time be and remain personal property and shall not
become a fixture of realty. Licensed program materials are licensed and provided
by IBM directly to lessee under the terms and conditions of the license
agreement.
41. NOTICES; ADMINISTRATION. Service of all notices under the lease shall
be sufficient if delivered personally or mailed to lessee at its address
specified in the supplement. Notice by mail shall be effective when deposited in
the United States mail, duly addressed and with postage prepaid. Notices,
consents and approvals from or by lessor shall be given by lessor or on its
behalf by IBM and all payments shall be made to IBM until lessor shall notify
lessee otherwise.
42. LESSEE REPRESENTATION. If the lease includes financing, lessee
represents that it is (a) a corporation if any item of equipment is located in
Ohio, Mississippi, Virginia, or West Virginia, and/or (b) a business corporation
if any item of equipment is located in Pennsylvania.
43. REVISIONS FOR PREVIOUSLY INSTALLED EQUIPMENT. Equipment installed
with lessee under an IBM lease or rental agreement may be purchased by lessor,
on the Effective Date of Purchase (as defined in the Purchase Agreement) for
lease to lessee under option B or B for such equipment, the lease shall be
revised as follows:
Paragraph 4 and 26 - replace "Estimated Shipment Date" by "Intended
Effective Date of Purchase," replace "delivery," and "Date of Installation" by
"Effective Date of Purchase."
Paragraph 7 - add at the end of the first paragraph, "Assignment" of the
option to purchase installed Equipment at the net purchase option price under an
IBM lease or rental agreement will be permitted only when Lessee submits the
supplement in sufficient time to achieve the intended Effective Date of
Purchase. The Effective Date of Purchase under this assignment shall be the
later of the first day of the Quotation Month of the day on which the applicable
supplement is accepted by lessor. If the Quotation Month expires and the
purchase of Equipment is not concluded, this assignment and lease will be null
and void regarding any such Equipment and all rights, duties and obligations of
lessee and IBM will remain in accordance with the provision of the IBM agreement
under which the Equipment is currently installed.
Paragraph 11 and 12 - delete both paragraphs; and
Paragraph 15 - replace the entire paragraph with the following: "The
Rent shall be based on the Lease Rate specified in the Supplement of such
greater lease rate as may be specified by written notice to lessee more than one
month before the Effective Date of Purchase. The unit Purchase Price is subject
to change in accordance with the referenced Purchase Agreement. Lessee any
terminate the Lease for any item subject to an increase by giving lessor written
notice on or before the effective date of purchase."
44. APPLICABLE LAW: SEVERABILITY. The Lease shall be governed by the laws
of the State of Connecticut. If any provision shall be held to be invalid or
unenforceable the validity and enforceability of the remaining provision shall
not in any way be affected or impaired.

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<PAGE>

IBM CREDIT CORPORATION Stamford, CT 06904
TERM LEASE MASTER AGREEMENT

Agreement No.: 7336742
Enterprise No.: 7336742
AGREEMENT COVERAGE PAGE

List below all entities affiliated with Lessee that may execute Supplements and
be deemed bound to this Agreement:

Entity Legal Name Address (if not all locations)

10.

11.

Page 5 of 5

<PAGE>

EXHIBIT 10.11

** I M P 0 R T A N T **

PLEASE FOLLOW THESE INSTRUCTIONS WHEN COMPLETING
THE LEASE FOR YOUR EQUIPMENT.

In the event you identify ANY errors in this package, PLEASE DO NOT
CORRECT THEM. Call our office for assistance, 1-800-409-3355
ITEMS ENCLOSED FOR SIGNATURE:
----------------------------
<TABLE>
<CAPTION>

DOCUMENT AUTH. SIGNATOR (S) INSTRUCTIONS
-------- ------------------ ------------
<S> <C> <C>
1) LEASE AGREEMENT CORPORATE OFFICER Sign, Title and Date
2) CREDIT APPLICATION CORPORATE OFFICER Sign Title and Date
</TABLE>
NO STAMPED SIGNATURES PLEASE

PLEASE PROVIDE THE FOLLOWING:
----------------------------

1) CHECK FROM: PROSOFT DEVELOPMENT CORP
------------------------
PAYABLE TO: SANWA LEASING CORPORATION

* Checks from non-commercial accounts, or accounts styled *
* differently than Lessee name on lease agreement WILL *
* require approval upon receipt of paperwork. *

FOR: $ 6,743.51 (Represents Advance Payment)
4,387.08 (Sales Tax on Advance Payment)
+ 35.00 (Represents lease processing fee)
----------
$71,915.59 Total Amount

NO MONEY ORDERS, CASHIER CHECKS, PERSONAL CHECKS OR TEMPORARY CHECKS

Please place ALL of the above mentioned items in the PRE-PAID FEDERAL
EXPRESS OVERNIGHT LETTER provided and return as soon as possible. The
Airbill is preprinted and ready to use.

