MONTGOMERY REALTY GROUP INC
10SB12G, 2000-04-14
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                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                  FORM 10-SB/A

                        GENERAL FORM FOR REGISTRATION OF
                      SECURITIES OF SMALL BUSINESS ISSUERS
       Under Section 12(b) or (g) of The Securities Exchange Act of 1934


                          MONTGOMERY REALTY GROUP, INC.
                 (Name of Small Business Issuer in its charter)


                Nevada                                        88-0377199
    --------------------------------                       ------------------
    (State or other jurisdiction of                        (I.R.S. Employer
    incorporation or organization)                         Identification No.)



                    400 Oyster Point Blvd., Suite 415
                          So. San Francisco, CA                    94080
                ----------------------------------------         ----------
                (Address of principal executive offices)         (Zip Code)


Issuer's telephone number, including area code:     Telephone (650) 266-8080
                                                    Telecopy (650) 266-8089


Securities registered pursuant to Section 12(b) of the Act:

   Title of each class                Name of each exchange on which registered
         None                                            None

Securities registered pursuant to Section 12(g) of the Act:

                         Common Stock, Par Value $0.001
                         ------------------------------
                                (Title of class)
<PAGE>

                 SPECIAL NOTE ABOUT FORWARD-LOOKING INFORMATION

         This  registration  statement  contains  statements  about the  future,
sometimes   referred  to  as   "forward-looking"   statements.   Forward-looking
statements are typically  identified by the use of the words  "believe,"  "may,"
"will," "should,"  "expect,"  "anticipate,"  "estimate,"  "project,"  "propose,"
"plan,"  "intend," and similar words and  expressions.  Statements that describe
Montgomery's   future   strategic   plans,   goals   or   objectives   are  also
forward-looking  statements.  Any  forward-looking  statements,  including those
regarding  Montgomery  or  its  management's   current  beliefs,   expectations,
anticipations, estimations, projections, proposals, plans or intentions, are not
guarantees  of future  performance,  results,  or events and  involve  risks and
uncertainties, such as those discussed below.

         The forward-looking  statements are based on present  circumstances and
on Montgomery's  predictions respecting events that have not occurred, which may
not occur, or which may occur with different  consequences and timing than those
now assumed or anticipated.  Actual events or results may differ materially from
those  discussed  in the  forward-looking  statements  as a  result  of  various
factors, including the risk factors discussed below. These cautionary statements
are intended to be applicable to all  forward-looking  statements  wherever they
appear in this registration statement.

                                       2
<PAGE>

                                     PART I

- --------------------------------------------------------------------------------
              ITEMS 1 AND 3. DESCRIPTION OF BUSINESS AND PROPERTIES
- --------------------------------------------------------------------------------

History

         Montgomery Realty Group, Inc.  ("Montgomery"),  was organized on August
20, 1997. Shortly after organization,  Montgomery issued to its founders 300,000
shares  of  common  stock at $0.05  per  share,  of which  225,000  shares  were
purchased by its then  officers and  directors.  Subsequently,  Montgomery  sold
200,000  shares of common stock to the public at an offering  price of $1.00 per
share for gross proceeds of approximately $200,000.

         Between  August  1997  and   approximately   June  1998,   Montgomery's
activities were limited to maintaining its good standing as a corporation  under
the laws of Nevada and seeking to identify  ongoing assets and  operations  that
Montgomery  could  acquire in exchange  for its common  stock.  In this  effort,
management  reviewed a number of unimproved and improved properties for possible
acquisition,  but none was  purchased.  Otherwise,  Montgomery did not engage in
business  operations or have any income.  In March 1998, Keith Cannon, a Company
stockholder  who was aware of the Company's  search for  operations,  introduced
Company officers to Dinesh Maniar,  who Mr. Cannon knew to have significant real
estate  holdings,  operations,  and  experience.  In  approximately  March 1998,
representatives  of  Montgomery  initiated  a review of certain  properties  and
assets of Dinesh Maniar. As this review was being completed,  Montgomery and Mr.
Maniar initiated discussions of the terms of a possible transaction. For several
months after the initial contacts between Company officers and Mr. Maniar,  they
discussed  from time to time the terms of a possible  transaction  while Company
management  also  considered  other  opportunities.  Finally,  the  negotiations
between  Company  officers  and Mr.  Maniar led to the  execution on January 12,
1999, of a letter of intent to acquire these properties from him.

         In  June  1999,  Montgomery  completed  the  acquisition  of  its  four
properties  from  Mr.  Maniar  in the San  Francisco  Bay Area in  exchange  for
16,000,000  shares of common stock and Montgomery's  assumption of approximately
$12,400,000 of indebtedness  secured by the  properties.  In connection with the
transaction,  Mr.  Maniar was  appointed  president of  Montgomery,  and persons
designated  by him  were  appointed  as four  of  Montgomery's  five  directors.
Property   management  and  development   services,   as  well  as  general  and
administrative   support,   are  provided  under  a  contract  with  Diversified
Investment and Management  Corporation  ("DIMC"),  an entity affiliated with Mr.
Maniar. See "ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."

         Montgomery's   executive  offices  are  located  at  400  Oyster  Point
Boulevard,  Suite 415,  South San  Francisco,  California  94080.  Its telephone
number is (650) 266-8080, and its facsimile number is (650) 266-8089.

                                      3
<PAGE>

Business Strategy

         Montgomery emphasizes the following strategies:

         o        Lease and operate  improved  properties  to  generate  current
                  positive cash flow while holding such  properties for possible
                  long-term  appreciation.   Montgomery  seeks  to  purchase  or
                  develop  commercial  properties  that can be leased to tenants
                  that  management  believes are financially  sound,  based on a
                  review of tenant financial statements, public filings with the
                  SEC, if any, credit reports,  and other financial  information
                  provided by the tenant or obtained  from  public  sources,  on
                  terms that will provide sufficient cash flow to meet or exceed
                  requirements for related  mortgage  amortization and operating
                  expenses. This enables Montgomery to generate current positive
                  cash flow while achieving  possible  investment return through
                  potential long-term appreciation.  The San Ramon Retail Center
                  and  Orchard  Supply  Shopping  Center  are  examples  of  the
                  implementation of this strategy.

         o        Develop selected  properties for either  long-term  leasing or
                  short term sale.  Montgomery  seeks to  identify  and  acquire
                  unimproved  properties or improved  properties with renovation
                  potential  that  meet  Montgomery's  cash  flow and  potential
                  appreciation  criteria.  In  some  instances,  Montgomery  may
                  acquire and hold unimproved  properties for future development
                  where the initial acquisition and holding costs are warranted,
                  in the  opinion  of  management,  in  view  of  the  projected
                  development  potential.  This approach is  illustrated  by the
                  Eccles Project in which the unimproved  land was acquired from
                  a third  party in 1980 by Mr.  Maniar and may  potentially  be
                  developed by  Montgomery  if not sold or exchanged as proposed
                  under a recent letter of intent. Montgomery's Keker & Van Nest
                  Office  Building  was  acquired  from a third  party  in 1980.
                  Thereafter,   Montgomery  completed  substantial  renovations,
                  including  a seismic  upgrade in 1989.  This  illustrates  the
                  purchase and substantial renovation of an improved property to
                  significantly increase cash flow and appreciation potential.

         o        Realization of accumulated  appreciation in properties through
                  refinancing  or  sale  or  exchange.  By  generating  positive
                  current  cash  flow,  Montgomery  is able to retain  long-term
                  ownership of  properties  that  Montgomery  believes  have the
                  potential for  significant  appreciation.  When  circumstances
                  warrant, in the opinion of management,  Montgomery may seek to
                  realize on  appreciation  in value by  selling a  property  in
                  order  to use  the  capital  for  opportunities  with  greater
                  potential financial return or directly exchanging the property
                  for another property management believes will offer Montgomery
                  a greater potential financial return. In other  circumstances,
                  Montgomery may refinance a property to realize on a portion of
                  the  appreciated   value  while  retaining  the  property  for
                  potential additional appreciation.

                                       4
<PAGE>

Properties

         Montgomery  owns  and  operates  three  commercial   leased  properties
containing an aggregate of  approximately  80,000 square feet of rentable space.
Montgomery  also  owns a 7.4  acre  undeveloped  parcel  of  land in  South  San
Francisco which is subject to a letter of intent for sale or exchange. Its three
improved  properties,  located in San Francisco and San Ramon,  California,  are
leased under  long-term  leases,  with each anchor  tenant being a reputable and
financially  sound tenant,  such that the properties  currently provide positive
cash flow after payment of related mortgage amortization and operating expenses.
Montgomery's properties are summarized as follows:

<TABLE>
<CAPTION>
                                                     Land      Building     Constructed/       Lease        Appraised
             Property                    Use       (sq. ft.)   (sq. ft.)     Renovated     Expiration (1)   Value (2)
             --------                    ---       ---------   ---------     ---------     --------------   ---------
<S>                                  <C>           <C>         <C>          <C>           <C>              <C>
Keker & Van Nest Office Building     Professional     6,300     22,300       1907/1989     2004             $6,750,000
710 Sansome Street                   offices
San Francisco, CA

Orchard Supply Shopping Center       Retail         176,854     54,700          1987       2013(3)
1041-1061 Market Place                                                                                       6,500,000
San Ramon, CA

San Ramon Retail Center              Retail           9,300      4,823          1987       2005 to
1021 Market Place                                                                          2009              1,140,000
San Ramon, CA


Eccles Project                       Possible
South San Francisco, CA              sale or
                                     exchange or    322,344          --(4)      N/A        N/A              8,950,000
                                     other use      -------   ----------                                    ---------
                                                    514,798     81,823                                     $23,340,000
                                                    =======     ======                                     ===========
</TABLE>

(1) Excluding renewal options.
(2) Based on third party MAI  appraisals  obtained  between  September  1998 and
    November 1999.
(3) Approximately  51,518  square feet are  leased to a single  tenant  (Orchard
    Supply Hardware, a wholly-owned  subsidiary of  Sears Roebuck & Co.) under a
    lease  expiring June 2013.  The  remaining  3,186  square feet are leased to
    three small tenants under leases expiring at various  times between 2003 and
    2005.
(4) Montgomery  has  prepared  plans that would  provide for  construction  of a
    195,000 square foot office building.  Montgomery recently signed a letter of
    intent to sell or exchange the Eccles Project land. If such sale or exchange
    is not completed, management will evaluate alternatives to determine whether
    to undertake development of the office building or a hotel, sell or exchange
    the property, or enter into a ground lease with a third party.

         Montgomery will continue to manage and operate, through DIMC, the Keker
& Van Nest Office  Building,  the Orchard Supply  Shopping  Center,  and the San
Ramon  Retail  Center.  Montgomery  recently  signed a letter of intent  for the
possible sale or exchange of the Eccles Project land.  Additionally,  Montgomery
will continue to evaluate,  purchase, lease, operate, develop, finance, and sell
other  properties  as deemed  appropriate  by  management  and as  circumstances
permit.

                                       5
<PAGE>

Eccles Project

         The  Eccles  Project  area  consists  of  approximately  7.4  acres  of
unimproved  land located at Eccles Avenue and Gull Road in South San  Francisco,
California.  This area, known as Oyster Point, is approximately  four miles from
the downtown  central business  district of South San Francisco.  The area has a
variety of mixed uses and is dominated by industrial buildings and office parks,
many of which have a  bioengineering  emphasis,  such as the Genentech campus in
South San Francisco.  Marriott Hotels is constructing a new hotel to the west of
the  Eccles  Project  at the Oyster  Point  Blvd.  junction  with  Highway  101.
Additionally, Montgomery has recently learned that Hilton Hotels, Inc., has been
approved for the  development of a 325 room hotel on land across the street from
the Eccles  Project land.  The Eccles  Project is accessed from the Oyster Point
exit of Highway 101, leading to Oyster Point Boulevard,  a two-lane road that is
currently being widened into four lanes.

         The Eccles  Project land was acquired by Mr.  Maniar from a third-party
in 1980. The property is currently  subject to a First Deed of Trust in favor of
Redwood  Bank  respecting  a line  of  credit  in the  amount  of  approximately
$2,000,000,  bearing  interest at the prime rate plus 1%, with no  amortization,
due and payable in full March 2001.

         In November  1999,  Montgomery  obtained an appraisal of $8,950,000 for
the Eccles  Project from The  Property  Sciences  Group,  Inc.,  an  independent
appraisal  company  licensed as such in  California  and whose  President  is an
"MAI",  that is a  member  in good  standing  of the  Appraisal  Institute.  The
Appraisal  Institute is an appraisal  industry  certification  organization that
specifies minimum appraisal  procedures and practices for its members.  MAI is a
designation  awarded by the Appraisal  Institute to members that are experienced
in the valuation and  evaluation of  commercial,  industrial,  residential,  and
other types of properties.

         The  November  1999  valuation  was  based  upon the  vacant  land with
proposed  entitlements  to  construct  a proposed  195,000  square  foot  office
building.  The  appraisal  does  not  take  into  consideration  costs  for  the
development of plans from architects,  surveyors,  environmental  reports,  city
planning  review  and  recommendation  to city  council,  public  review,  costs
incurred as a result of changes in plans and risks  associated  with  restricted
designs.  The costs  associated  with this  approval  process are  typically not
quantifiable.  Of course, there can be no assurance that Montgomery will be able
to obtain approval for its proposed plan or any other development plan.

         Management has evaluated three  alternatives with respect to the Eccles
Project land: (i)  development  by  Montgomery,  either alone or through a joint
venture with third  parties;  (ii) sale or exchange of the property;  or (iii) a
long-term ground lease.

         Montgomery  has  prepared  conceptual  designs  for  construction  of a
195,000 square foot office  building with  underground and surface parking areas
providing space for 800 vehicles on the Eccles Project land.  Preliminary design
work is required to seek zoning and ordinance  approval for the project from the
South San Francisco  Planning  Commission  before  proceeding to the  permitting
stage by seeking  building  permits  and related  consents to actually  commence
construction.  Management  estimates  that the  construction  would increase the
appraised  value of the property from $8,950,000 to  approximately  $50,000,000,
based on  management's  review of recent  valuations of nearby  properties  with
similar improvements and market rate capitalization of estimated possible rental
rates.  Management  recently  reconsidered its development  plans because of the
approval for Hilton Hotels,  Inc., to commence  construction of a 325 room hotel
on land across the street  from the Eccles  Project and the number of new hotels
that are being developed in the South San Francisco area. These hotels are being
constructed   to  accommodate   the  recent   expansion  of  the  San  Francisco
International  Airport.  Management  believes  that

                                       6
<PAGE>

the Eccles Project area has promising  potential for construction of a new hotel
because it is one of the largest  undeveloped  sites in the South San  Francisco
area.

         In  addition  to  development  of the Eccles  Project  as noted  above,
management  also  considered the possibility of selling or exchanging the Eccles
Project land. A tax-free  exchange would allow Montgomery to exchange the Eccles
Project for another  property that would  provide  additional  opportunities  to
Montgomery  consistent with its strategies  while deferring the realization of a
taxable gain that would result from a sale of the Eccles Project. Based on these
considerations,  on April 7, 2000,  Montgomery signed a letter of intent with an
unrelated  party  to  sell  or  exchange  the  Eccles  Project  at  a  price  of
$14,500,000,  subject to adjustment at the rate of $72.50 per square foot if the
building  approved by the South San  Francisco  Planning  Commission  is less or
greater than 200,000  square feet.  Montgomery  would be obligated to obtain the
South San  Francisco  Planning  Commission  approval,  based on the  preliminary
design work  completed,  unless waived by the buyer.  The buyer would  reimburse
Montgomery  up to  $75,000  for work  associated  with  obtaining  the South San
Francisco Planning Commission approval. The buyer's obligations would be subject
to its satisfaction about the condition of the property,  title matters, and the
existing  development  plans,  studies,  cost  estimates,  and similar  matters.
Montgomery  would have the right to  designate  a  property  for  purposes  of a
tax-free  exchange.  If the transaction  proceeds,  Montgomery intends to seek a
property  that  will  be  suitable  for  exchange  under  Montgomery's  business
strategy.  The letter of intent for the possible  sale or exchange of the Eccles
Project does not constitute a binding  agreement.  Montgomery is now preparing a
draft  definitive  agreement to be submitted to the buyer and intends to proceed
with the negotiation of a binding agreement. Unless and until a binding contract
is  executed,  Montgomery  has the  express  right to consider  other  offers or
terminate the letter of intent.  If  completed,  Montgomery  estimates  that the
transaction would not be closed until the third quarter of 2000.

         In the event that the sale or  exchange  as  proposed  under the recent
letter of intent is not completed and Montgomery  undertakes  development of the
Eccles Project by  constructing  either the proposed office building or a hotel,
management  estimates  that  it  will  require   approximately   $30,000,000  in
construction  and permanent  financing to undertake  such proposed  development.
This estimated  construction cost of approximately $150 per square foot is based
on management's  experience and familiarity with construction  costs for similar
buildings in the area.  Actual  construction  and  permanent  financing may vary
materially  from  this  estimate,  which is based  on  management's  development
experience and not on any third party  development,  construction  and financing
evaluation.  Montgomery has not obtained binding  commitments for such financing
and will be dependent on the  availability  of such  financing  from  commercial
lending sources.  As a new entrant into the real estate development  business in
the San  Francisco  Bay  Area,  Montgomery  may not be able to  obtain  required
financing  on  favorable  terms or at all.  Montgomery  may  attempt to obtain a
portion  of any such  funds and  thereby  decrease  the risk of  development  by
entering into a joint venture or other arrangement with third parties to develop
the Eccles Project. However, this would also decrease Montgomery's return on its
investment  for any  development.  Some sources of financing may demand that Mr.
Maniar,  as a principal  stockholder,  president,  and  director of  Montgomery,
personally guarantee company indebtedness, and Mr. Maniar is under no obligation
to do so.

         Management  has also  considered  the  possibility  of entering  into a
long-term  ground  lease.  This  would  provide  cash flow to  Montgomery  while
eliminating any tax liability associated with the sale of the Eccles Project.

         If the  proposed  sale or exchange is not  completed,  Management  will
continue to evaluate the available  options to determine how to proceed with the
Eccles  Project in a manner that  provides the greatest  return and cash flow to
Montgomery while minimizing risk and advancing Montgomery's

                                       7
<PAGE>

strategy. There can be no assurance that management will indeed be successful in
identifying  and pursuing the best possible  financial  return to Montgomery for
the Eccles Project.


Keker & Van Nest Office Building

         The Keker & Van Nest Office  Building is located at 710 Sansome Street,
San Francisco, California, with a total land area of approximately 0.1447 acres.
The office building is four-stories (including the basement), containing a total
leasable  floor area of  approximately  22,300  square  feet.  The building is a
reinforced  masonry building  constructed in 1907. The building was renovated in
1989 to meet  seismic and other  building  code  requirements  and  subsequently
leased in its entirety to the current tenant,  a San Francisco law firm. The law
firm leased the  building  at a monthly  rental of $56,395  through  December 1,
1999.  Pursuant  to a lease  option  exercise by the  tenant,  the monthly  rent
increased  to $59,190 per month and the lease term was  extended  for five years
until  December  2004,  unless  extended at the option of the tenant for another
five years.  The  building is in  excellent  condition,  based on a  third-party
property condition report dated November 1998.

         The  property is located just north of the  downtown  central  business
district  in the Jackson  Square  neighborhood,  a  historical  area  consisting
primarily  of  low-rise  buildings.  Many  buildings  in this  area are of brick
construction  and have been  renovated to  accommodate  office use. The area has
become  a  niche  market  location  for  law  firms,   graphic  designers,   and
consultants.  Retail  activity  in the area is also  niche-oriented  with a high
concentration of antique dealers in addition to restaurants and business support
services. Interstate 80 is located approximately one mile south of the area.

         The property has been owned by Mr.  Maniar since he acquired it from an
unrelated  party in 1980.  The  property  is secured by a First Deed of Trust in
favor of Wells Fargo Bank in the  approximate  principal  amount of  $4,800,000,
bearing interest at the fixed rate of 6.67% per annum,  amortized over 30 years,
with the unpaid  balance due January 2009.  An  independent  MAI appraiser  (The
Property  Group Sciences  Group,  Inc.) valued this property at $6,750,000 as of
October 1998. This property illustrates  implementation of Montgomery's strategy
of acquiring improved properties that can be renovated  significantly to improve
cash flow and appreciation potential.

Orchard Supply Shopping Center

         The  Orchard  Supply  Shopping  Center is located at  1041-1061  Market
Place,  San Ramon,  California  94583.  The lot on which the Shopping  Center is
located contains approximately 176,854 square feet. The shopping center consists
of one  building  containing  51,518  square feet and another  containing  3,186
square feet. The larger  building is leased to Orchard  Supply  Hardware under a
lease,  with monthly  rental  payments of $40,802,  that expires June 2013.  The
smaller  building is leased to three  separate small  businesses,  for aggregate
monthly rentals of $9,510.  The property is located in the incorporated  city of
San Ramon in Contra Costa County, California, approximately 25 miles east of San
Francisco and 15 miles east of Oakland.

         Beginning  in 1980,  major  companies  began  relocating  large  office
facilities to central Contra Costa County,  causing an office  development  boom
throughout the subsequent  decade.  Major  corporations have chosen Contra Costa
County  because of lower rental prices and  availability  of larger  floor-space
office  space.  The  property  is  adjacent  to  the  Bishop  Ranch  residential
development and is defined by numerous retail shopping centers. In addition, the
county has undergone  residential  growth due to its proximity to Silicon Valley
and comparatively reasonable real estate prices.

                                       8
<PAGE>

         The  property  was  purchased  by Mr.  Maniar in December  1991 from an
unrelated third-party.  The Orchard Supply Shopping Center is secured by a First
Deed of Trust in favor of Greenwich Capital  Products,  Inc., in the approximate
principal amount of $5,100,000,  bearing interest at 7.05% per annum,  amortized
over 30 years with the unpaid  balance due August 2008. In May 1998,  Mr. Maniar
obtained an  independent  MAI appraisal by The Property  Group  Sciences  Group,
Inc., of the improved property of $6,500,000.

         There are approximately  220  asphalt-paved  parking spaces on the east
and southern sides of the shopping center.  The improvements were constructed in
approximately 1987.

San Ramon Retail Center

         The San Ramon Retail Center was  originally  part of the Orchard Supply
Shopping Center.  In 1996, Mr. Maniar caused a subdivision to be created whereby
the San Ramon Retail Center became a separate legal parcel.

         The 4,823 square foot  building at the San Ramon Retail Center is fully
leased to three  tenants  for  approximately  $9,500 per month.  GST  Telecom (a
national  company whose stock is publicly  traded) which occupies  approximately
1,281 square feet at a base rent of $2,369.85 per month, together with a monthly
impound of $439 per month. GST Telecom's lease expires in March 2008 (subject to
option periods).  Green Valley Cleaners occupies approximately 1,666 square feet
at a monthly  rent of $3,165.40  together  with a monthly  impound of $383.  The
Green Valley lease expires February 28, 2008 and is personally guaranteed by the
owners  of Green  Valley.  Cave  Adsum  Corporation  dba  Alphagraphics  503 (an
Alphagraphics  franchise)  occupies the remaining 1,876 square feet at a monthly
rent of $3,975.62  together with a monthly  impound of $770.  The  Alphagraphics
lease  expires  October 31, 2004  (subject to a 5 year option) and is personally
guaranteed by Donald & Wendy Jardine, the owners of the Alphagraphics franchise.
Monthly  impounds are charged to each of these three tenants as discussed above,
in order to  reimburse  Montgomery  for real estate  taxes and certain  expenses
related to the operation  and  maintenance  of the common  areas.  The San Ramon
Retail Center is 100% occupied.

         The San Ramon Retail Center consists of an  approximately 9, 298 square
foot site and is located adjacent to Montgomery's Orchard Supply Shopping Center
in  San  Ramon.  This  property   includes   approximately  20  parking  spaces.
Additionally,  the site has a reciprocal  parking  arrangement  with the Orchard
Supply Shopping Center to the west.

         Mr.  Maniar  has  owned  the  property  since  December  1991,  when he
purchased it from an unrelated  third party.  The property is secured by a First
Deed of  Trust in favor of Gross  Mortgage  Company,  Inc.,  in the  approximate
principal  amount  of  $545,000,  bearing  interest  at 11% per  annum,  with no
amortization  and the unpaid  balance is due in June 2000. In January 1999,  Mr.
Maniar  obtained an  independent  MAI appraisal by The Property  Group  Sciences
Group,  Inc.,  valuing the property at  $1,140,000,  "as is," or at  $1,200,000,
fully leased.

                                       9
<PAGE>

Risk Factors

         Montgomery's   proposed   operations   are  subject  to  the  following
substantial risks.

Montgomery's operations will be substantially dependent on Dinesh Maniar.

         In June 1999, Mr. Dinesh Maniar was appointed  president of Montgomery.
Montgomery will be substantially dependent on the continued participation of Mr.
Maniar.  The loss of Mr. Maniar's  knowledge and abilities could have a material
adverse  affect on  Montgomery's  operations  and the  results  of its  proposed
development  and  operation  of its  properties.  Mr.  Maniar  will  manage  the
day-to-day affairs of Montgomery.  However, he also owns and manages three other
business   activities  in  California:   a  commercial   vineyard  operation  on
approximately 530 acres in Napa and Sonoma Counties; two thoroughbred race horse
operations; together with an apartment complex and a retail shopping center. Day
to day management of these other  businesses is delegated to employees,  but Mr.
Maniar  determines all significant or strategic  decisions.  Mr. Maniar will not
devote his full time and attention to the affairs of Montgomery.

The letter of intent is not a binding  agreement,  and the sale or exchange  may
not be completed.

         Montgomery has entered into a letter of intent for the sale or exchange
of the Eccles  Project  property.  That letter of intent does not  constitute  a
binding  agreement,  however,  and the sale or  exchange  may not be  completed.
Additionally,  if  the  sale  or  exchange  is not  completed,  the  process  of
attempting to complete the sale or exchange of the Eccles Project property under
the  letter of intent  may delay or  otherwise  hinder  Montgomery's  efforts to
obtain the best financial return from the Eccles Project property.

If the sale or exchange  proposed  under the letter of intent is not  completed,
Montgomery  will  require  substantial  additional  funds to develop  the Eccles
Project.

         Montgomery  has  evaluated  certain  alternatives  with  respect to the
development, lease, or sale of the Eccles Project land. In the event the sale or
exchange  proposed  under the  recent  letter of  intent  is not  completed  and
development and construction is undertaken by Montgomery,  management  estimates
that it will require  approximately  $30,000,000 in  construction  and permanent
financing to undertake such  development.  Montgomery  has not obtained  binding
commitments for such financing and will be dependent on the availability of such
financing  from  commercial  sources.  As a new  entrant  into the  real  estate
development  business in the San Francisco Bay Area,  Montgomery may not be able
to obtain  required  financing  on  favorable  terms or at all.  Montgomery  may
attempt  to  diversify  the  risk by  entering  into  joint  ventures  or  other
arrangements with third-parties.  However, this would also decrease Montgomery's
return on its investment.  Some sources of financing may demand that Mr. Maniar,
as a principal stockholder,  president,  and director of Montgomery,  personally
guarantee company indebtedness,  and Mr. Maniar is under no obligation to do so.
If Montgomery cannot obtain the required funds, it will be unable to develop the
Eccles Project.

                                       10
<PAGE>

Montgomery is subject to the general risks of real estate ownership.

         Ownership and operation of real estate involves  certain risks that may
be beyond the control of Montgomery or its officers and directors, including:

         o     adverse changes in general economic conditions;
         o     adverse changes in local conditions,  such as excessive  building
               resulting in an oversupply  of commercial  units in an area where
               Montgomery's properties are located;
         o     reduction in the appeal of particular types of properties;
         o     reduction  in the  cost  of  operating  competing  properties  or
               decreases in employment  that reduce the demand for properties in
               the area;
         o     the possible need for unanticipated renovations,  particularly in
               older structures;
         o     adverse changes in surrounding land values;
         o     adverse  changes in zoning laws,  other laws and  regulations and
               real property tax rates;
         o     damage from earthquakes or other natural disasters;
         o     the availability and expense of liability insurance; and
         o     the ability of the enterprise to provide for adequate maintenance
               of its property.

There can be no assurance  that any property  will be  sufficiently  occupied at
rents sufficient to ensure sustained  operations or allow adequate cash flows to
Montgomery.  The success of Montgomery and any of Montgomery's  investments will
depend upon factors that may be beyond the control of  Montgomery,  Montgomery's
directors, or any of its officers, and cannot be predicted at this time.

Montgomery's properties are subject to substantial encumbrances.

         In  acquiring  its  current  properties,   Montgomery  assumed  related
liabilities aggregating  approximately  $12,400,000,  as compared to independent
MAI  appraisals of market value dated between  September 1998 and November 1999,
aggregating  $23,340,000.  Montgomery will have to incur substantial  additional
indebtedness  to  develop  the  Eccles  Project if it  determines  to  undertake
development  and  construction.  In the event  Montgomery  is unable to make any
required  payments due under any  indebtedness  secured by its  properties,  the
secured  party  could  foreclose  on  the  related   property  and  Montgomery's
operations would be adversely affected.

                                       11
<PAGE>

Management may not identify the optimum use of the Eccles Project land.


         Although  management  evaluated  alternatives  to  development,   sale,
exchange, or lease of the Eccles Project and has entered into a letter of intent
to sell or exchange the Eccles Project property,  there can be no assurance that
management  will in fact be successful in its efforts to pursue the  alternative
that will provide the greatest  financial return while minimizing  economic risk
to Montgomery.


Montgomery's  development of the Eccles Project will be subject to  construction
and development risks.

         In the event Montgomery undertakes development of the Eccles Project or
any other property,  such  construction  and development  activities will expose
Montgomery to certain risks such as cost overruns,  carrying costs, availability
and costs of materials and labor, weather conditions and government  regulation.
Additionally,  Montgomery  will incur  costs in  connection  with the design and
implementation  of any  development  and  costs in  connection  with  performing
certain   oversight  and  review   functions,   including  costs  for  reviewing
construction  design  proposals,  negotiating  and  contracting  for feasibility
studies  and  supervising  compliance  with  local,  state or  federal  laws and
regulations.

Montgomery's officers and directors are subject to conflicts of interest.

         Montgomery's  officers and  directors and their  affiliates  have been,
are,  and will  continue to be subject to  significant  conflicts  of  interest.
Officers and  directors  will be subject to competing  demands for their limited
time as they divide their attention between managing  Montgomery and their other
business and investment  interests.  In some instances,  officers and directors,
particularly  Mr. Maniar,  will invest in real estate without  participation  by
Montgomery.  Such persons will be responsible  for  allocating  such portions of
their time as they may deem  appropriate to the business  affairs of Montgomery.
Mr. Maniar is the sole owner, president,  and a director of DIMC, which provides
a broad array of  services to  Montgomery.  The terms of the  arrangement  under
which Montgomery obtains property management services,  legal,  accounting,  and
bookkeeping  services,  administrative  support and office use from DIMC are all
provided  pursuant to the terms of a management  contract pursuant to which DIMC
receives a minimum of $7,500 per month as payment for these services (increasing
to $10,000 per month in June 2000 and  $15,000  per month in June  2001).  While
this contract was approved by a unanimous vote of Montgomery's outside directors
(Mr.  Maniar  abstained  because of the conflict of interest  resulting from his
affiliation with both Montgomery and DIMC),  this does not guarantee the absence
of a conflict of interest.  There can be no assurance  that any of the foregoing
or other  conflicts of interest  will be resolved in favor of  Montgomery or its
stockholders.  Montgomery  has adopted no policies  respecting the resolution of
actual or potential conflicts of interest.

         Under Nevada law,  Montgomery's officers and directors are obligated to
exercise  their  powers in good  faith and with a view to the  interests  of the
corporation,  considering  both the  long-term and  short-term  interests of the
corporation and its stockholders, including the possibility that these interests
may  best be  served  by the  continued  independence  of the  corporation  from
ownership by an acquiring entity. No transaction  between  Montgomery and one or
more of its officers or directors, an entity in which such officers or directors
also serve as officers or directors, or in which they have a financial interest,
is void or voidable if any of the following occur:

         o        the fact of such common  directorship,  office, or interest is
                  disclosed or known to the board or committee  and noted in the
                  minutes and a majority of the board or committee  approves the
                  transaction in good faith, without counting the vote of common
                  or interested directors;

         o        the fact of such common  directorship,  office, or interest is
                  disclosed or known to the  stockholders and the transaction is
                  approved  by the  holders of a majority  of the common  stock,
                  with the stock of the common or interested directors voting;

         o        the fact of the  common  directorship,  office,  or  financial
                  interest  is  not  known  to the  person  having  such  common
                  directorship,   office  or  financial   interest  when  it  is
                  considered by the board of directors; or

                                       12
<PAGE>

         o        the  transaction  is  fair  to  Montgomery  at the  time it is
                  approved or ratified.

         Although Mr. Maniar has  abstained,  in  accordance  with the foregoing
provision,  from voting as a director  on matters in which he has a  conflicting
interest, he is not required and does not intend to abstain in matters submitted
to the stockholders for approval under the foregoing provisions. Inasmuch as Mr.
Maniar  currently  owns  beneficially  approximately  97.3%  of the  issued  and
outstanding common stock, he would be able to assure stockholder approval of any
transaction in which he is an interested person.

See "Item 4.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT."

         Montgomery's  articles  of  incorporation  provide  that  the  personal
liability to the  corporation  of officers and directors for breach of fiduciary
duty is limited to acts or omissions that involve intentional misconduct, fraud,
or a knowing violation of law.

         Mr.  Maniar,  as  the  beneficial  owner  of  approximately   97.3%  of
Montgomery's  issued and outstanding common stock, also owes a fiduciary duty to
Montgomery and its other  stockholders,  particularly when considering  mergers,
sales of assets, or other extraordinary  matters requiring stockholder approval.
Such  fiduciary  duty  generally  may  be  breached  if  Mr.  Maniar  acts  as a
controlling  stockholder  to oppress the  minority or approve  matters  that are
unfair to Montgomery and its other stockholders.

The appraisals of the properties  acquired by Montgomery  from Dinesh Maniar are
subject to numerous uncertainties.

         The number of shares of common stock that Montgomery  issued to acquire
its principal  properties  from Mr.  Maniar was  determined in large part on the
aggregate  appraised  market  valuation of such  properties by  independent  MAI
appraisers. There are numerous uncertainties inherent in estimating the value of
real  estate.  The  estimated  values set forth in the  appraisals  are based on
various  comparisons  to sales  prices of other  properties;  predictions  about
market conditions,  demand, vacancy rates, and other factors;  assumptions about
the property's  condition,  conformance  with laws and  regulations,  absence of
material  defects,  and a variety of numerous other factors;  estimates of lease
revenues and operating  expenses,  and other items.  Any  significant  change in
these comparisons,  predictions,  assumptions,  and estimates, most of which are
beyond the control of Montgomery,  could  materially  and adversely  affect such
estimated market values. Montgomery cannot assure that it would be able sell the
properties at a price at or above their appraised market valuation.

         In  obtaining  the property  appraisals,  it was in Mr.  Maniar's  best
interest  to obtain high  market  valuations  in order to enhance his ability to
obtain  desired  refinancing  of the related  indebtedness  and to increase  the
number of shares of common stock issuable to him on conveyance of the properties
to Montgomery.

                                       13
<PAGE>

Montgomery's operations will be affected by variances in rental income.

         Montgomery's real property  investment  returns depend in large part on
the  capital  appreciation  in  property  values and amount of income  earned as
compared to related  expenses  incurred.  Most of  Montgomery's  properties  are
leased  under  long-term  arrangements  that  restrict  Montgomery's  ability to
increase rents. If Montgomery's  properties do not generate revenues  sufficient
to meet operating expenses, debt service and capital expenditures,  which may be
subject to increases outside of Montgomery's  control,  Montgomery's income will
be adversely affected.  Further,  Montgomery cannot assure that the value of its
properties will appreciate.

Montgomery's expenditures for property ownership are fixed.

         Various significant  expenditures associated with an investment in real
estate, such as mortgage payments,  real estate taxes and maintenance  expenses,
generally are not reduced when  circumstances  cause a reduction in revenue from
the investment.  Thus,  Montgomery's operating results and cash flow may decline
materially  if its rental  income is  reduced,  since its  expenses  will not be
correspondingly reduced.

Montgomery's real estate investments may be illiquid.

         Real  estate   investments  are  relatively   illiquid,   which  limits
Montgomery's  short-term  ability to  restructure  its  portfolio in response to
changes  in  economic  or other  conditions.  The  appraisals  obtained  for the
properties  estimate a 9-12 month period for marketing the properties  such that
immediate liquidity at said values is not available.

Montgomery's properties are geographically concentrated.

         All of  Montgomery's  properties  are located in the San  Francisco Bay
Area.  Adverse  economic  factors or other changes in this area could  adversely
impact Montgomery's operations and revenues.

Montgomery has few tenants.

         Most of  Montgomery's  properties  are occupied by a single tenant or a
limited number of tenants, many of which are large, financially stable entities.
Two tenants currently occupy about 90% of Montgomery's leaseable square feet and
lease  revenues from the two tenants  represented  approximately  88% and 91% of
Montgomery's  income  during  1998 and 1997,  respectively.  Losing a key tenant
could adversely affect Montgomery's operating results while it seeks a qualified
replacement  from a limited number of potential  large  tenants.  Montgomery may
incur costs for renovation,  leasing  emissions or the construction of leasehold
improvements  if tenants are changed,  particularly  if a property with a single
large tenant is converted to multiple tenant use.

                                       14
<PAGE>

Title to Properties

         In connection with acquiring its properties from Mr. Maniar, Montgomery
conducted  a due  diligence  review  of title to the  properties.  In  addition,
Montgomery  purchased  title  insurance  coverage  from a major title  insurance
company,  insuring  marketable  title  to all  four  properties  in the  name of
Montgomery  in the full  amount of the  valuation  set  forth in the  appraisals
obtained by Mr. Maniar in connection with  refinancing of the properties in 1998
and  1999.  Based  on  the  foregoing,  Montgomery  believes  it has  clear  and
marketable  title to the  properties,  except for the  obligations  assumed  and
outlined above.

Operational Hazards and Insurance

         Montgomery  does not directly  operate its  properties  but instead has
engaged DIMC, a licensed property management company affiliated with Mr. Maniar,
to render such  services.  This  procedure  allows  Montgomery  to transfer most
operational matters to DIMC, which is 100% owned by Mr. Maniar; he is a director
(one of three) and the  President.  DIMC  maintains  liability  insurance in the
amount of $1,000,000,  but does not have any other insurance on which Montgomery
could rely should DIMC be negligent in its duties.

         Montgomery  maintains $1,000,000 in liability insurance with respect to
each of its  properties,  together with a $10,000,000  umbrella  policy which is
placed with A+ VIII or better companies,  as determined by Best's Rating System.
Montgomery  also maintains  property  insurance for each of its properties in an
amount  Montgomery  believes  represents the full replacement  cost, except that
Montgomery does not maintain any property insurance for the building occupied by
Orchard  Supply  Hardware,  as Sears,  Roebuck & Co.,  the  parent  corporation,
self-insures the property damage risk on that property, pursuant to the terms of
the lease.

         Montgomery's  insurance is an "All Risks" type of insurance  and covers
most commercial  risks  associated  with the ownership of real property.  All of
Montgomery's  properties  are  located in areas that are  subject to  earthquake
activity.  Except  for  the  Keker  & Van  Nest  Office  Building,  Montgomery's
insurance policies do not cover damage caused by seismic activity, although they
do cover  losses from fires  after an  earthquake.  Additionally,  the amount of
earthquake  insurance may not be adequate to cover all losses.  Montgomery  does
not maintain any other insurance that would protect it from acts of nature, war,
or other catastrophe,  as Montgomery  generally does not consider such insurance
coverage to be economical.  If an earthquake or other similar catastrophe occurs
and results in substantial damage,  Montgomery's investment could be lost, which
would have a material  adverse effect on  Montgomery's  financial  condition and
operating results.  Notwithstanding  the damage or destruction of properties and
related   improvements,   Montgomery   could  remain   obligated  to  repay  the
indebtedness secured by such property.

Government Regulation

         Montgomery's  activities  are subject to extensive  federal,  state and
local  laws  and  regulations  which  can  have  substantial   impact  upon  the
acquisition,  development,  and  management  of real estate.  Present as well as
future   legislation  and  regulations  could  cause  additional   expenditures,
restrictions and delays in Montgomery's  business, the extent of which cannot be
predicted.

                                       15
<PAGE>

State and Local Regulation

         The commercial  real estate  industry is subject to extensive state and
local  government  regulation,  including  zoning  restrictions,  building  code
requirements,  environmental  law, the Americans with  Disabilities  Act of 1990
(the  "ADA")  and  similar  laws.  All of the  properties  owned  by  Montgomery
currently  comply with all relevant  zoning,  building,  environmental,  and ADA
laws; however,  there can be no assurance that these laws might be changed so as
to impose upon Montgomery the legal duty to make changes to its properties so as
to comply with said laws.

         Prior to its  acquisition of the properties from Mr. Maniar and as part
of its due  diligence  review,  Montgomery  reviewed  the Phase I  environmental
reports, seismic studies, building condition reports, and certain other relevant
documentation  to assure that the properties  acquired were in good to excellent
condition and did not violate any  applicable  governmental  law or  regulation.
Although  Montgomery  concluded that no such difficulties  exist, it is possible
that a  latent  defect  or  other  condition  was  unknown  at the  time  of the
acquisition  (or  not   ascertainable)  and  which  would  impose  liability  on
Montgomery.

Environmental Regulations

         Under various federal, state, and local laws and regulations,  an owner
of real  estate is liable  for the costs of removal  or  remediation  of certain
hazardous  substances on its property.  Such laws often impose liability without
regard to whether the owner knew of, or was  responsible  for,  the  presence of
hazardous  substances.  The costs of remediation or removal may be  substantial,
and the  presence  of the  hazardous  substances,  or the  failure  to  promptly
remediate them, may adversely affect the owner's ability to sell the real estate
or to  borrow  using the real  estate  as  collateral.  In  connection  with its
ownership and operations of the properties, Montgomery may be potentially liable
for the costs of removal or remediation of hazardous substances.

         Phase I  environmental  reports  on  Montgomery's  properties  dated as
follows  report an absence of any  significant  or adverse  quantities  of toxic
waste or hazardous materials at the properties:

                  Keker & Van Nest Office Building   November 1998
                  Orchard Supply Shopping Center     May 1998
                  San Ramon Retail Center            November 1995
                  Eccles Center                      March 1998

Safety and Health Regulations

         Montgomery's  properties  are  subject to the ADA.  Under the ADA,  all
places of public  accommodation  are  required  to comply with  certain  federal
requirements related to access and use by disabled persons. The ADA has separate
compliance  requirements for "public accommodations" and "commercial facilities"
but generally  requires that buildings and services  (including  restaurants and
retail stores) be made accessible and available to people with disabilities. The
ADA  requirements  could require  removal of access barriers and could result in
the imposition of injunctive relief,  monetary penalties,  or, in some cases, an
award of damages.

                                       16
<PAGE>

Competition

         The real estate business is intensely competitive in all of its phases,
and Montgomery  competes with many real estate investment and development firms,
including  individuals,  insurance companies,  real estate investment trusts and
other  entities,  most of which have  greater  financial  resources.  Montgomery
expects keen  competition  from a variety of sources for attractive  real estate
investment  and  development   opportunities.   Competition  among  private  and
institutional  purchasers of real property has increased substantially in recent
years,  with resulting  increases in the purchase  prices paid for real property
and higher fixed costs.

Employees and Consultants

         Montgomery  obtains  all of its  services  through  outside  management
companies  and  through  outside  consultants.  Montgomery  does  not  have  any
employees  other than the officers of  Montgomery,  who presently  serve without
compensation (other than appreciation in stock prices). In December 1999, it was
determined  each  director  would  receive  $300  for  each  meeting   attended.
Additionally,  on December 22, 1999,  Montgomery  granted each existing director
options to purchase  10,000 shares of common stock,  exercisable  until December
31, 2002,  at an exercise  price of $3.125 per share,  which is greater than the
market value of the common stock as of the date of grant. Montgomery obtains all
of its property  management  services from DIMC and must rely upon the employees
and  other  facilities  of DIMC  for all  day-to-day  management  decisions  and
actions.  See  "ITEM  7.  CERTAIN   RELATIONSHIPS  AND  RELATED   TRANSACTIONS."
Montgomery's  legal and accounting  work is done primarily  through  outside law
firms and CPA firms,  although most routine transactions are handled through the
staff  attorneys,  accountants,  and other  employees  of DIMC.  The  management
contract with DIMC has a five-year term.

Offices and Facilities

         Montgomery  obtains  the  shared  use of  executive  space and  related
services  at 400  Oyster  Point  Boulevard,  Suite  415,  South  San  Francisco,
California  94080,  under  a  cost  reimbursement   arrangement  with  DIMC,  an
affiliated   company.   See  "ITEM  7.   CERTAIN   RELATIONSHIPS   AND   RELATED
TRANSACTIONS."

                                       17
<PAGE>

- --------------------------------------------------------------------------------
        ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
- --------------------------------------------------------------------------------
Overview

         The  following  discussion  should  be read  in  conjunction  with  the
Financial  Statements of Montgomery  and the Notes thereto  appearing  elsewhere
herein.

         Montgomery is a real estate company that emphasizes  investment in both
development  real  estate  assets  and  income  producing  real  estate  assets.
Montgomery  is  engaged  in  the  ownership,  leasing,  management,   operation,
development,  redevelopment,  acquisition, and sale of real estate assets in the
Greater San  Francisco  Bay Area.  Montgomery  currently  owns  retail  shopping
centers  and an  office  building  and has a project  for which it has  recently
entered into a letter of intent to sell or exchange.  Montgomery conducts all of
its real property management  activities through a written management  agreement
with a related  corporation,  Diversified  Investment &  Management  Corporation
("DIMC"),  which is 100% owned by the  majority  stockholder,  Mr.  Maniar.  Mr.
Maniar currently owns in excess of 96% of the stock of Montgomery.

         Montgomery's   financial  condition  and  results  of  operations  were
substantially  changed by the  acquisition of its four (4)  properties  from Mr.
Maniar in June 1999.  These four properties are: (1) the Keker & Van Nest Office
Building in San Francisco;  (2) the Orchard Supply Shopping Center in San Ramon,
California;  (3) the San Ramon Retail Center in San Ramon,  California;  and (4)
the Eccles  Project  land  located  in South San  Francisco,  California.  These
assets,  which have an appraised  value of  approximately  $23,340,000  based on
independent  appraisals,  were sold to  Montgomery by Mr. Maniar in exchange for
16,000,000   shares  of  Montgomery's   stock  and  the  assumption  of  related
indebtedness by Montgomery of approximately  $12,400,000,  together with payment
of certain costs  associated with the transfer.  The transaction with Mr. Maniar
closed on June 8, 1999.

         With the  acquisition of these assets,  Montgomery  became an operating
real estate company with approximately  80,000 square feet of leaseable property
and  approximately  7.4  acres  of land  ready  for  development  in  South  San
Francisco,  California.  The lease space is currently 100% occupied.  Management
has  evaluated  certain  alternative  with  regard  to  the  development,  sale,
exchange,  or lease of the Eccles Project property and has recently entered into
a letter of intent to sell or exchange the Eccles Project property.

Basis of Presentation of Financial Information

         The  acquisition of the four properties was accounted for as a "reverse
acquisition"   whereby,  for  accounting   purposes,   the  properties  acquired
Montgomery  under the  purchase  method of  accounting  and,  due to the lack of
significant  prior  Montgomery  operations,  was  substantially  recorded  as  a
recapitalization.  Accordingly,  the historical  financial  statements have been
restated after giving effect to the June 8, 1999, acquisition of Montgomery. The
financial  statements  were  prepared to give  retroactive  effect to January 1,
1998, of the reverse  acquisition  completed on June 8, 1999,  and represent the
operations of the properties.  Consistent with reverse  acquisition  accounting:
(i) all properties,  assets, liabilities,  and accumulated deficit are reflected
at the properties'  combined historical cost (as the accounting  acquirer);  and
(ii) the preexisting  outstanding shares of Montgomery (the accounting acquiree)
are  reflected  at their  net  asset  value as if  issued  on June 8,  1999.  In
addition,  the benefit of

                                       18
<PAGE>

deferred tax assets  created by the  contribution  of the  properties on June 8,
1999,  has been  recorded  as  additional  capital.  Distributions  shown in the
accompanying  statement of stockholders'  deficit represent the properties' cash
flows, and refinancing  proceeds  distributed to Mr. Maniar prior to the reverse
acquisition.