PRODUCTION OF YOUR EQUIPMENT ORDER CANNOT BEGIN UNTIL ALL OF THE ITEMS
ABOVE ARE COMPLETED AS SPECIFIED AND RETURNED TO LEASING GROUP, INC.

** T H A N K Y O U **

PLEASE REMEMBER TO ENCLOSE YOUR CHECK!!
---------------------------------------
<PAGE>

SANWA LEASING CORPORATION LEASE AGREEMENT Lease#:______
- --------------------------------------------------------------------------------
Lessee: PROSOFT DEVELOPMENT CORP
- --------------------------------------------------------------------------------
Terms and Equipment - See Equipment Schedule attached to and made a part hereof
1. LEASE AGREEMENT; PAYMENTS: We agree to lease to you and you agree to
lease from us the equipment ("Equipment") listed below or identified in any
attached equipment schedule ("Equipment Schedule"). You promise to pay to us
the lease payments according to the terms of the payment schedule shown on the
Equipment Schedule hereto.
2. GENERAL TERMS; PAYMENT ADJUSTMENTS; EFFECTIVENESS: You agree to all the
terms and conditions on all signed pages of this Lease. This Lease is a complete
and exclusive statement of our agreement. The Equipment will not be used for
personal, family or household purposes. If the Equipment cost varies from the
estimate, you agree that we may adjust the Lease payment accordingly, upward or
downward, up to twenty percent (20%). You acknowledge receipt of a copy of this
Lease and acknowledge that you have selected the Equipment and reviewed the
supply contract under which we will obtain the equipment. THIS LEASE IS NOT
BINDING ON US AND WILL NOT COMMENCE UNTIL WE ACCEPT IT IN OUR TROY, MICHIGAN
OFFICE. You appoint us as your attorney-in-fact to execute, deliver and record
financing statements on your behalf to show our interest in the Equipment. You
agree that we are authorized without notice to you to supply missing information
or correct obvious errors in this Lease. Any security deposit you have given us
may be used by us to cover any costs or losses we may suffer due to your default
of this Lease.
3. LATE/OTHER CHARGES: If any payment is not made when due, you agree to pay
a late charge at the rate of 15% of such late payment or $25, whichever is
greater, and each month thereafter, a finance charge of one and three-quarter
percent (1 3/4%) on any unpaid balance. You also agree to pay $25 for each
collection call made by us and pay $25 for each returned check. You also agree
to pay a documentation fee of $35.
4. RENEWAL: After the original Lease term expires, this Lease automatically
renews for successive one (1) month terms unless you send us written notice that
you do not want it to renew at least sixty (60) days before the end of any term.
5. EQUIPMENT OWNERSHIP: We are and shall remain the sole owner of the
Equipment. You agree to keep the Equipment free from liens and encumbrances.
6. NO WARRANTIES: We are leasing the Equipment to you "AS IS", WITH NO
WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. We assign to you for the term of this Lease
any transferable manufacturer or supplier warranties. We are not liable to you
for any breach of those warranties. You agree that upon your acceptance of the
Equipment, you will have no set-offs or counter-claims against us.
7. MAINTENANCE; USE; INSTALLATION: You are responsible for installation and
maintenance of, and for any damage to, the Equipment. You must maintain and use
the Equipment in compliance with all laws and regulations. If the Equipment
malfunctions, is damaged, lost or stolen, you agree to continue to make all
payments due under this Lease.
8. EQUIPMENT LOCATION: You will keep the Equipment only at the address shown
on the Equipment SCHEDULE hereto, and you will not move it from that address
without our prior written consent.
9. INSURANCE: Until this Lease is paid in full and the Equipment has been
returned to us, you will: 1) keep the Equipment insured for its full replacement
value against all types of loss, including theft, and name us as loss payee;
and, 2) provide and maintain an acceptable general public liability insurance
policy. If you do not provide us with acceptable evidence of insurance, we may,
but will have no obligation to, obtain insurance for you and add a charge to
your monthly payments which will include the premium cost and related costs.
10. LIABILITY: WE ARE NOT RESPONSIBLE FOR ANY LOSSES OR INJURIES TO YOU OR ANY
THIRD PARTIES CAUSED BY THE EQUIPMENT OR ITS USE. You agree to reimburse us for
and to defend us against any claims for losses or injuries caused by the
Equipment and any costs or attorney fees relative to those claims.
11. TAXES/PERSONAL PROPERTY TAX FEES: You agree to show the Equipment as
"leased property" on all personal property tax returns. You agree to pay us all
personal property tax assessed against the Equipment or at our sole election we
may opt to charge you a liquidated monthly personal property tax fee. We will
advise you in writing of your personal property tax fee. You agree to reimburse
us for applicable sales and/or use tax and all other taxes, fees, fines and
penalties which may be imposed, levied or assessed by any federal, state or
local government or agency which relate to this Lease, the Equipment or its use.