Results of Operations

         Montgomery's  net  loss  (after  extraordinary  items)  decreased  from
$361,051 to $154,902, or 57.1%, for 1999 compared to 1998.

         Montgomery's  total  revenues  increased  from  $1,316,794  in  1998 to
$1,369,977  in 1999,  or 4.0%,  primarily  because  of two  factors:  (a) rental
payments  commenced  November 1999 under the new lease with Alphagraphics 503 at
the San Ramon Retail Center,  and (b) rental  increases took effect  December 1,
1999 in the base rent from Keker & Van Nest.  Additionally,  increases in tenant
recoverables attributable to both the Orchard Supply Shopping Center and the San
Ramon Retail Center  effected  total  revenue.  Montgomery  expects that it will
continue to incur minor  variations in rental income due to differing  levels of
expenses  reimbursable  under the lease,  as well as by reason of  increases  in
certain base rents due to increases in the Consumer Price Index. Currently, with
the exception of the Eccles  Project,  all of  Montgomery's  properties are 100%
leased  under  lease  terms  extending  beyond  the  end of 2000 so that no rent
reductions due to vacancies are expected for the balance of the current year.

         Total  operating  expenses  increased  to  $642,960  during  1999  from
$590,504  during 1998, or  approximately  9.1%,  due primarily to an increase in
administrative expenses.

         Net  interest  expense was  approximately  equal  during 1999 and 1998,
reflecting a lower weighted  average interest rate in 1999 offset by larger loan
amounts.  As a result of  refinancings in late 1998 and early 1999, the previous
outstanding loans with principal balances aggregating  approximately $10,500,000
at a weighted average interest rate of 8.3% per annum were refinanced with loans
with aggregate original  principal balances of approximately  $12,400,000 with a
weighted average interest rate of 7.35%.

         Extraordinary  item  expenses of $153,077 for 1998 was a  non-recurring
item. Extraordinary items include prepayment penalties and unamortized loan fees
that were written off due to the early extinguishment of debt in connection with
1998 refinancing activity.

Liquidity and Capital Resources

         Montgomery has met its requirements for liquidity and capital resources
principally from cash provided by operating and financing activities.

                                       19
<PAGE>

Operating Activities

         Operating activities provided net cash of $145,518 and $11,467 for 1999
and  1998,   respectively.   Noncash   expenses   related  to  depreciation  and
amortization  of  $275,188  in 1999 more  than  offset  the net  loss.  In 1998,
depreciation  and  amortization of $329,566 and write-off of deferred loan costs
of $101,558  together more than offset the net loss.  In addition,  during 1999,
fluctuations in accrued interest and security deposits and prepaid rent provided
an aggregate of $77,974 in cash.  During 1998,  fluctuations in accrued interest
and security deposits and prepaid rent used cash of $131,210.

Investing Activities

         During 1999 and 1998, investing activities used varying amounts of cash
due to additions to  properties  for tenant  improvements  or payments for lease
commissions and loan costs. These amounts will continue to vary depending on the
level of activities of Montgomery in refinancing existing obligations,  entering
into new leases, or constructing improvements.

Financing Activities

         Montgomery's  financing  activities reflect the results of its debt and
equity  transactions.  During 1999,  financing  activities  provided net cash of
$52,770  as a result of both  issuances  of common  stocks  and notes  offset by
distributions and principal payments on notes.

         During  1998,  financing  activities  provided  net  cash of  $199,080,
reflecting  the net funds  provided by  refinancing  of certain of  Montgomery's
secured indebtedness and the distribution of financing proceeds to Mr. Maniar.

         Montgomery  has net cash flow  from its  current  activities,  which it
believes it will be able to continue on a long-term basis,  providing sufficient
cash to cover  activities  other than new  acquisitions  or  developments  while
sheltering  cash flow from income tax by reason of the net taxable  loss that is
generated by depreciation and amortization.  However, Montgomery's positive cash
flow  may  not be  sufficient  to fund  expansion  or  acquisitions.  Montgomery
currently  generates  positive cash flow from operations  with noncash  expenses
such as depreciation and amortization generating a net loss. Montgomery plans to
achieve net income once the Eccles Project is sold, exchanged,  or developed, as
any of those  courses  of action  will  enable  Montgomery  to acquire an income
producing  asset to replace a real estate asset that  currently  generates a net
loss based upon its carrying costs.

Equity in Real Estate

         Montgomery's properties have a value of approximately $23,340,000 based
on independent  appraisals obtained between September 1998 and November 1999, as
compared to the historical cost, net of  depreciation,  of $8,513,506 with which
such  properties  are reported in its  financial  statements  as of December 31,
1999. The related indebtedness secured by such properties totaled $12,338,166 as
of December 31, 1999. Montgomery believes that the amount by which the appraised
value of its properties exceeds the related  indebtedness  provides an important
financial  resource.  When circumstances  warrant, in the opinion of management,
Montgomery  may seek to  refinance  a  property  to  realize on a portion of the
appreciated  value  while  retaining  the  property  for  potential   additional
appreciation.  Generally,  Montgomery will try to structure such  refinancing so
that the  property  will  continue  to provide  sufficient  cash flow to meet or
exceed  requirements for related mortgage  amortization and operating  expenses.
Montgomery's  goal is to generate  current  positive  cash flow while  achieving
possible  investment return

                                       20
<PAGE>

through potential long-term  appreciation.  Proceeds from such refinancings will
be used for Montgomery's capital requirements.

Capital Requirements

         Montgomery  plans to expand its asset base in the future.  Expansion is
currently  focused  primarily  upon the Eccles  Project in South San  Francisco,
California. On April 7, 2000, Montgomery entered into a letter of intent to sell
or  exchange  this  project  at a  price  of  $14,500,000,  subject  to  certain
adjustments.  Montgomery  intends  to select an  income-producing  property  for
purchase  by the  buyer for  exchange  with  Montgomery.  As a result of such an
exchange,  if  completed,  Montgomery  will be able to deploy  the equity in the
Eccles  Project  property  that  generates a net loss due to  carrying  costs by
acquiring an income-producing asset. If the proposed sale or exchange or another
similar transaction is not completed,  Montgomery may develop the Eccles Project
for  offices  or a  hotel  or  seek a  long-term  ground  lease.  If  Montgomery
undertakes  development of the Eccles Project, it anticipates that approximately
$30,000,000  in  development  funding will be required.  Montgomery  may seek to
borrow required  development funding from commercial  financial sources,  either
alone or in conjunction with a possible  development partner, in order to spread
developmental  risks and costs.  Montgomery  has not obtained any commitment for
any  development   funding  or  entered  into   discussions  with  any  possible
development partner, and there is no assurance that it will be able to do so. In
lieu of  developing  the  Eccles  Project,  either  alone or with a  development
partner,  Montgomery may seek to enter into a long-term  ground lease,  in which
case no additional capital would be required by Montgomery.

         Montgomery  believes that  diversification is the key to long-term real
estate industry viability and success. Therefore,  Montgomery plans to diversify
its current  portfolio with future  acquisitions of income producing real estate
and/or real estate with development potential.  Montgomery will seek the capital
for such growth and diversification through both commercial loan sources as well
as the sale of equity or debt securities. Although there are no current specific
plans for additional capital at this time, as a long-term  strategy,  Montgomery
intends  to raise  sufficient  equity  to allow it to  expand  its  asset  base.
Montgomery  anticipates  that it will  combine  the  proceeds  from  any  equity
financing  with  proceeds  from loans secured by the  properties  purchased.  In
addition to purchasing  either a large single asset or multiple income producing
assets,  Montgomery  may  purchase  potential  development  sites.  No  specific
properties have been identified for possible acquisition.

Other Matters

         Montgomery  has  reviewed all recently  issued,  but not yet  accepted,
accounting   standards  in  order  to  determine  their  effects,   if  any,  on
Montgomery's financial condition or results of operations. Based on that review,
Montgomery  believes that none of these  pronouncements  will have a significant
effect on current or future earnings or operations.

Year 2000

         To  date,  Montgomery  has not  experienced  adverse  impacts  from its
software and systems as a result of the Year 2000 computer  problem,  nor has it
received  notice from any of its suppliers,  tenants,  or lenders of any impacts
resulting  from the Year 2000 problem.  However,  there can be no assurance that
this will continue to be the case or that adverse impacts will not result in the
future  from the Year  2000  problem.  Montgomery  has no year  2000  compliance
covenants in any of its leases or loan agreements.

                                       21
<PAGE>

- --------------------------------------------------------------------------------
     ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- --------------------------------------------------------------------------------

         The  following  table sets forth,  as of the date of this  registration
statement,  the name,  address  and  shareholdings  of each  person  who owns of
record, or was known by Montgomery to own beneficially, 5% or more of the common
stock  currently  issued and  outstanding;  the name and  stockholdings  of each
director;  and the  stockholdings  of all executive  officers and directors as a
group. Unless otherwise  indicated,  all shares consist of common stock, and all
such shares are owned beneficially and of record by the named person or group.
<TABLE>
<CAPTION>

                                                       Nature of             Number of            Percentage of
Name of Person or Group (1)                           Ownership(2)            Shares               Ownership(3)
- -----------------------------------------------    -------------------    ----------------     ---------------------
Directors and Principal Stockholders
<S>                                               <C>                     <C>                      <C>
  Dinesh Maniar                                    Common Stock             16,060,000(4)              97.3%
  President and Chairman                           Options                      10,000                  0.0%
                                                                          ------------
  400 Oyster Point Boulevard, Suite 415            Total                    16,070,000                 97.3%
  South San Francisco, CA 94080

  Keith A. Cannon                                  Common Stock                200,700(5)               1.2%
  Director                                         Options                      10,000                  0.0%
                                                                          ------------
                                                   Total                       210,700                  1.3%

  O. Lee Barnett                                   Options                      10,000                  0.0%
  Director, Treasurer and Assistant Secretary

  James M. Hanavan                                 Options                      10,000                 0.0%
  Director and Secretary

  Arthur A. Torres                                 Options                      10,000                  0.0%
  Director

All Executive Officers and Directors as a          Common Stock             16,260,700                 98.5%
   Group (five persons)                            Options                      50,000                  0.3%
                                                                          -------------
                                                   Total                    16,315,700                 98.6%
- -------------------------
</TABLE>

(1)  Unless otherwise indicated, the address of the foregoing persons is in care
     of Montgomery at its corporate office.
(2)  Except as other noted,  shares are owned  beneficially  and of record,  and
     such record stockholder has sole voting, investment, and dispositive power.
     Beneficial  ownership is  determined  in  accordance  with the rules of the
     Securities  and  Exchange  Commission  and  generally  includes  voting  or
     investment power with respect to securities. Shares of common stock subject
     to stock options and warrants  currently  exercisable or exercisable within
     60 days are deemed to be outstanding for computing the percentage ownership
     of the person  holding  such  options and the  percentage  ownership of any
     group of which the holder is a member,  but are not deemed  outstanding for
     computing the percentage of any other person.
(3)  Calculations of total percentages of shares outstanding for each individual
     assumes the exercise of options and warrants and  conversion of convertible
     debt held by that individual to which the percentage  relates.  Percentages
     calculated  for totals of all  executive  officers and directors as a group
     assume  the  exercise  of  all  options  and  warrants  and  conversion  of
     convertible debt held by the indicated group.
(4)  Includes  16,000,000  shares  held of record by Dinesh  Maniar  and  60,000
     shares held by his wife.  Does not include  60,000  shares held by an adult
     child living outside of Mr. Maniar's house.
(5)  Includes shares held in Mr.  Cannon's  individual  retirement  accounts and
     13,000 shares owned by Mr. Cannon's wife.

                                       22
<PAGE>

- --------------------------------------------------------------------------------
    ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
- --------------------------------------------------------------------------------

Executive Officers and Directors

         Montgomery's  articles of incorporation provide for the election of the
entire board of directors at each annual meeting of stockholders,  each director
to serve until the next annual  meeting and until such  director's  successor is
elected and  qualified.  Officers  are elected and serve at the  pleasure of the
board of directors.

         On May 26, 1999,  at a special  meeting of  stockholders,  Montgomery's
stockholders  elected  a new  board  of  directors.  O.  Lee  Barnett,  who  was
previously a director,  continued  as member of the new board and the  following
persons (nominees of Mr. Maniar) were elected:  Dinesh Maniar,  Keith A. Cannon,
Arthur A. Torres, and James M. Hanavan.

         The  following  table sets forth the name,  age,  and  position of each
current director and executive officer of the Company.

        Name            Age                      Title
   -----------------    ---     ------------------------------------------------

   Dinesh Maniar        59      Chairman of the Board of Directors and President
   Keith A. Cannon      59      Director
   O. Lee Barnett       60      Director and Assistant Secretary
   James M. Hanavan     55      Director and Secretary
   Arthur A. Torres     53      Director

         Dinesh  Maniar  has  been an  industrial  and  commercial  real  estate
developer  since 1973. Mr. Maniar is president of the Maniar  Investment  Group,
consisting  principally of Diversified Investment and Management Corporation and
several  affiliated   companies  active  in  residential,   retail,  and  office
development,  management,  and  investment.  Mr.  Maniar  has built  and  leased
commercial  buildings of  approximately  2,000,000  square feet.  Several of Mr.
Maniar's  projects  have been  purchased by such  companies as  Prudential  Life
Insurance  Company,  Bank of America Trust  Company,  Equitable  Life  Assurance
Company and Grosvenor International. Mr. Maniar's projects have been occupied by
leading national and international  firms such as Japan Foods  (Kikkoman),  Coca
Cola,  Duracell,  Aero  Electronics,   Bally,  OMI,  Mead  Paper,  and  National
Semiconductor.

         Keith A. Cannon, a resident of Carlsbad,  California, has been for over
five years a stockbroker and registered  representative of Wilson-Davis & Co., a
broker-dealer  based in Salt Lake City, Utah. Since March 1993, he has served as
branch president.

         O. Lee Barnett has been  self-employed  since 1961 as a tax  accountant
and management consultant.  From 1969 until 1989, Mr. Barnett was also a trustee
of Mortgage  Investment  Trust of Utah,  located in Salt Lake City, Utah, a real
estate  investment trust investing in discounted real estate contracts and other
real  estate  evidences  of  indebtedness  as well as  unimproved  and  improved
commercial and residential  real estate.  From 1961 to the present,  Mr. Barnett
has been an investor in various real estate properties. Mr. Barnett was involved
in the  development  of real  estate  subdivisions  in Salt Lake  County,  Utah,
between 1986 and 1989.  Mr.  Barnett holds a Bachelor of Science degree from the
University  of Utah,  Salt Lake City,  Utah,  in Banking and  Finance  which was
obtained in 1961.

                                       23
<PAGE>

         James M. Hanavan has been a stockholder in the San Francisco  office of
the law firm of Bullivant Houser Bailey since June 1997. Previously, Mr. Hanavan
was a senior litigation partner with Gordon & Rees, LLP. Mr. Hanavan has over 20
years  experience  specializing  in  the  defense  of  accountants,   attorneys,
financial planners,  ERISA plan  administrators,  real estate brokers, and other
professionals.  Mr. Hanavan has  substantial  experience in real  estate-related
litigation,  as well  as in  providing  business  counseling  and  transactional
services for a variety of clients.  Mr.  Hanavan  received his B.S.  degree from
Pennsylvania  State University in 1967 and his juris doctor degree from American
University, Washington College of Law in 1973.

         Arthur A. Torres is chairman of the California  Democratic  Party since
February  1996. He served as a California  State Senator from 1982 to 1994 and a
California  State  Assemblyman  from  1972 to 1982.  He  serves  on the board of
directors for the California  Planning and  Conservation  League,  Heal the Bay,
Coalition for Clean Air, and Los Angeles Educational  Alliance for Restructuring
Now.  As a  senator,  he served on  numerous  committees  advocating  healthcare
insurance reform,  environmental  protection,  and business. Mr. Torres received
his B.A.  degree from the  University of  California,  Santa Cruz, and his juris
doctor degree from the University of California, Davis-School of Law.

- --------------------------------------------------------------------------------
                         ITEM 6. EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------

         To date,  Montgomery has not compensated any of its executive  officers
or  directors  for  their  services  as  such.  Montgomery  does not  intend  to
compensate  its chief  executive  officer,  Mr.  Maniar,  during  2000.  Certain
executive  officers will be compensated  indirectly through the reimbursement of
allocable costs for certain services provided.

         On December 21,  1999,  it was  determined  that the board of directors
would  receive a $300  honorarium  payment per meeting.  Prior to such date,  no
individuals  received  payment for  services as a director.  Additionally,  each
member of the board of directors  received  options to purchase 10,000 shares of
common stock, such options exercisable through December 31, 2002, at an exercise
price of $3.125  per share.  James T Graeb,  general  counsel to DIMC,  received
options to purchase  5,000  shares of common  stock,  such  options  exercisable
through December 31, 2002, at an exercise price of $3.125 per share.

                                       24
<PAGE>

- --------------------------------------------------------------------------------
             ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------

         Unless  otherwise  indicated,  the terms of the following  transactions
between  related  parties  were  not  determined  as a result  of  arm's  length
negotiations.

Issuance of Common Stock at Organization

         In connection with its  organization,  Montgomery  issued for $0.05 per
share,  or an  aggregate of $15,000,  an  aggregate of 300,000  shares of common
stock to three persons,  including 125,000 shares to Clemons F. (Bud) Walker and
100,000 shares to O. Lee Barnett,  both of whom were then executive officers and
directors.

Public Offering of Common Stock

         In late 1997, Montgomery sold a total of 200,000 shares of common stock
at  $1.00  per  share  for a total  of  $200,000  in  reliance  on  registration
exemptions  provided  by Rule  504  promulgated  under  Regulation  D under  the
Securities Act of 1933.  The offering was made pursuant to an offering  document
dated November 26, 1997.

         Rule  504(a)(3)  provides  that  an  exemption  from  the  registration
provisions of the Securities  Act is not available  under Rule 504 if the issuer
is a  development  stage  company that either has no specific  business  plan or
purpose or that has indicated that its business plan is to engage in a merger or
acquisition  with an  unidentified  company  or  companies,  or other  entity or
person.  Montgomery was a development  stage company at the time of its November
1997  offering  described  above so an  exemption  from  registration  under the
Securities Act for such offering may not have been available.  In the event of a
challenge by an investor  seeking  rescission  of the purchase of  securities in
such offering based on a claim that no exemption was available, Montgomery would
have the burden of establishing  that an exemption was available for the subject
offering.

Refinancing of Properties Conveyed to Montgomery

         Between October 1997 and March 1999, Mr. Maniar refinanced the previous
loans on the four  parcels of  improved  and  unimproved  real  estate that were
thereafter conveyed to Montgomery in June 1999 in exchange for 16,000,000 shares
of common stock and the  assumption  of such related  indebtedness.  Each of the
previous loans  contained a provision that would have required  repayment of the
entire outstanding  principal balance plus accrued interest on conveyance of the
properties to Montgomery.  Prior to such refinancings,  the previous outstanding
loans had principal balances aggregating approximately $10,532,388 at a weighted
average interest rate of 8.30% per annum.  The new loans,  assumed by Montgomery
as  permitted  by the  provisions  of the new  loans  when the  properties  were
conveyed to it, had an aggregate  original  principal  balance of  approximately
$12,400,000 with a weighted  average  interest rate of 7.35%. The  approximately
$1,860,000  by which the net  proceeds  from the new loans  exceeded  the amount
required to repay the loans  refinanced plus  approximately  $100,000 in related
costs was retained by Mr.  Maniar.  Such amount has been reported as part of the
distributions for 1998 and 1997 in the accompanying financial statements.

                                       25
<PAGE>

Issuance of Common Stock to Acquire Properties

         In June 1999,  Montgomery  issued and  delivered  16,000,000  shares of
common stock and assumed approximately $12,400,000 in indebtedness in connection
with the acquisition of four parcels of improved and unimproved real estate from
Mr. Maniar.  As part of the transaction for the conveyance of such properties to
Montgomery,  the board of directors was expanded  from two to five persons,  one
incumbent director, Clemons F. (Bud) Walker resigned to devote his time to other
business interests, and Mr. Maniar and persons designated by him were elected to
the resulting four vacancies. Mr. Maniar was appointed president of Montgomery.

         This acquisition of Montgomery's  current principal properties has been
accounted for as a "reverse  acquisition"  in which Mr. Maniar is treated as the
acquiring company and Montgomery is treated as the acquired company, even though
the  legal  structure  of  and  the  transaction  designates  Montgomery  as the
acquiring company and Mr. Maniar's four properties as the acquired company.  For
a  more  detailed  description  of  the  accounting  treatment,   see  "ITEM  2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION."

         The terms of the foregoing  transaction were the result of arm's length
negotiations  between  Montgomery's  management  and board of directors  and Mr.
Maniar.  The board of directors  of  Montgomery  concluded  that the issuance of
16,000,000 shares of common stock in exchange for the properties acquired was in
the best interest of Montgomery  and its  stockholders  in view of the equity in
such  properties as reflected by the amount by which the  $22,565,000  aggregate
appraised market value (now $23,340,000 based on recent  appraisals  obtained by
Montgomery)  exceeded the  approximately  $12,400,000 in aggregate  indebtedness
assumed  and the  prospects  and  opportunities  that such  acquisition  and the
related expertise and experience of new management afforded Montgomery.

Promissory Notes to Stockholder

         Montgomery  agreed  to  pay  the  closing  costs  associated  with  the
acquisition of the properties from Mr. Maniar.  In order to allow  Montgomery to
maintain its liquidity, Mr. Maniar did not demand immediate  reimbursement,  but
instead agreed to advance $80,000 of said costs. Montgomery issued to Mr. Maniar
a promissory note in the amount of $80,000 bearing  interest at 10% per annum as
repayment of the amount advanced. The promissory note was paid in full in 1999.

         On March 27, 2000,  Montgomery executed a promissory note in the amount
of  $100,000  in favor of Mr.  Maniar.  Montgomery  was  required  to reduce the
principal  amount of the loan on the Eccles  Project in favor of Redwood Bank by
$100,000.  Mr.  Maniar  agreed to loan  Montgomery  these funds at 10% interest,
payable in one (1) year.  Montgomery  elected to borrow  this money  rather than
reduce its working capital.

Reimbursement to DIMC for Office Use and Administrative Support

         Montgomery   obtains   the  use  of  office   facilities   and  related
administrative support from DIMC, a corporation owned by Mr. Maniar,  president,
director, and principal stockholder of Montgomery.  DIMC's executive offices are
located  at  400  Oyster  Point  Boulevard,  Suite  415,  South  San  Francisco,
California.   In   addition,   Montgomery   reimburses   DIMC  for  the  use  of
communications  and data  processing  systems,  secretarial  and  administrative
services,  office supplies,  and related support at their approximate  allocable
direct  cost,  as estimated by DIMC,  with a minimum  monthly  payment of $7,500
(such  minimum  monthly  payment  to be  increased  to  $10,000 at June 2000 and
$15,000  at June  2001).

                                       26
<PAGE>

Management  estimates  that the total amount to be reimbursed to DIMC for office
use and administrative support during 1999 will not exceed $52,500.

         Montgomery uses DIMC's professional property management and development
staff, including attorneys,  accountants,  engineers, and similar professionals,
as  determined by the  management of Montgomery to be needed in connection  with
its business  activities,  subject to  coordination  with DIMC.  Montgomery will
reimburse DIMC its direct costs for such services,  including  allocable payroll
burdens,  employee benefits,  and related costs. Such costs will vary, depending
on the nature and extent of services  actually  required by  Montgomery.  If the
proposed sale or exchange of the Eccles Project or a similar  transaction is not
completed  and  Montgomery  determines to proceed with  development,  Montgomery
estimates  that costs  incurred for such  purposes  could range from $400,000 to
$500,000,  unless unusual or  extraordinary  development  problems or delays are
encountered,  in which case amounts actually reimbursed may be larger.  Further,
Montgomery  will  reimburse  DIMC for  property  leasing and related  management
services in connection  with  re-leasing any of  Montgomery's  properties on the
expiration or termination of any existing lease.

         Amounts   reimbursed   by   Montgomery  to  DIMC  under  the  foregoing
arrangements may include reimbursement of salaries to persons who may also serve
as officers and directors of Montgomery.

Conflicts of Interest in Future Transactions

         In  future  transactions  between  the  Company  and one or more of its
officers or directors,  an entity in which such officers or directors also serve
as officers or directors, or in which they have a financial interest, the common
or interested  director is obligated to disclose such full  circumstances to the
board of  directors  who will then  consider  the terms of the  transaction  and
determine whether it is in the best interest of and fair to Montgomery,  without
the participation or vote of the common or interested director.

- --------------------------------------------------------------------------------
                       ITEM 8. DESCRIPTION OF SECURITIES
- --------------------------------------------------------------------------------

         Montgomery is authorized  to issue  80,000,000  shares of common stock,
$0.001 par value; and 20,000,000 shares of preferred stock, $0.001 par value.

Common Stock

         As  of  the  date  of  this  registration  statement,   Montgomery  had
16,500,000 shares of common stock issued and outstanding.  The holders of common
stock are  entitled to one vote per share on each matter  submitted to a vote at
any  meeting of  stockholders.  Holders of common  stock do not have  cumulative
voting rights,  and therefore,  a majority of the outstanding shares voting at a
meeting of stockholders are able to elect the entire Board of Directors,  and if
they do so, minority  stockholders would not be able to elect any members to the
Board of Directors.  Montgomery's  bylaws  provide that a majority of the issued
and  outstanding  shares of Montgomery  constitutes  a quorum for  stockholders'
meetings,  except with respect to certain matters for which a greater percentage
quorum is required by statute.

         Stockholders  of  Montgomery  have  no  preemptive  rights  to  acquire
additional shares of common stock or other  securities.  The common stock is not
subject to redemption and carries no subscription or

                                       27
<PAGE>

conversion  rights.  In the event of liquidation  of  Montgomery,  the shares of
common  stock  are  entitled  to  share   equally  in  corporate   assets  after
satisfaction of all liabilities and the payment of any liquidation preferences.

         Holders of common stock are  entitled to receive such  dividends as the
Board of Directors may from time to time declare out of funds legally  available
for the payment of  dividends.  Montgomery  seeks  growth and  expansion  of its
business  through the  reinvestment of profits,  if any, and does not anticipate
that it will pay dividends on the common stock in the foreseeable future.

Preferred Stock

         Under Montgomery's articles of incorporation, the board of directors is
authorized,  without  stockholder  action,  to issue up to 20,000,000  shares of
preferred  stock in one or more  series  and to fix the  number  of  shares  and
rights,  preferences and limitations of each series.  Among the specific matters
that may be  determined  by the board of directors  are the dividend  rate,  the
redemption price, if any,  conversion  rights, if any, the amount payable in the
event of any voluntary  liquidation or  liquidation  of the Company,  and voting
rights, if any.

Penny Stock

         The Securities and Exchange  Commission has promulgated rules governing
over-the-counter  trading  in penny  stocks,  defined  generally  as  securities
trading below $5 per share that are not quoted on a national securities exchange
or Nasdaq or which do not meet other  substantive  criteria.  Under such  rules,
Montgomery's  common stock is regulated as a penny stock. As a penny stock,  the
common stock is subject to  regulations  that impose  additional  sales practice
requirements  on  broker-dealers  who sell such securities to persons other than
established  customers and accredited  investors,  generally  institutions  with
assets  in  excess  of  $5,000,000  or  individuals  with net worth in excess of
$1,000,000 or annual income  exceeding  $200,000 or $300,000  jointly with their
spouse.  For  transactions  covered by the rule, the  broker-dealer  must make a
special suitability determination for the purchaser and transaction prior to the
sale.  Consequently,  the rule may affect the ability of  broker-dealers to sell
securities  of  Montgomery  and may also  affect the  ability of  purchasers  of
Montgomery's common stock to sell their shares in the secondary market. This may
also cause fewer  broker-dealers  willing to make a market and it may affect the
level of news coverage received by Montgomery.

         Further, if the price of the common stock is below $5 per share and the
issuer does not have  $2,000,000 or more in net tangible assets or is not listed
on a registered national  securities exchange or Nasdaq,  sales of such stock in
the secondary trading market are subject to certain additional rules promulgated
by the  Securities  and  Exchange  Commission.  Montgomery's  stock is currently
subject to these additional rules.  These rules generally  require,  among other
things,  that  brokers  engaged in  secondary  trading of penny  stocks  provide
customers with written  disclosure  documents,  monthly statements of the market
value of penny stocks, disclosure of the bid and asked prices, and disclosure of
the  compensation  to the  broker-dealer  and the  salesperson  working  for the
broker-dealer  in connection with the  transaction.  These rules and regulations
may  affect the  ability  of  broker-dealers  to sell  Montgomery's  securities,
thereby  effectively  limiting the liquidity of Montgomery's  securities.  These
rules may also adversely  affect the ability of persons who acquire common stock
of Montgomery to resell their securities in any trading market that may exist at
the time of such intended sale.

                                       28
<PAGE>

                                    PART II

- --------------------------------------------------------------------------------
  ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
                          RELATED STOCKHOLDER MATTERS
- --------------------------------------------------------------------------------
Limited Trading Market

         Montgomery  completed  a public  offering  of 200,000  shares of common
stock in  December  1997,  to  approximately  25  purchasers  in  Nevada  and 25
purchasers outside of the United States.  Since approximately  January 20, 1998,
Montgomery's common stock has been quoted on the OTCEBB under the symbol "MGRY."
On  January  14,  2000,  Montgomery's  stock  symbol  was  appended  with an "E"
symbolizing that as of said date, Montgomery had not registered its common stock
under the Securities  and Exchange Act of 1934, as required by recently  adopted
regulations.

         There  has  been  no   established,   consistent   trading  market  for
Montgomery's   common  stock  at  any  time.   Quotations   are  published  only
intermittently.  Therefore,  there  is no  reliable  information  from  which to
present data respecting regular trading prices and market activity. As a result,
the trading  volumes and prices for  Montgomery's  common  stock are expected to
fluctuate without regard to the business activities of Montgomery.  There can be
no assurance that a viable trading market will develop for  Montgomery's  common
stock in the future.

         The trading volume of the common stock is extremely limited, reflecting
the small  number of shares  believed by  Montgomery  to be eligible  for public
trading and the limited number of  stockholders.  Montgomery  believes that less
than 200,000 shares of the 16,500,000 currently issued and outstanding shares of
common stock are eligible for sale in any trading  market that may exist for the
common  stock.  This small  number of shares  available  to be  publicly  traded
creates the potential for significant changes in the trading price of the common
stock as a result of relatively  minor  changes in the supply and demand.  It is
likely that trading  prices and volumes for the common  stock will  fluctuate in
the future, without regard to the business activities of Montgomery.

         Only a very  limited  number of  transactions  in the common  stock are
believed  to  have  occurred.  Because  of  the  lack  of  specific  transaction
information  and  Montgomery's  belief  that such  quotations  are  particularly
sensitive to actual or anticipated volume of supply and demand,  Montgomery does
not believe that such quotations are reliable indicators of a trading market for
the common stock. In this limited  market,  brokers  typically  publish no fixed
quotations  to  purchase a minimum  number of shares at a published  price,  but
express  a  willingness  to buy or sell the  securities  and  from  time to time
complete  transactions in the securities at negotiated  prices.  As of April 11,
2000,  the common stock was quoted,  subject to the  foregoing  limitations  and
qualifications, at $3.00 bid.

         As of the date of this registration  statement,  the last reported sale
for the common stock was at $3.25 per share.

                                       29
<PAGE>

         Between  April 23,  1998,  and  February 9, 2000,  the common stock was
traded on the OTCEBB under the symbol  "MGRY."  Since  February  10,  2000,  the
common  stock has been quoted in the "pink  sheets"  published  by the  National
Quotations  Bureau.  There was no public trading market for Montgomery's  common
stock prior to April 23, 1998.  The following  table sets forth the high and low
closing bid quotations for  Montgomery's  common stock as reported on the OTCEBB
or the "pink  sheets," as the case may be, for the periods  indicated,  based on
interdealer  bid  quotations,   without  markup,   markdown,   commissions,   or
adjustments (which may not reflect actual transactions).

                                                         High           Low
                                                      -----------   -----------
   2000
       First Quarter                                   $  3.25      $   2.75

   1999
       Fourth Quarter..............................    $  2.875     $   2.50
       Third Quarter...............................       2.875         2.0625
       Second Quarter..............................       3.0625        2.00
       First Quarter...............................       2.00          1.625

   1998
       Fourth Quarter..............................    $  1.75      $   1.50
       Third Quarter...............................       1.625         1.50
       Second Quarter (commencing April 23, 1998)..       1.625         1.00

         Montgomery estimates that as of April 11, 2000, it had approximately 47
stockholders of record.

Penny Stock Regulations

         Montgomery's  stock  is  presently  regulated  as  a  penny  stock  and
broker-dealers  will be  subject to such  regulations  which  impose  additional
requirements on Montgomery and on broker-dealers  who want to publish quotations
or make a market in the  Montgomery  common stock.  See "ITEM 8.  DESCRIPTION OF
SECURITIES."

Dividend Policy

         Montgomery  has never paid cash  dividends  on the common  stock or its
preferred  stock  and does not  anticipate  that it will  pay  dividends  in the
foreseeable future.  Montgomery  currently intends to continue a policy of using
retained earnings primarily for the expansion of its business.

Transfer Agent

         Montgomery's  registrar and transfer agent is Silver State  Registrar &
Transfer Corp., 3541 Summer Estates Circle, Salt Lake City, Utah 84121.

                                       30
<PAGE>

- --------------------------------------------------------------------------------
                           ITEM 2. LEGAL PROCEEDINGS
- --------------------------------------------------------------------------------

         Montgomery  is not a party to, and its  properties  are not the subject
of, any material pending legal  proceedings,  and no material legal  proceedings
have been threatened by Montgomery or, to the best of its knowledge, against it.

- --------------------------------------------------------------------------------
             ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
- --------------------------------------------------------------------------------

         None.


- --------------------------------------------------------------------------------
                ITEM 4. RECENT SALES ON UNREGISTERED SECURITIES
- --------------------------------------------------------------------------------

         Since inception,  Montgomery has sold securities  without  registration
under  the  Securities  Act on the  terms  and  circumstances  described  in the
following paragraphs.

         In connection with the organization of Montgomery,  it issued for $0.05
per share, or an aggregate of $15,000,  an aggregate of 300,000 shares of common
stock to three persons,  including 125,000 shares to Clemons F. (Bud) Walker and
100,000 shares to O. Lee Barnett,  both of whom were then executive officers and
directors and accredited  investors,  as defined under the  Securities  Act, and
Delta Financial  Resources.  Delta Financial Resources  ("Delta"),  George Town,
Cayman  Islands,  and British  West  Indies,  acquired its shares at the time of
incorporation of Montgomery. Delta signed a subscription agreement in connection
with this  transaction,  confirming  that it was a  sophisticated  investor with
training and  experience in financial and investment  matters,  was able to bear
the risks of this  investment,  and was  acquiring  the stock for  investment as
"restricted  securities." No offers were made to any other persons in connection
with the transaction.

         In May 1999, Montgomery issued 16,000,000 shares of common stock to Mr.
Dinesh Maniar,  subject to a stop transfer  instruction which was removed at the
closing  on  June 8,  1999.  At the  closing  Montgomery  assumed  approximately
$12,400,000 in  indebtedness  in connection with the acquisition of four parcels
of improved and unimproved real estate from Mr. Maniar with fair market value by
third-party  appraisals  between  September  1998 and January  1999  aggregating
$23,340,000  ($22,565,000  at the  time  of the  transaction).  As  part  of the
transaction  for the conveyance of such  properties to Montgomery,  the board of
directors  was  expanded  from  two to  five  persons,  one  incumbent  director
resigned,  and Mr.  Maniar and  persons  designated  by him were  elected to the
resulting four vacancies. Mr. Maniar was appointed president of Montgomery.  Mr.
Maniar is an accredited investor, as defined under the Securities Act.

         The securities  issued in the transactions  described above were issued
in reliance on the  exemption  from the  registration  and  prospectus  delivery
requirements  of the  Securities  Act provided in ss. 4(2) thereof.  Each of the
persons or entities  acquiring the securities  acknowledged  that the securities

                                       31
<PAGE>

were  "restricted  securities" as defined in rule 144 under the Securities  Act;
that such shares could not be transferred  without  registration or an available
exemption therefrom,  that such purchaser was required to bear the economic risk
of the investment for an indefinite  period,  and that Montgomery would restrict
the transfer of the  securities in  accordance  with such  representations.  The
certificates  representing the foregoing shares bear an appropriate  restrictive
legend conspicuously on their face, and stop transfer instructions were noted on
Montgomery's stock transfer records. No underwriter participated in any sales.

         In December 1997,  Montgomery  sold a total of 200,000 shares of common
stock  at  $1.00  per  share  for  a  total  of  $200,000  to  approximately  25
stockholders  in Nevada  and 25  stockholders  outside  the United  States.  The
securities were sold pursuant to a disclosure  document dated November 26, 1997,
which  contained  certain  information  about  Montgomery and the offering.  The
public  offering was  completed in reliance on the exemption  from  registration
provided by Rule 504 promulgated under the Securities Act.

         Montgomery  believes the  exemption  provided by Rule 504 was available
for the  offering  because of the  following  circumstances:  (i) the  aggregate
offering  price,  when  integrated  with all sales  within the  previous  twelve
months,  did not  exceed  $1,000,000;  (ii)  Montgomery  was not  subject to the
reporting  requirements of section 13 or 15(d) of the Securities Exchange Act of
1934,  as amended;  (iii)  Montgomery  was not an investment  company;  and (iv)
although  Montgomery was a development  stage company,  it asserts that it had a
specific  business  plan or purpose  of  managing  and  acquiring  an  ownership
interest in commercial and industrial income producing real estate.

         Rule  504(a)(3)  provides  that  an  exemption  from  the  registration
provisions of the Securities  Act is not available  under Rule 504 if the issuer
is a  development  stage  company that either has no specific  business  plan or
purpose or that has indicated that its business plan is to engage in a merger or
acquisition  with an  unidentified  company  or  companies,  or other  entity or
person.  Montgomery was a development  stage company at the time of its November
1997  offering  described  above so an  exemption  from  registration  under the
Securities Act for such offering may not have been available.  In the event of a
challenge by an investor  seeking  rescission  of the purchase of  securities in
such offering based on a claim that no exemption was available, Montgomery would
have the burden of establishing  that an exemption was available for the subject
offering.

                                       32
<PAGE>

- --------------------------------------------------------------------------------
               ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
- --------------------------------------------------------------------------------

         Montgomery's articles of incorporation contain provisions providing for
the  indemnification  of officers and directors by Montgomery to the full extent
permitted by Nevada corporate law.

                                    PART F/S

         The  financial  statements of  Montgomery  Realty Group,  including the
auditors' report, are included  beginning at page F-1 immediately  following the
signature page of this report.

                                    PART III

               ITEMS 1 AND 2. INDEX TO AND DESCRIPTION OF EXHIBITS
<TABLE>
<CAPTION>

     SEC        Exhibit
  Reference      Number                           Title of Document                                  Location
   Number
- ------------------------- -------------------------------------------------------------------   -------------------
Articles of  Incorporation and Bylaws
<S>           <C>         <C>                                                                   <C>
     3         3.01       Articles of  Incorporation                                            This Filing
     3         3.02       Amendment to Articles of Incorporation                                This Filing
     3         3.03       Bylaws                                                                This Filing

Instruments Defining the Rights of Security Holders
     4         4.01       Articles of  Incorporation                                            See Item 3
     4         4.02       Amendment to Articles of Incorporation                                See Item 3
     4         4.03       Bylaws                                                                See Item 3

Material Contracts
     10        10.01      Purchase and Sale  Agreement  dated  effective May 5, 1999, by and    This Filing
                          between  Dinesh Maniar and Montgomery Realty Group, Inc.
     10        10.02      Lease  Agreement  dated  April 21,  1988,  by and  between  Dinesh    This Filing
                          Maniar,  landlord,  and John W. Keker, P. C., William A. Brockett,
                          P.C.,  Robert A. Van Nest,  P.C. and  individually  John W. Keker,
                          Wi11am A Brockett,  Robert A. Van Nest, R. Elaine  Leitner,  David
                          J.  Meadows,  Jeffrey R.  Chanin,  and Gary M. Cohen,  and Keker &
                          Brockett,  a California  General  Tenants,  regarding the lease of
                          real property commonly known as Keker & Van Nest Office Building.
     10        10.03      Lease  Agreement  dated  July  20,  1988  by and  between  Pacific    This Filing
                          Quadrant  Development  Company, a California general  partnership,
                          as landlord and Wickes Companies,  Inc., a Delaware corporation as
                          tenant  regarding  the  lease of real  property  known as  Orchard
                          Supply Shopping Center.

                                       33
<PAGE>

     SEC        Exhibit
  Reference      Number                           Title of Document                                  Location
   Number
- ------------------------- -------------------------------------------------------------------   -------------------
<S>           <C>         <C>                                                                   <C>
     10        10.04      Agreement of  Assignment  and  Assumption  of Leases dated June 2,    This Filing
                          1999 by and between  Dinesh  Maniar and  Montgomery  Realty Group,
                          Inc  regarding  the real  property  commonly  known as the Keker &
                          Van Nest Office Building.
     10        10.05      Agreement of  Assignment  and  Assumption  of Leases dated June 2,    This Filing
                          1999 by and between  Dinesh  Maniar and  Montgomery  Realty Group,
                          Inc  regarding  the real  property  commonly  known as the Orchard
                          Supply Shopping Center.
     10        10.06      Contact  for  Management  Agreement  dated  June 9,  1999,  by and    This Filing
                          between Montgomery Realty Group, Inc., and Diversified  Investment
                          and  Management  Corporation,   relating  to  management  services
                          provided to Montgomery.
     10        10.07      Promissory  Note  dated June 2, 1999,  in the  original  principal    This Filing
                          amount of $80,000  payable by Montgomery  Realty  Group,  Inc., to
                          Dinesh Maniar.
     10        10.08      Promissory  Note dated March 27, 2000,  in the original  principal    This Filing
                          amount of $100,000  payable by Montgomery  Realty Group,  Inc., to
                          Dinesh Maniar.

Financial Data Schedule
     27        27.01      Financial Data Schedule                                               This Filing
</TABLE>

- --------------------------------------------------------------------------------
                                   SIGNATURES
- --------------------------------------------------------------------------------

         Pursuant to the  requirements of section 12 of the Securities  Exchange
Act of 1934, the registrant  has duly caused this  registration  statement to be
signed on its behalf by the undersigned, thereunto duly authorized.


Dated:  April 13, 2000.                          MONTGOMERY REALTY GROUP, INC.
                                                 (Registrant)

                                                 By /s/ Dinesh Maniar
                                                    --------------------------
                                                    Dinesh Maniar, President
                                       34
<PAGE>

MONTGOMERY REALTY GROUP, INC.

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

                                                                       Page

INDEPENDENT AUDITORS' REPORT                                            F-2

FINANCIAL STATEMENTS:

   Balance Sheets - December 31, 1999 and 1998                          F-3

   Statements of Operations - Years Ended December 31, 1999 and 1998    F-4

   Statement of Stockholders' Deficit - Years Ended December 31, 1999
     and 1998                                                           F-5

   Statements of Cash Flows - Years Ended December 31, 1999 and 1998    F-6

   Notes to Financial Statements                                        F-7



                                      F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
  Montgomery Realty Group, Inc.:

We have audited the accompanying balance sheets of Montgomery Realty Group, Inc.
(the "Company") as of December 31, 1999 and 1998, and the related  statements of
operations, stockholders' deficit and cash flows for the years then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our  opinion,  such  financial  statements  present  fairly,  in all material
respects,  the  financial  position of the  Company as of December  31, 1999 and
1998,  and the results of its  operations  and its cash flows for the years then
ended in conformity with generally accepted accounting principles.




DELOITTE & TOUCHE LLP

San Francisco, California
January 21, 2000

                                      F-2
<PAGE>
<TABLE>
<CAPTION>
MONTGOMERY REALTY GROUP, INC.

BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
- ------------------------------------------------------------------------------------------------------------------------
                                                                                               1999           1998
ASSETS

PROPERTY:
<S>                                                                                          <C>             <C>
  Land                                                                                       $ 2,699,500     $ 2,699,500
  Building                                                                                     5,040,000       5,040,000
  Improvements                                                                                 3,279,384       3,257,784
                                                                                             -----------     -----------
           Total                                                                              11,018,884      10,997,284

  Less accumulated depreciation                                                               (2,505,378)     (2,284,673)
                                                                                             -----------     -----------

           Property, net                                                                       8,513,506       8,712,611

CASH                                                                                             134,361             130

TENANT RECEIVABLES                                                                                31,137           3,527

PREPAID EXPENSES AND OTHER ASSETS                                                                 36,949           5,884

DEFERRED LEASE COMMISSIONS, Net of accumulated amortization of
  $3,081 and $146,402, respectively                                                               13,995          23,667

DEFERRED LOAN COSTS, Net of accumulated amortization of $25,384
  and $32,341, respectively                                                                      134,906         137,260

DEFERRED RENT RECEIVABLE                                                                          40,425          74,321

DEFERRED TAX ASSET                                                                             1,492,435            -
                                                                                             -----------     -----------
TOTAL ASSETS                                                                                 $10,397,714     $ 8,957,400
                                                                                             ===========     ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES:
  Notes payable                                                                              $12,338,166     $12,376,326
  Accounts payable                                                                                67,292          52,170
  Accrued interest                                                                                68,112          49,835
  Security deposits and prepaid rent                                                             103,150          43,453
                                                                                             -----------     -----------
TOTAL LIABILITIES                                                                             12,576,720      12,521,784
                                                                                             -----------     -----------

COMMITMENTS AND CONTINGENCIES (Note 5)

STOCKHOLDERS' DEFICIT:
  Common  stock,  $0.001 par value;  authorized  80,000,000  shares;  issued and
    outstanding, 16,500,000 shares at December 31, 1999,
    16,000,000 shares at December 31, 1998                                                        16,500          16,000
  Preferred stock, $0.001 par value; authorized 20,000,000 shares; no
    shares issued and outstanding at December 31, 1999 and 1998                                     -               -
  Additional capital                                                                           1,692,742               -
  Accumulated deficit                                                                         (3,888,248)     (3,580,384)
                                                                                             -----------     -----------
TOTAL STOCKHOLDERS' DEFICIT                                                                   (2,179,006)     (3,564,384)
                                                                                             -----------     -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                                  $10,397,714     $ 8,957,400
                                                                                             ===========     ===========
</TABLE>

See notes to the financial statements.


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
MONTGOMERY REALTY GROUP, INC.

STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999 AND 1998
- -----------------------------------------------------------------------------------------------------------------------

                                                                                                1999             1998
REVENUES:
<S>                                                                                          <C>             <C>
  Rent                                                                                       $ 1,367,749     $ 1,316,285
  Other                                                                                            2,228             509
                                                                                             -----------     -----------
           Total revenues                                                                      1,369,977       1,316,794
                                                                                             -----------     -----------

EXPENSES:

  Real estate taxes                                                                               99,288         105,978
  Utilities                                                                                       11,900          12,799
  Repairs and maintenance                                                                         10,559           6,260
  General building                                                                                16,383          17,302
  Administration                                                                                 136,178          67,699
  Insurance                                                                                       20,109           9,296
  Management fee                                                                                  73,355          41,604
  Depreciation                                                                                   220,705         220,345
  Amortization (Note 1)                                                                           54,483         109,221
                                                                                             -----------     -----------
           Total expenses                                                                        642,960         590,504
                                                                                             -----------     -----------

INCOME BEFORE INTEREST EXPENSE, INCOME TAXES AND
  EXTRAORDINARY ITEM                                                                             727,017         726,290

INTEREST EXPENSE, NET                                                                           (925,004)       (934,264)
                                                                                             -----------     -----------

LOSS BEFORE EXTRAORDINARY ITEM AND INCOME TAXES                                                 (197,987)       (207,974)

EXTRAORDINARY ITEM, EARLY EXTINGUISHMENT OF DEBT                                                    -           (153,077)
                                                                                             -----------     -----------

LOSS BEFORE INCOME TAXES                                                                        (197,987)       (361,051)

DEFERRED INCOME TAX BENEFIT                                                                       43,085            -
                                                                                             -----------     -----------
NET LOSS                                                                                     $  (154,902)    $  (361,051)
                                                                                             ===========     ===========

LOSS PER COMMON SHARE BEFORE EXTRAORDINARY
  ITEM, BASIC AND DILUTED                                                                    $    (0.010)   $     (0.013)

EXTRAORDINARY ITEM PER COMMON SHARE, BASIC
  AND DILUTED                                                                                       -             (0.010)
                                                                                             -----------     -----------
NET LOSS PER COMMON SHARE, BASIC AND DILUTED                                                 $    (0.010)    $    (0.023)
                                                                                             ===========     ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES,
  BASIC AND DILUTED                                                                           16,282,967      16,000,000
                                                                                             ===========     ===========
</TABLE>

See notes to the financial statements.

                                      F-4
<PAGE>
<TABLE>
<CAPTION>
MONTGOMERY REALTY GROUP, INC.

STATEMENTS OF STOCKHOLDERS' DEFICIT
YEARS ENDED DECEMBER 31, 1999 AND 1998
- ----------------------------------------------------------------------------------------------------------------------------

                                        Shares of
                                          Common         Common      Additional          Accumulated
                                          Stock          Stock         Capital              Deficit            Total

<S>                                       <C>            <C>         <C>                 <C>              <C>
BALANCE, January 1, 1998                   16,000,000     $ 16,000                        $(1,574,475)      $(1,558,475)

DISTRIBUTIONS                                                                              (1,644,858)       (1,644,858)

NET LOSS                                                                                     (361,051)         (361,051)
                                           ----------     --------                        -----------       -----------

BALANCE, December 31, 1998                 16,000,000       16,000                         (3,580,384)       (3,564,384)

DISTRIBUTIONS
  January 1, 1999 through
  June 8, 1999                                                                               (152,962)         (152,962)

CONTRIBUTIONS                                                             $ 28,892                               28,892

REVERSE ACQUISITION OF
  MONTGOMERY REALTY
  GROUP, INC., June 8, 1999                   500,000          500         214,500              -               215,000

REVERSE ACQUISITION -
  TAX BENEFIT                                                            1,449,350                            1,449,350

NET LOSS                                                                                     (154,902)         (154,902)
                                           ----------     --------     -----------        -----------       -----------
BALANCE, December 31, 1999                 16,500,000     $ 16,500     $ 1,692,742        $(3,888,248)      $(2,179,006)
                                           ==========     ========     ===========        ===========      ============
</TABLE>

See notes to the financial statements.


                                      F-5
<PAGE>
<TABLE>
<CAPTION>

MONTGOMERY REALTY GROUP, INC.

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999 AND 1998
- -----------------------------------------------------------------------------------------------------------------------
                                                                                          1999              1998

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                      <C>              <C>
  Net loss                                                                                  $(154,902)       $ (361,051)
  Depreciation and amortization                                                               275,188           329,566
  Deferred rent receivable                                                                     33,896            47,092
  Deferred taxes                                                                               43,085              -
  Write-off of deferred loan costs                                                               -              101,558
  Adjustments to reconcile net loss to net cash provided by
    operating activities:
    Tenant receivables                                                                        (27,610)              527
    Prepaid expenses and other assets                                                         (31,065)             (910)
    Accounts payable                                                                           15,122            25,895
    Accrued interest                                                                           18,277           (78,184)
    Security deposits and prepaid rent                                                         59,697           (53,026)
                                                                                            ---------      ------------
           Net cash provided by operating activities                                          145,518            11,467
                                                                                            ---------      ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property                                                                       (21,600)             -
  Payment of lease commissions and loan costs                                                 (42,457)         (210,417)
                                                                                            ---------      ------------
           Net cash used in investing activities                                              (64,057)         (210,417)
                                                                                            ---------      ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of notes payable                                                      52,990        12,475,063
  Payments on notes payable                                                                   (91,150)      (10,631,125)
  Issuance of common stock                                                                    215,000              -
  Distributions                                                                              (152,962)       (1,644,858)
  Additional capital contribution                                                              28,892              -
                                                                                            ---------      ------------
           Net cash provided by financing activities                                           52,770           199,080
                                                                                            ---------      ------------
INCREASE IN CASH                                                                              134,231               130

CASH, BEGINNING OF YEAR                                                                           130               -
                                                                                            ---------      ------------
CASH, END OF YEAR                                                                           $ 134,361      $        130
                                                                                            =========      ============
</TABLE>

See notes to the financial statements.


                                      F-6
<PAGE>

MONTGOMERY REALTY GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

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

1.    ORGANIZATION, BASIS OF PRESENTATION, AND SUMMARY OF
      SIGNIFICANT ACCOUNTING POLICIES

      Organization and Ownership  Structure - Montgomery Realty Group, Inc. (the
      "Company")  was  formed on August  20,  1997 and did not have  significant
      operations  from its formation  through June 7, 1999. On June 8, 1999, the
      Company  completed the acquisition of four properties in the San Francisco
      Bay Area (the  "Properties")  held by Dinesh  Maniar,  a private  investor
      ("Mr. Maniar"),  in exchange for 16,000,000 shares of the Company's common
      stock  and  the  assumption  of  the   outstanding   indebtedness  of  the
      Properties.  The acquisition of the Properties has been accounted for as a
      "reverse   acquisition"  and   recapitalization   whereby,  for  financial
      reporting  purposes,  the Properties  acquired the Company.  See "Basis of
      Presentation," below.

      The Properties are summarized as follows:
<TABLE>
<CAPTION>
                                                                                                      Maniar
                         Name                       Location                     Use             Acquisition Date

<S>                                       <C>                         <C>                             <C>
      Keker & Van Nest Office
        Building                           San Francisco, CA           Professional offices            1980
      Orchard Supply Shopping
        Center                             San Ramon, CA               Retail shopping center          1991
      San Ramon Retail Center              San Ramon, CA               Retail shopping center          1991
      Eccles Project                       South San Francisco, CA     Land                            1980
</TABLE>

      Basis of  Presentation  - The  acquisition of the Properties was accounted
      for as a "reverse  acquisition"  whereby,  for  accounting  purposes,  the
      Properties  acquired the Company  under the purchase  method of accounting
      and,  due to  the  lack  of  significant  prior  Company  operations,  was
      substantially recorded as a recapitalization.  Accordingly, the historical
      financial statements have been restated after giving effect to the June 8,
      1999  acquisition  of the  Company.  The  financial  statements  have been
      prepared to give retroactive effect of the reverse  acquisition  completed
      on June 8, 1999 and represent the operations of the Properties. Consistent
      with reverse  acquisition  accounting:  (i) all of the Properties' assets,
      liabilities  and  accumulated  deficit  are  reflected  at their  combined
      historical  cost (as the  accounting  acquirer)  and (ii) the  preexisting
      outstanding shares of the Company (the accounting  acquiree) are reflected
      at their net asset value as if issued on June 8, 1999.  In  addition,  the
      benefit  of  deferred  tax  assets  created  by  the  contribution  of the
      Properties  on June 8,  1999  has been  recorded  as  additional  capital.
      Distributions shown in the accompanying statement of stockholders' deficit
      represent the Properties' cash flows and refinancing  proceeds distributed
      to Mr. Maniar prior to the reverse acquisition.

      Management   Estimates  -  The  preparation  of  financial  statements  in
      conformity  with  generally  accepted   accounting   principles   requires
      management  to make  estimates  and  assumptions  that affect the reported
      amounts of assets and liabilities and disclosure of contingent  assets and
      liabilities  at the dates of the  financial  statements  and the  reported
      amounts of revenues  and expenses  during the  reporting  periods.  Actual
      results could differ from those estimates.

                                      F-7
<PAGE>

      Property is stated at cost.  Depreciation is computed on the straight-line
      method over the estimated useful lives of the assets, which range from ten
      to 40 years.  When the Company concludes that the recovery of the carrying
      value of a property is impaired,  it reduces such  carrying  amount to the
      estimated fair value of the investment.

      Maintenance and minor repairs and replacements are expensed when incurred.

      Impairment of Long-Lived Assets - The Company evaluates the recoverability
      of its long-lived  assets in accordance with SFAS No. 121,  Accounting for
      the  Impairment  of  Long-Lived  Assets  and for  Long-Lived  Assets to be
      Disposed  of.  SFAS No. 121  requires  recognition  of  impairment  losses
      related to long-lived  assets in the event the net carrying  value of such
      assets exceeds the future  undiscounted  cash flows  attributable  to such
      assets.  The Company assesses the impairment of its long-lived assets when
      events or charges in circumstances  indicate that the carrying value of an
      asset may not be recoverable.

      Deferred lease commissions are amortized on a straight-line basis over the
      lives of the related leases.

      Deferred loan costs are amortized on a  straight-line  basis over the term
      of the loan.

      Revenue  Recognition - Rental  revenue is recognized in an amount equal to
      minimum base rent plus fixed rental increases amortized on a straight-line
      basis over the term of the lease.  Differences  between revenue recognized
      and amounts due under the lease  agreement  are recorded as deferred  rent
      receivable in the  accompanying  balance  sheets.  Tenant  recoveries  are
      recognized when earned.

      Stock-Based  Compensation - The Company accounts for stock-based  employee
      compensation  using the  intrinsic  value method  prescribed in Accounting
      Principles Board Opinion No. 25, Accounting for Stock Issued to Employees.
      The Company reports  non-employee  stock-based  compensation in accordance
      with SFAS No. 123, Accounting for Stock-Based Compensation.

      Income taxes are accounted for using the asset and liability method, under
      which  deferred taxes are provided for the temporary  differences  between
      the financial  reporting  basis and the tax basis of the Company's  assets
      and liabilities.  The operations of the Properties have been excluded from
      the  calculation of the tax provision for the period prior to June 8, 1999
      as the income  taxes of such  operations  were the  responsibility  of Mr.
      Maniar.

      Basic and diluted  loss per share are computed by dividing net loss by the
      weighted  average  number of shares  outstanding of 16,282,967 in 1999 and
      16,000,000 in 1998.

                                      F-8
<PAGE>

2.    PROPERTY

      Net book value of the  property at December 31, 1999 and 1998 and the most
      recent appraisal value are as follows:
<TABLE>
<CAPTION>
                                           Net Book Value                Appraisal          Appraisal
             Property                 1999              1998              Value                Date
<S>                                <C>               <C>               <C>               <C>
      Keker & Van Nest Office
        Building                    $3,052,132        $3,172,727        $ 6,750,000        October 1998
      San Ramon Retail Center
        and Orchard Supply                                                                 September 1998/
      Shopping Center                4,921,874         5,000,384          7,640,000          December 1998
      Eccles Project                   539,500           539,500          8,950,000        November 1999
                                    ----------        ----------        -----------
Total                                $8,513,506        $8,712,611       $23,340,000
                                    ===========       ===========       ===========
</TABLE>

        Appraisal values are derived from independent appraisal reports prepared
        by members of the Appraisal Institute. Determination of estimated market
        value involves subjective judgement because the actual market value of a
        real estate investment can be determined only by negotiation between the
        parties in a sales transaction.

        The San Ramon Retail Center and Orchard Supply  Shopping Center includes
        the net book values and appraisal  values of both properties as they are
        adjoining properties.

                                      F-9
<PAGE>

3.    NOTES PAYABLE

      Notes payable as of December 31, 1999 and 1998 were as follows:

<TABLE>
<CAPTION>
                                                                           1999              1998

<S>                                                                  <C>                 <C>
        Promissory  note with a bank in the  principal  amount of
          $4,800,000,  dated  November  25,  1998.  The  note  is
          secured  by deeds of trust and  assignment  of rents on
          Keker & Van Nest Office  Building and bears interest at
          the fixed  rate of 6.67% per annum  through  January 1,
          2009.   Monthly  interest  and  principal  payments  of
          $32,251 are required  through  January 1, 2009 when the
          remaining  principal  and accrued  interest are due and
          payable.                                                     $ 4,756,125        $ 4,800,000

        Line of  credit  with a bank for a maximum  borrowing  of
          $2,000,000,  dated March 23, 1998.  The line is secured
          by deeds of trust  and  assignment  of rents on  Eccles
          Project and bears  interest at the prime rate plus 1.0%
          (9.50% at December 31, 1999). Monthly interest payments
          are  required   through   March  23,  2000.                    1,999,000          1,946,010

        Promissory  note with a bank in the  principal  amount of
          $5,100,000, dated July 22, 1998. The note is secured by
          deeds  of trust  and  assignment  of  rents on  Orchard
          Supply  Shopping Center and bears interest at the fixed
          rate of 7.05% per annum through August 1, 2008. Monthly
          interest and principal payments of $34,102 are required
          through August 1, 2008 when the remaining principal and
          accrued   interest  are  due  and  payable.                    5,038,041          5,085,316

        Promissory  note with a bank in the  principal  amount of
          $545,000, dated September 29, 1998. The note is secured
          by deeds of trust and  assignment of rents on San Ramon
          Retail Center and note bears interest at the fixed rate
          of 11%  per  annum  through  June  1,  2000,  when  the
          principal  and accrued  interest  are due and  payable.
                                                                           545,000            545,000
                                                                       -----------        -----------
        Total                                                          $12,338,166        $12,376,326
                                                                       ===========        ===========
</TABLE>

      On June 2,  1999,  the  Company  entered  into a  shareholder  loan in the
      principal  amount of $80,000.  The note bore interest at the fixed rate of
      10.00% per annum  through  December  1, 1999.  The note was repaid in full
      upon maturity.

      Interest  paid on the notes in 1999 and 1998 was $911,436 and  $1,017,177,
      respectively.

                                      F-10
<PAGE>

      Principal installments due on the notes payable subsequent to December 31,
      1999 are as follows:

          2000                                                      $ 2,642,642
          2001                                                          105,654
          2002                                                          113,165
          2003                                                          120,519
          2004                                                          129,088
          Thereafter                                                  9,227,098
                                                                    -----------
          Total                                                     $12,338,166
                                                                    ===========

      Losses  resulting from early  extinguishment  of debt,  such as prepayment
      penalties  and  write-offs  of deferred  loan  costs,  are  recognized  as
      extraordinary items in the accompanying statements of operations.

4.    OPERATING LEASES WITH TENANTS

      The rental operations  include leasing  commercial office and retail space
      to tenants under non-cancelable  operating leases. As of December 31, 1999
      and 1998, two tenants occupied 90% of leasable square feet and represented
      87% and 88% of total 1999 and 1998 revenue, respectively.

      Minimum future rent under  noncancelable  operating  leases extending past
      December 31, 1999 are summarized as follows:

          2000                                                      $ 1,359,000
          2001                                                        1,345,000
          2002                                                        1,331,000
          2003                                                        1,328,000
          2004                                                        1,264,000
          Thereafter                                                  4,369,000
                                                                    -----------
          Total                                                     $10,996,000
                                                                    ===========

5.    TRANSACTIONS WITH AFFILIATES AND COMMITMENTS AND CONTINGENCIES

      The Properties and the Company  entered into  management  agreements  with
      Diversified  Investment and Management  Corporation ("DIMC"), an affiliate
      of Mr. Maniar. The current agreement,  dated June 9, 1999, extends through
      December 31, 2005 and requires management fees to be paid to DIMC equal to
      the greater of 3% of gross  revenues or a fixed amount equal to $7,500 per
      month for the first twelve months, $10,000 per month for the second twelve
      months,  and  $15,000  per  month  thereafter.  Management  fees paid were
      $52,500 and  $41,604 in 1999 and 1998,  respectively.  Accrued  management
      fees of $20,855 are included in accounts payable at December 31, 1999.

6.    STOCK OPTIONS

      In December  1999,  the Company  granted stock options to purchase  55,000
      shares  of  common  stock  exercisable  through  December  31,  2002 at an
      exercise  price of $3.125  per  share.  The  options  were  granted to its
      directors  (50,000 shares) and the general counsel to DIMC (5,000 shares).
      No compensation  expense has been  recognized in the financial  statements
      for the stock  options.  The fair  value of the stock  based  awards is de
      minimus at December 31, 1999.

                                      F-11
<PAGE>

7.    INCOME TAXES

      The Company provides a deferred tax expense or benefit equal to the change
      in the  deferred  tax  assets  during  the year.  Deferred  tax assets and
      liabilities   at  December  31,  1999   related   primarily  to  temporary
      differences  resulting  from differing tax and book bases of fixed assets,
      net operating loss  carryforwards,  and deferred state taxes.  Significant
      components of the Company's net deferred tax balances at December 31, 1999
      were as follows:

          Deferred tax assets:
            Differing bases of fixed assets                         $1,527,889
            Net operating loss carryforwards                            38,461
            Other                                                       92,965
                                                                    ----------
                Total deferred tax assets                            1,659,315
                                                                    ----------
          Deferred tax liabilities:
            Deferred state taxes                                      (112,479)
            Other                                                      (54,401)
                                                                    ----------
                Total deferred tax liabilities                        (166,880)
                                                                    ----------
          Net deferred tax assets                                   $1,492,435
                                                                    ==========


      The 1999 income tax benefit consists of the following:

          Deferred income tax benefit:
            Federal                                                    $37,300
            State                                                        5,785
                                                                       -------
               Total income tax benefit                                $43,085
                                                                       =======


      The  reconciliation  between  the  Company's  1999  effective  tax rate on
      earnings before income taxes and the statutory  federal income tax rate of
      34% was as follows:

          Statutory federal rate                                         34.0%
          State income taxes, net of federal income tax benefit           1.9
          Income excluded from provision                                (14.2)
                                                                        ------
          Effective tax rate                                             21.7%


                                     ******


                                      F-12


                           ARTICLES OF INCORPORATION

                                       OF

                         MONTGOMERY REALTY GROUP, INC.


KNOW ALL MEN BY THESE PRESENTS:

         That  we,  the  undersigned,   have  this  day  voluntarily  associated
ourselves  together for the purpose of forming a Corporation  under and pursuant
to the laws of the State of Nevada, and we do hereby certify that:

ARTICLE I - NAME:  The exact name of this Corporation is:

                         Montgomery Realty Group, Inc.

ARTICLE II - RESIDENT AGENT:

         The Resident Agent of the  Corporation is Max C. Tanner,  Esq., The Law
Offices of Max C. Tanner,  2950 East Flamingo Road,  Suite G, Las Vegas,  Nevada
89121.

ARTICLE III- DURATION:  The Corporation shall have perpetual existence.

ARTICLE IV - PURPOSES:  The purpose, object and nature of the business for which
this Corporation is organized are:

     (a)  To engage in any lawful activity;

     (b)  To carry on such business as may be necessary, convenient, or
          desirable to accomplish the above purposes, and to do all other things
          incidental thereto which are not forbidden by law or by these Articles
          of Incorporation.

ARTICLE V- POWERS:  The powers of the Corporation shall be those powers granted
by 78.060 and 78.070 of the Nevada Revised Statutes under which this corporation
is formed.  In addition, the Corporation shall have the following specific
powers:

     (a)  To elect or appoint officers and agents of the Corporation and to fix
          their compensation;

     (b)  To act as an agent for any individual, association, partnership,
          corporation or other legal entity;

<PAGE>

     (c)  To receive, acquire, hold, exercise rights arising out of the
          ownership or possession thereof, sell, or otherwise dispose of, shares
          or other interests in, or obligations of, individuals, associations,
          partnerships, corporations, or governments;

     (d)  To receive, acquire, hold, pledge, transfer, or otherwise dispose of
          shares of the corporation, but such shares may only be purchased,
          directly or indirectly, out of earned surplus;

     (e)  To make gifts or contributions for the public welfare or for
          charitable, scientific or educational purposes, and in time of war, to
          make donations in aid of war activities.

ARTICLE VI- CAPITAL STOCK:

     Section 1.  Authorized Shares.  The total number of shares which this
     Corporation is authorized to issue is 25,000,000 shares of Capital Stock at
     $.001 par value per share as set forth in subsections (a) and (b) of this
     Section 1 of Article VI.

     (a)  The total number of shares of Common Stock which this Corporation is
          authorized to issue is 20,000,000 shares at $.001 par value per share.

     (b)  The total number of shares of Preferred Stock which this Corporation
          is authorized to issue is 5,000,000 shares at $.001 par value per
          share, which Preferred Stock may contain special preferences as
          determined by the Board of Directors of the Corporation, including,
          but not limited to, the bearing of interest and convertibility into
          shares of Common Stock of the Corporation.

     Section 2.  Voting Rights of Shareholders.   Each holder of the Common
     Stock shall be entitled to one vote for each share of stock standing in his
     name on the books of the Corporation.

     Section 3.  Consideration for Shares.  The Common Stock shall be issued for
     such consideration, as shall be fixed from time to time by the Board of
     Directors.  In the absence of fraud, the judgment of the Directors as to
     the value of any property for shares shall be conclusive.  When shares are
     issued upon payment of the consideration fixed by the Board of Directors,
     such shares shall be taken to be fully paid stock and shall be non-
     assessable.  The Articles shall not be amended in this particular.

     Section 4.  Pre-emptive Rights.  Except as may otherwise be provided by the
     Board of Directors, no holder of any shares of the stock of the
     Corporation, shall have any preemptive right to purchase, subscribe for, or
     otherwise acquire any shares of stock of the Corporation of any class now
     or hereafter authorized, or any securities exchangeable for or convertible
     into such shares, or any warrants or other instruments evidencing rights or
     options to subscribe for, purchase, or otherwise acquire such shares.

<PAGE>

     Section 5.  Stock Rights and Options.  The Corporation shall have the power
     to create and issue rights, warrants, or options entitling the holders
     thereof to purchase from the corporation any shares of its capital stock of
     any class or classes, upon such terms and conditions and at such times and
     prices as the Board of Directors may provide, which terms and conditions
     shall be incorporated in an instrument or instruments evidencing such
     rights.  In the absence of fraud, the judgment of the Directors as to the
     adequacy of consideration for the issuance of such rights or options and
     the sufficiency thereof shall be conclusive.

ARTICLE VII - ASSESSMENT OF STOCK:  The capital stock of this Corporation, after
the amount of the subscription price has been fully paid in, shall not be
assessable for any purpose, and no stock issued as fully paid up shall ever be
assessable or assessed.  The holders of such stock shall not be individually
responsible for the debts, contracts, or liabilities of the Corporation and
shall not be liable for assessments to restore impairments in the capital of the
Corporation.

ARTICLE VIII - DIRECTORS:  For the management of the business, and for the
conduct of the affairs of the Corporation, and for the future definition,
limitation, and regulation of the powers of the Corporation and its directors
and shareholders, it is further provided:

     Section 1.  Size of Board.  The members of the governing board of the
     Corporation shall be styled directors.  The number of directors of the
     Corporation, their qualifications, terms of office, manner of election,
     time and place of meeting, and powers and duties shall be such as are
     prescribed by statute and in the by-laws of the Corporation.  The name and
     post office address of the directors constituting the first board of
     directors, which shall be One (1) in number are:

            NAME                          ADDRESS

            Max C. Tanner                 2950 East Flamingo Road, Suite G
                                          Las Vegas, NV 89121

     Section 2.  Powers of Board.  In furtherance and not in limitation of the
     powers conferred by the laws of the State of Nevada, the Board of Directors
     is expressly authorized and empowered:

     (a)  To make, alter, amend, and repeal the By-Laws subject to the power of
          the shareholders to alter or repeal the By-Laws made by the Board of
          Directors.

     (b)  Subject to the applicable provisions of the By-Laws then in effect, to
          determine, from time to time, whether and to what extent, and at what
          times and places' and under what conditions and regulations, the
          accounts and books of the Corporation, or any of them, shall be open
          to shareholder inspection.  No shareholder shall have any right to
          inspect any of the accounts, books or documents of the Corporation,
          except as permitted by law, unless and until authorized to do so by
          resolution of the Board of Directors or of the Shareholders of the
          Corporation;

<PAGE>

     (c)  To issue stock of the Corporation for money, property, services
          rendered, labor performed, cash advanced, acquisitions for other
          corporations or for any other assets of value in accordance with the
          action of the board of directors without vote or consent of the
          shareholders and the judgment of the board of directors as to value
          received and in return therefore shall be conclusive and said stock
          when issued.  Shall be fully-paid and non-assessable.

     (d)  To authorize and issue, without shareholder consent, obligations of
          the Corporation, secured and unsecured, under such terms and
          conditions as the Board, in its sole discretion, may determine, and to
          pledge or mortgage, as security therefore, any real or personal
          property of the Corporation, including after-acquired property;

     (e)  To determine whether any and, if so, what part, of the earned surplus
          of the Corporation shall be paid in dividends to the shareholders, and
          to direct and determine other use and disposition of any such earned
          surplus;

     (f)  To fix, from time to time, the amount of the profits of the
          Corporation to be reserved as working capital or for any other lawful
          purpose;

     (g)  To establish bonus, profit-sharing, stock option, or other types of
          incentive compensation plans for the employees, including officers and
          directors, of the Corporation, and to fix the amount of profits to be
          shared or distributed, and to determine the persons to participate in
          any such plans and the amount of their respective participations.

     (h)  To designate, by resolution or resolutions passed by a majority of the
          whole Board, one or more committees, each consisting of two or more
          directors, which, to the extent permitted by law and authorized by the
          resolution or the By-Laws, shall have and may exercise the powers of
          the Board;

     (i)  To provide for the reasonable compensation of its own members by By-
          Law, and to fix the terms and conditions upon which such compensation
          will be paid;

     (j)  In addition to the powers and authority herein before, or by statute,
          expressly conferred upon it, the Board of Directors may exercise all
          such powers and do all such acts and things as may be exercised or
          done by the corporation, subject, nevertheless, to the provisions of
          the laws of the State of Nevada, of these Articles of Incorporation,
          and of the By-Laws of the Corporation.

     Section 3.  Interested Directors.  No contract or transaction between this
     Corporation and any of its directors, or between this Corporation and any
     other corporation, firm, association, or other legal entity shall be
     invalidated by reason of the fact that the director of the Corporation has
     a direct or indirect interest, pecuniary or otherwise, in such corporation,
     firm, association, or legal entity, or because the interested director was
     present at the meeting of the Board of Directors which acted upon or in
     reference to such contract or transaction, or because he participated in
     such action, provided that: (1) the interest of each such director shall
     have been disclosed to or known by the Board and a disinterested majority
     of the Board shall have nonetheless ratified and approved such contract or
     transaction (such interested director or directors may be counted in
     determining whether a quorum is present for the meeting at which such
     ratification or approval is given); or (2) the conditions of N.R.S. 78.140
     are met.

<PAGE>

ARTICLE IX - LIMITATION OF LIABILITY OF OFFICERS OR DIRECTORS:  The personal
liability of a director or officer of the corporation to the corporation or the
Shareholders for damages for breach of fiduciary duty as a director or officer
shall be limited to acts or omissions which involve intentional misconduct,
fraud or a knowing violation of law.

ARTICLE X - INDEMNIFICATION:  Each director and each officer of the corporation
may be indemnified by the corporation as follows:

     (a)  The corporation may indemnify any person who was or is a party, or is
          threatened to be made a party, to any threatened, pending or completed
          action, suit or proceeding, whether civil, criminal, administrative or
          investigative (other than an action by or in the right of the
          corporation), by reason of the fact that he is or was a director,
          officer, employee or agent of the corporation, or is or was serving at
          the request of the corporation as a director, officer, employee or-
          agent of another corporation, partnership, joint venture, trust or
          other enterprise, against expenses (including attorneys' fees),
          judgments, fines and amounts paid in settlement, actually and
          reasonably incurred by him in connection with the action, suit or
          proceeding, if he acted in good faith and in a manner which he
          reasonably believed to be in or not opposed to the best interests of
          the corporation and with respect to any criminal action or proceeding,
          had no reasonable cause to believe his conduct was unlawful.  The
          termination of any action, suite or proceeding, by judgment, order,
          settlement, conviction or upon a plea of nolo contendere or its
          equivalent, does not of itself create a presumption that the person
          did not act in good faith and in a manner which he reasonably believed
          to be in or not opposed to the best interests of the corporation, and
          that, with respect to any criminal action or proceeding, he had
          reasonable cause to believe that his conduct was unlawful.

     (b)  The corporation may indemnify any person who was or is a party, or is
          threatened to be made a party, to any threatened, pending or completed
          action or suit by or in the right of the corporation, to procure a
          judgment in its favor by reason of the fact that he is or was a
          director, officer, employee or agent of the corporation, or is or was
          serving at the request of the corporation as a director, officer,
          employee or agent of another corporation, partnership, joint venture,
          trust or other enterprise against expenses including amounts paid in
          settlement and attorneys' fees actually and reasonably incurred by him
          in connection with the defense or settlement of the action or suit, if
          he acted in good faith and in a manner which he reasonably believed to
          be in or not opposed to the best interests of the corporation.
          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, after exhaustion of all appeals there from, to be liable
          to the corporation or for amounts paid in settlement to the
          corporation, unless and only to the extent that the court in which the
          action or suit was brought or other court of competent jurisdiction
          determines upon application that in view of all the circumstances of
          the case the person is fairly and reasonably entitled to indemnity for
          such expenses as the court deems proper.

     (c)  To the extent that a director, officer, employee or agent of a
          corporation has been successful on the merits or otherwise in defense
          of any action, suit or proceeding referred to in subsections (a) and
          (b) of this Article, or in defense of any claim, issue or matter
          therein, he must be indemnified by the corporation against expenses,
          including attomey's fees, actually and reasonably incurred by him in
          connection with the defense.

<PAGE>

     (d)  Any indemnification under subsections (a) and (b) unless ordered by a
          court or advanced pursuant to subsection (e), must be made by the
          corporation only as authorized in the specific case upon a
          determination that indemnification of the director, officer, employee
          or agent is proper in the circumstances.  The determination must be
          made:

          (i)   By the stockholders;

          (ii)  By the board of directors by majority vote of a quorum
                consisting of directors who were not parties to the act,
                suit or proceeding;

          (iii) If a majority vote of a quorum consisting of directors who
                were not parties to the act, suit or proceeding so orders, by
                independent legal counsel in a written opinion; or

          (iv)  If a quorum consisting of directors who were not parties to
                the act, suit or proceeding cannot be obtained, by
                independent legal counsel in a written opinion.

     (e)  Expenses of officers and directors incurred in defending a civil or
          criminal action, suit or proceeding must be paid by the corporation as
          they are incurred and in advance of the final disposition of the
          action, suit or proceeding, upon receipt of an undertaking by or on
          behalf of the director or officer to repay the amount if it is
          ultimately determined by a court of competent jurisdiction that he is
          not entitled to be indemnified by the corporation.  The provisions of
          this subsection do not affect any rights to advancement of expenses to
          which corporate personnel other than directors or officers may be
          entitled under any contract or otherwise by law.

<PAGE>

     (f)  The indemnification and advancement of expenses authorized in or
          ordered by a court pursuant to this section:

          (i)  Does not exclude any other rights to which a person seeking
               indemnification or advancement of expenses may be entitled under
               the certificate or articles of incorporation or any bylaw,
               agreement, vote of stockholders or disinterested directors or
               otherwise, for either an action in his official capacity or an
               action in another capacity while holding his office, except that
               indemnification, unless ordered by a court pursuant to subsection
               (b) or for the advancement of expenses made pursuant to
               subsection (e) may not be made to or on behalf of any director or
               officer if a final adjudication establishes that his acts or
               omissions involved intentional misconduct, fraud or a knowing
               violation of the law and was material to the cause of action.

          (ii) Continues for a person who has ceased to be a director, officer,
               employee or agent and inures to the benefit of the heirs,
               executors and administrators of such a person.

ARTICLE XI - PLACE OF MEETING; CORPORATE BOOKS:  Subject to the laws of the
State of Nevada, the shareholders and the Directors shall have power to hold
their meetings, and the Directors shall have power to have an office or offices
and to maintain the books of the Corporation outside the State of Nevada, at
such place or places as may from time to time be designated in the By Laws or by
appropriate resolution.

ARTICLE XII - AMENDMENT OF ARTICLES:  The provisions of these Articles of
Incorporation may be amended, altered or repealed from time to time to the
extent and in the manner prescribed by the laws of the State of Nevada, and
additional provisions authorized by such laws as are then in force may be added.
All rights herein conferred on the directors, officers and shareholders are
granted subject to this reservation.

ARTICLE XIII - INCORPORATOR:  The name and address of the sole incorporator
signing these Articles of Incorporation is as follows:

      NAME                                POST OFFICE ADDRESS

      Max C. Tanner                       2950 East Flamingo Road, Suite G
                                          Las Vegas, Nevada 89121

<PAGE>

      IN WITNESS WHEREOF, the undersigned incorporator has executed these
Articles of Incorporation this 19th day of August, 1997.


                                          /s/  Max C. Tanner
                                          -------------------
                                          Max C. Tanner



                                 ACKNOWLEDGMENT


STATE OF NEVADA         )
                        )ss:
COUNTY OF CLARK         )

      On August 19, 1997, personally appeared before me, a Notary Public, Max C.
Tanner, who acknowledged to me that he executed the foregoing Articles of
Incorporation for Montgomery Realty Group, Inc., a Nevada corporation.


                                          /s/  Lise-Lotte Ruzicka
                                          --------------------------
                                          Notary Public

<PAGE>

                           CERTIFICATE OF ACCEPTANCE
                        OF APPOINTMENT BY RESIDENT AGENT



      IN THE MATTER OF MONTGOMERY REALTY GROUP, INC.

      I, Max C. Tanner, do hereby certify that on the 19th day of August, 1997,
I accepted the appointment as Resident Agent of the above-entitled corporation
in accordance with Sec. 78.090, NRS 1957.

      Furthermore, that the principal office in this state is located at The Law
Offices of Max C. Tanner, 2950 East Flamingo Road, Suite G, City of Las Vegas
89121, County of Clark, State of Nevada.

      IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of August,
1997.

                                          MAX C. TANNER


                                          By /s/  Max C. Tanner
                                             --------------------
                                             Max C. Tanner, Esq.
                                             Resident Agent




             CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION

                                       OF

                         MONTGOMERY REALTY GROUP, INC.



     Pursuant to Section 78.380 of the Nevada Revised Statutes, I, Max C.
Tanner, the sole incorporator of Montgomery Realty Group, Inc. (the
"Corporation"), do hereby certify the following:

     1.   That I am the sole incorporator of the Corporation;

     2.   The original Articles were filed in the Office of the Secretary of
          State on August 20, 1997;

     3.   As of the date of this certificate, no stock of the corporation has
          been issued; and

     4.   The sole incorporator adopts the following amendment to the articles
          of incorporation:

     Article VI is amended to read as follows:

ARTICLE VI - CAPITAL STOCK:

     Section 1.  Authorized Shares.  The total number of shares which this
     Corporation is authorized to issue is 100,000,000 shares of Capital Stock
     at $.001 par value per share as set forth in subsections (a) and (b) of
     this Section 1 of Article VI.

     (a)  The total number of shares of Common Stock which this Corporation is
          authorized to issue is 80,000,000 shares at $.001 par value per share.

     (b)  The total number of shares of Preferred Stock which this Corporation
          is authorized to issue is 20,000,000 shares at $.001 par value per
          share, which Preferred Stock may contain special preferences as
          determined by the Board of Directors of the Corporation, including,
          but not limited to, the bearing of interest and convertibility into
          shares of Common Stock of the Corporation.



                                          /s/  Max C. Tanner
                                          ----------------------------------
                                          Max C. Tanner, sole incorporator

<PAGE>

                                 ACKNOWLEDGMENT


STATE OF NEVADA         )
                        )ss.
COUNTY OF CLARK         )


     On this, the 17th day of November, 1997, before me, the undersigned Notary
Public, Max C. Tanner, known to me, to be the sole incorporator of Montgomery
Realty Group, Inc., a Nevada corporation, acknowledged that he executed the
Certificate of Amendment to the Articles of Incorporation.

                                          /s/  Lise-Lotte Newell
                                          ------------------------
                                          Notary Public



                                   BY-LAWS OF

                         MONTGOMERY REALTY GROUP, INC.

                                   ARTICLE I

                                  SHAREHOLDERS


     Section 1.01  Annual Meeting.  The annual meeting of the shareholders shall
be held at such date and time as shall be designated by the board of directors
and stated in the notice of the meeting or in a duly-executed waiver of notice
thereof.  If the corporation shall fail to provide notice of the annual meeting
of the shareholders as set forth above, the annual meeting of the shareholders
of the corporation shall be held during the month of November or December of
each year as determined by the Board of Directors, for the purpose of electing
directors of the corporation to serve during the ensuing year and for the
transaction of such other business as may properly come before the meeting.  If
the election of the directors is not held on the day designated herein for any
annual meeting of the shareholders, or at any adjournment thereof, the president
shall cause the election to be held at a special meeting of the shareholders as
soon thereafter as is convenient.

     Section 1.02  Special Meetings.  Special meetings of the shareholders may
be called by the president or the Board of Directors and shall be called by the
president at the written request of the holders of not less than 51% of the
issued and outstanding shares of capital stock of the corporation.

     All business lawfully to be transacted by the shareholders may be
transacted at any special meeting at any adjournment thereof.  However, no
business shall be acted upon at a special meeting, except that referred to in
the notice calling the meeting, unless all of the outstanding capital stock of
the corporation is represented either in person or by proxy.  Where all of the
capital stock is represented, any lawful business may be transacted and the
meeting shall be valid for all purposes.

     Section 1.03  Place of Meetings.  Any meeting of the shareholders of the
corporation may be held at its principal office in the State of Nevada or such
other place in or out of the United States as the Board of Directors may
designate.  A waiver of notice signed by the shareholders entitled to vote may
designate any place for the holding of such meeting.

     Section 1.04  Notice of Meetings.

          (a)  The secretary shall sign and deliver to all shareholders of
     record written or printed notice of any meeting at least ten (10) days,
     but not more than sixty (60) days, before the date of such meeting;
     which notice shall state the place, date and time of the meeting,
     the general nature of the business to be transacted, and, in the case
     of any meeting at which directors are to be elected, the names of
     nominees, if any, to be presented for election.

          (b)  In the case of any meeting, any proper business may be
     presented for action, except that the following items shall be valid
     only if the general nature of the proposal is stated in the notice
     or written waiver of notice:

               (1)  Action with respect to any contract or transaction between
          the corporation and one or more of its directors or another firm,
          association, or corporation in which one or more of its directors has
          a material financial interest:

<PAGE>

               (2)  Adoption of amendments to the Articles of Incorporation; or

               (3)  Action with respect to the merger, consolidation,
          reorganization, partial or complete liquidation, or dissolution of the
          corporation.

          (c)  The notice shall be personally delivered or mailed by first class
     mail to each shareholder of record at the last known address thereof, as
     the same appears on the books of the corporation, and the giving of such
     notice shall be deemed delivered the date the same is deposited in the
     United States mail, postage prepaid.  If the address of any shareholder
     does not appear upon the books of the corporation, it will be sufficient to
     address any notice to such shareholder at the principal office of the
     corporation.

          (d)  The written certificate of the person calling any meeting, duly
     sworn, setting forth the substance of the notice, the time and place the
     notice was mailed or personally delivered to the several shareholders, and
     the addresses to which the notice was mailed shall be prima facie evidence
     of the manner and fact of giving such notice.

     Section 1.05  Waiver of Notice.  If all of the shareholders of the
corporation shall waive notice of a meeting, no notice shall be required, and,
whenever all of the shareholders shall meet in person or by proxy, such meeting
shall be valid for all purposes without call or notice, and at such meeting any
corporate action may be taken.

     Section 1.06  Determination of Shareholders of Record.

          (a)  The Board of Directors may at any time fix a future date as a
     record date for the determination of the shareholders entitled to notice of
     any meeting or to vote or entitled to receive payment of any dividend or
     other distribution or allotment of any rights or entitled to exercise any
     rights in respect of any other lawful action.  The record date so fixed
     shall not be more than sixty (60) days prior to the date of such meeting
     nor more than sixty (60) days prior to any other action.  When a record
     date is so fixed, only shareholders of record on that date are entitled to
     notice of and to vote at the meeting or to receive the dividend,
     distribution or allotment of rights, or to exercise their rights, as the
     case may be, notwithstanding any transfer of any shares on the books of the
     corporation after the record date.

          (b)  If no record date is fixed by the Board of Directors, then (1)
     the record date for determining shareholders entitled to notice of or to
     vote at a meeting of shareholders shall be at the close of business on the
     business day next preceding the day on which notice is given or, if notice
     is waived, at the close of business on the day next preceding the day on
     which the meeting is held; (2) the record date for determining shareholders
     entitled to give consent to corporate action in writing without a meeting,
     when no prior action by the Board of Directors is necessary, shall be the
     day on which written consent is given; and (3) the record date for
     determining shareholders for any other purpose shall be at the close of
     business on the day on which the Board of Directors adopts the resolution
     relating thereto, or the sixtieth (60th) day prior to the date of such
     other action, whichever is later.

     Section 1.07  Quorum;  Adjourned Meetings.

          (a)  At any meeting of the shareholders, a majority of the issued and
     outstanding shares of the corporation represented in person or by proxy,
     shall constitute a quorum.

<PAGE>

          (b)  If less than a majority of the issued and outstanding shares are
     represented, a majority of shares so represented may adjourn from time to
     time at the meeting, until holders of the amount of stock required to
     constitute a quorum shall be in attendance.  At any such adjourned meeting
     at which a quorum shall be present, any business may be transacted which
     might have been transacted as originally called.  When a shareholders'
     meeting is adjourned to another time or place, notice need not be given of
     the adjourned meeting if the time and place thereof are announced at the
     meeting at which the adjournment is taken, unless the adjournment is for
     more than ten (10) days in which event notice thereof shall be given.

     Section 1.08  Voting.

          (a)  Each shareholder of record, such shareholder's duly authorized
     proxy or attorney-in-fact shall be entitled to one (1) vote for each share
     of stock standing registered in such shareholder's name on the books of the
     corporation on the record date.

          (b)  Except as otherwise provided herein, all votes with respect to
     shares standing in the name of an individual on the record date (included
     pledged shares) shall be cast only by that individual or such individual's
     duly authorized proxy or attorney-in-fact.  With respect to shares held by
     a representative of the estate of a deceased shareholder, guardian,
     conservator, custodian or trustee, votes may be cast by such holder upon
     proof of capacity, even though the shares do not stand in the name of such
     holder.  In the case of shares under the control of a receiver, the
     receiver may cast votes carried by such shares even though the shares do
     not stand in the name of the receiver provided that the order of the court
     of competent jurisdiction which appoints the receiver contains the
     authority to cast votes carried by such shares.  If shares stand in the
     name of a minor, votes may be cast only by the duly-appointed guardian of
     the estate of such minor if such guardian has provided the corporation with
     written notice and proof of such appointment.

          (c)  With respect to shares standing in the name of a corporation on
     the record date, votes may be cast by such officer or agents as the by-laws
     of such corporation prescribe or, in the absence of an applicable by-law
     provision, by such person as may be appointed by resolution of the Board of
     Directors of such corporation.  In the event no person is so appointed,
     such votes of the corporation may be cast by any person (including the
     officer making the authorization) authorized to do so by the Chairman of
     the Board of Directors, President or any Vice President of such
     corporation.

          (d)  Notwithstanding anything to the contrary herein contained, no
     votes may be cast by shares owned by this corporation or its subsidiaries,
     if any.  If shares are held by this corporation or its subsidiaries, if
     any, in a fiduciary capacity, no votes shall be cast with respect thereto
     on any matter except to the extent that the beneficial owner thereof
     possesses and exercises either a right to vote or to give the corporation
     holding the same binding instructions on how to vote.

<PAGE>

          (e)  With respect to shares standing in the name of two or more
     persons, whether fiduciaries, members of a partnership, joint tenants,
     tenants in common, husband and wife as community property, tenants by the
     entirety, voting trustees, persons entitled to vote under a shareholder
     voting agreement or otherwise and shares held by two or more persons
     (including proxy holders) having the same fiduciary relationship respect in
     the same shares, votes may be cast in the following manner:

               (1)  If only one such person votes, the votes of such person
          binds all.

               (2)  If more than one person casts votes, the act of the majority
          so voting binds all.

               (3)  If more than one person casts votes, but the vote is evenly
          split on a particular matter, the votes shall be deemed cast
          proportionately as split.

          (f)  Any holder of shares entitled to vote on any matter may cast a
     portion of the votes in favor of such matter and refrain from casting the
     remaining votes or cast the same against the proposal, except in the case
     of elections of directors.  If such holder entitled to vote fails to
     specify the number of affirmative votes, it will be conclusively presumed
     that the holder is casting affirmative votes with respect to all shares
     held.

          (g)  If a quorum is present, the affirmative vote of holders of a
     majority of the shares represented at the meeting and entitled to vote on
     any matter shall be the act of the shareholders, unless a vote of greater
     number or voting by By-Laws.

     Section 1.09  Proxies.  At any meeting of shareholders, any holder of
shares entitled to vote may authorize another person or persons to vote by proxy
with respect to the shares held by an instrument in writing and subscribed to by
the holder of such shares entitled to vote.  No proxy shall be valid after the
expiration of six (6) months from the date of execution thereof, unless coupled
with an interest or unless otherwise specified in the proxy.  In no event shall
the term of a proxy exceed seven (7) years from the date of its execution.
Every proxy shall continue in full force and effect until its expiration or
revocation.  Revocation may be effected by filing an instrument revoking the
same or a duly-executed proxy bearing a later date with the secretary of the
corporation.

     Section 1.10  Order of Business.  At the annual shareholders meeting, the
regular order of business shall be as follows:

          (1)  Determination of shareholders present and existence of quorum;

          (2)  Reading and approval of the minutes of the previous meeting or
     meetings;

          (3)  Reports of the Board of Directors, the president, treasurer and
     secretary of the corporation, in the order named;

          (4)  Reports of committee;

          (5)  Election of directors;

          (6)  Unfinished business;

<PAGE>

          (7)  New business;

          (8)  Adjournment.

     Section 1.11  Absentees Consent to Meetings.  Transactions of any meeting
of the shareholders are as valid as though had at a meeting duly-held after
regular call and notice if a quorum is present, either in person or by proxy,
and if, either before or after the meeting, each of the persons entitled to
vote, not present in person or by proxy (and those who, although present, either
object at the beginning of the meeting to the transaction of any business
because the meeting has not been lawfully called or convened or expressly object
at the meeting to the consideration of matters not included in the notice which
are legally required to be included therein), signs a written waiver of notice
and/or consent to the holding of the meeting or an approval of the minutes
thereof.  All such waivers, consents, and approvals shall be filed with the
corporate records and made a part of the minutes of the meeting.  Attendance of
a person at a meeting shall constitute a waiver of notice of such meeting,
except when the person objects at the beginning of the meeting to the
transaction of any business because the meeting is not lawfully called or
convened and except that attendance at a meeting is not a waiver of any right to
object to the consideration of matters not included in the notice if such
objection is expressly made at the beginning.  Neither the business to be
transacted at nor the purpose of any regular or special meeting of shareholders
need be specified in any written waiver of notice, except as otherwise provided
in Section 1.04(b) of these By-Laws.

     Section 1.12  Action Without Meeting.  Any action which may be taken by the
vote of the shareholders at a meeting may be taken without a meeting if
consented to by the holders of a majority of the shares entitled to vote or such
greater proportion as may be required by the laws of the State of Nevada, the
Articles of Incorporation, or these By-Laws.  Whenever action is taken by
written consent, a meeting of shareholders needs not be called or noticed.