LESSEE SIGN HERE: /s/ BROOKS C. CORBIN DATE: 6/21/96
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LGI Reference # 10166705

2
<PAGE>

12. ASSIGNMENT: YOU MAY NOT SELL, PLEDGE, TRANSFER, ASSIGN OR SUBLEASE THE
EQUIPMENT OR THIS LEASE. We may sell, assign or transfer this Lease and/or the
Equipment. The new owner will have the same rights that we have, but you agree
you will not assert against the new owner any claims, defenses or set offs that
you may have against us or any supplier.
13. DEFAULT/DAMAGES: If you fail to make any Lease payment when due or
otherwise default on this Lease, we may accelerate the remaining balance due on
the Lease and demand the immediate return of the Equipment to us. If you do not
return the Equipment to us within ten (10) days of our notice of your default,
you will also pay a liquidated Equipment charge equal to anticipated lease-end
residual value of the Equipment. We may also use any remedies available to us
under the Uniform Commercial Code or any other applicable law. You agree to pay
our attorney's fees at 25% of the amount you owe, plus all actual costs,
including all costs of any Equipment repossession. You agree that we have no
duty to mitigate any damages to us caused by your default. You waive any notice
of our repossession or disposition of the Equipment. By repossessing any
Equipment, we do not waive our rights to collect the balance due on the Lease.
We will not be responsible to you for any consequential or incidental damages.
Our delay or failure to enforce our rights under this Lease will not prevent us
from doing so at a later time.
14. CHOICE OF LAW; JURISDICTION; VENUE; NON-JURY TRIAL: You and any Guarantor
agree that this Lease will be deemed fully executed and performed in the State
of Michigan and will be governed by Michigan law. You and any Guarantor
expressly agree to: (A) BE SUBJECT TO THE PERSONAL JURISDICTION OF THE STATE OF
MICHIGAN; (B) ACCEPT VENUE IN ANY FEDERAL OR STATE COURT IN MICHIGAN AND
(C) WAIVE ANY RIGHT TO TRIAL BY JURY. Any Lease charges which exceed the amount
allowed by law shall be reduced to the maximum allowed.
15. FINANCE LEASE; AMENDMENTS: THIS LEASE IS A "FINANCE LEASE" UNDER THE
UNIFORM COMMERCIAL CODE AS ADOPTED IN MICHIGAN ("UCC"). THIS LEASE MAY NOT BE
AMENDED EXCEPT BY A WRITING WHICH WE HAVE SIGNED. YOU WAIVE ANY AND ALL RIGHTS
AND REMEDIES YOU MAY HAVE UNDER UCC 2A-508 THROUGH 2A-522, INCLUDING ANY RIGHT
TO: (A) CANCEL THIS LEASE; (B) REJECT TENDER OF THE EQUIPMENT; (C) REVOKE
ACCEPTANCE OF THE EQUIPMENT; (D) RECOVER DAMAGES FOR ANY BREACH OF WARRANTY; AND
(E) MAKE DEDUCTIONS OR SET-OFFS, FOR ANY REASON, FROM AMOUNTS DUE US UNDER THIS
LEASE. IF ANY PART OF THIS LEASE IS INCONSISTENT WITH UCC 2A, THE TERMS OF THIS
LEASE WILL GOVERN.
16. EQUIPMENT RETURN: At the end of the Lease term, you will immediately
crate, insure and ship the Equipment, in good working condition, to us by means
we designated, with all expenses to be prepaid by you. If you fail to return the
Equipment to us as agreed, you shall pay to Lessor 1 1/2 times the regular Lease
payment for any month or partial month from the end of the term until the
Equipment is returned. You will be responsible for any damage to the Equipment
during shipping.
17. SAVINGS: If any provision of this Lease is unenforceable, invalid or
illegal, the remaining provisions will continue to be effective.
18. FAX LEASE: If you transmit this Lease to us by fax, the fax version of this
Lease, as received by us, shall constitute the original Lease and shall be
binding on you as if it were manually signed. We may treat and rely upon any fax
version of this Lease as the signed original. However, no fax version of this
lease shall become effective and binding against us until manually signed by us
in our Michigan offices. If you elect to sign and transmit this Lease by fax,
you waive notice of our acceptance of the Lease, and waive receipt of a copy of
the accepted Lease.