                                   ARTICLE II

                                   DIRECTORS

     Section 2.01  Number, Tenure and Qualification.  Except as otherwise
provided herein, the Board of Directors of the corporation shall consist of at
least one (1) but no more than nine (9) persons, who shall be elected at the
annual meeting of the shareholders of the corporation and who shall hold office
for one (1) year or until their successors are elected and qualify.

     Section 2.02  Resignation.  Any director may resign effective upon giving
written notice to the chairman of the Board of Directors, the president, or the
secretary of the corporation, unless the notice specifies a later time for
effectiveness of such resignation.  If the Board of Directors accepts the
resignation of a director tendered to take effect at a future date, the Board or
the shareholders may elect a successor to take office when the resignation
becomes effective.

     Section 2.03  Reduction in Number.  No reduction of the number of directors
shall have the effect of removing any director prior to the expiration of his
term of office.

<PAGE>

     Section 2.04  Removal.

          (a)  The Board of Directors or the shareholders of the corporation, by
     a majority vote, may declare vacant the office of a director who has been
     declared incompetent by an order of a court of competent jurisdiction or
     convicted of a felony.

     Section 2.05  Vacancies.

          (a)  A vacancy in the Board of Directors because of death,
     resignation, removal, change in number of directors, or otherwise may be
     filled by the shareholders at any regular or special meeting or any
     adjourned meeting thereof or the remaining director(s) by the affirmative
     vote of a majority thereof.  A Board of Directors consisting of less than
     the maximum number authorized in Section 0.01 of ARTICLE II constitutes
     vacancies on the Board of Directors for purposes of this paragraph and may
     be filled as set forth above including by the election of a majority of the
     remaining directors.  Each successor so elected shall hold office until the
     next annual meeting of shareholders or until a successor shall have been
     duly-elected and qualified.

          (b)  If, after the filling of any vacancy by the directors, the
     directors then in office who have been elected by the shareholders shall
     constitute less than a majority of the directors then in office, any holder
     or holders of an aggregate of five percent (5%) or more of the total number
     of shares entitled to vote may call a special meeting of shareholders to be
     held to elect the entire Board of Directors.  The term of office of any
     director shall terminate upon such election of a successor.

     Section 2.06  Regular Meetings.  Immediately following the adjournment of,
and at the same place as, the annual meeting of the shareholders, the Board of
Directors, including directors newly elected, shall hold its annual meeting
without notice, other than this provision, to elect officers of the corporation
and to transact such further business as may be necessary or appropriate.  The
Board of Directors may provide by resolution the place, date and hour for
holding additional regular meetings.

     Section 2.07  Special Meetings.  Special meetings of the Board of Directors
may be called by the chairman and shall be called by the chairman upon the
request of any two (2) directors or the president of the corporation.

     Section 2.08  Place of Meetings.  Any meeting of the directors of the
corporation may be held at its principal office in the State of Nevada, or at
such other place in or out of the United States as the Board of Directors may
designate.  A waiver or notice signed by the directors may designate any place
for the holding of such meeting.

     Section 2.09  Notice of Meetings.  Except as otherwise provided in Section
2.06, the chairman shall deliver to all directors written or printed notice of
any special meeting, at least three (3) days before the date of such meeting, by
delivery of such notice personally or mailing such notice first class mail, or
by telegram.  If mailed, the notice shall be deemed delivered two (2) business
days following the date the same is deposited in the United States mail, postage
prepaid.  Any director may waive notice of any meeting, and the attendance of a
director at a meeting shall constitute a waiver of notice of such meeting,
unless such attendance is for the express purpose of objecting to the
transaction of business threat because the meeting is not properly called or
convened.

     Section 2.10  Quorum; Adjourned Meetings.

<PAGE>

          (a)  A majority of the Board of Directors in office shall constitute a
     quorum.

          (b)  At any meeting of the Board of Directors where a quorum is not
     present, a majority of those present may adjourn, from time to time, until
     a quorum is present, and no notice of such adjournment shall be required.
     At any adjourned meeting where a quorum is present, any business may be
     transacted which could have been transacted at the meeting originally
     called.

     Section 2.11  Action Without Meeting.  Any action required or permitted to
be taken at any meeting of the Board of Directors or any committee thereof may
be taken without a meeting if a written consent thereto is signed by all of the
members of the Board of Directors or of such committee.  Such written consent or
consents shall be filed with the minutes of the proceedings of the Board of
Directors or committee.  Such action by written consent shall have the same
force and effect as the unanimous vote of the Board of Directors or committee.

     Section 2.12  Telephonic Meetings.  Meetings of the Board of Directors may
be held through the use of a conference telephone or similar communications
equipment so long as all members participating in such meeting can hear one
another at the time of such meeting.  Participation in such a meeting
constitutes presence in person at such meeting.

     Section 2.13  Board Decisions.  The affirmative vote of a majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors.

     Section 2.14  Powers and Duties.

          (a)  Except as otherwise provided in the Articles of Incorporation or
     the laws of the State of Nevada, the Board of Directors is invested with
     the complete and unrestrained authority to manage the affairs of the
     corporation, and is authorized to exercise for such purpose as the general
     agent of the corporation, its entire corporate authority in such manner as
     it sees fit.  The Board of Directors may delegate any of its authority to
     manage, control or conduct the current business of the corporation to any
     standing or special committee or to any officer or agent and to appoint any
     persons to be agents of the corporation with such powers, including the
     power to sub-delegate, and upon such terms as may be deemed fit.

          (b)  The Board of Directors shall present to the shareholders at
     annual meetings of the shareholders, and when called for by a majority vote
     of the shareholders at a special meeting of the shareholders, a full and
     clear statement of the condition of the corporation, and shall, at request,
     furnish each of the shareholders with a true copy thereof.

          (c)  The Board of Directors, in its discretion, may submit any
     contract or act for approval or ratification at any annual meeting of the
     shareholders or any special meeting properly called for the purpose of
     considering any such contract or act, provided a quorum is present.  The
     contract or act shall be valid and binding upon the corporation and upon
     all the shareholders thereof, if approved and ratified by the affirmative
     vote of a majority of the shareholders at such meeting.

          (d)  In furtherance and not in limitation of the powers conferred by
     the laws of the State of Nevada, the Board of Directors is expressly
     authorized and empowered to issue stock of the Corporation for money,
     property, services rendered, labor performed, cash advanced, acquisitions

<PAGE>

     for other corporations or for any other assets of value in accordance with
     the action of the Board of Directors without vote or consent of the
     shareholders and the judgment of the Board of Directors as to the value
     received and in return therefore shall be conclusive and said stock, when
     issued, shall be fully-paid and non-assessable.

     Section 2.15  Compensation.  The directors shall be allowed and paid all
necessary expenses incurred in attending any meetings of the Board.

     Section 2.16  Board Officers.

          (a)  At its annual meeting, the Board of Directors shall elect, from
     among its members, a chairman to preside at the meetings of the Board of
     Directors.  The Board of Directors may also elect such other board officers
     and for such term as it may, from time to time, determine advisable.

          (b)  Any vacancy in any board office because of death, resignation,
     removal or otherwise may be filled by the Board of Directors for the
     unexpired portion of the term of such office.

     Section 2.17  Order of Business.  The order of business at any meeting of
the Board of Directors shall be as follows:

     (1)  Determination of members present and existence of quorum;

     (2)  Reading and approval of the minutes of any previous meeting or
meetings;

     (3)  Reports of officers and committeemen;

     (4)  Election of officers;

     (5)  Unfinished business;

     (6)  New business;

     (7)  Adjournment.

                                  ARTICLE III

                                    OFFICERS

     Section 3.01  Election.  The Board of Directors, at its first meeting
following the annual meeting of shareholders, shall elect a president, a
secretary and a treasurer to hold office for one (1) year next coming and until
their successors are elected and qualify.  Any person may hold two or more
offices.  The Board of Directors may, from time to time, by resolution, appoint
one or more vice presidents, assistant secretaries, assistant treasurers and
transfer agents of the corporation as it may deem advisable; prescribe their
duties; and fix their compensation.

     Section 3.02  Removal; Resignation.  Any officer or agent elected or
appointed by the Board of Directors may be removed by it whenever, in its
judgment, the best interest of the corporation would be served thereby.  Any
officer may resign at any time upon written notice to the corporation without

<PAGE>

prejudice to the rights, if any, of the corporation under any contract to which
the resigning officer is a party.

     Section 3.03  Vacancies.  Any vacancy in any office because of death,
resignation, removal, or otherwise may be filled by the Board of Directors for
the unexpired portion of the term of such office.

     Section 3.04  President.  The president shall be the general manager and
executive officer of the corporation, subject to the supervision and control of
the Board of Directors, and shall direct the corporate affairs, with full power
to execute all resolutions and orders of the Board of Directors not especially
entrusted to some other officer of the corporation.  The president shall preside
at all meetings of the shareholders and shall sign the certificates of stock
issued by the corporation, and shall perform such other duties as shall be
prescribed by the Board of Directors.

     Unless otherwise ordered by the Board of Directors, the president shall
have full power and authority on behalf of the corporation to attend and to act
and to vote at any meetings of the shareholders of any corporation in which the
corporation may hold stock and, at any such meetings, shall possess and may
exercise any and all rights and powers incident to the ownership of such stock.
The Board of Directors, by resolution from time to time, may confer like powers
on any person or persons in place of the president to represent the corporation
for these purposes.

     Section 3.05  Vice President.  The Board of Directors may elect one or more
vice presidents who shall be vested with all the powers and perform all the
duties of the president whenever the president is absent or unable to act,
including the signing of the certificates of stock issued by the corporation,
and the vice president shall perform such other duties as shall be prescribed by
the Board of Directors.

     Section 3.06  Secretary.  The secretary shall keep the minutes of all
meetings of the shareholders and the Board of Directors in books provided for
that purpose.  The secretary shall attend to the giving and service of all
notices of the corporation, may sign with the president in the name of the
corporation all contracts authorized by the Board of Directors or appropriate
committee, shall have the custody of the corporate seal, shall affix the
corporate seal to all certificates of stock duly issued by the corporation,
shall have charge of stock certificate books, transfer books and stock ledgers,
and such other books and papers as the Board of Directors or appropriate
committee may direct, and shall, in general perform all duties incident to the
office of the secretary.  All corporate books kept by the secretary shall be
open for examination by any director at any reasonable time.

     Section 3.07  Assistant Secretary.  The Board of Directors may appoint an
assistant secretary who shall have such powers and perform such duties as may be
prescribed for him by the secretary of the corporation or by the Board of
Directors.

     Section 3.08  Treasurer.  The treasurer shall be the chief financial
officer of the corporation, subject to the supervision and control of the Board
of Directors, and shall have custody of all the funds and securities of the
corporation.  When necessary or proper, the treasurer shall endorse on behalf of
the corporation for collection checks, notes and other obligations, and shall
deposit all monies to the credit of the corporation in such bank or banks or
other depository as the Board of Directors may designate, and shall sign all
receipts and vouchers for payments made by the corporation.  Unless otherwise
specified by the Board of Directors, the treasurer shall sign with the president
all bills of exchange and promissory notes of the corporation, shall also have
the care and custody of the stocks, bonds, certificates, vouchers, evidence of
debts, securities and such other property belonging to the corporation as the
Board of Directors shall designate, and shall sign all papers required by law,
by these By-laws or by the Board of Directors to be signed by the treasurer.
The treasurer shall enter regularly in the books of the corporation, to be kept

<PAGE>

for that purpose, full and accurate accounts of all monies received and paid on
account of the corporation and whenever required by the Board of Directors, the
treasurer shall render a statement of any or all accounts.  The treasurer shall
at all reasonable times exhibit the books of account to any directors of the
corporation and shall perform all acts incident to the position of treasurer
subject to the control of the Board of Directors.  The treasurer shall, if
required by the Board of Directors, give a bond to the corporation in such sum
and with such security as shall be approved by the Board of Directors for the
faithful performance of all the duties of the treasurer and for restoration to
the corporation in the event of the treasurer's death, resignation, retirement,
or removal from office, of all books, records, papers, vouchers, money and other
property belonging to the corporation.  The expense of such bond shall be borne
by the corporation.

     Section 3.09  Assistant Treasurer.  The Board of Directors may appoint an
assistant treasurer who shall have such powers and perform such duties as may be
prescribed by the treasurer of the corporation or by the Board of Directors, and
the Board of Directors may require the assistant treasurer to give a bond to the
corporation in such sum and with such security as it may approve, for the
faithful performance of the duties of assistant treasurer, and for the
restoration to the corporation, in the event of the assistant treasurer's death,
resignation, retirement or removal from office, of all books, records, papers,
vouchers, money and other property belonging to the corporation.  The expense of
such bond shall be borne by the corporation.

                                   ARTICLE IV

                                 CAPITAL STOCK

     Section 4.01  Issuance.  Shares of capital stock of the corporation shall
be issued in such manner and at such times and upon such conditions as shall be
prescribed by the Board of Directors.

     Section 4.02  Certificates.  Ownership in the corporation shall be
evidenced by certificates for shares of stock in such form as shall be
prescribed by the Board of Directors, shall be under the seal of the corporation
and shall be signed by the president or the vice president and also by the
secretary or an assistant secretary.  Each certificate shall contain the name of
the record holder, the number, designation, if any, class or series of shares
represented, a statement of summary of any applicable rights, preferences,
privileges, or restrictions thereon, and a statement that the shares are
assessable, if applicable.  All certificates shall be consecutively numbered.
The name and address of the shareholder, the number of shares, and the date of
issue shall be entered on the stock transfer books of the corporation.

     Section 4.03  Surrender; Lost or Destroyed Certificates.  All certificates
surrendered to the corporation, except those representing shares of treasury
stock, shall be canceled and no new certificates shall be issued until the
former certificate for a like number of shares shall have been canceled, except
that in case of a lost, stolen, destroyed or mutilated certificate, a new one
may be issued therefor.  However, any shareholder applying for the issuance of a
stock certificate in lieu of one alleged to have been lost, stolen, destroyed or
mutilated shall, prior to the issuance of a replacement, provide the corporation
with his, her or its affidavit of the facts surrounding the loss, theft,
destruction or mutilation and an indemnity bond in an amount and upon such terms
as the treasurer, or the Board of Directors, shall require.  In no case shall
the bond be in amount less than twice the current market value of the stock and
it shall indemnify the corporation against any loss, damage, cost or
inconvenience arising as a consequence of the issuance of a replacement
certificate.

     Section 4.04  Replacement Certificate.  When the Articles of Incorporation
are amended in any way affecting the statements contained in the certificates
for outstanding shares of capital stock of the corporation or it becomes

<PAGE>

desirable for any reason, including, without limitation, the merger or
consolidation of the corporation with another corporation or the reorganization
of the corporation, to cancel any outstanding certificate for shares and issue a
new certificate therefor conforming to the rights of the holder, the Board of
Directors may order any holders of outstanding certificates for shares to
surrender and exchange the same for new certificates within a reasonable time to
be fixed by the Board of Directors.  The order may provide that a holder of any
certificate(s) ordered to be surrendered shall not be entitled to vote, receive
dividends or exercise any other rights of shareholders until the holder has
complied with the order provided that such order operates to suspend such rights
only after notice and until compliance.

     Section 4.05  Transfer of Shares.  No transfer of stock shall be valid as
against the corporation except on surrender and cancellation by the certificate
therefor, accompanied by an assignment or transfer by the registered owner made
either in person or under assignment.  Whenever any transfer shall be expressly
made for collateral security and not absolutely, the collateral nature of the
transfer shall be reflected in the entry of transfer on the books of the
corporation.

     Section 4.06  Transfer Agent.  The Board of Directors may appoint one or
more transfer agents and registrars of transfer and may require all certificates
for shares of stock to bear the signature of such transfer agent and such
registrar of transfer.

     Section 4.07  Stock Transfer Books.  The stock transfer books shall be
closed for a period of ten (10) days prior to all meetings of the shareholders
and shall be closed for the payment of dividends as provided in Article V hereof
and during such periods as, from time to time, may be fixed by the Board of
Directors, and, during such periods, no stock shall be transferable.

     Section 4.08  Miscellaneous.  The Board of Directors shall have the power
and authority to make such rules and regulations not inconsistent herewith as it
may deem expedient concerning the issue, transfer and registration of
certificates for shares of the capital stock of the corporation.

                                   ARTICLE V

                                   DIVIDENDS

     Section 5.01  Dividends may be declared, subject to the provisions of the
laws of the State of Nevada and the Articles of Incorporation, by the Board of
Directors at any regular or special meeting and may be paid in cash, property,
shares of corporate stock, or any other medium.  The Board of Directors may fix
in advance a record date, as provided in Section 1.06 of these By-laws, prior to
the dividend payment for the purpose of determining shareholders entitled to
receive payment of any dividend.  The Board of Directors may close the stock
transfer books for such purpose for a period of not more than ten (10) days
prior to the payment date of such dividend.

<PAGE>

                                   ARTICLE VI

             OFFICES; RECORDS; REPORTS; SEAL AND FINANCIAL MATTERS

     Section 6.01  Principal Office.  The principal office of the corporation in
the State of Nevada shall be the Law Offices of Max C. Tanner, 2950 East
Flamingo Road, Suite G, Las Vegas, Nevada 89121, and the corporation may have an
office in any other state or territory as the Board of Directors may designate.

     Section 6.02  Records.  The stock transfer books and a certified copy of
the By-laws, Articles of Incorporation, any amendments thereto, and the minutes
of the proceedings of the shareholders, the Board of Directors, and committees
of the Board of Directors shall be kept at the principal office of the
corporation for the inspection of all who have the right to see the same and for
the transfer of stock.  All other books of the corporation shall be kept at such
places as may be prescribed by the Board of Directors.

     Section 6.03  Financial Report on Request.  Any shareholder or shareholders
holding at least five percent (5%) of the outstanding shares of any class of
stock may make a written request for an income statement of the corporation for
the three (3) month, six (6) month, or nine (9) month period of the current
fiscal year ended more than thirty (30) days prior to the date of the request
and a balance sheet of the corporation as of the end of such period.  In
addition, if no annual report for the last fiscal year has been sent to
shareholders, such shareholder or shareholders may make a request for a balance
sheet as of the end of such fiscal year and an income statement and statement of
changes in financial position for such fiscal year.  The statement shall be
delivered or mailed to the person making the request within thirty (30) days
thereafter.  A copy of the statements shall be kept on file in the principal
office of the corporation for twelve (12) months, and such copies shall be
exhibited at all reasonable times to any shareholder demanding an examination of
them or a copy shall be mailed to each shareholder.  Upon request by any
shareholder, there shall be mailed to the shareholder a copy of the last annual,
semiannual or quarterly income statement which it has prepared and a balance
sheet as of the end of the period.  The financial statements referred to in this
Section 6.03 shall be accompanied by the report thereon, if any, of any
independent accountants engaged by the corporation or the certificate of an
authorized officer of the corporation that such financial statements were
prepared without audit from the books and records of the corporation.

     Section 6.04  Right of Inspection.

          (a)  The accounting books and records and minutes of proceedings of
     the shareholders and the Board of Directors and committees of the Board of
     Directors shall be open to inspection upon the written demand of any
     shareholder or holder of a voting trust certificate at any reasonable time
     during usual business hours for a purpose reasonably related to such
     holder's interest as a shareholder or as the holder of such voting trust
     certificate.  This right of inspection shall extend to the records of the
     subsidiaries, if any, of the corporation.  Such inspection may be made in
     person or by agent or attorney, and the right of inspection includes the
     right to copy and make extracts.

<PAGE>

          (b)  Every director shall have the absolute right at any reasonable
     time to inspect and copy all books, records and documents of every kind and
     to inspect the physical properties of the corporation an<Uor its subsidiary
     corporations.  Such inspection may be made in person or by agent or
     attorney, and the right of inspection includes the right to copy and make
     extracts

     Section 6.05  Corporate Seal.  The Board of Directors may, by resolution,
authorize a seal, and the seal may be used by causing it, or a facsimile, to be
impressed or affixed or reproduced or otherwise.  Except when otherwise
specifically provided herein, any officer of the corporation shall have the
authority to affix the seal to any document requiring it.

     Section 6.06  Fiscal Year.  The fiscal year-end of the corporation shall be
the calendar year or such other term as may be fixed by resolution of the Board
of Directors.

     Section 6.07  Reserves.  The Board of Directors may create, by resolution,
out of the earned surplus of the corporation such reserves as the directors may,
from time to time, in their discretion, think proper to provide for
contingencies, or to equalize dividends or to repair or maintain any property of
the corporation, or for such other purpose as the Board of Directors may deem
beneficial to the corporation, and the directors may modify or abolish any such
reserves in the manner in which they were created.

                                  ARTICLE VII

                                INDEMNIFICATION

     Section 7.01  Indemnification.  The corporation shall, unless prohibited by
Nevada Law, indemnify any person (an "Indemnitee") who is or was involved in any
manner (including, without limitation, as a party or a witness) or is threatened
to be so involved in any threatened, pending or completed action suit or
proceeding, whether civil, criminal, administrative, arbitrative or
investigative, including without limitation, any action, suit or proceeding
brought by or in the right of the corporation to procure a judgment in its favor
(collectively, a "Proceeding") by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other entity or enterprise, against all Expenses and Liabilities actually and
reasonably incurred by him in connection with such Proceeding.  The right to
indemnification conferred in this Article shall be presumed to have been relied
upon by the directors, officers, employees and agents of the corporation and
shall be enforceable as a contract right and inure to the benefit of heirs,
executors and administrators of such individuals.

     Section 7.02  Indemnification Contracts.  The Board of Directors is
authorized on behalf of the corporation, to enter into, deliver and perform
agreements or other arrangements to provide any Indemnitee with specific rights
of indemnification in addition to the rights provided hereunder to the fullest
extent permitted by Nevada Law.  Such agreements or arrangements may provide (i)
that the Expenses of officers and directors incurred in defending a civil or
criminal action, suit or proceeding, must be paid by the corporation as they are
incurred and in advance of the final disposition of any such action, suit or
proceeding provided that, if required by Nevada Law at the time of such advance,
the officer or director provides an undertaking to repay such amounts if it is
ultimately determined by a court of competent jurisdiction that such individual
is not entitled to be indemnified against such expenses, (iii) that the
Indemnitee shall be presumed to be entitled to indemnification under this
Article or such agreement or arrangement and the corporation shall have the
burden of proof to overcome that presumption, (iii) for procedures to be
followed by the corporation and the Indemnitee in making any determination of

<PAGE>

entitlement to indemnification or for appeals therefrom and (iv) for insurance
or such other Financial Arrangements described in Paragraph 7.02 of this
Article, all as may be deemed appropriate by the Board of Directors at the time
of execution of such agreement or arrangement.

     Section 7.03  Insurance and Financial Arrangements.  The corporation may,
unless prohibited by Nevada Law, purchase and maintain insurance or make other
financial arrangements ("Financial Arrangements") on behalf of any Indemnitee
for any liability asserted against him and liability and expenses incurred by
him in his capacity as a director, officer, employee or agent, or arising out of
his status as such, whether or not the corporation has the authority to
indemnify him against such liability and expenses.  Such other Financial
Arrangements may include (i) the creation of a trust fund, (ii) the
establishment of a program of self-insurance, (iii) the securing of the
corporation's obligation of indemnification by granting a security interest or
other lien on any assets of the corporation, or (iv) the establishment of a
letter of credit, guaranty or surety.

     Section 7.04  Definitions.  For purposes of this Article:

     Expenses.  The word "Expenses" shall be broadly construed and, without
limitation, means (i) all direct and indirect costs incurred, paid or accrued,
(ii) all attorneys' fees, retainers, court costs, transcripts, fees of experts,
witness fees, travel expenses, food and lodging expenses while traveling,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service, freight or other transportation fees and expenses, (iii) all
other disbursements and out-of-pocket expenses, (iv) amounts paid in settlement,
to the extent permitted by Nevada Law, and (v) reasonable compensation for time
spent by the Indemnitee for which he is otherwise not compensated by the
corporation or any third party, actually and reasonably incurred in connection
with either the appearance at or investigation, defense, settlement or appeal of
a Proceeding or establishing or enforcing a right to indemnification under any
agreement or arrangement, this Article, the Nevada Law or otherwise; provided,
however, that "Expenses" shall not include any judgments or fines or excise
taxes or penalties imposed under the Employee Retirement Income Security Act of
1974, as amended ("ERISA") or other excise taxes or penalties.

     Liabilities.  "Liabilities" means liabilities of any type whatsoever,
including, but not limited to, judgments or fines, ERISA or other excise taxes
and penalties, and amounts paid in settlement.

     Nevada Law.  "Nevada Law" means Chapter 78 of the Nevada Revised Statutes
as amended and in effect from time to time or any successor or other statutes of
Nevada having similar import and effect.

     This Article.  "This Article" means Paragraphs 7.01 through 7.04 of these
By-Laws or any portion of them.

     Power of Stockholders.  Paragraphs 7.01 through 7.04, including this
Paragraph, of these By-Laws may be amended by the stockholders only by vote of
the holders of sixty-six and two-thirds percent (66 2/3%) of the entire number
of shares of each class, voting separately, of the outstanding capital stock of
the corporation (even though the right of any class to vote is otherwise
restricted or denied); provided, however, no amendment or repeal of this Article
shall adversely affect any right of any Indemnitee existing at the time such
amendment or repeal becomes effective.

<PAGE>

     Power of Directors.  Paragraphs 7.01 through 7.04 and this Paragraph of
these By-Laws may be amended or repealed by the Board of Directors only by vote
of eighty percent (80%) of the total number of Directors and the holders of
sixty-six and two-thirds percent (66 2/3) of the entire number of shares of each
class, voting separately, of the outstanding capital stock of the corporation
(even though the right of any class to vote is otherwise restricted or denied);
provided, however, no amendment or repeal of this Article shall adversely affect
any right of any Indemnitee existing at the time such amendment or repeal
becomes effective.

                                  ARTICLE VIII

                                    BY-LAWS

     Section 8.01  Amendment.  Amendments and changes of these By-Laws may be
made at any regular or special meeting of the Board of Directors by a vote of
not less than all of the entire Board, or may be made by a vote of, or a consent
in writing signed by the holders of a majority of the issued and outstanding
capital stock.

     Section 8.02  Additional By-Laws.  Additional by-laws not inconsistent
herewith may be adopted by the Board of Directors at any meeting of the Board of
Directors at which a quorum is present by an affirmative vote of a majority of
the directors present or by the unanimous consent of the Board of Directors in
accordance with Section 2.1 1 of these By-laws.

                                 CERTIFICATION

     I, the undersigned, being the duly elected secretary of the Corporation, do
hereby certify that the foregoing By-laws were adopted by the Board of Directors
on the 20th day of August, 1997.


                                          /s/  Max C. Tanner
                                          -------------------------
                                          Max C. Tanner, Secretary




                          PURCHASE AND SALE AGREEMENT



                                 By and Between


                                 DINESH MANIAR,
                                   AS SELLER,



                                      and



                         MONTGOMERY REALTY GROUP, INC.




                          DATED EFFECTIVE MAY 5, 1999

<PAGE>

                           PURCHASE AND SALE AGREEMENT


     This Purchase and Sale Agreement ("Agreement") is entered into effective
May 5, 1999, by and between MR. DINESH MANIAR ("Seller") and MONTGOMERY REALTY
GROUP, INC., a Nevada corporation ("MRG"), and is based on the following:

                                    PREMISES

     A.   Seller is the owner of various commercial real estate located in the
San Francisco Bay Area.   Seller has agreed to sell to MRG four (4) Properties,
as more particularly described herein, on the price and terms set forth in this
Agreement.

     B.   MRG has agreed to purchase said four (4) Properties from Seller on the
price and terms set forth in this Agreement.

     C.   Seller intends this sale to qualify as a tax free transfer pursuant to
the provisions of Internal Revenue Code Section 351, et seq., and will,
immediately after the sale, own more than Eighty Percent (80%) of the
outstanding equity stock of MRG.

     D.   MRG has made or will make, in accordance with this Agreement, a due
diligence inquiry as to the Properties, and has made or will make, in accordance
with this Agreement, various findings as to value, marketability, financial
condition, environmental matters, physical condition and similar matters, all to
MRG's satisfaction.

     E.   Seller has made or will make, in accordance with this Agreement, a due
diligence inquiry as to MRG's formation and operation.  MRG's financial
condition, the marketability of MRG's securities, and the suitability of MRG as
an investment vehicle for Seller, all to Seller's satisfaction.

                                   AGREEMENT

     NOW THEREFORE, for and in consideration of the premises and the mutual
promises and covenants contained herein, the parties agree as follows:


                                   ARTICLE I.
                          DEFINITIONS AND CONSTRUCTION

1.01 Certain Terms Defined.  The terms defined in this Section shall, for
     purposes of this Agreement, have the meanings herein specified, unless the
     context requires otherwise:

     (a)  Closing means consummation of the transaction contemplated by
          this Agreement.

     (b)  Closing Date means the date on which the Closing occurs.

     (c)  Code shall mean the Internal Revenue Code of 1986, as amended.

     (d)  Exchange Act means the Securities and Exchange Act of 1934, as
          amended

<PAGE>

     (e)  New MRG Stock means the shares of common stock of MRG delivered
          to Seller.

     (f)  Properties shall have the meaning set forth in Section 2.01 of
          this Agreement.

     (g)  Purchase Price shall mean the 16,000,000 shares of New MRG Stock
          to be issued as consideration for the Properties and certain other
          costs to be paid by MRG, as set forth in Section 2.03.

     (h)  SEC shall mean the United States Securities and Exchange
          Commission.

     (i)  Securities Act shall mean the Securities Act of 1933, as amended.

     (j)  Title Company is First American Title Insurance Company, 1850 Mt.
          Diablo Boulevard, Suite 300, Walnut Creek, California.

     (k)  Transfer Agent is Silver State Registrar & Transfer Corp., 3541
          Summer Estates Circle, Salt Lake City, Utah 84121

                                  ARTICLE II.
                      AGREEMENT TO SELL PROPERTY; CLOSING

2.01 Agreement to Sell; Properties Defined.  For and in consideration of the
     Purchase Price and subject to the terms and conditions set forth in this
     Agreement, Seller agrees to sell to MRG, the following interests in the
     following properties:

     (a)  all of Seller's right, title and interest in the following:

          (i)  The Orchard Supply Shopping Center located at 1041-1061
               Market Place, San Ramon, California, and more particularly
               described in Exhibit "A" attached hereto and incorporated herein
               by this reference (the "OSH Center").

          (ii) The San Ramon Shopping Center located at 1021 Market Place,
               San Ramon, California, and more particularly described in Exhibit
               "B" attached hereto and incorporated herein by this reference
               (the "Retail Center").

          (iii)The Keker & Van Nest Office Building located at 710 Sansom
               Street, San Francisco, California, and more particularly
               described in Exhibit "C" attached hereto and incorporated herein
               by this reference (the "San Francisco Office Building").

          (iv) The Eccles Office Project located at 560 Eccles Avenue,
               South San Francisco, California, and more particularly described
               in Exhibit "D" attached hereto and incorporated herein by this
               reference (the "Eccles Project").

     All of which is collectively referred to herein as the "Real Property";

     (b)  any and all rights, privileges and easements appurtenant to the
          Real Property, including, without limitation, all minerals, oil, gas
          and other hydrocarbon substances on and under the Real Property, as

<PAGE>

          well as all development rights and credits, air rights, solar rights,
          water, water rights, and water stocks relating to the Real Property
          and any easements, rights-of-way or other appurtenances used in
          connection with the beneficial use and enjoyment of the Real Property
          (collectively the "Appurtenances");

     (c)  any and all improvements and fixtures located on the Real
          Property, including, without limitation, all buildings and other
          structures presently located on the Real Property, together with all
          apparatus, equipment and appliances used in connection with the
          operation or occupancy of the Real Property, such as heating and air
          conditioning systems and facilities used to provide any utility
          services, refrigeration, ventilation, garbage disposal, recreation or
          other services on the Real Property (all of which are collectively
          called the "Improvements");

     (d)  any and all personal property (the "Personal Property") of Seller
          located on or in the Real Property and Improvements and used in its
          operation including, without limitation, the items of personal
          property, if any, described in Exhibit "F" attached hereto; provided,
          however, that those items of personal property described on Exhibit
          "G" shall not be transferred to the MRG; and

     (e)  any and all of the interest of Seller in any intangible personal
          property now or hereafter owned by Seller and used in the ownership,
          use and operation of the Real Property, Improvements and Personal
          Property, including, without limitation, any contract or lease rights,
          agreements, utility contracts or other rights relating to the
          ownership, use and operation of the Property.

     All of the items described in subsections (a), (b), (c), (d) and (e) above,
     as they relate to the OSH Center, the Retail Center, the San Francisco
     Office Building and the Eccles Project, are hereinafter collectively called
     the "Properties".

2.02 Assumed Obligations.  At Closing, MRG shall take the Properties subject
     only to the existing loans on the Properties (the "Assumed Obligations"),
     which loans are disclosed to MRG as follows:

     (a)  Respecting the OSH Center: a loan secured by a First Deed of
          Trust in favor of Greenwich Capital Products, Inc. (serviced by
          Midland Loan Services) in the approximate principal amount of Five
          Million One Hundred Thousand Dollars ($5,100,000), which loan bears
          interest at a rate of approximately 7.03 % per annum, is amortized
          over a Thirty (30) year period, with certain impounds for tenant
          improvements and taxes collected monthly, and with a maturity date of
          approximately July 31, 2008;

     (b)  Respecting the Retail Center:  a loan secured by a First Deed of
          Trust in favor of Gross Mortgage Company, Inc., in the approximate
          principal amount of Five Hundred Forty Five Thousand Dollars
          ($545,000), which loan bears interest at a rate of approximately 11.00
          % per annum, with no amortization, and a maturity date of
          approximately October 1, 1999.

     (c)  Respecting the San Francisco Office Building: a loan secured by a
          First Deed of Trust in favor of Wells Fargo Bank, in the approximate
          principal amount of Four Million Eight Hundred Thousand Dollars
          ($4,800,000), which loan bears interest at a rate of approximately
          6.67 % per annum, with Thirty (30) year amortization, together with

<PAGE>

          property tax impounds collected monthly, and with a maturity date of
          approximately December 15, 2009; and

     (d)  Respecting the Eccles Project: a loan secured by a First Deed of
          Trust in favor of Redwood Bank, in the approximate principal amount of
          Two Million Dollars ($2,000,000), which loan bears interest at a rate
          of 8.75 % per annum, with no amortization, and with a maturity date of
          approximately March 20, 2000.

The promissory notes, deeds of trust, and related documents concerning the
Assumed Obligations are available for MRG's review at the offices of Seller at
400 Oyster Point Blvd., Suite 415, So. San Francisco, California 94080
("Seller's Offices").   In no event shall Seller be liable for payment of any
loan assumption fee or other costs associated with the transfer of the
Properties subject to the foregoing loans.

2.03 Purchase Price.

     (a)  The Purchase Price of the Property is Sixteen Million
          (16,000,000) shares of New MRG Stock, which common stock is not
          subject to transfer or voting restrictions pursuant to the Articles of
          Incorporation or Bylaws of MRG and is not subject to the superior
          rights of any preferred stock, convertible security, or other
          interest.

     (b)  The 16,000,000 shares have been physically delivered to Seller
          prior to the execution of this Agreement, with MRG having concurrently
          instructed the Transfer Agent not to permit any sale, hypothecation or
          other transfer of said shares until after the close of escrow as
          contemplated herein.  Concurrent with the execution hereof, MRG shall
          irrevocably instruct the Transfer Agent to obey all further
          instructions of the Title Company respecting removal of restrictions
          on the New MRG Stock.  MRG does hereby irrevocably appoint Title
          Company as MRG's agent for all purposes under this Agreement related
          to stock transfer.  The Title Company shall, upon the recording of the
          grant deeds from Seller to MRG, instruct the Transfer Agent to release
          any and all restrictions (other than those imposed by various
          securities laws) on the free transferability of Seller's shares.

     (c)  At the Closing, Seller and MRG shall deposit such cash or other
          immediately available funds, in U.S. dollars, with Title Company, as
          may be necessary to effect the following reimbursements and
          prorations:

          (i)  Seller shall be reimbursed for all unamortized loan fees
               associated with the existing loans against the Properties;

          (ii) Seller shall be reimbursed for all loan impound balances
               (tax impounds, tenant improvement impounds, and all other
               impounds) with balances determined as of the Closing Date;

          (iii)Seller shall transfer to MRG all rights and interests in the
               loan impound balances determined as of the closing date;

          (iv) Seller shall transfer to MRG and MRG shall assume all
               obligations of Seller under the various leases affecting the
               Properties, as set forth in the Assignment and Assumption
               Agreement, which agreement will be in substantially the same form

<PAGE>

               as that set forth in Exhibit "E" attached hereto and incorporated
               herein by this reference;

          (v)  Seller shall transfer to MRG all security deposits held on
               behalf of tenants of the Properties and MRG shall assume all
               liability for said security deposits;

          (vi) Subject to tax impound accounts with various lenders on the
               Properties, real property taxes, business taxes, assessments and
               all other charges against the Real Property, Appurtenances and
               Improvements shall be prorated at the close of escrow;

          (vii)MRG and Seller shall share the costs of escrow 50% each;

          (viii)MRG shall pay all transfer taxes, if any;

          (ix) MRG shall pay for all policies of title insurance; and

          (x)  MRG shall pay all loan assumption fees, if any, in
               connection with the assumption of the Assumed Obligations to the
               lenders on the Properties.

          (xi) Monthly interest, principal, and related charges for the
               loans described in Section 2.02 shall be prorated as of the
               Closing Date.

     The money transferred pursuant to this subparagraph shall be deemed part of
     the Purchase Price.

2.04 MRG's Due Diligence Investigation.  As conditions precedent to Closing, MRG
     shall review the following information and determine whether or not MRG
     shall consummate this transaction.  If MRG fails to give written notice to
     Seller within said five (5) business day period, MRG shall be conclusively
     presumed to have accepted the Properties and related matters "AS IS" and to
     have elected to close this transaction as set forth in Sections 2.06 and
     5.08, below.  MRG's due diligence shall consist of the following:

     (a)  Title.  MRG's review and approval of title to the Property.  The
          Title Company and/or Seller, at MRG's sole cost and expense, shall
          make available to MRG at Seller's Offices the following:

          (i)  a current extended coverage preliminary title report on the Real
               Property issued by Title Company, accompanied by legible copies
               of all documents referred to in the report;

          (ii) copies of all existing and proposed easements, covenants,
               restrictions, agreements or other documents that affect the
               Properties and which are not disclosed by the preliminary title
               report, or, if no such documents exist, a certification of Seller
               to that effect;

          (iii)to the extent reasonably available to Seller an "as-built"
               survey of the Real Property and Improvements by a licensed
               surveyor or civil engineer.  Said survey shall be acceptable to,
               and certified to, MRG and in sufficient detail to provide the
               basis for an ALTA Owner's Policy of Title Insurance without

<PAGE>

               boundary, encroachment or survey exceptions, and shall show the
               location of all easements and Improvements (including underground
               improvements) and any and all other pertinent information with
               respect to the Properties.  The survey shall also indicate any
               encroachments of Improvements onto easements or onto adjacent
               properties or certify to their absence and shall indicate the
               presence of improvements and easements on property adjoining the
               Real Property if located within five (5) feet of the boundaries
               of the Real Property.  Failure of Seller to deliver such an "As
               Built" survey shall permit MRG to engage a surveyor and conduct
               an "As Built" survey at MRG's sole cost and expense;

          (iv) copies of the two (2) most recent property tax bills for the
               Properties; and

          (v)  a chain of title report for the Real Property.

          MRG shall advise the Seller within five (5) business days from the
          date of this Agreement, what exceptions to title, if any, will be
          accepted by MRG; provided, however, that Seller hereby agrees to
          remove all monetary liens, encumbrances and judgments of any nature
          whatsoever encumbering title to the Properties with the exception of
          the notes secured by first deeds of trust to the lenders respecting
          the Assumed Obligations as disclosed in Section 2.02.  As to all other
          matters, MRG shall be deemed to approve all such title exceptions
          unless written disapproval thereof is delivered to Seller and Title
          Company within five (5) business days from the date of this Agreement.
          If MRG should object, Seller shall have five (5) business days after
          receipt of MRG's objections to give MRG notice:  (i) that Seller will
          remove any objectionable exceptions from title and provide MRG with
          evidence satisfactory to MRG of such removal, or provide MRG with
          evidence satisfactory to MRG that said exceptions will be removed on
          or before the Closing; or (ii) that Seller elects not to cause such
          exceptions to be removed.  If Seller gives MRG notice under clause
          (ii), MRG shall have two (2) additional business days to notify Seller
          that MRG intends to proceed with the purchase and take the Property
          subject to such exceptions, or to terminate this Agreement.  If MRG
          shall fail to give Seller notice of its election within two (2)
          business days, MRG shall be deemed to have elected to have accepted
          said exceptions.

     (b)  Documents Affecting the Properties.  MRG's review and approval, within
          five (5) business days from the date of this Agreement, of any and all
          seismic engineering reports, asbestos and/or environmental reports,
          service contracts, maintenance contracts, management contracts,
          certificates of occupancy, warranties, soils reports, insurance
          policies, operating statements for the Properties for the prior two
          (2) years, market studies for the Properties and all other contracts
          or documents of significance to the Properties.  All such documents
          shall be made available to MRG at Seller's Offices at 400 Oyster Point
          Blvd., Suite 415, So. San Francisco, California, on any business day,
          from 9:00 a.m. to 5:00 p.m.  In addition, during such five (5)
          business day period, Seller shall make available to MRG all of
          Seller's files, books and records regarding the Properties for review
          by MRG.

     (c)  Leases/Tenant Matters.  MRG's review and approval, within five (5)
          business days from the date of this Agreement of:

          (i)  all existing and pending leases (and any amendments,
               modifications, and letter agreements relating thereto) affecting
               the Properties;

<PAGE>

          (ii) a current rent roll for the Properties, listing for each
               tenant the name, rent, obligation for reimbursement for expenses,
               amount of deposit and prepaid rent, if any, lease commencement
               date, lease termination date, lease options, option rent, and
               cost of living or other rent escalation clauses; and

          (iii)a schedule of any employees employed by Seller or
               contractors retained by Seller in the operation of the
               Properties, setting forth names, salaries, other compensation,
               and other pertinent information concerning such employees or
               contractors, including the terms of any contracts with them.  All
               such items shall be made available to MRG at Seller's Offices at
               400 Oyster Point Blvd., Suite 415, So. San Francisco, California,
               on any business day, from 9:00 a.m. to 5:00 p.m.

     (d)  Condition of the Properties--Physical.  MRG's review and approval
          within five (5) business days of the date of this Agreement of the
          structural, mechanical, electrical, and other physical characteristics
          of the Properties.  Seller shall use its best efforts to make
          available to MRG, at Seller's Offices, a copy of all plans and
          specifications for the Properties which shall include, without
          limitation, any mechanical, electrical, HVAC, plumbing and life safety
          system plans, specifications and drawings, and service records for the
          building systems in the Improvements and the operating and maintenance
          statements and manuals therefor, all to the extent that any of the
          foregoing are known by Seller to be in its possession or otherwise
          reasonably available to Seller.

     (e)  Condition of the Properties--Environmental.

          (i)  MRG's review and approval, at MRG's sole discretion, of the
               environmental characteristics of the Properties, including,
               without limitation, inspections and examinations for the
               existence of asbestos, asbestos containing materials,
               polychlorinated biphenyls ("PCB's), underground storage tanks,
               radioactive substances, explosives, petroleum or petroleum by-
               products, urea formaldehyde, and other hazardous or toxic
               chemicals, or waste substances.  Seller shall make available to
               MRG, at Seller's offices any and all environmental surveys, Phase
               I reports and any and all other investigative information related
               to the presence or absence of toxic waste and/or hazardous
               materials that effect the Properties, if any, under the
               Comprehensive Environmental Response, Compensation and Liability
               Act of 1980, as amended (the "Superfund Act"), the Carpenter-
               Presley-Tanner Hazardous Substance Account Act, the Resource
               Conservation and Recovery Act of 1976, the Toxic Substances
               Control Act or any other federal, state or local environmental
               statutes, regulations, ordinances or regulatory requirements.

          (ii) Seller makes no representations or warranties as to the
               presence or absence of toxic waste or hazardous materials, or the
               suitability of the Properties from an environmental point of
               view.   To the fullest extent permissible by law, MRG will assume
               any and all obligations regarding any toxic waste or hazardous
               material and will indemnify, defend and hold Seller harmless from
               any and all liability, claims, suits or other matters that may
               arise by reason of the environmental condition of the Properties.
               For purposes of this Agreement, the definition of the terms

<PAGE>

               "hazardous materials" , "toxic waste" or "hazardous substances"
               shall be mean the definition set forth in Section 4.21 below.

          (iii)Notwithstanding any other provision of this Agreement,
               Seller makes no representation or warranty, and MRG assumes all
               liability, if any, for any release or discharge of any type
               whatsoever (including any "release" as defined in 42 U.S.C.
               Section 9601 [22]) or threat of release or discharge (such a
               release or threatened release being hereinafter referred to as a
               "Release") of any hazardous substances (as also defined in 42
               U.S.C. Section 9601 (14) or as defined as hazardous or toxic
               under any other federal, state or local law), petroleum,
               including crude oil or any fraction thereof, or natural gas
               liquids, liquefied natural gas, or synthetic gas (all such items
               being also included in the definition herein of the terms
               "hazardous material" or "toxic waste") on, upon, under, or onto
               the Properties or to any adjoining real properties or to real
               properties in the vicinity of the Properties which could have
               come to be located upon the Properties or the water or ground
               water thereon or thereunder.

          (iv) Notwithstanding any other provision of this Agreement to the
               contrary, Seller makes no representations or warranties as to
               whether or not the Properties have been used as a land fill,
               mine, dump or other disposal facility, or whether or not there
               are or ever have been any underground storage tanks of any kind
               or character, whether empty or containing substances of any
               nature.  Seller makes no representation or warranty as to the
               existence of any violation or any alleged violation of any
               Environmental Regulation from any government entity or agency
               with respect to the Properties, except that Seller does represent
               that he has not actually received any such notice regarding the
               Properties, however, Seller further makes no representation or
               warranty as to whether or not there is now or ever has been any
               investigation or report by or to any governmental agency or
               entity, nor whether or not any party has threatened or asserted
               any claim, cause of action, penalty, cost or demand for payment
               of compensation, whether or not involving injury or threatened
               injury to human health, the environment or natural resources,
               resulting or allegedly resulting from any violation of any
               Environmental Regulation in connection with the Properties.

          (v)  In assessing environmental risk or the absence thereof, MRG
               has relied solely upon its own due diligence and has not relied
               on any representation or warranty of Seller, whether oral or in
               writing, all such representations and warranties, if any, being
               hereby nullified.

     (f)  Applicable Laws. MRG's review and approval, within five (5) business
          days from the date of this Agreement, of all zoning, land-use,
          subdivision, environmental, building and construction laws and
          regulations restricting or regulating or otherwise affecting the use,
          occupancy or enjoyment of the Properties.

     (g)  Leases.  MRG's receipt, review and approval within five (5)
          business days from the date of this Agreement of photocopies of all
          tenant leases involving the Properties, and all records and
          information within the possession of Seller relating thereto,
          including prospective leases currently under negotiation, security
          deposits, and other financial matters, all of which is made available
          to MRG at Seller's Offices as aforesaid.

<PAGE>

     (h)  Surveys.  MRG's receipt, review and approval within five (5) business
          days from the date of this Agreement at Seller's Offices, of a copy of
          the most recent ALTA survey, if any, in Seller's possession,  of the
          Properties for the purposes of obtaining at MRG's sole cost and
          expense an updated ALTA survey and thereby inducing the Title Company
          into issuing an ALTA title policy, to be updated at closing at MRG's
          sole expense.  If no ALTA survey is given by Seller to MRG for
          updating, or if Seller informs MRG that no such survey is available,
          then MRG may engage a surveyor of MRG's choice, and immediately cause
          an ALTA survey to be prepared by the closing or otherwise available
          for the issuance or upgrade of the owner's title policy to an ALTA
          owner's policy, all at MRG's sole expense.

     (i)  Plans & Specifications.  MRG's receipt, review and approval within
          five (5) business days from the date of this Agreement of all as-built
          plans and specifications for each building on the Properties in
          Seller's possession (or which Seller can obtain from its agents,
          employees, contractors and brokers) together with access to all
          reports and design calculations of engineers, consultants and
          contractors relating to the Properties all as the same, if any, may be
          available at Seller's Offices as aforesaid.

     (j)  Appraisals.  MRG's receipt, review and approval within five (5)
          business days from the date of this Agreement of all Covenants,
          Conditions & Restrictions ("CC&Rs), appraisals and market studies in
          Seller's possession (or which Seller can obtain from its agents,
          employees, contractors and brokers), as the same may relate to the
          Properties,  all of which are available at Seller's Offices as
          aforesaid.

     (k)  Governmental Records.  MRG's receipt, review and approval within five
          (5) business days from the date of this Agreement of all governmental
          records, permits approvals, licenses, approvals, certificates of
          occupancy, and associated notices and correspondence in Seller's files
          (or which Seller can obtain from its agents, employees, contractors
          and brokers) effecting repairs, operations and/or restrictions on the
          operation of the Properties, within Seller's possession or which
          Seller or its agents, employees, contractors and brokers may have
          access to, all of which, if any, is available at Seller's Offices as
          aforesaid.

     (l)  Existing Contracts.  MRG's receipt, review and approval within
          five (5) business days from the date of this Agreement of all existing
          warranties and/or guarantees, if any, furnished by contractors and
          vendors for the buildings and mechanical equipment associated with the
          Properties, such warranties and/or guarantees, if any, to be
          transferred to MRG at the close of escrow.

2.05 Seller's Due Diligence.

     (a)  Within five (5) days from the date of this Agreement, MRG shall
          deliver to Seller, at Seller's Offices originals or true and correct
          copies of all:

          (i)  Written contracts relating to stockholders, directors,
               officers, employees, and agents;

<PAGE>

          (ii) Written contracts relating to any agreement with a
               securities broker or underwriter concerning holding, selling,
               marketing, or otherwise buying or selling stock or other
               securities of MRG;

          (iii)Written contracts with attorneys engaged by MRG;

          (iv) Written contracts with accountants engaged by MRG;

          (v)  Written contracts with any other professional or agent of
               MRG not specified in subparagraphs (a) through (d) above;

          (vi) Written schedules of any and all oral contracts to which MRG
               is a party or by which the Properties or MRG's operations are
               bound;

          (vii)The current stockholder list, showing each stockholder's
               name, address, number of shares owned, and purchase price,
               updated to the date of this Agreement;

          (viii)A transaction register from MRG's Transfer Agent setting
               forth the details of all issuances of common stock certificates,
               indicating in the case of each certificate the date of issuance,
               certificate number, number of shares, registered owner, and
               whether such certificate constitutes an original issuance or the
               transfer of outstanding stock, indicating the number of the
               certificate from which such stock was transferred;

          (ix) Assurances provided by MRG stockholders as contemplated by
               Section 4.24(e) and documenting the availability of an exemption
               from registration under federal and state securities laws in
               accordance with the terms of this Agreement, together with a
               memorandum of MRG's counsel setting forth the principal
               conditions to be met under the laws of the various states in
               which the New MRG Stock is issued in order to rely on exemptions
               from the registration provisions of such laws;

          (x)  All documents relating to the trading symbol "MGRY" pursuant
               to which MRG's stock is quoted;

          (xi) All documents relating to the registration symbol of MRG's
               stock on the "Pink Sheets";

          (xii)A schedule of the last 20 stock trades made in  MRG's stock,
               which schedule will be in reverse chronological order (i.e., the
               most recent transaction first), showing the date of the trade,
               the number of shares traded, the purchase price for the shares,
               and the name of the MRG and the seller;

          (xiii)All filings with the SEC, if any;

          (xiv)All filings with any state securities commission, state
               corporations commission, or similar filing;

<PAGE>

          (xv) All filings with any non-United States securities
               commission, non-United States corporations commission, Canadian
               province, or similar filing;

          (xvi)The quarterly financial statements of MRG for the period
               ended March 31, 1999;

          (xvii)Any other document that is operative as to the business
               operations of MRG or to its sales or issuances of securities.

          (xviii)A schedule indicating the names, addresses, and term of
               office of each director of MRG.

          (xix)A schedule indicating the names, addresses, and term of
               office of each officer of MRG.

          (xx) All pension plans, 401(k), profit-sharing, stock option, or
               incentive plans in effect concerning MRG or any of its officers,
               directors, employees, or agents.

          (xxi)A schedule setting forth the name, address, and position of
               each employee of MRG.

     Seller shall have ten (10) business days from receipt of said documents to
     review the financial, operating, and trading history of MRG and determine
     if MRG meets Seller's suitability standards, which standards shall be
     determined in Seller's sole and absolute discretion.  Unless Seller
     notifies MRG in writing within said ten (10) business day period that MRG
     meets Seller's suitability standards, Seller shall be deemed to have
     disapproved MRG's suitability and this Agreement shall be of no further
     force or effect.

     (b)  MRG will deliver to Seller, pursuant to Section 4.01 below,
          within three (3) business days of the effective date of this
          Agreement, the following:

          (i)  Certified copies of the Articles of Incorporation of
               Montgomery Realty Group, Inc. filed with the Secretary of the
               State of Nevada on August 20, 1997;

          (ii) Certified copies of the Certificate of Amendment of Articles
               of Incorporation of Montgomery Realty Group, Inc. filed with the
               Secretary of State of the State of Nevada on November 18, 1997;

          (iii)Certified copies of all corporate minute books, stock
               transfer books, and the corporate seal (if any) of MRG;

          (iii)Trading symbol rights; and

          (iv) Authorization to instruct transfer agent.

2.06 Closing.  The Closing hereunder shall be held at such time and place as the
     parties shall mutually agree, but in no event later then May 30, 1999, and
     delivery of all items to be made at the Closing under the terms of this
     Agreement shall be made at the offices of Title Company on the date five
     (5) days after completion of MRG's and Seller's due diligence and the
     satisfaction of all of the conditions set forth in Sections 2.04 and 2.05

<PAGE>

     of this Agreement (or, if said date fails on a holiday or weekend day, then
     the second business day after such holiday or weekend day) (the "Closing
     Date").  Such date may not be extended without the written approval of both
     Seller and MRG.  If the Closing does not occur on or before May 30, 1999,
     the Title Company as escrow holder shall, unless it is notified by both
     parties to the contrary within two (2) days after May 30, 1999, return to
     the depositor thereof items which may have been deposited hereunder.  Any
     such return shall not, however, relieve either party hereto of any
     liability it may have for its wrongful failure to close.  MRG and Seller
     shall each submit to the Title Company, not less than five (5) days prior
     to the Closing Date, escrow instructions consistent with the provisions of
     this Agreement.

2.07 Title to Real Property.

     (a)  At the Closing, Seller shall convey to MRG marketable and
          insurable fee simple title to the Real Property, the Appurtenances and
          the Improvements, by duly executed and acknowledged grant deed in a
          form acceptable to MRG.  Evidence of delivery of marketable and
          insurable fee simple title shall be the issuance by Title Company of
          an ALTA Owner's Policy of Title Insurance (rev. 10/17/70), in the full
          amount of $16,000,000 insuring fee simple title to the Real Property,
          the Appurtenances and the Improvements in MRG, subject only to those
          exceptions as MRG shall approve pursuant to Section 2.04(a); said
          policy shall provide full coverage against mechanics' or materialmen's
          liens arising out of the construction of any of the Improvements and
          shall contain such special endorsements as MRG may reasonably require.
          The Title Company shall obtain, if requested by MRG, reinsurance
          agreements from such companies and in such amounts as MRG may request.

     (b)  At the Closing, Seller shall transfer title to the Personal
          Property by a bill of sale in the form attached hereto as Exhibit "H,"
          such title to be free of any liens and encumbrances.

2.08 Seller's Documents.  At or before the Closing, Seller shall deliver to the
     Title Company the following:

     (a)  duly executed and acknowledged grant deeds conveying to the MRG
          all Real Property described as the OSH Center, the Retail Center, the
          San Francisco Office Building and the Eccles Center, including all
          Appurtenances and the Improvements and all rights, privileges and
          easements appurtenant thereto;

     (b)  a duly executed bill of sale covering the Personal Property, in
          the form attached hereto as Exhibit "H";

     (c)  a Certificate from the California Secretary of State (or a
          commercial reporting service satisfactory to MRG) that indicates that
          as of the Closing Date there are no filings against Seller in the
          office of the Secretary of State under the California Commercial Code
          that would be a lien on any of the items specified in the Bill of Sale
          referred to above (other than such filings, if any, as are disclosed
          in Section 2.02 in connection with the Assumed Obligations);

     (d)  originals of all leases (and amendments, modifications and letter
          agreements relating thereto, if any) or if originals are not
          available, true and accurate photocopies thereof, covering any portion
          of the Properties, any non-cash security deposits relating thereto,

<PAGE>

          all tenant files and a duly executed Assignment of Leases in the form
          attached hereto as Exhibit "I" (these may, at Seller's option, be
          delivered outside of escrow);

     (e)  originals or copies of all service contracts, maintenance
          contracts and management affecting the Property (collectively, the
          "Service Contracts") to be continued by MRG after the Closing, and any
          warranties or guaranties received by Seller from any contractors,
          subcontractors, suppliers or materialmen in connection with
          construction of the Improvements (these may, at Seller's option, be
          delivered outside of escrow);

     (f)  a duly executed Assignment of Service Contracts, Warranties and
          Guaranties and Other Intangible Property, in the form attached hereto
          as Exhibit "J";

     (g)  to the extent available to Seller originals or copies of building
          permits and certificates of occupancy for the buildings and all
          tenant-occupied space included within the Improvements (these may, at
          Seller's option, be delivered outside of escrow);

     (h)  to the extent available to Seller one complete set of plans and
          specifications for the Improvements (these may, at Seller's option, be
          delivered outside of escrow);

     (i)  notices to the tenants at the Properties in the form attached as
          Exhibit "K," executed by Seller (these may, at Seller's option, be
          delivered outside of escrow);

     (j)  an affidavit of Seller that Seller is not a "foreign person"
          within the meaning of Section 1445 of the Code duly executed by Seller
          in the form attached hereto as Exhibit "M";

     (k)  closing statement in form and content satisfactory to MRG and
          Seller;

     (l)  a duly executed Assignment of Leases in the form attached hereto
          as Exhibit "I";

     (m)  a duly executed Bill of Sale in the form attached hereto as
          Exhibit "N"; and

     (n)  any other documents, instruments or agreements called for
          hereunder which have not previously been delivered.

     MRG may waive compliance on Seller's part under any of the foregoing items
     by an instrument in writing.

2.09 MRG's Documents and Funds.   At least two (2) business days prior to the
     Closing, MRG shall deliver to Title Company the following:

     (a)  Updated MRG Schedules, if any are required, dated as of the
          Closing Date and certified in the manner provided in Section 4.08.

     (b)  Copies of the resolutions of the board of directors and
          stockholders of MRG authorizing the execution and performance of this
          Agreement and the consummation of the transaction, certified by the
          president and secretary or an assistant secretary of MRG as of the
          Closing Date;

<PAGE>

     (c)  Certificate of good standing of MRG issued as of a recent date by
          the Secretary of State of the state of Nevada.

     (d)  All consents, waivers or approvals obtained by MRG with respect
          to the consummation of the transactions contemplated by this
          Agreement;

     (e)  A certificate, dated the date of the Closing, certified by MRG's
          president and secretary confirming the truthfulness of all matters set
          forth in Sections 4.01, 4.02, 4.03, 4.05, 4.06, 4.07, 4.09(a),
          4.09(b), 4.09(c), 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17,
          4.18, 4.19, 4.20, 4.22, 4.23, 4.24, and 4.25; and

     (f)  A certificate, dated the date of the Closing, signed by MRG,
          certifying that no security interests have been created in or against
          the assets of MRG subsequent to the date of the certificates referred
          to subparagraph g.

     (g)  any other documents, instruments or agreements called for
          hereunder which have not previously been delivered.

Seller may waive compliance on MRG's part under any of the foregoing items by an
instrument in writing, or Seller may, at Seller's option, take possession of
these documents at Seller's Offices, outside of escrow.

2.10 Other Documents.  Seller and MRG shall each deposit such other instruments
     as are reasonably required by the Title Company or otherwise required to
     close the escrow and consummate the purchase of the Property in accordance
     with the terms hereof.

                                  ARTICLE III.
                   REPRESENTATIONS AND WARRANTIES OF SELLLER

     Seller hereby represents and warrants to MRG as follows:

3.01 No Litigation.  There is no litigation pending or, after due and diligent
     inquiry, to the best of the Seller's knowledge threatened, against Seller
     or any basis therefor that arises out of the ownership of the Properties or
     that might detrimentally affect MRG's proposed use or operation of the
     Properties, or the value of the Properties or adversely affect the ability
     of Seller to perform his obligations under this Agreement.

3.02 No Liens and Encumbrances.  Seller holds the Properties free and clear of
     all liens and encumbrances, except for those included in the Assumed
     Obligations.

3.03 No Foreign Person.  Seller is not a "foreign person" within the meaning of
     Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended (the
     "Code").

3.04 No Broker's or Finder's Fee.  No broker, finder or investment banker is
     entitled to any brokerage, finder's or other fee or commission in
     connection with the transactions contemplated by this Agreement based upon
     arrangements made by or on behalf of Seller.

3.06 Validity of Conveyance.  This Agreement and all documents executed by
     Seller which are to be delivered to MRG at the time of Closing are, or at
     the time of Closing will be, duly executed and delivered by Seller, are, or

<PAGE>

     at the time of Closing will be, legal, valid, and binding obligations of
     Seller, are and at the time of Closing will be sufficient to convey title
     (if they purport to do so), and do not and at the time of Closing will not
     violate any provisions of any agreement or judicial order to which Seller
     is a party or to which Seller or the Properties is subject, except that the
     deeds of trust held by Gross Mortgage Company and Redwood Bank contain a
     due on sale clause.

                                  ARTICLE IV.

                     REPRESENTATIONS AND WARRANTIES OF MRG

    As an inducement to and to obtain the reliance of Seller, MRG represents
and warrants as follows:

4.01 Organization; Corporate Documents. MRG is a corporation duly
     organized, validly existing, and in good standing under the laws of the
     State of Nevada and is in good standing and authorized to do business in
     the State of California, has registered as a foreign corporation with the
     Secretary of State of the State of California, and is in good standing with
     the State of California, all fees and taxes having been paid current; has
     the corporate power to own all of its properties and assets and to carry on
     its business in all material respects as it is now being conducted, and
     there is no jurisdiction in which it is not so qualified in which the
     character and location of the assets owned by it or the nature of the
     business transacted by it requires qualification, except where failure to
     do so would not have a material adverse effect on the business or
     properties of MRG.  Included as Schedule 4.01 hereto are complete and
     correct copies of all items set forth in Section 2.05(b). The execution and
     delivery of this Agreement does not, and the consummation of the
     transactions contemplated by this Agreement in accordance with the terms
     hereof will not, violate any provision of MRG' certificate of incorporation
     or bylaws.  MRG has full power, authority, and legal right and has taken
     all action required by law, its certificate of incorporation, bylaws, and
     otherwise to consummate the transactions herein contemplated.

4.02 Board of Directors; Approval of Agreements.

     (a)  The board of directors of MRG has authorized the execution and
          delivery of this Agreement by MRG and has approved the consummation of
          the transactions contemplated hereby. Schedule 4.02 hereto is a
          certified copy of resolutions duly adopted by the board of directors
          of MRG evidencing such approval, and the minute book referred to in
          Section 4.19 contains the original of the minutes of the meeting or
          the consent in lieu thereof at which such resolutions were adopted,
          all as described in Section 2.09(b).

     (b)  The members of the existing Board of Directors of MRG are:  Mr.
          Clemons F. Walker, Mr. O. Lee Barnett, and Mr. X, and said directors
          may resign or be removed by the shareholders without payment or
          compensation of any kind being owed to said directors for services
          rendered or for any other reason. It is not required under Nevada Law
          for the shareholders of MRG to approve the transactions contemplated
          by this Agreement, as required by Section 5.03 below.

4.03 Capitalization. The authorized capitalization of MRG consists of
     100,000,000 shares, par value $0.001, consisting of  20,000,000 shares of
     preferred stock, none of which is issued and outstanding, and 80,000,000
     shares of Common Stock, of which 500,000 shares are issued and outstanding,

<PAGE>

     and no shares are reserved for issuance on the exercise of warrants or
     options, the conversion of other securities, or the exercise of any other
     call, commitment, or right to which MRG is a party or by which it is bound.
     All issued and outstanding shares of New MRG Stock are validly authorized
     and, upon issuance in accordance with the terms of this Agreement, will be,
     legally issued, fully paid, and nonassessable and not issued in violation
     of the preemptive or other right of any person

4.04 No. Subsidiaries, Predecessors. MRG owns no equity securities of any other
     and does not have any predecessor, as that term is defined under generally
     accented accounting principles.

4.05 MRG Financial Statements.

     (a)  The MRG Financial Statements consist of the following, all of which
          appear as Schedule 4.05 hereto:  (i) audited consolidated balance
          sheets as of December 31, 1998 and December 31, 1997, and the related
          statements of operations, cash flows, and stockholders' equity for
          each of the years then ended, including the notes thereto, together
          with the opinions of independent certified public accountants, and
          (iii) unaudited balance sheets of MRG as of March 31, 1999 (the "MRG
          Current Balance Sheet"), and the related statements of income, cash
          flows, and stockholders' equity for the quarters ended March 31, 1998
          and 1999.

     (b)  All of the MRG Financial Statements have been prepared in accordance
          with generally accepted accounting principles consistently applied
          throughout the periods involved. All of such balance sheets present
          fairly, as of their respective dates, the consolidated financial
          position of MRG.  MRG did not have, as of the date of any of such
          condensed balance sheets, except as and to the extent reflected or
          reserved against therein, any liabilities or obligations (absolute or
          contingent) which should be reflected in a combined balance sheet or
          the notes thereto prepared in accordance with generally accepted
          accounting principles and all assets reflected therein present fairly
          the assets of MRG in accordance with generally accepted accounting
          principles. The consolidated statements of operations, cash flows, and
          stockholders' equity present fairly the information required to be set
          forth therein under generally accepted accounting principles. MRG
          maintains and will continue to maintain a standard system of
          accounting established and maintained in a manner permitting the
          preparation of financial statements in accordance with generally
          accepted accounting principles.

     (c)  The MRG Financial Statements have not been prepared in accordance with
          regulation S-X promulgated by the SEC regarding the form and content
          of and requirements for financial statements to be filed with the SEC.

4.06 Tax Returns.  MRG has filed all tax returns and reports as required by law
     and has delivered copies of said returns and reports pursuant to Section
     2.05(a). All such returns and reports are accurate and correct in all
     material respects. MRG has no liabilities with respect to the payment of
     any federal, state, county, local, or other taxes (including any
     deficiencies, interest, or penalties) accrued for or applicable to the
     period ended on the date of the MRG Current Balance Sheet and all such
     dates and years and periods prior thereto and for which MRG may at said
     date have been liable in its own right or as transferee of the assets of,
     or as successor to, any other corporation or other entity, except for taxes
     accrued but not yet due and payable. MRG has not elected at any time
     pursuant to the Code to be treated as an S corporation pursuant to Section
     1362(a) of the Code or a collapsed corporation pursuant to Section 341(f)
     of the Code or elected pursuant to the Code to be treated as an S

<PAGE>

     corporation pursuant to Section 1362(a) of the Code or a collapsible
     corporation pursuant to Section 341(f) of the Code, nor has MRG made any
     other elections pursuant to the Code.  MRG has not made any other election
     pursuant to the Code (other than elections which relate solely to methods
     of accounting, depreciation, or amortization) that would have a material
     adverse effect on MRG, its financial condition, its business as presently
     conducted or proposed to be conducted, or any of its properties or material
     assets. There are no outstanding agreements or waivers extending the
     statutory period of limitation applicable to any tax return of MRG.

4.07 Books and Records.  The books and records, financial and otherwise, of MRG
     are in all material respects complete and correct and have been made and
     maintained in accordance with sound business and bookkeeping practices and,
     in reasonable detail, accurately and fairly reflect the transactions and
     dispositions of the assets of MRG. MRG has maintained a system of internal
     accounting controls sufficient to provide reasonable assurances that (i)
     transactions have been and are executed in accordance with management's
     general or specific authorization; (ii) transactions are recorded as
     necessary to permit the preparation of financial statements in conformity
     with generally accepted accounting principles or any other criteria
     applicable to such statements and to maintain accountability for assets;
     (iii) access to assets is permitted only in accordance with management's
     general or specific authorization; and (iv) the recorded accountability for
     assets is compared with the existing assets at reasonable intervals, and
     appropriate action is taken with respect to any differences.

4.08 Information. The information concerning MRG set forth in this Agreement
     and in the Schedules delivered by MRG is complete and accurate in all
     material respects and does not contain any untrue statement of a material
     fact or omit to state a material fact required to make the statements
     made, in light of the circumstances under which they were made, not
     misleading.  All Schedules set forth in Section 2.05, et seq., and
     delivered to Seller by MRG shall be certified as being true and correct by
     MRG's president.  Where no documents or items are applicable, MRG shall
     issue a schedule stating "None."

4.09 Absence of Certain Changes or Events.  Except as set forth in this
     Agreement or in Schedule 4.09 hereto, since the date of the MRG Current
     Balance Sheet:

     (a)  There has not been (i) any material adverse change in the business,
          operations, properties, level of inventory, assets, or condition of
          MRG or (ii) any damage, destruction, or loss to MRG (whether or not
          covered by insurance) materially and adversely affecting the
          business, operations, properties, assets, or conditions of MRG;

     (b)  MRG has not (i) amended its articles of incorporation or bylaws; (ii)
          declared or made, or agreed to declare or make, any payment of
          dividends or distributions of any assets of any kind whatsoever to
          stockholders or purchased or redeemed, or agreed to purchase or
          redeem, any of its capital stock; (iii) waived any rights of value
          which in the aggregate are extraordinary or material considering the
          business of MRG; (iv) made any material change in its method of
          management, operation, or accounting; (v) entered into any other
          material transactions; (vi) made any accrual or arrangement for or
          payment of bonuses or special compensation of any kind or any
          severance or termination payment to any present or former director,
          officer, employee, or shareholder; (vii) increased the rate of
          compensation payable or to become payable by it to any of its

<PAGE>

          officers or directors or any of its employees; or (viii) made any
          increase in any profit sharing, bonus, deferred compensation,
          insurance, pension, retirement, or other employee benefit plan,
          payment, or arrangement made to, for, or with its officers,
          directors, or employees;

     (c)  MRG has not (i) granted or agreed to grant any options, warrants, or
          other rights for its stocks, bonds, or other corporate securities
          calling for the issuance thereof; (ii) borrowed or agreed to borrow
          any funds or incurred, or become subject to, any material obligation
          or liability (absolute or contingent) except liabilities incurred in
          the ordinary course of business; (iii) paid any material obligation
          or liability (absolute or contingent) other than current liabilities
          reflected in or shown on the MRG Current Balance Sheet and current
          liabilities incurred since the date of the MRG Current Balance Sheet
          in the ordinary course of business; (iv) sold or transferred, or
          agreed to sell or transfer, any of its assets, properties, or rights
          (except assets, properties, or rights not used or useful in its
          business which, in the aggregate have a value of less than $5,000);
          (v) made or permitted any amendment or termination of any contract,
          agreement, or license to which it is a party if such amendment or
          termination is material, considering the business of MRG; (vi)
          issued, delivered, or agreed to issue or deliver any stock, bonds, or
          other corporate securities including debentures (whether authorized
          and unissued or held as treasury stock); or (vii) disclosed to third
          parties any confidential or proprietary information of MRG respecting
          its products, services, manufacturing, or marketing procedures or
          practices, methods of pricing, or other data material to the business
          and operations of MRG; and

     (d)  To the best knowledge of MRG, it has not become subject to any law or
          regulation which materially and adversely affects, or in the future
          may adversely affect, the business, operations, properties, assets,
          or condition of MRG.

4.10 Title and Related Matters.

     (a)  MRG owns no real property.

     (b)  Schedule 4.10 hereto sets forth an accurate and complete list of all
          tangible personal property owned by MRG or used in its business
          together with all intangible assets owned by MRG or used in its
          business and having a purchase price or fair market value of over
          $500, together with a description of any mortgages, financing
          instruments, or other encumbrances to the title to such properties.
          Schedule 4.10 hereto also sets forth details of all leases for real
          and personal property to which MRG is a party, including the real or
          personal property involved, the amount of the monthly or other
          periodic payment due thereunder, a notation of any additional
          charges, the expiration date, and any residual or similar payment
          required on expiration of the lease in order to acquire ownership of
          the leased property. Except as disclosed in Schedule 4.10 hereto,
          each such lease is in full force and effect; all rents and additional
          rents due to date on each such lease have been paid; in each case,
          the lessee has been in peaceable possession since the commencement of
          the original term of such lease and is not in default thereunder, and
          no waiver, indulgence, or postponement of the lessee's obligation
          thereunder has been granted by the lessor; and there exists no event
          of default or event, occurrence, condition, or act, which, with the
          giving of notice, the lapse of time, or the happening of any further
          event or condition, would become a default under such lease. MRG has
          not violated any of the terms or conditions under any such lease in
          any material respect and, to the best of MRG's knowledge,

<PAGE>

          information, and belief, all of the covenants to be performed by any
          other party under any such lease have been fully performed. The
          property leased by MRG is in a state of good maintenance and repair
          and is adequate and suitable for the purposes for which it is
          presently being used.

     (d)  MRG owns the entire right, title, and interest in and to, or has the
          right to use all of the trade secrets, technology, know-how,
          tradenames, trademarks, servicemarks, and other proprietary
          information owned by or used in connection with the business of MRG,
          including all copyrights, patents, patent applications,
          registrations, and applications with respect thereto (collectively
          the "Intellectual Property"). Such Intellectual Property is not
          subject to the payment of royalties or any other obligation to any
          other person or entity. None of the employees of MRG owns, directly
          or indirectly, any right, title, or interest in or to the
          Intellectual Property. To the best knowledge of MRG, none of the
          Intellectual Property is subject to any order, decree, judgment,
          stipulation, settlement, encumbrance, or attachment.  There are no
          pending or threatened proceedings, litigation, or other adverse
          claims of which MRG is aware affecting or with respect to the
          Intellectual Property. To the best knowledge of MRG, the Intellectual
          Property does not infringe on the copyright, patent, trade secret,
          know-how, or other proprietary right of any other person or entity
          and comprises all such rights necessary to permit the operation of
          the business of MRG as now being conducted.

4.11 Litigation and Proceedings. Except as set forth in Schedule 4.11 hereto,
     there are no actions, suits, or proceedings pending or, to the knowledge
     of MRG, threatened by or against MRG, its officers and directors in their
     capacity as such, or affecting MRG or its properties, at law or in equity,
     before any court or other governmental agency or instrumentality, domestic
     or foreign, or before any arbitrator of any kind. MRG does not have any
     knowledge of any default on its part with respect to any judgment, order,
     writ, injunction, decree, award, rule, or regulation of any court,
     arbitrator, or governmental agency or instrumentality.

4.12 Contracts.

     (a)  Included in Schedule 4.12 hereto is a copy of every material
          contract, including every contract not made in the ordinary course of
          business which is material to MRG and is to be performed in whole or
          in part at or after the date hereof or was entered into not more than
          two years before the date hereof by MRG (consisting only of contracts
          as to which MRG is a party or to which it has succeeded to a party by
          assumption or assignment or in which MRG has a beneficial interest);

     (b)  Except as described in this Agreement or in Schedule 4.12 hereto, MRG
          is not a party to or bound by, and the properties of MRG are not
          subject to, any material contract, agreement, other commitment or
          instrument or any charter or other corporate restriction or any
          judgment, order, writ, injunction, decree, or award which materially
          and adversely affects, or in the future may (as far as MRG can now
          foresee) materially and adversely affect, the business operations,
          properties, assets, or condition of MRG; and

     (c)  Except as included or described in Schedule 4.12 hereto or reflected
          in the most Current MRG Balance Sheet, MRG is not a party to any
          material oral or written (i) contract for the employment of any
          officer, director, or employee which is not terminable on 30 days (or
          less) notice; (ii) profit sharing, bonus, deferred compensation,

<PAGE>

          stock option, severance pay, pension benefit or retirement plan,
          agreement, or arrangement covered by title IV of the Employee
          Retirement Income Security Act, as amended; (iii) agreement,
          contract, or indenture relating to the borrowing of money; (iv)
          guarantee of any obligation for the borrowing of money or otherwise,
          excluding endorsements made for collection and other guarantees of
          obligations, which, in the aggregate do not exceed $1,000; (v)
          consulting or other similar contract with an unexpired term of more
          than one year or providing for payments in excess of $1,000 in the
          aggregate; (vi) collective bargaining agreement; (vii) agreement with
          any present or former officer or director of MRG; or (viii) other
          contract, agreement, or other commitment involving payments by it of
          more than $1,000 in the aggregate.

     (d)  Except as included or described in Schedule 4.12 hereto, no contract
          with any broker, underwriter, market maker or other agent of MRG,
          dealing in MRG's securities or selling said securities on behalf of
          MRG, is now in existence, nor will any such agreement come into
          existence by the mere lapse of time.

4.13 Material Contract Defaults. MRG is not in default in any material respect
     under the terms of any outstanding contract, agreement, lease, or other
     commitment which is material to the business, operations, properties,
     assets, or condition of MRG, and there is no event of default or other
     event which, with notice or lapse of time or both, would constitute a
     default in any material respect under any such contract, agreement, lease,
     or other commitment respecting which MRG has not taken adequate steps to
     prevent such a default from occurring.

4.14 No Conflict with Other Instruments. The execution of this Agreement and
     the consummation of the transactions contemplated by this Agreement will
     not result in the breach of any term or provision of, or constitute an
     event of default under, any material indenture, mortgage, deed of trust, or
     other material contract, agreement, or instrument to which MRG is a party
     or to which any of its properties or operations are subject.

4.15 Governmental Authorizations. Except as set forth in Schedule 4.15 hereto,
     to the best knowledge of MRG, it has all governmental authorizations that
     are legally required to enable it to conduct its business in all material
     respects as conducted on the date hereof or as presently foreseeable in
     connection therewith. Except for compliance with federal and state
     securities and corporation laws, as hereinafter provided, to the best of
     its knowledge no authorization, approval, consent, or order of, or
     registration, declaration, or filing with, any court or other governmental
     body is required in connection with the execution and delivery by MRG of
     this Agreement and the consummation by MRG of the transactions contemplated
     hereby.

4.16 Compliance with Laws and Regulations. Except as set forth in Schedule 4.16
     hereto, MRG has complied, to the best of its knowledge, with all applicable
     statutes and regulations of any federal, state, or other governmental
     entity or agency thereof, except to the extent that noncompliance would not
     materially and adversely affect the business, operations, properties,
     assets, or condition of MRG or except to the extent that noncompliance
     would not result in the incurrence of any material liability for MRG.
     Schedule 4.16 includes a copy of each letter of inquiry, review, or
     investigation or other writing from or to any governmental authority since
     inception evidencing a violation or possible or alleged violation of any of
     the foregoing.

4.17 Insurance. Schedule 4.17 hereto sets forth a complete list of all products
     liability, casualty, automobile, extended coverage, and other insurance
     policies which MRG maintains respecting its products, services, business,

<PAGE>

     properties, and employees, showing for each type of coverage the policy
     limits, principal exclusions, deductibles, insurer, and the like. Such
     policies are in full force and effect and are free from any right of
     termination by the insurance carriers. Except as set forth in Schedule 4.17
     hereto, all of the insurable properties of MRG are insured for its benefit
     in the amount of their full replacement value (subject to reasonable
     deductibles) against losses due to fire and other casualty, with extended
     coverage, and other risks customarily insured against by persons operating
     similar properties in the localities where such properties are located and
     under valid and enforceable policies issued by insurers of recognized
     responsibility. Such policy or policies containing substantially equivalent
     coverage will be outstanding and in full force at the Closing Date, as
     hereinafter defined.

4.18 Transactions with Affiliates. Schedule 4.18 hereto sets forth a
     description of every material contract, agreement, or arrangement between
     MRG and any person who is or has ever been an officer or director of MRG or
     person owning of record, or known by MRG to own beneficially, 5% or more of
     the issued and outstanding common stock of MRG and which is to be performed
     in whole or in part after the date hereof or was entered into within three
     years before the date hereof. In all of such circumstances, the contract,
     agreement, or arrangement was for a bona fide business purpose of MRG, and
     the amount paid or received, whether in cash, in services, or in kind, is,
     has been during the full term thereof, and is required to be during the
     unexpired portion of the term thereof, no less favorable to MRG than terms
     available from otherwise unrelated parties in arm's length transactions.
     Except as disclosed in Schedule 4.18 hereto or otherwise disclosed herein,
     no officer or director of MRG or 5% shareholder of MRG has, or has had
     during the preceding three years, any interest, directly or indirectly, in
     any material transaction with MRG. Schedule 4.18 hereto also includes a
     description of any commitment by MRG, whether written or oral, to lend any
     funds to, borrow any money from, or enter into any other material
     transaction with, any such affiliated person.

4.19 Minute Book; Stockholder List. The minute book of MRG contains, and will
     contain at the Closing Date, evidence of the due election and incumbency of
     the board of directors and officers of MRG executing this Agreement or any
     document, certificate, or other instrument executed in order to consummate
     the transactions herein contemplated together with an accurate and complete
     record of the proceeds of all meeting of directors, committees thereof, or
     stockholders and all written consents in lieu thereof. The stockholders'
     list of Seller attached hereto is a true and accurate copy thereof as of
     the date of this Agreement.  The Transfer Agent retains in safekeeping all
     certificates that have been or should be canceled on the registration of
     transfer thereof.  All of such canceled certificates have on their face in
     conspicuous permanent ink or perforations the word "canceled."  All stock
     certificates issued to date and all unissued blank certificates are
     sequentially numbered [    ] through [     ].  All of such certificates are
     accounted for as either canceled and in the possession of the Transfer
     Agent, outstanding, or unissued.
4.20  Labor Agreements and Actions.

     (a)  MRG is not bound by or subject to (and none of its operations is
          bound by or subject to) any written or oral, express or implied,
          contract, commitment, or arrangement with any labor union, and no
          labor union has requested or, to the knowledge of MRG, has sought to
          represent any of the employees, representatives, or agents of MRG.
          There is no strike or other labor dispute involving MRG pending, or to
          the knowledge of MRG threatened, which could have a material adverse

<PAGE>

          effect on the assets, properties, financial condition, operating
          results, or business of MRG (as such business is presently conducted
          and as it is proposed to be conducted), nor is MRG aware of any labor
          organization activity involving its employees.

     (b)  MRG is not aware that any officer or key employee, or that any
          group of key employees, intends to terminate their employment with
          MRG, nor does MRG have a present intention to terminate the employment
          of any of the foregoing. The employment of each officer and employee
          of MRG, to the best of MRG' knowledge, is terminable at the will of
          MRG.

4.21  Hazardous Substances. The terms "hazardous waste," "hazardous substance,"
     "disposal," "release," and "threatened release," as used in this Agreement,
     shall have the same meanings as set forth in the Comprehensive
     Environmental Response, Compensation, and Liability Act of 1980, as
     amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund
     Amendments and Reauthorization Act of 1986, Pub. L. no. 99-499 ("SARA"),
     the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et
     seq., the Resource Conservation and Recovery Act, 49 U.S.C. Section 6901,
     et seq., or other applicable state or federal laws, rules, or regulations
     adopted pursuant to any of the foregoing.

4.22 Compliance with Securities Laws, Rules, and Regulations.  All securities
     of MRG issued since its inception, consisting solely of common voting
     stock, have been issued pursuant to and in compliance with applicable
     federal and state laws, rules, and regulations; specifically, all offers
     and sales of shares of common voting stock were made pursuant to exemptions
     from the registration requirements of Section 5 of the Securities Act of
     1933, as amended, and pursuant to available exemptions provided by
     applicable state securities laws.  Further, MRG has made all the required
     filings with any federal or state regulatory agency regarding the offer and
     sale of all issued and outstanding shares of common voting stock.

4.23 No Broker's or Finder's Fee.  No broker, finder or investment banker is
     entitled to any brokerage, finder's or other fee or commission in
     connection with the transactions contemplated by this Agreement based upon
     arrangements made by or on behalf of MRG.

4.24 Securities Matters.  MRG hereby represents and warrants that:

     (a)  The common stock of MRG is currently listed on the NASD
          Electronic Bulletin Board System and on the "Pink Sheets" with the
          trading symbol "MGRY."  MRG is in compliance with all currently
          applicable requirements for the continuation of such quotation until
          the effective date of the requirement that MRG's common stock be
          registered under section 12(g) of the Exchange Act.

     (b)  To the best of MRG's knowledge, the last trade reported occurred
          on _______, 1999, at a bid price of $____ per share and an asked price
          of $_____ per share.

     (c)  Neither MRG nor, to the best of MRG's knowledge, any other
          person, has at any time during the past year or currently has any
          agreement, plan, or arrangement to at any time in the future (i)
          submit or publish or cause to be submitted or published, directly or
          indirectly, any quotation for the common stock of MRG on behalf of MRG
          or any of its affiliates; or (ii) provide to any securities broker-
          dealer any incentive or inducement, financial or otherwise, to publish
          quotations for the common stock of MRG at any specific or minimum

<PAGE>

          prices or amounts or to execute any specific transactions in such
          common stock, other than usual and customary commissions and markups.

     (d)  To the extent applicable, MRG has complied with the securities
          laws of each and every jurisdiction in which a shareholder resided as
          of the date such shareholder purchased securities from MRG, and such
          shares purchased from MRG can be resold without restriction (except
          for any applicable control restrictions) by such shareholder in said
          jurisdiction immediately after the closing as herein contemplated.

     (e)  MRG has complied with each and every filing required by the
          Securities and Exchange Commission, or has met the requirements for
          exemption from said filings and attaches proof of said exemptions, by
          way of attorney opinion letter, or otherwise, collectively as Exhibit
          "M."

     (f)  The Transfer Agent for MRG is that entity identified in Article I
          hereof is the only authorized transfer agent to register transfers of
          securities of MRG.

     (g)  MRG has taken all steps necessary or appropriate to ensure that
          it is in full compliance with the U.S. securities laws, the various
          federal or provincial securities laws for jurisdictions outside of the
          United States, as applicable the 50 States of the United States, the
          National Association of Securities Dealers, and as applicable any
          other exchange board or oversight agency.

     (h)  Except for stock owned by current directors or holders of
          controlling interest in MRG, there are no restrictions or limitations
          on the trading of MRG Common Stock.

     (i)  There are no circumstances known to any of the directors,
          officers, employees or agents of MRG that would restrict the free
          transfer of securities issued to Seller in connection with this
          transaction, or which would prohibit or impair the issuance of
          additional securities offerings of MRG, except as set forth on
          Schedule 4.24.

4.25 MRG Schedules. MRG has delivered to Seller schedules, which are
     collectively referred to as the "MRG Schedules" and which consist of
     separate schedules dated as of the date of execution of this Agreement and
     instruments and data as of such date, all certified by the chief executive
     officer and financial or accounting officer of MRG as complete, true, and
     accurate, as contemplated by the foregoing provisions of this Article IV.
     MRG shall cause the MRG Schedules and the instruments and data delivered to
     Seller hereunder to be updated after the date hereof up to and including a
     specified date not more than three business days prior to the Closing Date
     as required by Section 2.09(a). Such updated MRG Schedules, certified in
     the same manner as the original MRG Schedules, shall be delivered prior to
     and as a condition precedent to the obligation of Seller under this
     Agreement.

                                   ARTICLE V.
                                   COVENANTS

5.01  Activities of MRG and Seller.

     (a)  From and after the date of this Agreement until the Closing Date, MRG
          and Seller (respecting the activities of Seller as they relate to the
          Properties) will:

<PAGE>

          (i)  Carry on their respective businesses in substantially the
               same manner as they have heretofore:

          (ii) Maintain in full force and effect all insurance in amount
               and in scope of coverage to that now maintained by it;

          (iii)Perform in all material respects all obligations under
               material contracts, leases, and instruments relating to or
               affecting their respective assets, properties, and businesses;

          (iv) Use their best efforts to maintain and preserve their
               respective business organizations intact, to retain their key
               employees, and to maintain their respective relationships with
               their material suppliers and customers; and

          (v)  Fully comply with and perform in all material respects all
               obligations and duties imposed on them by all federal and state
               laws and all rules, regulations, and orders imposed by federal
               or state governmental authorities.

     (b)  From and after the date of this Agreement and except as provided
          herein until the Closing Date, MRG will not:

               (i) Make any change in its articles of incorporation or
          bylaws;

               (ii)Take any action adversely affecting any of the
          representations of Article IV ; or

               (iii)Enter into or amend any contract, agreement, or other
          instrument of any of the types described in such party's schedules.

5.02 Access to Properties and Records. MRG will afford to the Seller full
     access to its properties, books, and records in order that Seller may have
     full opportunity to make such reasonable investigation as Seller shall
     desire to make of the affairs of the MRG, and will furnish Seller with
     such additional financial and operating data and other information as to
     the business and properties of MRG as Seller shall from time to time
     reasonably request.

5.03 Meeting of Stockholders.  It is acknowledged that the transactions
     contemplated hereby do not require approval of MRG's stockholders.
     However, the parties have agreed to condition the consummation of the
     transaction on obtaining such stockholder approval.  Accordingly, within
     five days from the date of this Agreement, MRG will cause to be sent to
     each stockholder of record as of a record date selected by MRG a notice of
     a meeting for the consideration and approval by MRG stockholders of this
     transaction.  MRG shall take all actions necessary in accordance with
     Nevada law and its articles of incorporation and bylaws to obtain approval
     of MRG's stockholders of the transactions contemplated by this Agreement,
     and MRG shall consult with Seller in connection therewith.  MRG shall
     obtain from its stockholders proxies in favor of the approval and adoption
     of this Agreement and to secure the vote of stockholders required by Nevada
     law and its articles of incorporation and bylaws to approve and adopt this
     Agreement at the earliest practicable date, but in any event within 20 days
     after the date of this Agreement.

<PAGE>

5.04 Appropriate Action; Consents; Filings.

     (a)  Seller and MRG shall each use, all reasonable efforts to (i)
          take, or cause to be taken, all appropriate action, and do, or cause
          to be done, all things necessary, proper or advisable under applicable
          Law or otherwise to consummate and make effective the transactions
          contemplated by this Agreement, (ii) obtain from any governmental
          entities any consents, licenses, permits, waivers, approvals,
          authorizations or orders required to be obtained or made by MRG or
          Seller in connection with the authorization, execution and delivery of
          this Agreement and the consummation of the transactions contemplated
          hereby, (iii) make all necessary filings, and thereafter make any
          other required submissions, with respect to this Agreement required
          under (A) the Securities Act and the Exchange Act and the rules and
          regulations thereunder, and any other applicable federal or state
          securities laws, and (B) any other applicable federal or state law;
          provided that MRG and Seller shall cooperate with each other in
          connection with the making of all such filings, including providing
          copies of all such documents to the nonfiling party and its advisors
          prior to such filings and, if requested, shall accept all reasonable
          additions, deletions or changes suggested in connection therewith.
          Seller and MRG shall furnish all information required for any
          application or other filing to be made pursuant to the rules and
          regulations of any applicable Law in connection with the transactions
          contemplated by this Agreement.

     (b)  Each of Seller and MRG shall give any notices to third parties,
          and use all reasonable efforts to obtain any third party consents (A)
          necessary, proper or advisable to consummate the transactions
          contemplated by this Agreement, (B) otherwise required under any
          contracts, licenses, leases or other agreements in connection with the
          consummation of the transactions contemplated hereby or (C) required
          to prevent a material adverse effect on Seller or MRG from occurring
          prior to the Closing Date.  In the event that any party shall fail to
          obtain any such third party consent, such party shall use all
          reasonable efforts, and shall take any such actions reasonably
          requested by the other party, to limit the adverse effect upon MRG and
          Seller resulting or which could reasonably be expected to result after
          the Closing Date, from the failure to obtain such consent.

     (c)  MRG shall promptly notify Seller of (w) any material change in
          its current or future business, assets, liabilities, financial
          condition or results of operations, (x) any complaints, investigations
          or hearings (or communications indicating that the same may be
          contemplated) of any governmental entities with respect to its
          business or the transactions contemplated hereby, (y) the institution
          or the threat of litigation involving it or any of its subsidiaries or
          (z) any event or condition that might reasonably be expected to cause
          any of its representations, warranties, covenants or agreements set
          forth herein not to be true and correct at the Closing Date.  As used
          in the preceding sentence, "litigation" means any case, arbitration or
          adversary proceeding wheresoever filed or instituted.

5.05 Complete Disclosure.  MRG acknowledges that full and complete
     disclosure has been made regarding the Properties, their value, condition
     and related matters, and that MRG has relied upon its own due diligence,
     experts, consultants, attorneys and other agents in determining to accept
     the Properties on the terms and conditions set forth in this Agreement and
     in satisfying the due diligence conditions of Section 2.04.  MRG further
     acknowledges and agrees that except as provided in subparagraphs (a), (b)

<PAGE>

     and (c) of this Paragraph, Seller has made no representations or warranties
     to MRG, and that Seller specifically, but not by way of limitation, has
     made no representations or warranties, either express or implied, regarding
     the value or physical condition of the Properties, the status of the
     tenants or financing associated with the Properties and that MRG has
     satisfied itself as to all such matters based solely upon its own due
     diligence.  MRG has reviewed or has had the opportunity to review any and
     all documents, reports, and other matters concerning the Properties,
     including, but not limited to those matters set forth above.  MRG agrees to
     purchase said Properties on an "AS IS" basis.

5.06 Tenants; Rent Rolls.  MRG agrees to accept the tenants at the
     Properties as the same may be in actual possession of the Properties and
     MRG agrees that it has had ample opportunity to examine the tenant leases,
     inspect the Properties and interview tenants, and that MRG is not relying
     upon any rent roll, operating statement or other representation of Seller
     as to the existence of any lease, the rental income derived therefrom or
     the operating expenses associated with the Properties.

5.07 Complete Review.  MRG and Seller further specifically acknowledge and
     agree that MRG has had an opportunity to examine the various promissory
     notes, deeds of trust, assignment of leases, and other documents involving
     the existing financing effecting the Properties, and that MRG agrees to
     accept said Properties subject to the existing loans and to pay any and all
     costs associated therewith, regardless of the origin of said costs.  MRG
     further acknowledges that it is aware that there are due on sale provisions
     of the loans from Redwood Bank and Gross Mortgage Company, and that these
     disclosures by Seller to MRG have been full and adequate.

5.08 Properties Accepted in "AS IS" Condition.  MRG and Seller further
     specifically acknowledge and agree that:

     NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT IT IS EXPRESSLY
     UNDERSTOOD AND AGREED THAT MRG's PURCHASE OF THE PROPERTIES IS MADE ON AN
     "AS IS" BASIS AND THAT SELLER HAS MADE NO REPRESENTATIONS OR WARRANTIES,
     EXPRESS OR IMPLIED, ORAL OR WRITTEN, REGARDING THE VALUE OR CONDITION OF
     THE PROPERTIES, THE RENTAL INCOME, TENANTS, OR OPERATING EXPENSES
     ASSOCIATED WITH THE PROPERTIES, OR THE EXISTENCE OR NONE EXISTENCE OF ANY
     TERM, COVENANT OR CONDITION IMPOSED BY ANY OF THE LOANS THAT MRG IS
     ASSUMING AND/OR TAKING SUBJECT TO IN CONNECTION WITH MRG's PURCHASE OF THE
     PROPERTIES.  MRG IS RELYING SOLELY UPON ITS OWN DUE DILIGENCE, ATTORNEYS,
     EXPERTS, CONSULTANTS AND AGENTS AS TO ALL THESE MATTERS AND SHALL NOT LOOK
     TO SELLER IN ANY WAY SHOULD ANY MATTER NOT BE AS ANTICIPATED PRIOR TO THE
     CLOSING.  UPON THE CLOSE OF THE ESCROW CONTEMPLATED HEREIN, ANY AND ALL
     LIABILITY OF SELLER AS IT RELATES IN ANY WAY TO THE PROPERTIES SHALL CEASE,
     IF NOT ALREADY TERMINATED, AND MRG SHALL INDEMNIFY, DEFEND AND HOLD SELLER
     HARMLESS FROM ANY AND ALL CLAIMS, LIABILITIES, SUITS AND OTHER MONETARY OR
     ADMINISTRATIVE  DEBTS AND OBLIGATIONS.