IMPORTANT: NEITHER THE SUPPLIER NOR ANY SALESPERSON ARE THE LESSOR'S AGENT.
THEIR STATEMENTS WILL NOT AFFECT THE RIGHTS OR OBLIGATIONS PROVIDED IN THIS
LEASE.

THIS LEASE MAY NOT BE CANCELED.
Accepted in Troy, Michigan, on , 19 .
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<CAPTION>
<S> <C>
PROSOFT DEVELOPMENT CORP SANWA LEASING CORPORATION

(Lessee) (Lessor)

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

Print name: Print: name:

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

Title: Title:

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

Date: Date:

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</TABLE>

LGI Reference#10166705

<PAGE>

P U R C H A S E O P T I O N

Lease #
---------------------

This option is incorporated as part of the Lease between SANWA LEASING
CORPORATION, Lessor, and PROSOFT DEVELOPMENT CORP, Lessee.

Lessor hereby grants to the above named Lessee, the option to purchase the
Equipment ("Option") covered by the aforesaid Lease for:

OPTION PRICE: $ 1.00
plus applicable sales tax, if any. Lessee may exercise such Option upon the
expiration of said Lease (either the original term or any modification or
extension thereof mutually agreed upon in writing), provided that, at that
time, all rental and other sums payable by the Lessee over the entire term of
the Lease have been paid in full and the Lessee is not otherwise in default
thereof. Lessee must provide to Lessor written notice of its intent to exercise
said Option at least thirty (30) days, but not more than sixty (60) days, prior
to the expiration of said Lease. Upon receipt of the Option Price, the Lessor
will execute and deliver to the Lessee an "as is" bill of sale of said
Equipment, at its then location and in its then condition, without any warranty
or representation by, or recourse against, the Lessor. Lessee agrees that the
existence of this Option does not render the Lease other than a true lease, nor
does Lessee acquire any ownership interest in the Equipment until the Option is
actual1y exercised.

LESSEE: PROSOFT DEVELOPMENT CORP LESSOR: SANWA LEASING CORPORATION

Illegible Signature
- -------------------------------- --------------------------------
Signed Signed
CFO
- -------------------------------- --------------------------------
Title Title
6-21-96
- -------------------------------- --------------------------------
Date Date

<PAGE>

LGI REFERENCE #1166689

SCHEDULE A

Lessee: PROSOFT DEVELOPMENT CORP.
Mailing Address: 7100 KNOTT AVENUE, BUENA PARK, CA 90620
Equipment Address: 5730 BOWDEN ROAD STE. 107, JACKSONVILLE, FL 32216
SUPPLIER: COMPUSA-ANAHEIM 550 NORTH EUCLID, ANAHEIM, CA 92801

Months: Monthly Pay Tax Total $0.00 Security Deposit
* 12 $ 6433.71 + $418.19= $6851.90 Due and payable with the
first monthly payment.

*ADDITIONAL PROVISIONS:
One (1) Advance payment of $69,992.47 plus tax of $4,549.51 followed by
Twelve (12) monthly payments of $6,433.71 plus tax of $418.19.

EQUIPMENT
43 CMPQ PENT 43 MONITORS 2 PRINTERS 2 INFOCUS LCD PWR VIEW

Subtotal $139,984.94
Freight 0.00
Tax 0.00
--------------------
TOTAL $139,984.94