<PAGE>

5.09 Tax Treatment.  Each party hereto shall use all reasonable efforts to cause
     the transaction to qualify, and shall not take, and shall use all
     reasonable efforts to prevent any affiliate of such party from taking, any
     actions that could prevent the transaction from qualifying, as a tax-free
     incorporation under the provisions of Section 351(a) of the Code

5.10 Public Announcements.  Neither party shall issue any press release or
     otherwise make any public statements with respect to the transactions
     contemplated by this Agreement without the approval of the other.

5.11 Information for Reports. Seller will furnish MRG with all information
     concerning Seller required for inclusion in any report to be filed by MRG
     with any governmental body in connection with the transactions
     contemplated by this Agreement, and Seller represents and warrants to MRG
     that all information so furnished for such reports shall be true and
     correct in all material respects without omission to state any material
     fact required to be made to make the information provided not misleading.

5.12 The Acquisition of New Seller Stock. The consummation of this Agreement,
     including the issuance of the New MRG Stock to Seller as contemplated
     hereby, constitutes the offer and sale of securities under the Securities
     Act and applicable state statutes. Such transactions shall be consummated
     in reliance on exemptions from the registration and prospectus delivery
     requirements of such statutes which depend, among other items, on the
     circumstances under which Seller acquires such securities.

     (a)  In order to provide documentation for reliance upon exemptions from
          the registration and prospectus delivery requirements for such
          transactions, Seller hereby represents and warrants:

          (i)  Seller acknowledges that neither the SEC nor the securities
               regulatory agencies of any state or other federal agency has made
               any determination as to the merits of acquiring the New MRG
               Stock, and that this transaction involves certain risks.

          (ii) Seller has received and read the Agreement and understands the
               risk related to the consummation of the transactions therein
               contemplated.

         (iii) Seller has such knowledge and experience in business and
               financial matters that he is capable of evaluating MRG and its
               proposed business operations.

          (iv) Seller has been provided with a copy of the Agreement and the
               related disclosure schedules of the parties hereto plus all
               materials and information requested by Seller or his
               representative, including any information requested to verify any
               information furnished (to the extent such information is
               available or can be obtained without unreasonable effort or
               expense), and Seller has been provided the opportunity for direct
               communication with MRG and its representatives regarding the
               transactions contemplated hereby.

          (v)  All information which Seller has provided to MRG or its agents or
               representatives concerning such Seller's suitability to hold
               shares in MRG following the transactions contemplated hereby is
               complete, accurate, and correct.

<PAGE>

         (vi)  Seller has not offered or sold any securities of MRG or
               interest in this Agreement.

        (vii)  Seller was at no time solicited by any leaflet, public
               promotional meeting, circular, newspaper or magazine article,
               radio or television advertisement, or any other form of general
               advertising or solicitation in connection with the offer, sale,
               or purchase of the stock through this Agreement.

       (viii)  Seller has adequate means of providing for his current needs
               and possible personal contingencies and has no need now, and
               anticipates no need in the foreseeable future, to sell the New
               MRG Stock. Seller is able to bear the economic risks of this
               investment, and consequently, without limiting the generality
               of the foregoing, is able to hold the New MRG Stock to be
               received for an indefinite period of time and has a sufficient
               net worth to sustain a loss of the entire investment, in the
               event such loss should occur.

         (ix)  Seller understands that the New MRG Stock has not been
               registered, but is being acquired by reason of a specific
               exemption under the Securities Act as well as under certain
               state statutes for transactions by an issuer not involving any
               public offering and that any disposition of the subject New MRG
               Stock may, under certain circumstances, be inconsistent with
               this exemption and may make the undersigned an "underwriter"
               within the meaning of the Securities Act. It is understood that
               the definition of "underwriter" focuses upon the concept of
               "distribution" and that any subsequent disposition of the
               subject New MRG Stock can only be effected in transactions
               which are not considered distributions. Generally, the term
               "distribution" is considered synonymous with "public offering"
               or any other offer or sale involving general solicitation or
               general advertising. Under present law, in determining whether
               a distribution occurs when securities are sold into the public
               market, under certain circumstances one must consider the
               availability of public information regarding the issuer, a
               holding period for the securities sufficient to assure that the
               persons desiring to sell the securities without registration
               first bear the economic risk of their investment, and a
               limitation on the number of securities which the shareholder is
               permitted to sell and on the manner of sale, thereby reducing
               the potential impact of the sale on the trading markets. These
               criteria are set forth specifically in rule 144 promulgated
               under the Securities Act, and, after one year after the date
               the New MRG Stock is fully paid for, as calculated in
               accordance with rule 144(d), sales of securities in reliance
               upon rule 144 can only be made in limited amounts in accordance
               with the terms and conditions of that rule. After two years
               from the date the securities are fully paid for, as calculated
               in accordance with rule 144(d), they can generally be sold
               without meeting those conditions, provided the holder is not
               (and has not been for the preceding three months) an affiliate
               of the issuer.

          (x)  Seller acknowledges that the shares of New MRG Stock must be
               held and may not be sold, transferred, or otherwise disposed of
               for value unless they are subsequently registered under the
               Securities Act or an exemption from such registration is

<PAGE>

               available. MRG is under no obligation to register the New MRG
               Stock under the Securities Act, except as may be expressly
               agreed to by it in writing. If rule 144 is available (and no
               assurance is given that it will be except as expressly set
               forth in this Agreement), after one year and prior to two years
               following the date the shares are fully paid for, only routine
               sales of such New MRG Stock in limited amounts can be made in
               reliance upon rule 144 in accordance with the terms and
               conditions of that rule. MRG is under no obligation to Seller
               to make rule 144 available, except as may be expressly agreed
               to by it in writing in this Agreement, and in the event rule
               144 is not available, compliance with regulation A or some
               other disclosure exemption may be required before Seller can
               sell, transfer, or otherwise dispose of such New MRG Stock
               without registration under the Securities Act. MRG's registrar
               and transfer agent will maintain a stop transfer order against
               the registration of transfer of the New MRG Stock, and the
               certificate representing the New MRG Stock will bear a legend
               in substantially the following form so restricting the sale of
               such securities:

               THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
               REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE
               "SECURITIES ACT") AND ARE "RESTRICTED SECURITIES" WITHIN
               THE: MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES
               ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
               MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE
               144 IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER
               COMPLIANCE UNDER THE SECURITIES ACT.

         (xi)  MRG may refuse to register transfer of the New MRG Stock in
               the event of a sale thereof in the absence of compliance with
               rule 144 unless a transferee furnishes in writing to the issuer
               the same representations and agree to the same conditions with
               respect to such New MRG Stock as set forth herein. The issuer may
               also refuse to transfer the New MRG Stock if any circumstances
               are present reasonably indicating that the transferee's
               representations are not accurate.

     (b)  In connection with the transaction contemplated by this Agreement,
          Seller and MRG shall each file, at MRG's sole cost and expense and
          with the assistance of the other and their respective legal counsel,
          such notices, applications, reports, or other instruments as may be
          deemed by them to be necessary or appropriate in an effort to document
          reliance on such exemptions, including a notice on Form D to be filed
          with the SEC, and the appropriate regulatory authority in such states
          as shareholders of MRG are residents, all to the extent and in the
          manner as may be deemed by such parties to be appropriate.

     (c)  In order to more fully document reliance on the exemptions as provided
          herein, Seller shall execute and deliver to Seller, at or prior to the
          Closing, such further letters of representation, acknowledgment,
          suitability, or the like, as MRG and its counsel may reasonably
          request in connection with reliance on exemptions from registration
          under such securities laws.

<PAGE>

     (d)  Seller acknowledges that the basis for relying on exemptions from
          registration or qualifications are factual, depending on the conduct
          of the various parties, and that no legal opinion or other assurance
          will be required or given to the effect that the transactions
          contemplated hereby are in fact exempt from registration or
          qualification.

5.13 Long-Term Stock Incentive Plan.  Following the Closing, the board of
     directors of MRG may adopt a long term stock incentive plan or plans
     ("LTSIP") under which stock options, bonuses, stock appreciation rights, or
     other incentives may be awarded to employees, directors and others;
     however, prior to Closing, no such LTSIP shall be adopted.

5.14 Management Services Agreement.  At the Closing Seller shall execute
     and deliver a Financial Advisory Services Agreement in form and substance
     reasonably satisfactory to it for the engagement of Keith Cannon to provide
     certain financial advisory services to Seller/MRG.

5.15 Property Management Agreement.  At the Closing, MRG shall execute and
     deliver a Property Management Agreement with Diversified Investment &
     Management Corporation, a California corporation ("DIMC"), and deliver the
     same to DIMC, in form and substance satisfactory to Seller.

                                  ARTICLE VI.
                 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER

     The obligations of Seller under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:

6.01 Accuracy of Representations. The representations and warranties made by
     MRG in this Agreement were true when made and shall be true at the Closing
     Date with the same force and effect as if such representations and
     warranties were made at and as of the Closing Date (except for changes
     therein permitted by this Agreement), and MRG shall have performed or
     complied with all covenants and conditions required by this Agreement to be
     performed or complied with by MRG prior to or at the Closing. Seller shall
     be furnished with certificates, signed by the chief executive and principal
     financial or accounting officer or officers of MRG and dated the Closing
     Date, to the foregoing effect.

6.02 Officers' Certificate. Seller shall have been furnished with a certificate
     dated the Closing Date and signed by the duly authorized chief executive
     officer and principal accounting and financial officer or officers of MRG
     to the effect that:

     (a)  This Agreement has been duly approved by MRG' board of directors and
          shareholders and has been duly executed and delivered in the name and
          on behalf of MRG by its duly authorized officers pursuant to, and in
          compliance with, authority granted by the board of directors of MRG;

     (b)  The representations and warranties of MRG set forth in this Agreement
          are true and correct as of the date of the certificate;

     (c)  There has been no material adverse change in the financial condition,
          business, or operations of MRG nor has any event occurred which, with

<PAGE>

          the lapse of time or giving of notice, may cause or create any
          material adverse change in the financial condition, business, or
          operations of MRG up to and including the date of the certificate;

     (d)  All conditions required by this Agreement to have been met, satisfied,
          or performed by MRG have been met;

     (e)  The consummation of the transactions contemplated by this Agreement
          does not violate any law, regulation, order, writ, injunction, or
          decree of any court or governmental body or result in the creation or
          imposition of any mortgage, lien, charge, or encumbrance of any nature
          upon any of the properties of MRG, pursuant to any mortgage,
          resolution, agreement, or instrument to which MRG is a party;

     (f)  All authorizations, consents, approvals, registrations, and/or filings
          with any governmental body, agency, or court required in connection
          with the execution and delivery of the documents by MRG have been
          obtained and are in full force and effect or, if not required to have
          been obtained will be in full force and effect by such time as may be
          required; and

     (g)  There is no action, suit, proceeding, inquiry, or investigation at law
          or in equity by any public board or body pending or threatened against
          MRG, wherein an unfavorable decision, ruling, or finding would have an
          adverse effect on the financial condition of MRG, the operations or
          business of MRG, transaction contemplated herein, or any material
          agreement or instrument by which MRG is bound.

6.03 Good Standing. Seller shall have received a certificate of good standing
     from the appropriate authority or authorities, dated as of a date within
     five days prior to the Closing Date, certifying that MRG is in good
     standing as a corporation and/or qualified to transact business in the
     States of Nevada and California.

6.04 Securities Matters. Seller shall have received such assurances as it may
     reasonably request from and on behalf of the stockholders of MRG to enable
     it to reasonably rely on exemptions from registration under applicable
     federal and state securities laws for consummation of the transactions
     contemplated hereby and issuance of the New MRG Stock and there shall not
     exist any circumstances on which Seller shall reasonably conclude that any
     facts or representations contained therein are not true.

6.05 Other Items. Seller shall have received such further documents,
     certificates, or instruments relating to the transactions contemplated
     hereby as Seller may reasonably request.

6.07 Stockholder's Release.  Each director and officer and each of the three
     stockholders with the largest stock holdings of record in MRG shall have
     delivered to Seller an instrument, in form and substance satisfactory to
     Seller, dated the Closing Date, releasing MRG and Seller from any and all
     claims of such director, officer, or stockholder against MRG, and any and
     all obligations of the MRG to such director, officer, or stockholder.

6.08 Termination of Related Party and Other Agreements.  Except for the
     agreements set forth on Schedule 4.12, Seller shall have received
     satisfactory evidence (a) that all existing agreements between MRG and any
     stockholder, any relative of any director, officer, broker, underwriter,
     employee, agent or any stockholder, and any affiliates of the stockholder

<PAGE>

     shall have been canceled effective prior to the Closing Date, and (b) that
     the terminations required by Section 9.06 shall be available to Seller.

6.09 Repayment of Debt.  Each director, officer, broker, underwriter, employee,
     agent or any stockholder shall have repaid or caused to have been repaid,
     or shall repay or cause to be repaid at the Closing, all indebtedness of
     such stockholder or its affiliates owing to the MRG, whether or not then
     due or matured.

                                  ARTICLE VII.
                   CONDITIONS PRECEDENT TO OBLIGATIONS OF MRG

7.01 Performance by Seller.  Seller has substantially performed all conditions
     of this Agreement unless any such requirement has been waived in writing by
     MRG.

7.02 Accuracy of Representations. The representations and warranties made by
     Seller in this Agreement were true when made and shall be true at the
     Closing Date with the same force and effect as if such representations and
     warranties were made at and as of the Closing Date (except for changes
     therein permitted by this Agreement), and Seller shall have performed or
     complied with all covenants and conditions required by this Agreement to be
     performed or complied with by Seller prior to or at the Closing. MRG shall
     be furnished with certificates, signed by the chief executive and principal
     financial or accounting officer or officers of Seller and dated the Closing
     Date, to the foregoing effect.

7.02 Satisfaction of Condition of Due Diligence. MRG shall not have timely
     terminated this Agreement pursuant to Section 2.04.

7.03 No Material Adverse Change Through the Closing Date. There shall not have
     been any material adverse change in the Properties, and it shall not have
     Seller shall not have sustained any material loss or damage to the
     Properties, whether or not insured, materially affecting the Properties.

7.04 Third Party Consents. Seller shall have obtained consents of all third
     parties whose consent is required to the transfer of any of the Properties,
     including any consents reasonably requested by MRG.

                                 ARTICLE VIII.
                         INDEMNIFICATION AND RESCISSION
8.01 Indemnification.

     (a)  MRG will indemnify and hold harmless Seller from and against any
          and all losses, claims, damages, expenses, liabilities, or actions to
          which he may become subject under applicable law (including the
          Securities Act and the Exchange Act) and will reimburse Seller for any
          legal or other expenses reasonably incurred by Seller in connection
          with investigating or defending any claims or actions, whether or not
          resulting in liability, insofar as such losses, claims, damages,
          expenses, liabilities, or actions arise out of or are based upon any
          untrue statement or alleged untrue statement of a material fact
          contained in any report or other document filed with a governmental
          body or arise out of or are based upon the omission or alleged
          omission to state therein a material fact required to be stated
          therein, or necessary in order to make the statements therein not

<PAGE>

          misleading, but only insofar as any such statement or omission was
          made in reliance upon and in conformity with information furnished in
          writing by MRG expressly for use therein. MRG agrees at any time upon
          the request of Seller to furnish to Seller a written letter or
          statement confirming the accuracy of the information with respect to
          MRG contained in any report or other document referred to in Section
            , or in any draft of any such documents, and confirming that the
          information with respect to MRG contained in such document or draft
          was furnished by MRG, indicating the inaccuracies or omissions
          contained in such document or draft or indicating the information not
          furnished by MRG expressly for use therein. The indemnity agreement
          contained in this section shall remain operative and in full force and
          effect, regardless of any investigation made by or on behalf of Seller
          and shall survive the consummation of the transactions contemplated by
          this Agreement.

     (b)  MRG agrees to indemnify, defend and hold Seller harmless from and
          against any and all claims, demands, liabilities, costs, expenses,
          penalties, damages and losses, including, without limitation,
          reasonable attorneys' fees, resulting from any misrepresentations or
          breach of warranty or breach of covenant made by MRG in this Agreement
          or in any document, certificate, or exhibit given or delivered to the
          other pursuant to or in connection with this Agreement.  The
          indemnification provisions of this Article VIII shall survive beyond
          the delivery of the grant deed and transfer of title, or, if title is
          not transferred pursuant to this Agreement, beyond any termination of
          this Agreement.  Further, the personal liability of any person who
          knowingly makes a false representation shall in no way be limited by
          the terms of this Agreement.

8.02 Rescission.  In the event that there has been any material default by MRG
     of any term, covenant, or condition of this Agreement, or if, after the
     Closing contemplated herein, the securities of MRG are not tradable or
     marketable as represented by MRG in this Agreement, then Seller, at
     Seller's sole discretion, (i) may rescind this transaction and MRG shall
     return to Seller by grant deed all Properties transferred to it by Seller,
     (ii) Seller shall return to MRG all securities of MRG received by Seller,
     (iii) Seller and MRG shall each pay their respective costs and expenses in
     negotiating and completing this transaction; and (iv) each party shall
     restore the other to its financial condition immediately prior to entering
     into this Agreement.  This right of rescission is available to Seller for a
     period of forty-five (45) days from the date of Closing.  Both MRG and
     Seller acknowledge and agree that since the assets of MRG immediately after
     the Closing will consist primarily of the Properties, and since MRG is a
     validly existing corporation, Seller's remedy of collecting damages at law
     from MRG is commercially moot such that a damage remedy is insufficient to
     compensate Seller, both MRG and Seller have agreed to permit a rescission
     and stipulate that such a remedy is appropriate, fair, and reasonable in
     the circumstances.

                                  ARTICLE IX.
                         MISCELLANEOUS PROPERTY MATTERS

9.01 Loss by Fire or Other Casualty; Condemnation.  In the event that, prior to
     Closing, the Properties, or any part thereof, are destroyed or damaged, or
     if condemnation proceedings are threatened or commenced against the
     Property, MRG shall have the right, exercisable by giving notice of such
     decision to Seller within three (3) days after receiving written notice

<PAGE>

     from Seller or such damage, destruction or condemnation proceedings, to
     terminate this Agreement, in which case, neither party shall have any
     further rights or obligations hereunder and the full amount of the Deposit
     shall be returned to MRG.  If MRG elects to accept the Property in its then
     condition, all proceeds of insurance or condemnation awards payable to
     Seller by reason of such damage, destruction or condemnation shall be paid
     or assigned to MRG.  If MRG fails to give notice MRG shall be deemed to
     have elected to terminate this Agreement.

9.02 Possession.  Possession of the Properties shall be delivered to MRG on the
     Closing Date; provided that Seller shall afford authorized representatives
     of MRG reasonable access to the Property for the purposes of satisfying MRG
     with respect to the due diligence investigations of MRG as set forth
     herein.  MRG shall also have access to the Property for the purpose of
     conducting environmental surveys, soils tests, surveys or other physical
     inspections of the Property.  Seller shall cooperate with MRG in providing
     access to the Property and satisfying the conditions contained herein.

9.03 Maintenance of Property.  Between the Seller's execution of this Agreement
     and the Closing, Seller shall maintain the Property in good order,
     condition and repair, reasonable wear and tear excepted, shall perform all
     work required to be done by the landlord under the terms of any lease
     affecting the Property, and shall make all repairs, maintenance and
     replacements of equipment or improvements and otherwise operate the
     Property in the same manner as before the making of this Agreement, the
     same as though Seller were retaining the Property.

9.04 Maintenance of the Corporation.  Between the MRG's execution of this
     Agreement and the Closing, MRG shall take no action which would impair the
     financial condition of MRG or in any way inhibit the free trading of its
     stock.

9.05 Seller's Consent to New Contracts Affecting MRG.   MRG shall not, after the
     date of MRG's execution of this Agreement, enter into any contract,
     agreement with any shareholder, director, officer, employee or agent for
     MRG without obtaining Seller's prior written consent thereto.

9.06 Equity Vehicle.

     (a)  It is expressly understood and agreed that Seller's purpose in
          entering into this Agreement is to obtain an investment vehicle
          whereby Seller can raise equity capital to assist in the growth of its
          asset base and to secure the solvency of its real estate operations.

     (b)  MRG represents and warrants that it knows of no reason, other than
          requirements of federal and state securities law, which would inhibit
          or impair the ability of MRG to raise equity capital by way of
          additional stock sales, or to raise the market value of its stock by
          free trading in the over the counter securities market.

     (c)  MRG knows of no reason why immediately after the transaction
          herein contemplated, MRG would be restricted in its choice of:

          (i)  one or more brokers to market or underwrite its securities;

          (ii) one or more attorneys to assist in MRG's compliance with all
               securities laws and other legal affairs;

<PAGE>

          (iii)one or more accountants or CPA's to audit, review or compile
               the financial statements of MRG;

          (iv) who MRG can appoint as its directors, officers, employees or
               agents;

          (v)  what price to offer its securities for to the open market,
               or to any existing shareholder, or to any person or which would
               restrict the number, type or value of any securities to be sold
               by MRG after the closing as herein contemplated.

                                  ARTICLE IX.
                                 MISCELLANEOUS

10.01 Prorations.   To the extent not covered in Sections 2.03(c) and 10.02,
     the following prorations shall be made between Seller and MRG by Title
     Company (whether such collection occurs prior to, on or after the Closing),
     real property taxes, water, sewer and utility charges, amounts payable
     under the Service Contracts, annual permits and/or inspection fees
     (calculated on the basis of the period covered), insurance premiums (as to
     those policies, if any, that MRG determines will be continued after the
     Closing), and other expenses normal to the operation and maintenance of the
     Property shall be prorated on the basis of a 365-day year as of 12:01 a.m.
     on the date the grant deed is recorded.

     Seller and MRG hereby agree that if any of the aforesaid prorations cannot
     be calculated accurately on the Closing Date, then the same shall be
     calculated within thirty (30) days after the Closing Date and either party
     owing the other party a sum of money based on such subsequent proration(s)
     shall promptly pay said sum to the other party, together with interest
     thereon at the rate of ten percent (10%) per annum from the Closing Date to
     the date of payment if payment is not made within ten (10) days after
     delivery of a bill therefor.

10.02 Expenses.  MRG shall pay all fees for the policies of title insurance.
     MRG shall pay the cost of all transfer taxes applicable to the sale, if
     any, as well as the full amount of any assessments or bonds on the
     Property.  Seller shall pay all leasing commissions and tenant improvement
     costs accrued in connection with any lease executed on or before the
     Closing.  Seller and MRG shall each pay fifty percent (50%) any charges of
     the escrow for the sale as well as the cost of recording the grant deed to
     the Property.   MRG shall be entitled to a credit against the cash portion
     of the Purchase Price as set forth in Paragraph 2(b) for the total sum of
     all security deposits paid to Seller by tenants under any leases affecting
     the Properties.

     10.03 Notices. Any notice, demand, request, or other communication
     under this Agreement shall be in writing and shall be deemed to have been
     given on the date of service if personally served or by facsimile
     transmission (if receipt is confirmed by the facsimile operator of the
     recipient), or delivered by overnight courier service or on the third day
     after mailing if mailed by certified mail, return receipt requested,
     addressed as follows:

<PAGE>

          If to Seller, to:        Mr. Dinesh Maniar
                                   400 Oyster Point Boulevard, Suite 415
                                   South San Francisco, California 94080
                                   Facsimile: (650) 266-8089

          With copies to:          Mr. James T. Graeb
                                   400 Oyster Point Boulevard, Suite 415
                                   South San Francisco, California 94080
                                   Facsimile: (650) 266-8089

          And                      Mr. James R. Kruse
                                   KRUSE, LANDA & MAYCOCK, L.L.C.
                                   50 West Broadway, 8th Floor
                                   Salt Lake City, Utah 84101
                                   Facsimile: (801) 531-7091

          If to BBB, to:           Mr. C. F. Walker
                                   President
                                   Montgomery Realty Group, Inc.
                                   648 Rising Star Drive
                                   Henderson, NV 89014
                                   Facsimile: (702) 434-2466

          With copies to:          Max C. Tanner
                                   2950 East Flamingo Road, Suite G
                                   Las Vegas, NV 89121
                                   Facsimile: (702) 369-5731

or such other addresses and facsimile numbers as shall be furnished in writing
by any party in the manner for giving notices hereunder, and any such notice,
demand, request, or other communication shall be deemed to have been given as of
the date so delivered or sent by facsimile transmission (if receipt is confirmed
by the facsimile operator of the recipient), three days after the date so
mailed, or one day after the date so sent by overnight delivery.

     10.04 Governing Law. This Agreement shall be governed by, enforced and
construed under and in accordance with the laws of the United States of America
and, with respect to matters of state law, with the laws of the state of
California.

     10.05 Attorney's Fees. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party shall reimburse the nonbreaching
party for all costs, including reasonable attorneys' fees, incurred in
connection therewith and in enforcing or collecting any judgment rendered
therein, including such costs which are incurred in any bankruptcy or appellate
proceeding.

     10.06 Survival. All representations and warranties by the respective
parties herein or made in writing pursuant to this Agreement are intended to and
shall remain true and correct as of the time of Closing, shall be deemed to be
material, and shall survive the execution and delivery of this Agreement and the
delivery of the grant deed and transfer of title.  All statements contained in
any certificate or other instrument delivered at any time by or on behalf of MRG
in connection with the transaction contemplated hereby shall constitute
representations and warranties hereunder.

<PAGE>

     10.07 Form of Execution; Counterparts. A valid and binding signature
hereto or any notice or demand hereunder may be in the form of a manual
execution or a true copy made by photographic, xerographic, or other electronic
process that provides similar copy accuracy of a document that has been
executed.  This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and all of which taken together shall be but a
single instrument.

     10.08 Amendment or Waiver. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether conferred herein, at
law, or in equity, and may be enforced concurrently herewith, and no waiver by
any party of the performance of any obligation by the other shall be construed
as a waiver of the same or any other default then, theretofore, or thereafter
occurring or existing.  At any time prior to the Closing Date, this Agreement
may be amended by a writing signed by all parties hereto, with respect to any of
the terms contained herein, and any term or condition of this Agreement may be
waived or the time for performance thereof may be extended by a writing signed
by the party or parties for whose benefit the provision is intended.

     10.09 Successors and Assigns.  This Agreement shall bind and inure to
the benefit of the parties hereto and their respective successors, heirs,
administrators and assigns.

     10.10 Merger of Prior Agreements.  This Agreement contains the entire
agreement of the parties and supersedes all prior negotiations, correspondence,
understandings and agreements between the parties, relating to the subject
matter hereof.

     10.11 Time of the Essence.  Time is of the essence of this Agreement.

     10.12 Tax Free Incorporation.  Seller intends that the transaction
contemplated herein shall qualify under Internal Revenue Code Section 351 as a
"tax free incorporation" and MRG or MRG's representatives shall execute and
deliver to Seller such other and further documents as Seller may require in
order to correctly report this transaction as a tax free incorporation and to
defend any such reporting if it is subject to review by any government
authority.

     10.13 Confidentiality. MRG and Seller shall keep the terms and
conditions of the transaction contemplated by this Agreement confidential and
shall not disclose any information regarding the same prior to the Closing;
provided, however, that MRG shall have the right to disclose the terms of this
Agreement and such information to potential its officers, directors and
shareholders and MRG shall have the right to make inquiries regarding the
Property of governmental officials and current and former service providers,
contractors, tenants and other persons having knowledge of the Property and
shall have the right to state as the basis for any such inquiries that MRG has
entered into this Agreement with Seller for the purchase and Sale of the
Property.

     10.14 Assignment.  Anything in this Agreement to the contrary
notwithstanding, neither party to this Agreement may assign any part hereof
without the prior consent of the other party.

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

               MRG:           MONTGOMERY REALTY GROUP, INC.

                              By  /s/  C. F. Walker
                                 -----------------------
                                 C.F. Walker, President

<PAGE>

               Seller:

                              /s/ Dinesh Maniar
                              ---------------------
                              Dinesh Maniar

<PAGE>

Exhibit "A"    Description of the Orchard Supply Shopping Center property, San
               Ramon, California

Exhibit "B"    Description of the San Ramon Shopping Center property, San Ramon,
               California

Exhibit "C"    Description of the Keker & Van Nest Office Building property, San
               Francisco, California

Exhibit "D"    Description of the Eccles Office Project property,  South San
               Francisco, California

Exhibit "E"    Assignment and Assumption Agreement

Exhibit "F"    Schedule of Personal Property to be transferred to MRG

Exhibit "G"    Schedule of Personal Property not to be transferred to MRG

Exhibit "H"    Bill of Sale for transfer of Personal Property

Exhibit "I"    Assignment of Leases

Exhibit "J"    Assignment of Service Contracts, Warranties, and Guaranties

Exhibit "K"    Notices to Tenants at the Properties

Exhibit "L"    Seller's Foreign Person Affidavit

Exhibit "M"    Proof of filings with the Securities and Exchange Commission or
               exemption therefrom




                                     Lease

     THIS LEASE, made as of this 21st day of April, 1988, between Dinesh Maniar,
landlord, and John W. Keker, P. C. and .John W. Keker, individually; William
A. Brockett, P.C. and Wi111am A Brockett , individually;  Robert A. Van Nest,
P.C. and Robert A. Van Nest, Individually; R. Elaine Leitner, individually;
David J. Meadows, individually; Jeffrey R. Chanin, Individually; Gary M. Cohen,
individually; also the California General Partnership commonly known as "KEKER &
BROCKETT," Tenants.

                               W I T N E S E T H

     1.   Premises.

          (a)  Landlord hereby leases to Tenant, and Tenant hereby leases from
     Landlord, for the term and subject to the agreements, covenants, conditions
     and provisions hereinafter set forth, to each and all of which Landlord and
     Tenant mutually agree, the space (the "Premises") being that certain
     Building located at 710 Sansome Street in the City and County of San
     Francisco, State of California.  The term "Building" shall mean that
     certain 3-story, office building and other improvements.  The term "Land"
     shall mean, collectively, the parcels of land currently designated as
     Assessor's Parcel No. 02-0174-008, City and County of San Francisco,
     California, together with all appurtenant rights and easements.  The Land
     and the Building are hereinafter  collectively called the "Real Property."
     The Premises shall include the appurtenant right to the use of lobbies,
     entrances, stairs and elevator of the Building.

          (b)  Said leasing is upon and subject to the terms, covenants,
     agreements, limitations, exceptions, reservations and conditions herein set
     forth, and 'Tenant covenants as a material part of the consideration for
     this Lease to keep and perform each and all of the said terms, covenants,
     agreements, limitations. exceptions, reservations and conditions by it to
     be kept and performed and that this Lease is made on the condition of such
     Performance.

     2.   Definitions.  The following terms used herein shall have the meaning
specified below:

     Floor(s) on which the Premises are located Lower Level, Ground Level, 2nd
Floor, and 3rd Floor Addition.

     Agreed Initial Term:  Ten (10) years and zero (0) months, commencing upon
substantial completion of tenant improvements and ending ten years from
commencement of term.

     Base Year:  The first 12 months of occupancy.

     Monthly Rent:  The sum of Forty Six Thousand Three Hundred Ninety-Seven
dollars ($46,397) for the first five years (60 Months).

     Monthly Rent:  The sum of Fifty-Six Thousand Three Hundred Ninety-Five
dollars ($56,395) for the second five years (61-120 Months).

     Security Deposit:  The sum of Forty One Thousand Seven Hundred Seventy Two
dollars ($41,772). Landlord shall pay annually to Tenant interest accrued on the
Security Deposit, which Deposit shall be placed in one (l) year Certificates of
Deposit  with a major  Lending Institution.

     Tenant's share:  100%

     Business of Tenant:  General Office (Law Firm).

     Real Estate Broker:  The Rubicon Group.

     Tenant:  If there is more than one tenant on the signature page, than each
person or entity signing shall be included, and be jointly and severally liable

     Landlord's Consent:  Except as provided in Paragraph 33 and Paragraph
13(d), where ever the Lease refers to the Landlord's discretion, consent or
approval on any matter, Landlord agrees that such consent, approval or
discretion shall not be unreasonably withheld or unduly delayed.

     3.   Term.  Delivery of Possession of Premises.

          (a)  The term of this Lease shall commence and, unless sooner
     terminated as hereinafter provided, shall expire on the dates specified in
     Paragraph 2 for the commencement and expiration of the Agreed Initial Term.

          (b)  If Landlord, for any reason whatsoever, cannot deliver possession
     of the Premises to Tenant at commencement of the term hereof, then, except
     as provided in Paragraph 3(c) this lease shall not be void or voidable, nor
     shall Landlord or Landlord's agents, employees or contractors he liable to
     Tenant for any loss or damage resulting therefrom, but in that event,
     Monthly Rent and additional rent payable pursuant to Paragraph 7 hereof
     shall not be payable for the period from the commencement of the term of
     this Lease through and including the day preceding the date Landlord can
     deliver possession of the Premises to Tenant.  Any delay in delivery
     extends the lease term but does not amend Tenant's obligations under the
     lease.

          (c)  Notwithstanding any of the foregoing terms of Paragraph 3(b) to
     the contrary:

               (l)  If, except to the extent of any delays caused by Tenant or
          Acts of God, Landlord is unable to deliver possession of the Premises
          to Tenant within five (5) months after the issuance of the building
          permit for landlord's base building construction, Landlord shall pay
          to Tenant the amount of $500 per day for each day after the expiration
          of such five (5) month period, until the date that Landlord delivers
          possession of the Premises to Tenant.  This amount represents
          liquidated damages for any delay in delivery of possession of the
          Premises.

               (2)  If, for any reason other than delays caused by Tenant,
          Landlord is unable to deliver possession of the premises to Tenant
          within eleven (11) months after the issuance of the building permit
          for Landlord's base building construction, Tenant at Tenant's option,
          shall have the right to terminate thin Lease upon thirty (30) days'
          written notice given to Landlord at any time after said eleven (11)
          month period, provided that suc11 notice of termination shall not be
          effective if prior to the conclusion of such thirty (30) day period
          Landlord sha11 have delivered possession of the Premises to Tenant.

          (d)  If the Premises are ready for occupancy prior to the date for
     commencement of the term of this Lease as specified in Paragraph 2, Tenant
     shall have the right to take early occupancy of the Premises on such date
     as Landlord and Tenant agree and, notwithstanding Paragraph 2, the term of
     this Lease shall commence on the date of such early occupancy by Tenant,
     but shall nevertheless expire on the expiration date specified in Paragraph
     2.

          (e)  Landlord shall give thirty (30) days advance notice of the date
     on which Landlord expects the Agreed Initial Term to commence and Landlord
     shall promptly notify Tenant thereafter of any change in the expected date
     of such commencement.  From and after Landlord's notice to Tenant of the
     expected Commencement Date, Tenant and Tenant's employees, agents and
     contractors shall he permitted to enter upon the Premises to install
     Tenant's furniture and equipment therein and to otherwise make the Premises
     ready for Tenant's occupancy; provided, however, that such entry by Tenant
     shall be subject to all of the terms and conditions of the Lease, including
     specifically but not limited to indemnification of Landlord; except,
     however, Tenant shall have no obligation to pay Monthly Rent or additional
     rent, during this period.  Further, If Landlord is unable to deliver
     possession of the Premises within five (5) months of the issuance of the
     building permit for Landlord's base building construction, Landlord shall
     give Tenant a reasonably detailed construction schedule for the completion
     of the Premises and the Tenant's move-in date.

     4.   Building and Tenants Improvements.

     Promptly following the execution of this Lease, Landlord shall undertake to
prepare the Building and the Premises for occupancy by Tenant.  All construction
to be undertaken by Landlord is to conform to City Building codes, including
Fire and Handicapped Codes.

     5.   Monthly Rent.

          (a)  On or before the first day of each calendar month during the term
     hereof, Tenant shall pay to Landlord, as monthly rent for the Premises, the
     Monthly Rent specified in Paragraph 2.  In the event the term of this Lease
     commences on a day other than the first day of a calendar month, or
     terminates on a day other than the last day of a calendar month, then the
     Monthly Rent payable for such partial month shall be approximately prorated
     on the basis of a thirty (30) day month.  Monthly Rent and the additional
     rent specified in Paragraph 7 (in accordance with the procedure specified
     therein) shall be paid by Tenant to Landlord, in advance, without deduction
     or offset except as expressly provided in Sections in lawful money of the
     United States of America at the office of Dinesh Maniar, 110 Kimball Way,
     South San Francisco, California 94080, or to such other person or at such
     other place as Landlord may from time to time designate in writing.

          (b)  All amounts payable by Tenant to Landlord under this Lease in
     addition to the Monthly Rent, including without limitation, Tenant's Share
     of increases in Tax Expenses and Operating Expenses as provided in
     Paragraph 7, all amounts which Tenant owes to Landlord on account of the
     installation by Landlord of any alterations, additions and improvements,
     and all personal property and other taxes payable by Tenant as provided in
     Paragraph 18 shall constitute additional rent owing by Tenant to Landlord
     hereunder.  Monthly Rent and additional rent, if not paid by Tenant to
     Landlord after an Event of Default, shall bear interest from such due date
     to the date of payment by Tenant at the maximum annual interest rate
     allowed by law on such due date for business loans (not primarily for
     personal, family or household purposes) not exempt from the usury law or,
     if there is no such maximum annual interest rate, at the rate of interest
     (the "Prime Rate") announced by the .San Francisco Main Office of Bank of
     America, NT&SA (or any successor bank thereto) as its "reference rate" (or
     if there is no such "reference rate" announced, the rate announced or
     charged by such bank in pricing ninety (90) days commercial loans to
     substantial commercial borrowers) plus four (4) percentage points.  Failure
     by tenant to pay monthly and/or additional rent when due, plus interest as
     aforesaid, shall constitute an event of default by Tenant hereunder giving
     rise to all remedies by landlord under this Lease for nonpayment of rents
     subject to the specific Notice and Cure provisions of subparagraph 5(d)
     below.

          (c)  Notwithstanding anything to the contrary above, if Landlord shall
     fail to observe or perform any of the covenants, conditions or provisions
     to be performed by Landlord under this Lease, with the exception of
     Paragraphs 9 and 25 of this Lease, which failure shall continue for a
     period of thirty (30) days after written notice thereof given by Tenant,
     Tenant may cure the same at the expense of Landlord and offset costs
     actually expended by Tenant from the rental payable by Tenant under this
     Leases provided, however, that this remedy may not exceed $50,000 in any
     one (1) year; and further, provided, however, that in the case of default
     by Landlord which with due diligence cannot be cured within such thirty
     (30) day period, such thirty (30) day period sha11 be deemed extended and
     Tenant's right to cure such default shall not arise if Landlord shall
     institute within said thirty (30) day period and diligently continue to
     prosecute to completion all steps necessary to cure such default.

          (d)  Upon Tenant's failure to pay Rent as aforesaid, then on the fifth
     day of said month Landlord shall provide written notice to Tenant of the
     past due Rent and the five percent (5%) penalty provided in Paragraph 30 of
     this Lease, and Tenant shall have five (5) business days to cure.  If
     Tenant does not cure in said five (5) business days, such failure shall be
     an Event of Default as defined in Paragraph 24.

     6.   Security Deposit.  Tenant sha11 pay to Landlord upon the commencement
of the Tenant Improvement construction the Security Deposit specified in
Paragraph 2 as security for the faithful performance by Tenant of all of the
forms, covenants, agreements and the conditions of this Lease to be kept and
performed by Tenant during the term hereof.  If Tenant fails to pay Land1ord any
rent, Landlord, at Landlord's option, may apply all or part of the Security
Deposit in satisfaction of Tenant's obligation to the extent of such
application.  In no event shall Landlord be required to make any such
application.  If Landlord elects to make such application, Landlord shall notify
Tenant in writing of the nature and amount thereof and Tenant shall thereupon be
obligated to deposit with Landlord an amount sufficient to return the Security
Deposit to an amount equal to one hundred percent (100%) of the amount specified
in Paragraph 2.  If Tenant fails to do so within five (5) days after Landlord
has given such notice, Landlord at it's option may resort to any or all remedies
available to it for nonpayment of Rent.  Promptly following the termination of
the term of this Lease, or, if Tenant has held over beyond such termination,
promptly following the end of any period Tenant has so held over, provided
Tenant has vacated the Premises and fully performed all obligations by Tenant to
he performed hereunder, Landlord shall promptly return to Tenant the Security
Deposit or such portion thereof then held by Landlord after all applications on
account of Tenant's defaults; provided, however, any such return shall not be
construed as an admission by Landlord that Tenant has performed all of its
obligations hereunder.  No holder of a Superior Interest (as defined in
Paragraph 21), nor any purchaser at any judicial or private foreclosure sale of
the Real Property or any portion thereof, shall be responsible to Tenant for
such Security Deposit unless such holder or purchaser shall have actually
received the same.

     7.   Expense Escalation.

          (a)  Tenant shall pay to Landlord as additional rent under this Lease
     at the times hereinafter set forth Tenant's Share as specified in Paragraph
     2 of any increase in the operating Expenses incurred by Landlord in each
     calendar year subsequent to the Base Year specified in Paragraph 2 over the
     Operating Expenses incurred by Landlord during such Base Year.  The term
     "Operating Expenses" shall mean the total costs and expenses incurred by
     Landlord in connection with the management, operation, maintenance, repair
     and ownership of the Real Property, as determined in accordance with
     generally accepted accounting principles, consistently applied excluding
     "Tax Expenses" as defined below, and including, without limitation, the
     following costs (i) the reasonable allocation of salaries, wages, bonuses
     and other compensation relating to employees of Landlord or its agents
     engaged in the operation, repair, or maintenance of the Real Property; (ii)
     premiums and other charges incurred by Landlord with respect to fire and
     other casualty, rent and liability insurance, any other insurance as is
     deemed necessary or advisable in the reasonable judgment of Landlord, or
     any insurance required by the holder of any Superior Interest, and, after
     the Base Year, costs of repairing an insured casualty the extent of the
     deductible amount under the applicable insurance policy, but excluding
     financing charges (other than charges paid to the insurer) with respect to
     amounts borrowed by Landlord to pay such premiums or other charges; (iii)
     license, permit and inspection fees; (iv) sales, use and excise taxes on
     goods and services purchased by Landlord in connection with the operation,
     maintenance or repair of the Real Property; (v) supplies, tools, materials
     and equipment used in connection with the operation, maintenance and repair
     of the Real Property; (vi) the reasonable allocation of accounting, legal,
     and other professional fees and expenses; (vii) The cost of maintaining the
     sidewalks (amortized over a three (3) year period, at ten percent (10%)
     interest) and landscaping; (viii) the cost of any capital improvement made
     by Landlord to the Real Property or capital assets acquired by Landlord
     after the Base Year required under any governmental law, regulation or
     insurance requirement with which the Real Property was not required to
     comply during the Base Year, such cost or allocable portion to be amortized
     over the useful life thereof, together with interest on the unamortized
     balance at a rate per annum equal to the Prime Rate charged at the time
     such capital improvements or capital assets are constructed or acquired or
     such higher rate as may have been paid by Landlord on funds borrowed for
     the purpose of constructing or acquiring such capital improvements or
     capital assets, but in either case not more than the maximum rate permitted
     by law at the time such capital improvements of capital assets are
     constructed or acquired; (ix) the cost of any capital improvements approved
     by Tenant (which approval shall not be unreasonably withheld) that are made
     by Landlord to the Building or capital assets acquired by Landlord after
     the Base Year for the protection of the health and safety of the occupants
     of the Real Property or that are designed to reduce other Operating
     Expenses, such cost or allocable portion thereof to be amortized over the
     useful life thereof, together with interest on the unamortized balance at a
     rate per annum equal to the Prime Rate charged at the time such capital
     improvements or capital assets are constructed or acquired or such higher
     rate as may have been paid by Landlord on funds borrowed for the purpose of
     constructing or acquiring such capital improvements or capital assets, but
     in either case not more than the maximum rate permitted by law at the time
     such capital improvements or capital assets are constructed or acquired.

          (b)  In order that the Operating Expenses during the Base Year fairly
     reflect the cost of maintaining and operating the Building during the Base
     Year and are not unduly lower during the Base Year, Operating Expenses for
     any calendar year following the Base Year shall be computed in accordance
     with the following principle:  Any category of Operating Expense included
     in any year following the Base Year which was not fully incurred during the
     Base Year shall be included in Operating Expenses for such subsequent year
     only to the extent of the increase in cost thereof over the cost thereof
     which would have been included therefor during the Base Year had such
     category of Operating Expense been fully incurred in the Base Year.  For
     purposes of this Paragraph 7(b) Landlord shall supply Tenant with a list of
     Base Year Operating Expenses which are unduly lower, the subsequent change
     thereto and a written explanation thereof, within 90 days after the close
     of the Base Year, and within 90 days after the close of the next two (2)
     subsequent years.

          (c)  Notwithstanding any of the terms of Section 7(a) of the Lease to
     the contrary, "Operating Expenses" shall be the total costs and expenses
     reasonably incurred by Landlord as provided in Section 7(a) of the Lease,
     but shall not include any of the following:

               (i)  Repairs or other work to the Building occasioned by fire,
          windstorm or other insured casualty or by the exercise of the right of
          eminent domain (except that the deductible amount under any policy of
          casualty insurance up to a maximum amount of $5,000 per occurrence may
          be included within Operating Expenses);

               (ii) Attorneys' fees, costs and disbursement and other expenses
          incurred in connection with negotiations or disputes with or
          prospective subtenants or assignees or associated with the enforcement
          of any sublease or the defense of Landlord's title to or interest in
          the Building or any part thereof;

               (iii) Costs incurred due to a violation by Landlord of any
          law, ordinance or governmental rule or regulation or of the terms and
          conditions of any lease;

               (iv) Debt service on any mortgages or deed of trust or any rent
          or other payments due under any ground or underlying lease; and

               (v)  The cost of the premium for earthquake insurance in any
          operating year to the extent that such cost exceeds twenty percent in
          excess of (i) the cost of such insurance premium during the Base Year
          times (ii) the percentage change in the Consumer Price Index (All
          items, San Francisco-Oakland, 1982-84 = 100) between the commencement
          of the first operating year following the Base Year and the operating
          year in question.

          (d)  Except as provided in subparagraph (e) below and notwithstanding
     any of the other terms of Paragraph 7 of the Lease to the contrary, Tax
     Expenses for any calendar year shall not include any increase in taxes
     resulting from any reassessment of the Building permitted under Article
     XIII A of the California Constitution as a consequence of any change in
     ownership of the Building if such change in ownership is between Landlord
     and an Affiliated Entity, as such terms are defined in California Revenue
     and Taxation Code Sections 60 through 70.  Further, any rebate or refund of
     property taxes paid by Landlord during any calendar year during the term of
     the Lease shall be credited against the amount of Tax Expenses owing in the
     subsequent calendar year for purposes of determining the Tenant's
     percentage share of property taxes for such calendar year (or, if such
     refund or rebate shall pertain to any taxes paid by Landlord during the
     last calendar year of the term of the Lease, Landlord shall pay to Tenant
     its appropriate share of such refund or rebate based upon Tenant's
     percentage share of such property taxes paid by Tenant for such calendar
     year).

          (e)  Notwithstanding any other terms or provisions of this Paragraph 7
     to the contrary, during the Agreed Initial Term the pass-through of any
     increases in Tax Expense caused by a change of ownership of the Real
     Property shall be limited as follows:

               (i)  With respect to a sale or transfer of the Real Property by
          the original Landlord (together with any transferee, assignee or
          successor who has taken title to the Real Property without causing a
          "reassessment" thereof pursuant to the terms of Cal. Rev. and Tax Code
          Sections 60-70) the following provisions shall govern:

                    (A)  There shall be a full pass-through to Tenant of any
               increase in Tax Expense resulting from such transfer by said
               original Landlord' and

                    (B)  Said original Landlord shall pay to Tenant upon the
               closing of such transfer the following amounts:

                         (l)  Fifty percent (50%) of any increase in Tax Expense
                    that will be payable annually by Tenant for the balance of
                    the Agreed Initial Term based upon the first $2,500,000 of
                    any increase in the assessed value of the Real Property (in
                    the year of transfer) as a consequence of such change of
                    ownership over the assessed value of the Real Property
                    immediately prior to such change of ownership; and

                         (2)  One Hundred percent (100%) of any increase in Tax
                    Expense that will be payable annually by Tenant for the
                    balance of the Agreed Initial Term based upon any increase
                    over $2,500,000 in such assessed value of the Real Property
                    (in the year of such transfer).

                    Such amounts described in clauses (l) and (2) above shall be
               paid in a lump sum, which sum shall be determined by using a )0%
               discount factor with respect to the reasonably anticipated
               increases in Tax Expense over the balance of the Agreed Initial
               Term as a consequence of the reassessment of the hea1 Property
               upon such change of ownership. For purposes of clauses (l) and
               (2) above, the "increase in Tax Expense that will be payable
               annually by Tenant for the balance of the Agreed Initial Term"
               shall be reasonably determined at the time of transfer.

               (ii) With respect to any subsequent sale or transfer of the nea1
          Property during the Agreed Initial Term, there shall be no
          pass-through to Tenant of any increase in Tax Expense resulting from a
          "reassessment" based upon such subsequent sale or transfer.

          (f)  Operating Expenses for any calendar year following the Base Year
     shall be computed in accordance with good accounting practices common in
     the industry.

          (g)  Tenant shall pay to Landlord as additional rent under this Lease
     at the times hereinafter set forth Tenant's Share as specified in Paragraph
     2 of any increase in Tax Expenses incurred by Landlord in each calendar
     year subsequent to the Base Year over Tax Expenses incurred by Landlord
     during such Base Year.  The term "Tax Expenses" shall mean all taxes,
     assessments, general or special, excises, transit charges, housing fund
     assessments or other housing charges or levies, fees or charges, general or
     special, ordinary or extraordinary, unforeseen as well as foreseen, of any
     kind, which are assessed, levied, charged, confirmed or imposed on the Real
     Property, on the Landlord with respect to the Real Property, and the act of
     entering into this Lease on the use or occupancy of the Real Property or
     any party thereof, including, without limitation, any gross income tax or
     excise tax levied with respect to the receipt of such rent, by the United
     States of America, the State of California, the City and County of San
     Francisco, any political subdivision, public corporation, district or other
     political or public entity or public authority, and shall also include any
     other tax, fee or other excise, however described, which may be levied or
     assessed in lieu of, as a substitute, in whole or in part, for, or as an
     addition to, any other Tax Expense.  Tax Expenses shall not include income,
     franchise, transfer, inheritance or capital stock taxes, unless, due to a
     change in the method of taxation, any of such taxes is levied or assessed
     against Landlord in lieu of, as a substitute, in whole or in part, for, or
     as an addition to, any other charge which would otherwise constitute a Tax
     Expense.  Tax Expenses shall include reasonable attorneys' fees, costs and
     disbursements incurred in connection with proceedings to contest, determine
     or reduce Tax Expenses; provided, however, such shall not exceed $500.  If
     it shall not be lawful for Tenant to reimburse Landlord for any increase in
     Tax Expenses as defined herein, the Monthly Rent payable to Landlord prior
     to the imposition of such increases in Tax Expenses shall be increased to
     net Landlord the same net Monthly Rent after imposition of such increases
     in Tax Expenses as would have been received by Landlord prior to the
     imposition of such increases in Tax Expenses.

          (h)  As the Base Year Tax Expenses may not include the supplemental
     tax assessment arising as a consequence of the construction of the Premises
     and Tenant Improvements to be made prior to the commencement of the Agreed
     Initial Term, the Parties agree that Tax Expenses for the Base Year shall
     include such supplemental assessment regardless of when paid.

          (i)  Subject to all of the terms of this Paragraph 7, it is the
     intention of Landlord and Tenant that the Monthly Rent paid to Landlord
     from the commencement of the term of this Lease to the end thereof shall be
     absolutely net of all increases, respectively, in Tax Expenses and
     Operating Expenses over, respectively, Tax Expenses and Operating Expenses
     for the Base Year, and the foregoing provisions of this Paragraph 7 are
     intended to so provide.  The provisions for payment of subsequent year
     respective increases in Tax Expenses and Operating Expenses by means of a
     periodic payment by tenants of their respective Tenant's Shares thereof are
     intended to pass on to the tenants and reimburse Landlord for all
     increases, respectively, in Tax Expenses and Operating Expenses over,
     respectively, Tax Expenses and Operating Expenses for the Base Year.

          (j)  On or before the first day of each 12 month period following the
     Base Year (herein "operating year") during the term of this Lease, or as
     soon as practicable thereafter, Landlord shall give to Tenant notice of
     Landlord's estimate of the additional rent, if any, payable by Tenant
     pursuant to Paragraphs 7(a) and 7(9) for such operating year subsequent to
     the Base Year.  On or before the first day of each month during such
     subsequent operating year, Tenant shall pay to Landlord one twelfth
     (l/12th) of such estimated additional rent: provided that if such notice is
     not given prior to the first day of any operating year Tenant shall
     continue to pay on the basis of the prior year's estimate until the month
     after such notice is given.  If at any time it appears to Landlord that the
     additional rent payable under Paragraphs 7(a) and 7(g) will vary from its
     estimate by more than five percent (5%) Landlord may, by written notice to
     Tenant, revise its estimate for such year, and subsequent payments by
     Tenant for such year shall be based upon such revised estimate.  Landlord
     shall provide Tenant with a written statement setting forth in reasonable
     detail the basis for Landlord's determination of such annual determination.

          (k)  Within ninety (90) days after the close of the Base Year and each
     operating year thereafter during the term of this Lease or as soon after
     such ninety (90) day period as practicable, Landlord shall deliver to
     Tenant a statement setting forth in reasonable detail the Operating
     Expenses and Tax Expenses for said operating year together with reasonable
     supporting documentation (including invoices) relating to such expenses.
     Additional rent payable under Paragraphs 7 for such operating year, as
     shown by such statement, shall be final and binding upon Landlord and
     Tenant, unless the Tenant gives written notice of dispute to Landlord
     specifying the disputed items within sixty (60) days after receipt of said
     statement.  In the event of such dispute, Tenant shall pay all amounts not
     disputed (plus any amounts owing based upon Paragraph 7(j) above) and
     retain an outside property management company to review such statement and
     determine whether such statement appears to be an accurate statement of the
     Operating Expenses and Tax Expenses for the Real Property for such 12 month
     period.  If such property management company determines that such statement
     appears to be in error by $1000 or more, Landlord may justify the
     additional rent statement by informally showing to Tenant the necessary
     books and records.  If informal resolution fails, the parties shall submit
     the matter to arbitration. If such statement shows an amount owing by
     Tenant that is less than the estimated payment for such year previously
     made by Tenant, Landlord shall at its option either credit the excess to
     the next succeeding installments of estimated additional rent or pay the
     excess to Tenant within thirty (30) days after delivery of such statement.
     If such statement shows an amount owing by Tenant that is more than the
     estimated payments for such year previously made by Tenant, Tenant shall
     pay the deficiency to Landlord within thirty (30) days after delivery of
     such statement.

          (l)  If this Lease shall terminate on a day other than the last day of
     an operating year, the additional rent payable by Tenant pursuant to this
     Paragraph 7 applicable to the operating year in which such termination
     shall occur shall be prorated on the basis that the number of days from the
     commencement of such operating year to and including such termination date
     bears to three hundred sixty-five (365).

     8.   Use.

          (a)  The Premises shall be used solely for general office purposes and
     for no other use or purpose without the prior written consent of Landlord.

          (b)  Tenant shall not do or suffer or permit anything to be done in or
     about the Premises or the Real Property, nor bring or keep anything
     therein, which would in any way subject Landlord, Landlord's agents or the
     holder of any Superior Interest (as defined in Paragraph 21) to any
     liability, increase the premium rate of or affect any fire, casualty,
     liability, rent or other insurance relating to the Real Property or any of
     the contents of the Building, or cause a cancellation of, or give rise to
     any defense by the insurer to any claim under, or conflict with, any
     policies for such insurance.  If any act or omission of Tenant results in
     any such increase in premium rates, Tenant shall pay to Landlord upon
     demand the amount of such increase. In the event of subtenants, Tenant
     shall not obstruct their use of their demised premises, Tenant shall not
     use or suffer or permit the Premises to be used for any immoral, unlawful
     or objectionable purpose, nor shall Tenant cause, maintain, suffer or
     permit any nuisance in, on or about the Premises.  No loudspeakers or other
     similar device, system or apparatus which can be heard or experienced
     outside the Premises shall, without the prior written approval of Landlord,
     be used in or about the Premises; provided, nothing herein shall prohibit
     an internal paging or announcement system.  Tenant shall not commit or
     suffer to be committed any waste in, to or about the Premises.

          (c)  Tenant shall not use or suffer or permit anything to be done in
     or about the Premises which will in any way conflict with any law, statute,
     ordinance or governmental rule, regulation or requirement now in force or
     which may hereafter be enacted or promulgated.  Tenant, at its sole cost
     and expense, shall promptly comply with all laws, statutes, ordinances and
     governmental rules, regulations or requirements now in force or which may
     hereafter be in force and with the requirements of any board of fire
     underwriters or other similar body now of hereafter constituted relating to
     or affecting the condition, use or occupancy of the Premises, excluding
     structural changes not related to or affected by Tenant's improvements,
     acts or occupancy of the Premises.  The judgment of any court of competent
     jurisdiction or the admission of Tenant in an action against Tenant,
     whether Landlord be a party thereto or not, that Tenant has violated any
     law, statute, ordinance or governmental rule, regulation or requirement
     shall be conclusive of the fact as between Landlord and Tenant.

          (d)  Notwithstanding any of the terms of Paragraph 8(c) of the Lease
     to the contrary, Landlord and Tenant acknowledge and agree that Tenant's
     obligation thereunder shall not apply to the correction or alteration of
     any physical condition or characteristic of any portion of the Premises if
     such condition or characteristic existed prior to the commencement of the
     Agreed Initial Term.

          (e)  The provisions of this Paragraph are for the benefit of Landlord
     only and are not nor shall they be construed to be for the benefit of any
     tenant or occupant of the Building.

     9.   Alterations and Restoration After First Year.

          (a)  Other than during the first year of occupancy, Tenant shall not
     make or suffer to be made any alterations, additions or improvements to or
     of the Premises or any part thereof, excepting as expressly provided in
     this Paragraph.  In the event Tenant desires any alterations, additions or
     improvements to or of the Premises or any part thereof, Tenant must obtain
     Landlord's prior written approval of all of same.  If Landlord approves
     such alterations, additions or improvements desired by Tenant, at
     Landlord's sole election and if the cost thereof is in excess of $100,000
     in any 12-month period, the same shall be made by Landlord, at Tenant's
     sole cost and expense, and Tenant agrees to pay to Landlord, promptly upon
     Landlord's demand (which demand may be for the entire cost and expense
     thereof in advance of construction (in which case such amount shall be paid
     to a third party escrow for payment as construction progresses) or for
     installment payments prior to and/or during the course of construction),
     the amount of such cost and expense (including. without limitation,
     reasonable direct and indirect expenses of Landlord and its agents in
     connection with such alterations, additions and improvements, plus the
     supervision of such work by Landlord or a general contractor selected by
     Landlord on a competitive basis.  In the event Landlord does not elect to
     make (either directly or through such general contractor selected by
     Landlord) such alterations, additions or improvements as shall have been
     approved by Landlord or if the same cost less than $100,000 in any 12-month
     period, then Tenant may cause such approved alterations, additions, or
     improvements to be made at Tenant's sole cost and expense but only by a
     contractor approved in writing by Landlord in advance; in such event Tenant
     shall pay Landlord on demand prior to or during the course of such
     construction a reasonable amount determined by Landlord to compensate
     Landlord for its review of Tenant's proposed alterations, additions and
     improvements and for all other direct and indirect expenses reasonably
     incurred by Landlord or Landlord's agents in connection with such
     alterations, additions or improvements.  In no event shall Tenant employ
     any person, entity or contractor to perform work in the Premises whose
     presence (or the presence of any employees or subcontractors of such
     person, entity or contractor) may give rise to a labor or other disturbance
     in the Building.  Default by Tenant in the payment of any sums agreed to be
     paid by Tenant for or in connection with alterations, additions or
     improvements to the Premises (irrespective of whether such agreement is
     pursuant to this Paragraph 9 or separate instrument) shall entitle Landlord
     to all the same remedies as for non-payment of rent hereunder.  Any
     alterations, additions or improvements to or of the Premises, including,
     without limitation, any fixed partitions, all carpeting, or any other item
     which is normally deemed as affixed to the Premises shall at once become
     part of the Building and the property of Landlord.  Movable furniture,
     equipment, trade fixtures (including any removable secretarial stations and
     bookshelves) and personal property shall remain the property of Tenant.

          (b)  At Landlord's sole election any or all such alterations,
     additions or improvements made for or by Tenant and all such movable
     furniture, equipment, trade fixtures and personal property shall be removed
     from the Premises at the expiration or sooner termination of the term
     hereof and the Premises shall be restored to the condition of same prior to
     the making or installation of such alterations, additions, improvements or
     Tenant's personal property.  Said work of removal and restoration shall be
     performed at Tenant's sole cost and expense either (i) by Tenant, in which
     event Tenant shall pay to a third party escrow (who shall disburse said
     funds as the costs of restoration are incurred) on demand by Landlord an
     amount sufficient to guarantee that the Premises are restored to the
     original condition (except for approved alterations), or (ii) by Landlord,
     in which later case Tenant shall pay to Landlord, promptly upon Landlord's
     demand, the cost and expense of such work and for supervision of such work
     by Landlord or a general contractor selected by Landlord on a competitive
     basis.

          (c)  Notwithstanding any of the terms of this Section 9 of the Lease
     to the contrary, any alterations, additions or improvements made for or by
     Tenant after the commencement of the Term shall be removed from the
     Premises at the expiration or sooner termination of the term of the Lease
     only if Landlord so notifies Tenant of such requirement prior to the
     installation of any such alterations, additions or improvements.  Tenant
     shall notify Landlord of all Tenant improvements, installations,
     alterations or additions at least twenty (20) days before commencing work
     so that Landlord may approve and may advise Tenant that the same shall be
     required to be removed at the expiration or sooner termination of the
     Lease.

          (d)  Notwithstanding any other provision of this Section 9 of the
     Lease the Tenant may:

               (i)  Make minor tenant improvements after previously notifying
          Landlord pursuant to and subject to the terms and conditions of
          Paragraph 9(b); provided, however, the term minor tenant improvements
          is limited to expenditures of less than $25,000 in a three (3) month
          period; and

               (ii) Install without Landlord's consent any movable partition or
          like tangible personal property.

     10.  Repair.

          (a)  By entry hereunder upon commencement of the term hereof, Tenant
     accepts the Premises as being in good, sanitary order, condition and
     repair.  Tenant, at Tenant's sole cost and expense, shall keep the interior
     of the Premises and the Building electrical and plumbing systems in good
     working order at all times.  Tenant shall be responsible for providing its
     own janitorial services for the Premises and all other matters concerning
     day-to-day maintenance of the interior of the Building. Tenant hereby
     waives all rights to make repairs at the expense of Landlord as provided by
     any law, statute or ordinance now or hereinafter in effect.  It is
     specifically understood and agreed that Landlord has no obligation and has
     made no promises to alter, remodel, improve, or repair the building systems
     which are the responsibility of the Tenant (i.e. plumbing and electrical),
     or to decorate or paint the Premises or any part thereof and that no
     representations respecting the condition of the Premises or the Building
     have been made by Landlord to Tenant except as specifically herein set
     forth.  Tenant hereby waives all rights under, and benefits of, subsection
     1 of section 1932 and sections 1941 and 1942 of the California Civil Code
     and under any similar law, statute or ordinance now or hereafter in effect.

          (b)  If Landlord makes any additions, alterations or improvements to
     any portion of the Real Property at the written request of Tenant, then
     Tenant shall pay all cost and expense of same as if it were being done on
     the Premises pursuant to Paragraph 9 and Landlord at its option may charge
     Tenant for the entire additional cost and expense of repair, maintenance
     and operation of the Real Property resulting therefrom incurred by Landlord
     from time to time as determined by Landlord, damage to any such additions,
     alterations or improvements by fire, earthquake, act of God, or elements
     excepted. Tenant shall promptly pay Landlord such cost and expense upon
     demand.

          (c)  Notwithstanding any of the terms of Paragraph 10(a) of the Lease
     to the contrary, Tenant's acceptance of the Premises shall be subject to
     Landlord's completion of any punchlist items within sixty (60) days after
     the commencement of the Agreed Initial Term and to Landlord's obligation to
     balance and adjust the HVAC and other building systems in the Premises
     after Tenant takes occupancy.  Landlord shall remain obligated to repair
     any latent defects in the Premises and the Building, except for the
     electrical and plumbing systems.

          (d)  Landlord shall, at Landlord's sole cost and expense, repair and
     maintain in good order and condition, the foundations, bearing and exterior
     walls, the roof and roof membrane and other structural portions of the
     Building.  Landlord shall also repair and maintain in good working order
     the heating, ventilation and air conditioning system and elevator serving
     the Premises (except that Tenant shall be responsible for cleaning the
     elevator cab).  With respect to the repair and maintenance of the HVAC
     system and elevator:  (1) any service contracts therefore shall be included
     within the definition of Operating Expense (which are the two (2) items
     contemplated at the time this Lease is made, as being "unduly" low as set
     forth in Paragraph 7(b) and (ii) any capital items of repair or replacement
     may be included in Operating Expense on an amortized basis in the manner
     provided in Paragraph 7(a) for the amortization of other capital items
     described therein.

   11.  Abandonment.  Tenant shall not abandon the Premises or any substantial
part thereof at any time during the term hereof.  Tenant understands that if
Tenant should leave the Premises or any part thereof vacant and unsupervised for
a substantial period of time such that the risk of fire, other casualty and
vandalism to the Premises and the Building will be increased, such action by
Tenant shall constitute a breach of this Lease, whether or not Tenant continues
to pay rent and additional rent under this Lease.  If Tenant shall abandon,
vacate or surrender the Premises, or any substantial part thereof or be
dispossessed by process of law, or otherwise, any movable furniture, equipment,
trade fixtures, or other personal property belonging to Tenant and left on the
Premises shall be deemed to be abandoned at the option of Landlord (except such
property as may be mortgaged to Landlord), and, whether or not deemed abandoned,
Landlord shall have the right to remove the same from the Premises and charge
Tenant for such removal and any restoration as provided in Paragraph 9.
Landlord may charge Tenant at such rates as Landlord shall from time to time
determine for storing the property so left upon the Premises by Tenant, or, at
Landlord's option, may store the same in a public warehouse at Tenant's expense
provided, however, nothing set forth in this Paragraph or elsewhere in this
Lease shall impose on Landlord any obligation for the care or preservation of
such property so left upon the Premises, and Tenant hereby waives and releases
Landlord from any and all claims in connection with such removal and
specifically waives the provisions of section 1542 of the California Civil Code
with respect to such release.  No action or inaction by Landlord pursuant to
this Paragraph 11 shall be construed to have waived Landlord's right to require
Tenant to remove its property, restore any damage to the Building caused by such
removal, and make any restoration required pursuant to Paragraph 9 hereof

     12.  Liens.  Tenant shall not permit any mechanic's materialman's or other
liens arising out of work performed by Tenant or on Tenant's behalf to be filed
against the fee of the Real Property nor against Tenant's leasehold interest or
estate in the Premises.  Landlord shall have the right to post and keep posted
on the Premises any notices which it deems necessary for protection from such
liens.  If any such liens are so filed, Landlord may, upon thirty (30) days'
written notice to Tenant, without waiving its rights based on such breach by
Tenant and without releasing Tenant from any obligations, pay and satisfy the
same and in such event the sums so paid by Landlord shall be due and payable by
Tenant at once without notice or demand, with interest from such due date at the
Prime Rate plus four (4) percentage points, but in no event more than the
maximum rate permitted by law.

     13.  Assignment and Subletting.

          (a)  Neither this Lease not all or any part of the leasehold interest
     created hereby shall, directly or indirectly, voluntarily or involuntarily,
     by operation of law or otherwise, be assigned, mortgaged, pledged,
     encumbered or otherwise transferred by Tenant or Tenant's legal
     representatives or successors in interest and neither the Premises nor any
     part thereof shall be sublet or be used or occupied for any purpose by
     anyone other than Tenant, without the prior written consent of Landlord
     first had and obtained in each instance, which consent shall not be
     unreasonably withheld or unduly delayed.  Tenant agrees that the instrument
     by which any assignment or subletting is accomplished shall expressly
     provide that no subtenant or assignee shall have the further right to
     assign or sublet without Landlord's consent or otherwise permit the space
     which is the subject of the subletting or assignment to be used by others
     and that each assignee or subtenant will perform and observe all of the
     agreements, covenants, conditions and provisions to be performed and
     observed by Tenant under this Lease as and when performance and observance
     is due and that Landlord shall have the right to enforce said agreements,
     covenants, conditions and provisions directly against such assignee or
     subtenant.  Any mortgage, pledge, hypothecation, encumbrance or transfer or
     any such assignment, subletting, occupation or use without the consent of
     Landlord as aforesaid shall be void and, at the option of Landlord,
     constitute a default entitling Landlord to terminate this Lease and give
     rise to all other remedies available to Landlord for breach of this Lease.
     For purposes of this Paragraph 13, the following events shall be deemed an
     assignment of this Lease or a sublease, as appropriate:  (i) the issuance
     of equity interests (whether stock or partnership interests or otherwise)
     in Tenant or any subtenant or assignee, or any entity controlling any of
     them, to any person or group of related persons, in a single transaction or
     a series of related or unrelated transactions, such that, following such
     issuance, such person or group shall have control of Tenant; or (ii) a
     transfer of control of Tenant or such subtenant or assignee, or any entity
     controlling any of them, in a single transaction or a series of related or
     unrelated transactions (including, without limitations, by consolidation,
     merger, acquisition or reorganization), except that the transfer of
     outstanding capital stock or other listed equity interests by persons or
     parties other than "insiders" within the meaning of the Securities Exchange
     Act of 1934, as amended, through the "over-the-counter" market or any
     recognized national or international securities exchange, shall not be
     included in the determination of whether control has been transferred.
     "Control" shall mean direct or indirect ownership of not less than 50% of
     all of the voting stock of such corporation or not less than 50% of all the
     legal and equitable interests in any other business entity.  If this Lease
     is assigned, whether or not in violation of the terms of this Lease,
     Landlord may collect rent from the assignee.  If the Premises or any part
     thereof is sublet or is used or occupied by anybody other than Tenant,
     Landlord may, after an event of Default by Tenant, collect rent from such
     subtenant or occupant without having to share "excess rent" as provided in
     Paragraph 13(c), but no more than fifty percent (50%) of such "excess rent"
     shall be deemed to offset Landlord's damages, except to the extent Tenant's
     Monthly Rent and additional rent is being paid by said subtenant.  In
     either event, Landlord may apply the next amount collected to the rents
     herein reserved.  The consent by Landlord to an assignment, transfer,
     encumbering or subletting pursuant to any provision of this Lease shall not
     relieve Tenant or any assignee or subtenant from obtaining the express
     written consent of Landlord to any other or further assignment, transfer,
     encumbering or subletting.  Neither any assignment of this Lease or any
     interest created hereby, nor any subletting, occupancy or use of the
     Premises or any part thereof by any person other than Tenant, nor any
     collection of rent by Landlord from any person other than Tenant, nor any
     application of any such rent as provided in this subparagraph (a) shall be
     deemed a waiver of any of the provisions of this subparagraph (a) or
     relieve, impair, release or discharge Tenant of its obligation fully to
     perform the terms of this Lease on Tenant's part to be performed, and
     Tenant shall remain fully and primarily liable hereunder.

          (b)  Tenant shall pay to Landlord the reasonable amount of Landlord's
     cost of processing every proposed assignment or subletting (with the
     limitation of $500 for the costs of attorneys' and other professional fees
     and administrative, accounting and clerical time of Landlord), and the
     reasonable amount of all direct and indirect expense incurred by Landlord
     arising from any assignee or sublessee (as the case may be) taking
     occupancy.  Notwithstanding anything herein elsewhere to the contrary,
     Landlord shall have no obligation to process any request for such consent
     prior to Landlord's receipt of payment by Tenant of the amount of
     Landlord's estimate of the processing coats and expenses not to exceed $500
     and all other direct and indirect costs and expenses of Landlord and its
     agents arising from such assignee or subtenant taking occupancy.

          (c)  In the event of (i) any permitted subletting at a greater rental
     rate the Monthly Rent and additional rent provided for in Paragraph 7
     hereof payable by Tenant hereunder (as ratable to the sublease space), or
     (ii) any permitted assignment of this Lease or subletting providing for
     payment of any consideration (including, without limitation, payment for
     such leasehold improvements) by assignee or sublessee to the Tenant, then
     one-half (1/2) the amount of all such sublease rental which in excess of
     the Monthly Rent and additional rent payable by Tenant hereunder (as
     ratable to the sublease space) and one-half (1/2) the amount of all such
     consideration shall be deemed additional rent for the Premises and shall be
     paid over by Tenant to Landlord as received.  Upon Landlord's request
     Tenant shall assign to Landlord one-half (1/2) of all such excess amounts
     to be paid to Tenant by any such subtenant and shall direct such subtenant
     to pay the same directly to Landlord.  In the event of more than one
     instance of permitted subletting, the amounts (if any) to be paid over by
     Tenant to Landlord pursuant to the foregoing with respect to each sublease
     shall be separately calculated and shall not be cumulatively calculated as
     respects combined subleases.

          (d)  Tenant shall notify Landlord in writing if Tenant desires to
     sublet all or part of the Premises, designating the space proposed to be
     sublet and the terms proposed.  If during the first Option Period, Tenant
     so notifies Landlord that Tenant desires to sublease all or substantially
     all of the Premises for the balance of the first Option Period plus all or
     any portion of the second Option Period, then Landlord shall have the
     right, at its sole discretion, by written notice to Tenant given within
     thirty (30) days of such notice from Tenant, to terminate this Lease as of
     the date of such subletting proposed by Tenant.

          (e)  Tenant shall submit to Landlord for Landlord's written approval
     any proposed sublease agreement (in which the proposed subtenant shall be
     named) together with current financial statement of such proposed
     subtenant.  Landlord shall not have any liability for any real estate
     brokerage commission(s) or with respect to any of the costs and expenses
     that Tenant may incur in connection with its proposed subletting, and
     Tenant agrees to indemnify, defend and hold harmless Landlord from and
     against any and all claims (including, without limitation, claims for
     commissions) arising from such proposed subletting or to lease the portion
     of the Premises involved to the prospective subtenant as specified by
     Tenant in such written notice or to any other person or persons, on the
     terms specified by Tenant in such written notice or otherwise arising from
     such sublet.  Landlord's foregoing rights shall continue throughout the
     entire term of this Lease including all option periods.  A proposed
     assignment of this Lease in whole or in part shall be deemed a proposed
     subletting of the Premises in whole or in part (as applicable) for the
     purposes of paragraph 13(d).

          (f)  Except for Paragraph 13(c) and other terms of paragraph 13 to the
     contrary, Landlord's consent to a proposed assignment or subletting of the
     Premises shall not be unreasonably withheld or delayed.

          (g)  Notwithstanding any of the terms of Paragraph 13(c) of the Lease
     to the contrary, Landlord and Tenant agree that Tenant shall not be
     required to pay to Landlord any portion of any sublease rental or
     consideration for any assignment of the Lease until such time as Tenant has
     recouped from any such sublease rental or consideration for any assignment
     all of Tenant's costs (including without limitation brokerage commissions,
     attorneys' fees and any tenant improvement costs) incurred by Tenant in
     connection with such assignment or subletting' and then, Landlord and
     Tenant shall share 501 each, all excess sublease Rents over the Tenant's
     Rent and Additional Rent hereunder; unless Tenant is in breach pursuant to
     Paragraph 13(a).

          (h)  Nothing herein shall be deemed as an offset to any Monthly Rent
     or Additional Rent payable by Tenant.

          (i)  Notwithstanding any of the terms of this Paragraph 13 to the
     contrary:  (i) neither the admission nor withdrawal of partners of Keker &
     Brockett shall constitute an assignment of this Lease for any purpose
     whatsoever and shall not require notice to or approval by Landlord; (ii)
     Tenant shall have the right from time to time to enter into incidental
     occupancy agreements with clients, other attorneys and business
     professionals for the use of offices within the Premises, and any such
     agreements shall not constitute an assignment or sublease for any purpose
     hereunder so long as no separately demised premises is created by Tenant in
     connection therewith and as used herein the term "incidental occupancy
     agreements" shall not include any oral or written lease with a guaranteed
     term of more than one (1) month, unless such lease is a month-to-month
     lease, with a maximum lease term of six (6) months; and (c) Landlord
     recognizes that Keker & Brockett may merge or otherwise become affiliated
     or associated with, or become part of, another law firm, and in connection
     therewith may alter its name, and any such merger, affiliation, association
     or combination shall not constitute an assignment or sublease for any
     purpose hereunder, nor shall it be deemed to release any signatory to this
     Lease from liability to Landlord.

     14.  Indemnification of Landlord.

          (a)  Landlord and the holders of any Superior Interests (as defined in
     Paragraph 21 hereof) shall not be liable to Tenant and Tenant hereby waives
     all claims against such parties for any loss, cost, damage, injury,
     illness, or death suffered by any person or damage to any property in or
     about the Premises or the Real Property by or from any cause whatsoever
     and, without limiting the generality of the foregoing, whether caused by
     water leakage of any character from the roof, walls, basement or other
     portion of the Premises or the Real Property or caused by gas, fire,
     electricity or any cause whatsoever, in, on or about the Premises or the
     Real Property or any part thereof; provided, however, that nothing herein
     shall, subject to the provisions of Paragraph 16, be deemed to excuse
     Landlord from or relieve Landlord of any liability for the active
     negligence or intentional act or omission of Landlord, its agents,
     contractors, or its employees.

          (b)  Tenant shall hold Landlord and the holders of any Superior
     Interests, the respective individual parties therein and the respective
     shareholders thereof, as applicable, and all proper agents, contractors,
     servants, officers, directors, employees and licenses (hereinafter
     collectively called the "Indemnitees") harmless from and against any and
     all loss, cost, liability, claim, damage and expense including, without
     limitation, penalties, fines and attorneys' fees and expenses, incurred in
     connection with or arising from any default by Tenant hereunder or from any
     loss, cost, damage, injury, illness, or death suffered by any person or
     damage to any property or from any other cause whatsoever:  (i) occurring
     in or on the Premises or any part thereof arising at any time and from any
     cause whatsoever other than to the extent caused by the active negligence
     or willful misconduct of any of the Indemnitees or (ii) arising at any time
     and occurring in, on or about any part of the Real Property other than the
     Premises (including, without limitation, any facilities of the Real
     Property, such as elevators, stairways, passageways, hallways, concourses,
     plaza areas or adjacent sidewalk) to the extent such injury, illness, death
     or damage shall be caused in part or in whole by any act, neglect or
     default or omission of any duty with respect to the same by Tenant, its
     agents, employees, invitees or licenses.  The provision of this Paragraph
     14(b) shall survive the termination of this Lease with respect to any
     injury, illness, death or damage occurring prior to such termination. In
     case any action or proceeding be brought against any of the Indemnitees by
     reason of any such claim or liability, Tenant, upon notice from Landlord,
     covenants to resist and defend at Tenant's sole expense such action or
     proceeding by counsel reasonably satisfactory to Landlord.  Tenant, as a
     material part of the consideration to Landlord for this Lease, hereby
     assumes all risks of damage to property (to whoever belonging) in, upon or
     about the Premises from any source, and Tenant hereby waives all claims in
     respect thereof against the Indemnitees and agrees to defend and save the
     Indemnitees harmless from and against all such claims by others; provided,
     however, that nothing herein shall, subject to the provisions of Paragraph
     16, be deemed to excuse Landlord from or relieve Landlord of any liability
     for the gross negligence or intentional act or omission of Landlord, its
     agents, contractors, or its employees.

          (c)  Landlord agrees to defend, indemnify and hold harmless Tenant
     from and against any liability for any injury, lose or damages to any
     person or property occurring in or about the Premises and from and against
     any and all costs, expenses and liabilities (including without limitation
     court costs and reasonable attorneys' fees) incurred in connection with or
     arising from (i) any act, omission or active negligence of Landlord or (ii)
     any default or failure by Landlord to observe or perform the terms and
     conditions of this Lease.

          (d)  Wither party's obligation to defend, indemnify and hold harmless
     the other party, its agents, employees or contractors shall not apply to
     any injury, loss or damage to any person or property to the extent caused
     by the active negligence or willful acts of the other party or its agents,
     employees or contractors and is subject to the provisions of Section 16 of
     the Lease.

     15.  Insurance.

          (a)  Tenant shall keep in force during the term of this Lease (and, if
     Tenant shall take possession of or otherwise occupy or conduct activities
     in or about the Premises prior to or after the term hereof, then also
     during such pre-term or post-term period), at Tenant's expense:  (i)
     comprehensive general liability insurance including contractual liability
     coverage with a minimum combined single limit of three million dollars
     ($3,000,000) per occurrence for injuries to or illness or death of persons
     and damage to property occurring in or about the Premises: (ii) property
     insurance protecting Tenant against loss or damage by fire and such other
     risks as are insurable under then-available standard forms of "all risk"
     insurance policies (excluding earthquake and flood but including water
     damage), covering Tenant's property in or about the Premises or the Real
     Property (including Tenant's personal property and any fixtures,
     alterations and improvements which, by the terms hereof or by special
     agreement with Landlord, have remained or become Tenant's property) for the
     full replacement value thereof without deduction for depreciation: and
     (iii) workers' compensation insurance in statutory limits.  If Tenant shall
     at any time undertake or perform any addition to or alteration or
     improvement or the Premises, Tenant shall, at Tenant's expense, carry
     during such activities "all-risk" builder's risk insurance, completed value
     form, in an amount satisfactory to Landlord.  The aforesaid liability
     insurance shall protect Tenant, as named insured, and Landlord and all the
     Indemnitees and any other parties reasonably designated by Landlord, as
     additional insureds; shall insure Landlord's and such other parties'
     contingent liability as respects acts or omissions of Tenant; shall
     specifically include the liability assumed by Tenant under this Lease
     (provided, however, that such contractual liability coverage shall not
     limit or be deemed to satisfy Tenant's indemnity obligations under this
     Lease); and shall contain a cross-liability endorsement allowing an insured
     thereunder to recover for injury or damage caused by any of the other
     insureds.  Landlord reserves the right to increase the foregoing amount of
     liability coverage from time to time as Landlord determines is required
     adequately to protect Landlord and the other parties designated by Landlord
     from the matters insured against, subject to subparagraph (b).

          (b)  If at any time or from time to time, the insurance coverage
     specified in Paragraph 15(a) of the Lease is no longer adequate in the
     reasonable opinion of Landlord, Tenant shall increase the coverage to the
     amount specified by Landlord within forty-five (45) days after notice from
     Landlord, provided, that Tenant shall not be required to increase its
     coverage more often than once in any 12-month period and any increase in
     insurance coverage shall be consistent with prudent business practice.

          (c)  Each insurance policy required pursuant to this Paragraph 15
     shall be issued by an insurance company licensed to do business in the
     State of California and approved by Landlord, provide that it is primary
     insurance and not excess over or contributory with any other insurance
     force for or on behalf of Landlord or any other insureds designated by
     Landlord, provide that it may not be materially changed, amended, cancelled
     or allowed to lapse unless thirty (30) days' prior written notice to
     Landlord and any other insureds designated by Landlord is first given, and
     provide that no act or omission of Tenant shall affect or limit the
     obligations of the insurer with respect to any other insured. Each such
     insurance policy or a certificate thereof shall be delivered to Landlord by
     Tenant on or before the effective date of such policy and thereafter Tenant
     shall deliver to Landlord renewal policies or certificates at least thirty
     (30) days in advance of the expiration dates of expiring policies. In the
     event Tenant shall fail to procure such insurance, or to deliver such
     policies or certificates, Landlord may, at its option, procure the same for
     the account of Tenant, and the coat thereof shall be paid to Landlord by
     Tenant upon demand.

          (d)  Nothing in this Paragraph 15 shall be construed as creating or
     implying the existence of (i) any ownership by Tenant of any fixtures,
     additions, alterations, or improvements in or to the Premises or (ii) any
     right on Tenant's part to make any addition, alteration or improvement in
     or to the Premises.

          (e)  At all times during the term of this Lease, landlord shall
     maintain on the Building and the Premises an "All-Risk" casualty policy to
     the extent of the full replacement value of the Building and rent lose
     insurance coverage for one (1) year of Rent payments hereunder.

     16.  Waiver of Subrogation Rights.  To the extent permitted by their
respective policies of "all risk" or other casualty insurance, Landlord and
Tenant each hereby waive any right of recovery against the other and the
authorized representatives of the other for any loss or damage covered by any
such policy of insurance maintained by either with respect to the Building, the
Premises, or the contents of the Building or the Premises, whether or not such
loss or damage is caused by the fault or negligence of the other party, provided
that such waiver shall be limited to the extent of the net insurance proceeds
payable by the relevant insurance company with respect to such loss or damage.
If any policy of "all risk" or other casualty insurance maintained by Landlord
or Tenant relating to this Lease, the Building, the Real Property, or the
Premises does not permit the foregoing waiver or if the coverage under any such
policy would be invalidated as a result of such waiver, the party maintaining
such policy shall notify the other party of such nonpermission or invalidity
and, either (i) if reasonably possible without payment of additional premium,
obtain from the insurer on such policy a waiver of all rights of subrogation the
insurer might have against either party in connection with any claim of 10SB or
damage covered by such policy, or (ii) have the other party added as an
additional insured under such insurance policy.

     17.  Utilities.  Tenant shall pay, prior to delinquency, all charges for
gas, heat, light, power, telephone, trash removal, janitorial services (which
are to be provided by Tenant) and for all other materials and services supplied
to the Premises.  Tenant shall pay to Landlord, as additional rent, Tenant's Pro
Rata Share of charges for water and sewer services to the Building and for any
utility services furnished to, in or about the Building which are not separately
metered, including but not limited to utilities supplied to Common Areas.
Tenant shall indemnify, defend and hold Landlord harmless from any claim, demand
or liability relating to any of the charges and services referred to herein,
including but not limited to any all attorneys' fees and costs connected
therewith.  Landlord shall not be liable for the interruption, unavailability or
decrease in the level of service of any utility service to the Premises, unless
caused by Landlord' negligence.

     18.  Personal Property and Other Taxes.  Tenant shall pay, at least ten
(10) days before delinquency, any and all taxes, fees, charges or other
governmental impositions levied or assessed against Landlord or Tenant (a) upon
Tenant's equipment, furniture, fixtures, improvements and other personal
property located in the Premises, including carpeting installed by Tenant, (b)
by virtue of alterations, additions or improvements to the Premises made by
Tenant in each such case whether or not such property has become part of the
Premises and the property of Landlord pursuant to Paragraph 9 of this Lease, and
(c) upon this transaction or any document to which Tenant is a party creating or
transferring an interest or an estate in the Premises.  In the event said taxes,
fees, charges or other governmental impositions are charged to or paid or
payable by Landlord, Tenant, forthwith upon demand therefore, shall reimburse
Landlord therefor.

     19.  Rules and Regulations.  Tenant shall faithfully observe and comply
with the Rules and Regulations set forth on Exhibit B attached hereto and any
reasonable amendments or additions thereto.  Landlord shall not be responsible
to Tenant for the nonperformance by any subtenant or occupant of the Building of
any of said Rules and Regulations.

     20.  Holding Over.

          (a)  Any holding over after the expiration of the term of this Lease
     by expiration of time or otherwise with the express written consent of
     Landlord shall be construed to be a tenancy from month-to-month at a rent
     which shall be determined by Landlord in its reasonable discretion, but in
     no event less than the Monthly Rent and additional rent payable under this
     Lease during the last full month prior to the date of such expiration and
     shall otherwise be on the terms and conditions of thin Lease so far as
     possible.  Acceptance by Landlord of rent after such holding over with
     Landlord's written consent shall not result in any other tenancy or any
     renewa1 of the term hereof.

          (b)  If, without Landlord's consent, Tenant shall retain possession of
     the Premises or part thereof after expiration of the term hereof, by lapse
     of time or otherwise, than Tenant shall pay Landlord for each month of such
     retention rent as determined by Landlord in its reasonable discretion, but
     in no event less than one hundred fifty percent (150%) the Monthly Rent and
     additional rent payable under this Lease for the last full month prior to
     the date of such expiration and shall indemnify Landlord against all
     losses, costs, claims, liabilities and expenses (including, without
     limitation, attorneys' fees and expenses) sustained by Landlord by reason
     of such retention (including, without limitation, claims for damages by any
     other person to whom Landlord may have leased all or any part of the
     Premises effective upon the expiration of the term of this Lease).
     Acceptance by Landlord of rent after such holding over without Landlord's
     prior written consent shall not constitute a renewal of the term hereof or
     creation of a month-to-month tenancy and Tenant shall be a tenant by
     sufferance only; provided, however, such holding over shall otherwise be on
     the same terms and conditions of this Lease so far as possible.  This
     provision is in addition to, and does not affect or waive, Landlord's right
     of reentry or any other right or remedy available to Landlord on account of
     such holding over.

     21.  Subordination to Mortgages and Deeds of Trust.

          (a)  This Lease shall be subject and subordinate at all times to all
     ground or underlying leases which may now exist or hereafter be executed
     affecting the Real Property or any part thereof and to the lien of any
     mortgages or deeds of trust in any amount or amounts whatsoever now or
     hereafter placed on or against the Rea1 Property or any part thereof or on
     or against Landlord's interest or estate therein or on or against any
     ground or underlying lease (any of the foregoing being a "Superior
     Interest") without the necessity of having further instruments on the part
     of Tenant to effectuate such subordination.  Notwithstanding the foregoing,
     Tenant covenants and agrees to execute and deliver, upon demand, such
     further instruments as may be required by Landlord so long as the same
     contains a nondisturbance covenant.  If Tenant fails to execute same within
     ten (10) days, then tenant hereby irrevocably appoints Landlord the
     attorney-in-fact of the Tenant to execute and deliver any such instrument
     or instruments for or in the name of Tenant.

          (b)  Notwithstanding such subordination, in the event that any ground
     lease or underlying lease terminates for any reason or any mortgage or deed
     of trust is foreclosed or a conveyance in lieu of foreclosure is made for
     any reason, Tenant's right to possession of the Premises shall not be
     disturbed if Tenant shall not be then in default in the terms of this
     Lease, and Tenant shall attorn to the lessor under any ground lease or
     underlying 1ease or to any purchaser of the Real Property or shall, at such
     lessor's or purchaser's option, enter into a new lease for the balance of
     the Term upon the same terms and conditions of this Lease.  Tenant
     covenants and agrees to execute and deliver, upon demand by Landlord and in
     the form reasonably requested by Landlord, any additional documents
     evidencing the priority or subordination of this Lease with respect to any
     such ground leases or underlying leases or the lien of any such mortgage or
     deed of trust.

     22.  Entry by Landlord.

          (a)  Landlord reserves and shall at any and all reasonable times have
     the right to enter the Premises to inspect the same, to show the Premises
     to prospective purchasers or tenants, to post notices of nonresponsibility,
     and to alter, improve, or repair the Premises or any portion of the Real
     Property with the right to erect in the Premises or elsewhere in the Real
     Property scaffolding and other necessary structures where reasonably
     required by the character of the work to be performed, in each such case
     without any abatement or reduction of rents provided, however, that all
     such work shall be done so as to cause as little interference to Tenant as
     reasonably possible.  Tenant hereby waives any claim for damages for any
     injury or inconvenience to or interference with Tenant's business, any loss
     of occupancy or quiet enjoyment of the Premises, and any other occasioned
     by such entry.  For each of the aforesaid purposes, Landlord shall at all
     times have and retain a key with which to unlock all of the doors in, upon
     or about the Premises, excluding Tenant's vaults and safes, and Landlord
     shall have the right to use any and all means which Landlord may deem
     proper to open said doors in any emergency in order to obtain entry to the
     Premises, and any entry to the Premises obtained by Landlord by any of said
     means, or otherwise, shall not under any circumstances be construed or
     deemed to be a forcible or unlawful entry into or a detainer of the
     Premises or an eviction of Tenant from the Premises or any portion thereof.

          (b)  Landlord covenants and agrees that Landlord's right to enter the
     Premises (except in an emergency) to make alterations, repairs or
     additions, whether pursuant to Section 22 of the Lease or as anywhere else
     provided in the Lease, shall be exercised with the least possible
     interference to Tenant, and to the extent reasonably possible, such work
     shall be done after normal business hours where the nature of such work may
     materially interfere with or otherwise unreasonably distract Tenant from
     the conduct of its business.  Nothing contained in this Paragraph 22 shall
     be deemed to excuse or relieve Landlord or Tenant from any liability for
     the negligence or willful misconduct of such party or party's agents,
     servants, employees, contractors or invitees.

          (c)  Landlord will (except in any emergency) not enter Tenant's
     premises without at least 24 hours advance notice.

     23.  Insolvency or Bankruptcy.  Without limitation, the following ehal1
constitute a default under this Lease:

          (a)  If Tenant shall file a voluntary petition under any applicable
     bankruptcy law or shall have an order for relief entered under any
     applicable bankruptcy law, or shall file any petition or answer seeking any
     reorganization, arrangement, composition, readjustment, liquidation,
     dissolution or similar relief for itself under the present or future
     applicable Federal, state or other statue or law relative to bankruptcy,
     insolvency or other relief for debtors, or shall seek to consent to or
     acquiesce in the appointment of any trustee, receiver, conservator or
     liquidator of Tenant or of all or any substantial part of its properties or
     its interest in the Premises (the term "acquiesce," as used in this
     Paragraph, includes but is not limited to the failure to file a petition or
     motion to vacate appeal or discharge any order, judgment or decree within
     ten (10) days after retry of such order, judgment or decree); or

          (b)  If a court of competent jurisdiction shall enter an order,
     judgment or decree approving a petition filed against Tenant seeking any
     reorganization, arrangement, composition, readjustment, liquidation,
     dissolution or similar relief under any present or future applicable
     Federal, state or other statute or law relating to bankruptcy, insolvency,
     or other relief for debtors, and Tenant shall acquiesce in the entry of
     such order, Judgment or decree, or such order, Judgment or decree sha11
     remain unvacated and unstayed for an aggregate of sixty (60) days (whether
     or not consecutive) from the date of entry thereof, or any trustee,
     receiver, conservator or liquidator of Tenant or of all or any substantial
     part of its properties or its interest in the Premises shall be appointed
     without the consent or acquiescence of Tenant and such appointment shall
     remain unvacated and unstayed for an aggregate of sixty (60) days (whether
     or not consecutive); or

          (c)  If Tenant shall be unable, or admit in writing its inability to
     pay its debts as they matures; or

          (d)  If Tenant shall give notice to any governmental body of
     insolvency or pending insolvency, or suspension or pending suspension or

          (e)  If Tenant shall make an assignment for the benefit of creditors
     or take any other similar action for the protection or benefit of
     creditors.

Upon the happening of any such event, this Lease shall terminate.  In no event
shall this Lease be assigned or assignable by reason of any voluntary or
involuntary bankruptcy proceedings, nor shall any rights or privileges hereunder
be an asset of Tenant, the trustee, debtor-in-possession, or the debtor's estate
in any bankruptcy, insolvency or reorganization proceedings.

     24.  Default.

          (a)  Any failure by Tenant to observe and perform any provision of the
     Lease other than Paragraph 5, to be observed or performed by Tenant, where
     such failure continues for thirty (30) days after written notice thereof by
     Landlord to Tenant shall be deemed an Event of Default: provided, however,
     that if such failure is not reasonably susceptible of cure within said
     thirty (30) day period (financial inability of Tenant excepted) such
     failure shall not constitute an Event of Default as long as Tenant
     commences to cure within said thirty (30) day period and thereafter
     diligently prosecutes such cure to completion.  Any Notice of Default
     hereunder shall specify the default and the applicable Lease provisions,
     and shall demand that Tenant perform the provisions of the Lease or pay the
     Rent that is in arrears, as the case may be. within the applicable period
     of time.  No such notice shall be deemed a forfeiture or termination of the
     Lease provided Tenant cures the default within the applicable period of
     time.  Failure to specify default in any other Lease provision in said
     Notice of Default, shall not be deemed a waiver of any other default
     provision.

          (b)  In the event of the occurrence of an Event of Default (as defined
     in this Lease) by Tenant, then Landlord, in addition to any other rights
     and remedies of Landlord at law or in equity, shall have the right either
     to terminate Tenant's right to possession of the Premises and thereby
     terminate this Lease or to have this Lease continue in full force and
     effect with Tenant at all times having the right to possession of the
     Premises.  Should Landlord elect to terminate Tenant's right to possession
     of the Premises and terminate this Lease, then Landlord shall have the
     immediate right to entry and may remove all persons and property from the
     Premises.  Such property so removed may be stored in a public warehouse or
     elsewhere at the cost and for the account of Tenant.  Upon such
     termination, Landlord, in addition to any other rights and remedies
     available at law or in equity, shall have the right to recover from
     Tenant's.

               (i)  The worth at the time of award of all unpaid rent which had
          been earned at the time of termination;

               (ii) The worth at the time of award of the amount by which all
          unpaid rent which would have been earned after termination until the
          time of award exceeds the amount of such rental loss that Tenant
          proves could have been reasonably avoided;

               (iii)     The worth at the time of award of the amount by which
          all unpaid rent for the balance of the term of this Lease after the
          time of award exceeds the amount of such rental lose that Tenant
          proves could be reasonably avoided; and

               (iv) All other amounts necessary to compensate Landlord for all
          the detriment proximately caused by Tenant's failure to perform its
          obligations under this Lease or which in the ordinary course of things
          would be likely to result therefrom.

     The "worth at the time of award" of the amounts referred to in clauses (i)
     and (ii) above shall be computed by allowing latest at the maximum annual
     interest rate allowed by law for business loans (not primarily for
     personal, family or household purposes) not exempt from the usury law at
     the time of termination or, if there is no such maximum annual interest
     rate, at the Prime Rate charged on such termination date plus four (4)
     percentage points.  The "worth at the time of award" of the amount referred
     to in clause (iii) above shall be computed by discounting such amount at
     the discount rate of the Federal Reserve Bank of San Francisco at the time
     of award plus one percent (1%) per annum. For the purpose of determining
     unpaid rent under clauses (i), (ii) and (iii) above, such unpaid rent shall
     be the Monthly Rent and additional rent payable by Tenant in accordance
     with all of the provisions of this Lease, including, without limitation,
     provisions pertaining to the increase of such Monthly Rent and additional
     rent from time to time during the term of this Lease.

          (c)  Should Landlord, following any breach or default of this Lease by
     Tenant, elect to keep this Lease in full force and effect, for so long as
     Landlord does not terminate Tenant's right to possession of the Premises
     (notwithstanding the fact Tenant may have abandoned the Premises), then
     Landlord, besides all other rights and remedies Landlord may have at law or
     in equity, shall have the right to enforce all of Landlord's rights and
     remedies under this Lease, including but not limited to the right to
     recover the installments of rent as they become due under this Lease.
     Notwithstanding any such election to have this Lease remain in full force
     and effect, Landlord may at any time thereafter elect to terminate Tenant's
     right to possession of said Premises and thereby terminate this Lease for
     any previous breach or default which remains uncured, or for any subsequent
     breach or default.  For the purposes of Landlord's right to continue this
     Lease in effect upon Tenant's breach or default, acts of maintenance or
     preservation or efforts of Landlord to relet the Premises, or the
     appointment of a receiver on the initiative of Landlord to protect its
     interest under this Lease does not constitute a termination of Tenant's
     right to possession.

          (d)  In the event Landlord elects, upon default of this Lease by
     Tenant, to keep this Lease in full force and effect, Landlord may, from
     time to time sublet the Premises or any part thereof for such term and at
     such rent and upon such other terms as Landlord in its reasonable
     discretion may deem advisable with the right to make alterations and
     repairs to the Premises; provided, however, nothing herein shall diminish
     Landlord's rights pursuant to subparagraph 24(b).  Upon each such
     subletting (i) Tenant shall be immediately liable to pay to Landlord, in
     addition to indebtedness other than rent due hereunder, the coat of such
     subletting and of such alterations and repairs, incurred by Landlord, and
     the amount by which the rent hereunder for the period of such subletting
     (to the extent such period does not exceed the term hereof) exceeds the
     amount agreed to be paid as rent for the Premises for such period of such
     subletting; or (ii) at the option of Landlord, rents received from such
     subletting shall be applied; first, to payment of indebtedness other than
     rent due hereunder from Tenant to Landlord; second, to payment of coats of
     such subletting and of such alterations and repairs: third, to payment of
     rent due and unpaid hereunder: and the residue, if any, shall be held by
     Landlord and applied in payment of future rent as the same becomes due
     hereunder.  If Tenant has been credited with any rent to be received by
     such subletting under option (i), and such rent shall not be promptly paid
     to Landlord by such subtenant(s), or if such rent received from such
     subletting under option (ii) during any month be less than that to be paid
     during that month by Tenant hereunder, Tenant shall pay any such deficiency
     to Landlord.  Such deficiency shall be calculated and paid monthly.  No
     taking possession of the Premises by Landlord, shall be construed as an
     election on its part to terminate this Lease unless a written notice of
     such intention be given to Tenant.  Notwithstanding any such subletting
     without termination, Landlord may at any time thereafter elect to terminate
     this Lease for such previous breach.  At Landlord's option and application,
     a receiver for Tenant shall be appointed to take possession or the Premises
     and to exercise Landlord 'a right to sublet the Premises for Tenant and to
     apply any rent collected from the Premises as provided herein.

          (e)  As used in this Paragraph 24, the one half (1/2) of the "excess
     rent" (as defined in Paragraph 13(c)) that is payable to Landlord shall not
     be deemed, in any way, to offset Landlord's damages herein.  Landlord's
     damages, however, will be offset, as provided in this Paragraph 24, to the
     extent that Landlord collects (so provided in Paragraph 13(c)) the one-half
     (1/2) of "excess rent" that is otherwise payable to Tenant under Paragraph
     13(c).

     25.  Damage by Fire, Etc.

          (a)  If the Premises or the Building is damaged by fire or other
     casualty, Landlord shall diligently repair the same, subject to the
     provisions of this Paragraph, provided such repairs can be made within one
     hundred eighty (180) days, and this Lease shall remain in full force and
     effect.  If such fire or other casualty damages the Premises or common
     areas or the Real Property necessary for Tenant's use and occupancy of the
     Premises, then during the period the Premises or any part thereof are
     rendered unusable by such damage and the repair thereof, Tenant shall be
     entitled to a proportionate reduction of rent on account of such damage and
     repair, such proportionate reduction to be based upon the extent to which
     such damage and repair shall prevent the conduct of business by Tenant in
     the Premises as set forth more particularly in subparagraph 25 (d);
     provided, however, in the event that such damage is the result of the
     negligence or willful misconduct of Tenant or Tenant's agents, employees,
     contractors, licensees or invitees and is not covered by insurance, then
     there shall be no rent abatement.  Landlord shall not be obligated to
     repair any damage to, or to make any replacement of, Tenant's movable
     furniture, equipment, trade fixtures, and other personal property, nor any
     additions, alterations or improvements installed in the Premises by or for
     Tenant, and Tenant shall, at Tenant's sole cost and expense, repair and
     replace such movable furniture, equipment, trade fixtures and other
     personal property, and such alterations, additions, and improvements.  All
     such repair and replacement of alterations, additions and improvements
     other than as previously installed pursuant to Paragraph 9 shall be treated
     as a work of alteration, addition or improvement by Tenant and all of the
     provisions of Paragraph 9 shall apply thereto.  Tenant hereby waives
     California Civil Code sections 1932(2) and 1933(4), providing for
     termination of hiring upon destruction of the thing hired and sections 1941
     and 1942, providing for repairs to and of premises.

          (b)  Landlord's obligation to repair pursuant to subparagraph 25(a)
     and 25(c) shall be subject to insurance proceeds being available to
     Landlord to effect such repair; provided, however, in the event of an
     uninsured casualty costing less than $150,000 to repair, such damage shall
     be repaired and this Lease shall remain in effect (except that Rent owing
     hereunder shall be abated as provided in Subparagraph 25(d) below) in which
     case a Landlord may elect to either (i) repair such damage at Landlord's
     sole cost and expense, or (ii) permit Tenant to undertake such repair, in
     which latter case Tenant shall repair such damage and shall be entitled to
     offset against Monthly Rent the cost of such repair (such offset shall be
     limited to fifty percent (50%) of the Monthly Rent for each month until
     Tenant has recouped the cost of such repair).  With respect to any damage
     to be repaired by Landlord, Landlord shall with all due diligence repair or
     rebuild the Building and the Premises (including any of Tenant 'a
     improvements therein) to the condition at least equal to that existing
     immediately prior to said damage.  With respect to any insured casualty,
     Landlord shall use any insurance proceeds payable to Landlord for the
     purpose of such rebuilding, as well as, with respect to the Premises, any
     insurance proceeds received by Tenant by reason of its insurance on the
     Premises to the extent of the actual amount needed to replace or restore
     Tenant's improvements, trade fixtures, and equipment.

          (c)  If any such damage to Building, or Premises (herein "major
     damages") cannot be repaired by Landlord within 180 days after the
     occurrence thereof and if as a result of such damage a material portion of
     the Premises shall be unusable for the normal operation of Tenant's
     business for a period of 180 days or more, Tenant or Landlord shall have
     the option to terminate this Lease upon thirty (30) days' written notice to
     the other party in which event the Monthly Rent and all additional rent
     shall be prorated to the date of the damage, and Tenant shall not be liable
     for any Monthly Rent or additional rent after the date of damage.

          (d)  If the Lease is not terminated after any damage or destruction,
     the Monthly Rent and all additional rent shall be equitably prorated and
     abated for and during the period commencing with the date of such casualty
     and continuing until repairs are completed in the proportion that the area
     of the Premises usable by Tenant for normal business operations bears to
     the total area then leased by Tenant, taking into consideration the rental
     rate per square foot for the space for which the abatement is made and any
     adverse effects and disruptions to Tenant's business caused during the
     period of such repairs, which Tenant could not reasonably mitigate.

     26.  Eminent Domain.

          (a)  If all or any part of the Premises shall be taken or appropriated
     by any public or quasi-public authority under the power of eminent domain,
     or any agreement in lieu thereof, this Lease shall terminate as to the part
     so taken as of the date of taking and, in the case of a partial taking,
     either Landlord or Tenant shall have the right to terminate this Lease as
     to the balance of the Premises by giving written notice to the other within
     ninety (90) days after such dates provided, however, that a condition to
     the exercise by Landlord or Tenant of such right to terminate shall be that
     the portion of the Premises taken shall be of such extent and nature as to
     render the balance of the Premises unusable or uneconomical for Tenant's
     purposes.  In the event of any taking by exercise of the power of eminent
     domain, or agreement in lieu thereof, Landlord shall be entitled to all
     compensation, damage, income, rent awards and interest thereon whatsoever
     which may be paid or made in connection therewith and Tenant shall have no
     claim against Landlord for the value of any unexpired term of this Lease or
     of any of the work performed by Landlord in the Premises for or by Tenants
     provided, however, that nothing contained herein shall prohibit or prevent
     Tenant from seeking at its cost and expense and retaining for its own
     account from the authority exercising the power of eminent domain an award
     to compensate Tenant for the unamortized cost of any improvements,
     additions or alteration to the Premises, which were paid for solely at
     Tenant's expense, its relocation expenses and for any loss by Tenant of any
     movable furniture, equipment and other personal property resulting from
     such exercise.  In the event of a partial taking of the Premises which does
     not result in a termination of this Lease, the rent thereafter to be paid
     under this Lease shall be equitably reduced.

          (b)  Notwithstanding the foregoing, if all or any portion of the
     Premises is taken under power of eminent domain or any agreement in lieu
     thereof for a period of time ending prior to the end of the term of this
     Lease, this Lease shall remain in full force and effect and Tenant shall
     continue to pay all rent and to perform all of the terms, conditions and
     covenants of this Lease; provided, however, in such case Tenant shall be
     entitled to all compensation, damages, income, rent awards and interest
     thereon whatsoever which may be paid or made in connection with any such
     temporary taking.

     27.  Limitation of Landlord's Liability.

          (a)  Anything contained in this Lease to the contrary notwithstanding,
     Tenant shall look solely to Landlord's interest in the Real Property for
     the recovery of any judgment against Landlord on account of Landlord's
     breach of any of its covenants or obligations under this Lease.  Landlord,
     the partners of Landlord (if Landlord is a partnership), the officers,
     directors or shareholders of Landlord (if Landlord is a corporation), and
     the employees and agents of any of them, shall never have any personal
     liability for any breach of any covenant or obligation of Landlord under
     this Lease and no recourse shall be enforceable against the assets of
     Landlord or any such other person other than the interest of Landlord or
     such other person in the Real Property for payment of any sums due to
     Tenant or enforcement of any other relief based upon any claim made by
     Tenant for breach of any of Landlord's covenants or obligations under this
     Lease.

          (b)  As used herein, Landlord's interest in the nea1 Property shall
     include any insurance proceeds or condemnation awards received by Landlord
     and not applied to the restoration of the Real Property or to the payment
     of any indebtedness thereon.  Further, the provisions of this Paragraph 27
     shall only be effective so long as Landlord maintains a minimum of
     $1,000,000 unencumbered equity in the Real Property, and only during the
     period that Landlord owns the Real Property.

     28.  Sale by Landlord.

          (a)  In the event of a sale, conveyance or other transfer by Landlord
     of the Real Property, the same shall operate to release Landlord from any
     future liability of any covenants or conditions, express or implied, herein
     contained in favor of Tenant, and in such event Tenant agrees to look
     solely to the successor in interest of Landlord in this Lease for
     performance of all of Landlord's covenants or obligations hereunder
     accruing from and after the date of such transfer.  If any security be
     given by Tenant to secure the faithful performance of all or any of the
     covenants of this Lease on the part of Tenant, Landlord shall transfer
     and/or deliver the security, as such, to the successor in interest of
     Landlord, and thereupon Landlord shall be discharged from any further
     liability in reference thereto; provided, however, nothing in this
     Paragraph 28 shall require Landlord to transfer more security than is
     actually held by Landlord at the date of transfer and; provided, however,
     that any dispute between Landlord and Tenant over any previous application
     of the security shall not be waived as a consequence of the transfer.

          (b)  As a condition to the release of Landlord's liability under the
     Lease upon sale of the Building, any buyer of the Building shall assume in
     writing Landlord's obligations under the Lease and shall acknowledge
     Tenant's security deposit.

     29.  Estoppel Certificate.  Tenant, at any time upon not less than ten (10)
days' prior written notice from Landlord, shall execute, acknowledge and deliver
to Landlord a statement in writing (1) certifying that the Lease is unmodified
and in full force and effect (or, if modified, stating the nature of such
modification and certifying that the Lease, as so modified, is in full force and
effect) and the date to which the rent and other charges are paid in advance, if
any, and (2) acknowledging that there are not, to Tenant's knowledge, any
uncured defaults on the part of Landlord hereunder, or specifying such defaults
if any are claimed.  Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrancer of the Premises.  Tenant's failure to
deliver such statement within such time shall be conclusive upon Tenant (1) that
the Lease in full force and effect, without modification, except as may be
represented by Landlord, (2) that there are no uncured defaults in Landlord's
performance, and (3) that not more than one (1) month's rent has been paid in
advance.

     30.  Right of Landlord to Perform; Late Charge.

          (a)  All covenants and agreements to be kept or performed by Tenant
     under any of the terms of this Lease shall be performed by Tenant at
     Tenant's sole cost and expense and without any abatement of rent.  If
     Tenant shall fail to pay any sum of money required to be paid by it
     hereunder (other than Monthly Rent and additional rent payable pursuant to
     Paragraphs 5 and 7) or shall fail to perform any other act on its part to
     be performed hereunder, Landlord may, but shall not be obliged to, and
     without waiving any default of Tenant or releasing Tenant from any
     obligations to Landlord hereunder, make any such payment or perform any
     such other act on Tenant's part to be made or performed as in this Lease
     provided.  All sums so paid by Landlord and all necessary incidental costs,
     together with interest thereon from the date of such payment by Landlord
     until paid at an annual rate of interest equal to the lesser of (a) four
     percent (4%) over the prevailing "base rate" announced from time to time by
     the Bank of America NT&SA for purposes of pricing loans to major corporate
     borrowers or (b) the highest rate allowed by law for commercial
     obligations, which interest shall be payable forthwith upon demand, and
     Landlord shall have (in addition to any other right or remedy of Landlord)
     the same rights and remedies in the event of nonpayment thereof by Tenant
     as in the case of default by Tenant in the payment of rent.

          (b)  Tenant acknowledges that late payment by Tenant to Landlord of
     any installment of Monthly Rent or additional rent will cause Landlord to
     incur costs not contemplated by this Lease, the exact amount of such costs
     being extremely difficult and impracticable to fix.  Such costs include,
     without limitation, processing and accounting charges, and late charges
     that may be imposed on Landlord by the terms of any encumbrance and note
     secured by any encumbrance encumbering the Real Property.  Therefore, if
     any installment of Monthly Rent or additional rent due from Tenant is not
     paid within five (5) days after the date such installment is due, the
     Tenant shall pay to Landlord an additional sum of five percent (5%) of the
     overdue installment as a late charge.  The parties agree that this late
     charge represents a fair and reasonable estimate of the costs that Landlord
     will incur by reason of late payment by Tenant.  Acceptance of any late
     charge shall not constitute a waiver of Tenant's default with respect to
     the overdue amount, nor prevent Landlord from exercising any of the other
     rights and remedies available to Landlord.

     31.  Arbitration and Attorneys' Fees.

          (a)  Any dispute, controversy or claim arising under this Lease shall
     be submitted to arbitration in the City of San Francisco, California.
     Except as otherwise provided with respect to the selection of arbitrators,
     said arbitration shall be conducted in accordance with the Rules of
     Commercial Arbitration of the American Arbitration Association or its
     successor, and the provisions of California Code of Civil Procedure Section
     1283.05 or any successor or amended statute or law containing similar
     provisions.  Each party to this Agreement shall appoint one arbitrator and
     notify the other party of such appointment; provided, however, that no
     officer, agent, attorney, employee or other person who has a financial
     interest in said dispute may be appointed and that each person so appointed
     shall have had five year's experience in commercial leasing matters in San
     Francisco.  Promptly after their appointment, the two arbitrators appointed
     by the parties shall meet and select as the third and presiding arbitrator
     a member of State Bar of California who in the last ten years tried ten
     cases to judgment and arbitrated to award or served as an arbitrator of at
     least three disputes.  The arbitrators shall have no power to modify any of
     the provisions of this Lease and their jurisdiction is limited accordingly.
     The arbitrators shall prepare and serve written findings of fact and
     conclusions which adequately set forth the basis of their decision and
     which cites the statutes and precedents relied upon in reaching such
     decision.  Except as may be otherwise decided by the arbitration tribunal,
     the expenses of arbitration shall be borne equally by the parties and each
     party shall be responsible for the fees and expenses of its own experts,
     evidence and attorneys.  Judgment upon the award rendered by the
     arbitrators may be entered in any court having jurisdiction thereof,
     including, but not limited to, the rights and remedies for in Title 3,
     chapter 4 of the California Code of Civil Procedure.  All arbitration
     concerning this Lease, the Real Property or any matter related thereto
     shall be binding and final.

          (b)  In the event of any action or proceeding at Law or in equity
     between Landlord and Tenant (including an action or proceeding between
     Landlord and the trustee or debtor in possession while Tenant is a debtor
     in a proceeding under the Bankruptcy Code (Title 11 of the United States
     Code) or any successor statute to such Code) to enforce any provision of
     this Lease or to protect or establish any right or remedy of either
     Landlord or Tenant hereunder, the unsuccessful party to such action or
     proceeding shall pay to the prevailing party all costs and expenses,
     including, without limitation, reasonable attorneys' fees and expenses,
     incurred in such action or proceeding and in any appeal in connection
     therewith by such prevailing party, whether or not such action, proceeding
     or appeal is prosecuted to judgment or other final determination.  The term
     "prevailing party" shall include, without limitation, a party who obtains
     legal counsel or brings an action against the other by reason of the
     other's breach or default and obtains substantially the relief sought,
     whether by compromise, settlement or judgment.  If such prevailing party
     shall recover in any such action, proceeding or appeal, such costs,
     expenses and/or attorneys' fees shall be included in and as a part of such
     judgment.

     32.  Surrender of Premises.

          (a)  Upon the expiration or sooner termination of the term hereof,
     Tenant shall surrender the Premises to Landlord in the same condition as
     when received, ordinary wear and tear and damage by fire, earthquake, act
     of God or the elements excepted and, at Tenant's sole cost, shall remove
     all movable furniture, equipment, trade fixtures and personal property
     (except partitions, in accordance with Paragraph 9 of this Lease) and
     repair any damage in the Premises or elsewhere in the Building caused by
     such removal.  Any property which is not so removed by Tenant within
     fifteen (15) calendar days following notice thereof to Tenant shall be
     deemed abandoned by Tenant, and title to such property shall, at Landlord's
     election, pass to Landlord, provided that any such abandonment and transfer
     of title shall not be deemed to be a waiver of Landlord's rights and
     remedies against Tenant for removal of such items by Tenant.  Whether or
     not title shall so pass to Landlord, Landlord may cause such property to be
     removed and stored and/or disposed of, and may make appropriate repairs to
     the Premises and Building, and Tenant shall pay the cost of such action on
     demand.  Tenant shall indemnify Landlord against any loss or liability
     resulting from delay by Tenant in so surrendering the Premises, removing
     property and making repairs, including without limitation any claims made
     by any succeeding tenant- founded on such delay, unless such delay is
     caused by fire, earthquake, act of God or other conditions beyond Tenant's
     reasonable control (financial inability excepted).

          (b)  The voluntary or other surrender of this Lease by Tenant or a
     mutual cancellation thereof shall not work a merger, and at the option of
     Landlord, (i) shall terminate all or any existing subleases or
     subtenancies, or (ii) shall operate as an assignment to Landlord of all or
     any such subleases or subtenancies.

33.  Withdrawal of Partners.

          (a)  In the event of the withdrawal or removal of one or more than one
     of the general partners of Tenant's general partnership (said partner being
     referred to herein as a "Withdrawing Partner" and said general partnership
     being referred to as the "Partnership"), Landlord agrees that; upon advance
     notice to Landlord of said withdrawing Partner to withdrawal or removal
     from the Partnership, said withdrawing Partner or Partners shall not be
     released from any obligations and/or liabilities under the Lease unless
     consented to by Landlord in its sole judgment which consent may be withheld
     for any reason.  In the event of a partner's withdrawal is consented to
     then the remaining partners must:

               (i)  Assume the proportional share of liability of the
          withdrawing partner; and

               (ii) Must submit adequate documentation to Landlord that the
          remaining partners are of sufficient financial strength to give
          Landlord security for the Lease given the expenses incurred by
          Landlord in making improvements.

          (b)  The partners of Keker & Brockett (or successor) shall provide
     additional financial statements to the present Lender or any proposed
     Lender, when reasonably requested.

     34.  Waiver.  The waiver by Landlord or Tenant of performance of any term,
covenant or condition herein contained shell not be deemed to be a waiver of
such term, covenant or condition or any subsequent breach of the same or by any
other term, covenant or condition herein contained.  The subsequent acceptance
of rent hereunder by Landlord shall not be deemed to be a waiver of any
preceding breach by Tenant of any term, covenant or condition of this Lease,
other than the failure of Tenant to pay the particular rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rent.

     35.  Notices.  All notices and demands which may or are required to be
given by either party to the other hereunder shall be in writing.  All notices
and demands by Landlord to Tenant shall be delivered personally or sent by
United States certified or registered mall, postage prepaid, addressed to Tenant
at the Premises, or to such other place as Tenant may from time to time by like
notice designate.  All notice and demands by Tenant to Landlord shall be sent by
United States certified or registered mail, postage prepaid, addressed to
Landlord in care of Dinesh Maniar, 110 Kimball Way, So. San Francisco,
California 94080, or to such other place as Landlord may from time to time by
like notice designate.

     36.  Notice of Surrender.  At least ninety (90) days before the last day of
the term hereof, Tenant shall give to Landlord a written notice of intention to
surrender the Premises on that date, but neither this Paragraph nor any failure
by Landlord to protest the lack of such notice by Tenant shall be construed as
an extension of the term hereof or as consent of Landlord to any holding over by
Tenant, provided, however, that failure to give such notice in a timely manner,
shall not be deemed an Event of Default.

     37.  Defined Terms and Marginal Headings.  The words "Landlord" and
"Tenant" as used herein shall include the plural as well as the singular.  Words
used in masculine gender include the feminine and neuter.  If there be more than
one Tenant the obligations hereunder imposed upon Tenant shall be joint and
several.  The headings and titles to the Paragraphs of this Lease are not a part
of this Lease and shall have no effect upon the construction or interpretation
of any part hereof.  Whatsoever the term "including" or "includes" has been used
in this Lease it shall be construed as if followed by the phrase "without
limitation."  As used herein the term "shall" is mandatory and "may" is
permissive.

     38.  Time and Applicable Law.  Time is of the essence of this Lease and
each and all of its provisions.  This Lease shall in all respects be governed by
and construed in accordance with the laws of the State of California.

     39.  Successors.  Subject to the provisions of Paragraphs 13 and 28 hereof,
the covenants and conditions herein contained shall be binding upon and inure to
the benefit of the heirs, successors, executors, administrators and assigns of
the parties hereto.

     40.  Entire Agreement.  This Lease (including any Exhibits, Riders or
attachments hereto) together with the Work Agreement of even date herewith
(which Work Agreement shall no longer be operative following Tenant's letter
that said Work Agreement has been completed), constitutes the entire agreement
between Landlord and Tenant and no promises or representations, express or
implied, either written or oral, not herein set forth shall be binding upon or
inure to the benefit of Landlord or Tenant.  This Lease shall not be modified by
any oral agreement, either express or implied, and all modifications hereof
shall be in writing and signed by both Landlord and Tenant.

     41.  Equal Employment Opportunity.  There are incorporated in this Lease
the provisions of Executive Order 11246 (as amended ) of the President of the
United States on equal employment opportunities and the rules and regulations
issued pursuant thereto with which Landlord represents that it will comply
unless exempted.

     42.  Light and Air.  Tenant covenants and agrees that no diminution of
light, air or view by any structure which may hereafter be erected (whether or
not by Landlord) shall entitle Tenant to any reduction of rent hereunder, result
in any liability or Landlord to Tenant, or in any other way affect this Lease.

     43.  Severability.  If any provision of this Lease or the application
thereof to any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Lease and the application of such provisions to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.

     44.  Financing Condition.  If at any time or times Landlord declares to
obtain financing for the Real Property, if any lender which intends to take, or
is holding, a mortgage or deed of trust encumbering the Rea1 Property should
require, as a condition to such financing, either execution by Tenant of an
agreement requiring Tenant to send such lender written notice of any default by
Landlord under this Lease, giving such lender the right to cure such default
until such lender has completed foreclosure, and preventing Tenant from
terminating this Lease unless such default remains uncured after foreclosure has
been completed, or any modification of the agreements, covenants, conditions or
provisions of this Lease, or both of them, then Tenant agrees to execute and
deliver such agreement and to modify this lease as required by such lender,
provided, however, that no such modification shall affect the length of the term
hereof or increase the Rent payable by Tenant under Paragraphs 5 and 7, or
increase any other financial obligation existing under this Lease, or Tenants
rights herein and shall be in all other respects be reasonable related to the
lender's security interest in this Lease.  Tenant acknowledges and agrees that
its failure to execute any such agreement or modification required by such
lender may cause Landlord serious financial damage by causing the failure of a
financing transaction and Landlord shall have rights to damages caused by the
lose of said financing.

     45.  Authority.  If Tenant is a corporation, partnership, trust,
association or other entity, Tenant and each person executing this Lease on
behalf of Tenant does hereby covenant and warrant that (a) Tenant is duly
incorporated or otherwise established or formed and validly existing under the
laws of its state of incorporation, establishment or formation, (b) Tenant has
and is duly qualified to do business in California, (c) Tenant has full
corporate, partnership, trust, association or other appropriate power and
authority to enter into this Lease and to perform all Tenant's obligations
hereunder, and (d) each person (and all of the persons of more than one signs)
signing this Lease on behalf of Tenant is duly and validly authorized to do so.

     46.  No Offer.  Submission of this instrument for examination and signature
by Tenant does not constitute a reservation of or option for lease, and is not
effective as a lease or otherwise until execution and delivery by both Landlord
and Tenant.

     47.  Real Estate Brokers.  Each party to this Lease represents and warrants
that it has negotiated this Lease with the Real Estate Broker identified in
Paragraph 2 and has not authorized or employed, or acted by implication to
authorize or to employ, any other real estate broker or salesman to act for
either Tenant or Landlord in connection with this Lease.  Each party shall hold
the other harmless from and indemnify and defend Landlord against any and all
claims by any real estate broker or salesman other than the Real Estate Broker
identified in Paragraph 2 for a commission or finder's fee as a result of
Tenant's entering into this Lease.

     48.  Counterparts; Exhibits, Riders and Other Attachments.

          (a)  This Lease may be executed in two or more counterparts, but all
     of such counterparts taken together shall constitute one and the same
     instrument.

          (b)  All Exhibits, Riders and other attachments hereto are hereby
     incorporated herein and made a part hereof.


     49.  OPTION TO EXTEND TERM:

          (a)  First Option Period.

          If an Event of Default by Tenant shall not then exist, Tenant shall
     have the right to extend the Initial Term of this Lease for a period of
     five (5) years ("First Option Period").  The First Option Period shall
     commence on the day following the date on which this Lease otherwise
     terminates according to the provisions of Paragraph 2, and shall terminate
     at midnight on the last day of the sixtieth (60th) month thereafter.
     Tenant shall exercise the right to the First Option Period by delivering
     written notice to Landlord not later than six (6) months prior to the
     expiration of the Agreed Initial Term of this Lease.

          (b)  Terms, Conditions, Covenants and Rent for First Option Period.

          The First Option Period shall be on all of the terms, conditions and
     covenants applicable to the Agreed Initial Term of the Lease with the
     following specific exception.  The monthly rent for the First Option Period
     shall be determined in the manner set forth in Subparagraph 49.e, hereof.

          (c)  Second Option Period.

          If an Event of Default by Tenant shall not then exist, and Tenant has
     exercised the right to the First Option Period, Tenant shall have the right
     to extend the Term of the Lease for a Second Five (5) Year Option Period;
     provided, however, that the right to exercise the Second Option shall be
     personal to Tenant to the extent that if, during the Agreed Initial Term,
     Tenant shall have assigned this Lease or subleased the entire Premises or
     substantially all the Premises, for the balance of the Agreed Initial Term
     and the First Option Period such that the original Tenant hereunder (as
     such Tenant may have changed through any one or more mergers, affiliations,
     associations or combinations as described in Paragraph 13(j) above) is no
     longer in possession of all or substantially all of the Premises, then the
     Second Option shall be null and void and Tenant shall have no right to
     extend the term of this Lease for the Second Option Period.  The Second
     (2nd) Five Year Option Period shall commence on the day following the date
     on which the First Option Period terminates and shall terminate on the last
     day of the Sixtieth (60th) month thereafter.  The failure by Tenant to
     exercise any Option Period herein shall terminate Tenant's right to any
     successive Option Periods.  Tenant shall exercise the right to the Second
     Five Year Option Period by delivering written notice to Landlord not later
     than six (6) months prior to the expiration of the First Option Period.

          (d)  Terms, Conditions, Covenants and Rent for Second Five Year Option
     Period.

          The Second Five Year Option Period shall be on all of the terms,
     conditions and covenants applicable to the Initial Term and the First
     Option Period with the following exceptions:

               (l)  The monthly rent for the Second Five Year Option Period
          shall be determined as set forth in Subparagraph 49.e, hereof.

               (2)  Tenant shall have no right to extend any Term or Option
          Period of this Lease beyond the termination of the Second (2nd) Five
          Year option Period.

          (e)  Rent During Option Periods.  The basic rent for each Option
     Period shall be the "Fair Market Rental" for such Option Period determined
     as follows:

               (1)  As used herein, the term "Fair Market Rental" for any Option
          Period means the Monthly Rent that Landlord could obtain as of the
          commencement of the Option Period from a third party desiring to lease
          the Premises for the Option Period taking into account the services
          provided under the terms of the Lease, the rental then being obtained
          for new leases of space comparable to the Premises in the locality of
          the Building, tenant improvement allowances provided or to be
          provided, rental abatements, other forms of rental concessions and all
          other factors that would be relevant to a third party desiring to
          lease the Premises for said Option Period on said terms in determining
          the rental such party would be willing to pay therefore.  Said Fair
          Market shall also take into account an equitable sharing of the cost
          savings in leasing commissions realized as a consequence of Tenant's
          election to exercise the renewa1 Option.

               (2)  At least 120 days prior to the commencement of any Option
          Period Landlord shall send to Tenant a notice setting forth its
          determination of the Fair Market Rental.  In the event Tenant disputes
          Landlord's determination of the Fair Market Rental, Tenant shall,
          within thirty (30) days after the date of Landlord's notice send to
          Landlord a notice stating that Tenant desires to submit the dispute as
          to the Fair Market Rental to arbitration as provided in subparagraph
          (3) below.  If Tenant does not so send Landlord such notice,
          Landlord's determination of the Fair Market Rental shall be the
          Monthly Rents for such Option Period.  In the event Tenant elects to
          arbitrate, and such arbitration shall not have been concluded Prior to
          the commencement of the Option Period, Tenant shall pay Monthly Rent
          to Landlord at the rate set forth in Landlord's notice to Tenant of
          the Fair Market rental.  If the amount of Fair Market Rental, as
          finally determined by arbitration, is greater than Landlord's
          determination, Tenant shall pay to Landlord the difference between the
          amount paid by Tenant and the Fair Market rental, as so determined by
          arbitration, for the period between the commencement of the Option
          Period and the date of such determination within thirty (30) days of
          the determination, and if the Fair Market rental, as finally
          determined by arbitration. is less than Landlord's determination, the
          difference between the amount paid by Tenant and the Fair Market
          Rental, as so determined by arbitration, for said period shall be
          credited against the next installments of basic rent due from Tenant
          to Landlord.

               (3)  In the event Tenant elects to submit the determination of
          the Fair Market Rental for any Option Period to arbitration as above
          provided, the judgment or the award rendered in any such arbitration
          may be entered in any court having jurisdiction and shall be final and
          binding upon the parties.  The arbitration shall be conducted and
          determined in the City and County of San Francisco in accordance with
          the then prevailing rules of the American Arbitration Association or
          its successor for arbitration of commercial disputes, except to the
          extent that the procedures mandated by said rules are expressly
          modified herein.

                    (A)  Tenant's notice requiring arbitration as provided in
               subparagraph (2) above shall specify the name and address of the
               person to act as the arbitrator on Tenant's behalf.  The
               arbitrator shall be an attorney, M.A.I. or licensed real estate
               broker with at least ten (10) years' experience in the field of
               commercial property leases, who's familiar with the prevailing
               market rentals of first-class commercial office space in the
               downtown San Francisco area and would qualify as an expert
               witness over objection to give opinion testimony addressed to the
               lease in a court of competent jurisdiction.  Within twenty (20)
               business days after receipt of the notice requiring arbitration,
               Landlord shall give notice to Tenant specifying the name and
               address of the Person designated by Landlord as arbitrator on its
               behalf, who shall be similarly qualified.  If Landlord fails to
               notify Tenant of the appointment of its arbitrator, within the
               time above specified, then Tenant on behalf of Landlord may
               request appointment of a similarly qualified person by the then
               Chief Judge of the United States District Court having
               jurisdiction over the City and County of San Francisco, and the
               other party shall not raise any question as to such Judge's full
               power and jurisdiction to entertain the application for and make
               the appointment.

                    (B)  In the event that the two arbitrators are chosen
               pursuant to subparagraph (A) above, the arbitrators so chosen
               shall meet within ten (10) business days after the second
               arbitrator is appointed, and if within ten (10) business days
               after such first meeting the arbitrators shall be unable to agree
               upon a determination of the Fair Market Rental, they shall
               appoint a third arbitrator, who shall be a competent and
               impartial person with qualifications similar to those above
               required or the first two arbitrators.  In the event the two
               arbitrators are unable to agree upon such appointment of a third
               arbitrator within five (5) business days after the expiration of
               such ten-day period, the third arbitrator shall be selected by
               the parties, if they can agree thereon, within a further period
               of ten (10) business days.  If the parties do not so agree, then
               either on behalf of both, may request appointment of such a
               qualified person by the then Chief Judge of the United States
               District Court having jurisdiction over the City and County of
               San Francisco, and the other party shall not raise any question
               as to such Judge's full power and jurisdiction to entertain the
               application for and make the appointment.  The three arbitrators
               shall decide the dispute if it has not previously been resolved
               by following the procedure set forth in subparagraph (C) below
               and shall attempt to so decide the issue within ten (10) business
               days of the appointment of the third arbitrator.

                    (C)  If the determination of the Fair Market Rental cannot
               be resolved by agreement between the two arbitrators selected by
               Landlord and Tenant or settlement between the parties during the
               course of arbitration, the issue shall be resolved by the three
               arbitrators in accordance with the following procedure.  The
               arbitrator selected by each of the parties shall state in writing
               his determination of the Fair Market Rental, supported by the
               reasons therefore with counterpart copies to each party.  The
               arbitrators shall arrange for simultaneous exchange or such
               proposed determinations.  The role of the third arbitrator shall
               be to select which of the two proposed determinations most
               closely approximates his determination of the Fair Market Rental.
               The third arbitrator shall have the right to propose a middle
               ground or any modification of either of the two proposed
               determinations.  The determination he chooses shall constitute
               the decision of the arbitrators and shall be binding and
               conclusive upon the parties.

                    (D)  In the event of a failure, refusal or inability of any
               arbitrator to act, his successor (similarly qualified) shall be
               appointed by him, but in the case of the third arbitrator, his
               successor shall be appointed in the same manner as above provided
               for appointment of the third arbitrator.  Any decision in which
               the arbitrator appointed by Landlord and the arbitrator appointed
               by Tenant concur shall be binding and conclusive upon the
               parties.  Each party shall pay the fees and expenses of its
               respective arbitrator and both shall share the fees and expenses
               of the third arbitrator, if any, and the attorneys' fees and
               expenses of counsel of the respective parties and of witnesses
               shall be paid by the respective party engaging such counsel or
               calling such witnesses.

                    (E)  The arbitrators shall have the right to consult experts
               and competent authorities with factual information or evidence
               pertaining to a determination of the Fair Market Rental, but any
               such consultation shall be made in the presence of both parties
               with full right on their part to cross-examine.  The arbitrators
               shall render their decision and award in writing with counterpart
               copies to each party.  The arbitrators shall have no power to
               modify the provisions of the Lease.

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

     By Landlord:                  /s/ Dinesh Maniar
                                   Dinesh Maniar


     By Tenants:                   /s/ John W. Keker
                                   John W. Keker, P.C.
                                   by John W. Keker its principal


                                   /s/ John W. Keker
                                   John W. Keker, individually


                                   /s/ William A. Brockett
                                   William A. Brockett, P.C.,
                                   by William A. Brockett its principal


                                   /s/ William B. Brockett
                                   William A. Brockett, individually


                                   /s/ Robert A. Van Nest
                                   Robert A. Van Nest, P.C.,
                                   by Robert A. Van Next its principal


                                   /s/ Robert A. Van Nest
                                   Robert A. Van Nest, individually


                                   /s/ R. Elaine Leitner
                                   R. Elaine Leitner, individually


                                   /s/ Christopher J. Hunt
                                   Christopher J. Hunt, individually


                                   /s/ David J. Meadows
                                   David J. Meadows, individually


                                   /s/ Jeffrey R. Chanin
                                   Jeffrey R. Chanin, individually


                                   /s/ Gary M. Cohen
                                   Gary M. Cohen, individually


                                   /s/
                                   Keker & Brockett, a California Partnership

                                   Tenants.



                                     LEASE


     THIS LEASE is dated as of July 20, 1988, for purpose of reference only, and
is made by and between PACIFIC QUADRANT DEVELOPMENT COMPANY, a California
general partnership, having an office at c/o 1646 North California Boulevard,
Suite 650, Walnut Creek, California 94596 ("Landlord"), and WICKES COMPANIES,
INC., a Delaware corporation, having an office at c/o Orchard Supply Hardware,
6450 Via Del Oro Street, San Jose, California 95119 ("Tenant").

                                  ARTICLE ONE

                            PREMISES AND DEFINITIONS

     1.1  Demise of Premises.  Landlord hereby leases to Tenant, and Tenant
leases from Landlord, for the Lease Term, the Premises together with:  (i) the
non-exclusive right to use the Common Area of the Shopping Center described in
this Lease, (ii) the right to erect signs as set forth in Article 14 hereof,
(iii) rights to ingress and egress to and from the Premises over the Common Area
to and over the public street known as Market Place which provides access to
Bollinger Canyon Road and Alcosta Boulevard, and (iv) any and all other rights,
easements, and appurtenances in and to the Premises and the Shopping Center.

     1.2  Definitions.  As used herein, the following terms shall have the
following meanings:

          A.  Base Monthlv Rent.  The term "Base Monthly Rent" shall mean the
fixed rent to be paid by Tenant during the Lease Term, which is set forth in
Sections 5.1 and 5.2.

          B.  Building.  The term "Building" shall mean the approximately
thirty-one thousand and sixty-two (31,062) square foot structure which is part
of the Premises.

          C.  Commencement Date.  The term "Commencement Date" shall mean the
date upon which the Lease Term commences, as more particularly defined in
Section 3.2.

          D.  Common Area.  The term "Common Area" shall mean those portions of
the Shopping Center designated as such on Exhibit "B-1", including, without
limitation, the automobile parking areas, pedestrian and vehicular access ways,
sidewalks, passageways, and ingress and egress areas.

          E.  Effective Date. The term "Effective Date" shall mean the date on
which this Lease is executed by the last signatory whose execution is required
to make it binding on Landlord and Tenant.

          F.  Excusable Delay.  The term "Excusable Delay" shall mean any
extension of the time for performance by either Landlord or Tenant of its
obligations under this Lease because of a delay resulting from a cause beyond
the reasonable control of the party obligated to perform, as more particularly
described in Section 20.8.

          G.  Lease Term.  The term "Lease Term" shall mean the term of this
Lease which shall commence and be for the period described in Section 3.1, as
such period may be extended by tenant pursuant to Article 4.

          H.  Lease Year.  The term "Lease Year" shall mean any twelve (12)
month period commencing on February 1st and terminating on the following
January 31st; provided, however, that (i) if the Commencement Date occurs
between February 2 and June 30 (inclusive), then the first Lease Year shall
be the period commencing on the Commencement Date and terminating on the
first January 31 thereafter; and (ii) if the Commencement Date occurs
between July 1 and January 30 (inclusive), then the First Lease Year shall
be the period commencing on the Commencement Date and terminating on the
second January 31 thereafter.

          I.  Legal Requirements.  The term "Legal Requirements" shall mean all
laws, statues, ordinances, building codes, zoning regulations, ordinances,
orders, rules, regulations or requirements of all federal, state, local and
municipal governments, the appropriate agencies, offices, departments, boards
and commissions thereof, whether now or hereafter in effect which may affect or
be applicable to the Premises, the Shopping Center, or any part thereof or to
the use or manner of use of all or any part of the Premises or the Shopping
Center.

          J.  Premises.  The term "Premises" shall mean the one-story concrete
block building to be constructed in accordance with the provisions hereof prior
to the Commencement Date, which building is to contain approximately thirty-one
thousand and sixty-two (31,062) square feet of floor space, a receiving area of
approximately two thousand six hundred forty (2,640) square feet of floor space,
a mezzanine of approximately one thousand seven hundred twenty-nine (1,729)
square feet of floor space above the receiving area, a nursery area of
approximately nine thousand six hundred sixty-seven (9,667) square feet, and an
adjoining building to house a pick-up station containing approximately six
thousand four hundred and twenty (6,420) square feet of floor area with an
adjoining outside yard area of approximately nine thousand eight hundred and
forty-seven (9,847) square feet, all in the location shown on Exhibit "B-1"
attached hereto.  The final building size may be adjusted to avoid conflict with
the adjacent storm sewer easement and be consistent with the final plans,
specifications and working drawings to be approved by Landlord and Tenant.

          K.  Shopping Center.  The term "Shopping Center" shall mean that
property consisting of approximately 4.27 acres located near the intersection of
the Bollinger Canyon Road and Market Place in San Ramon, Contra Costa County,
California which is more particularly described by Exhibit "A" attached hereto
and by the site plan attached hereto as Exhibit "B-1".  Landlord and Tenant
acknowledge that as of the Effective Date the Shopping Center has not been
constituted as a separate legal parcel by the recordation of a final subdivision
map.  The City of San Ramon has approved subdivision map number 69-49 dated May
1988 that is consistent with Exhibits A and B-1.  Landlord shall cause all
conditions to the recordation of such approved subdivision map to be satisfied
and cause it to be recorded so that the Shopping Center is constituted as a
separate legal parcel.  Landlord shall not allow any changes to be made to such
subdivision map without the prior written consent of Tenant.

          L.  Shop Pads.  The term "Shop Pads" shall mean those two areas within
the Shopping Center identified as "Shops" on the site plan attached hereto as
Exhibit "B-1" showing a maximum buildable area for shop buildings Landlord
intends to construct in the future of 3,186 square feet and 4,814 square feet,
respectively.  Notwithstanding the foregoing, Landlord shall have the right to
adjust the Shop Pads to change their size and configuration so long as (i) the
location of the Shop Pads is not changed, and (ii) the buildable area of both
Shop Pads taken together does not exceed 8,000 square feet.

          M.  Tenant's Proportionate Share.  The term "Tenant's Proportionate
Share" shall initially mean eighty-four and one-tenth percent (84.1%), subject
to adjustment pursuant to this Section.  If any buildings are constructed in the
Shopping Center other than the Building (including buildings on the Shop Pads),
upon substantial completion of any such building Tenant's Proportionate Share
shall be adjusted to that percentage equivalent to the quotient obtained by
dividing the net leaseable area of the Building (including the entire area of
any nursery that is within walls, but excluding any receiving area, pickup area,
and outdoor yard area) by the net leaseable area of the ground floor area of all
buildings within the Shopping Center (including the Building and any buildings
constructed on the Shop Pads); provided, however, that in no event shall
Tenant's Proportionate Share ever exceed eighty-nine and eight-tenths percent
(89.8%).

          N.  Agreed Interest Rate.  The term "Agreed Interest Rate" shall mean
that interest rate determined as of the time it is to be applied that is equal
to the lessor of (i) five percent (5%) in excess of the discount rate
established by the Federal Reserve Bank of San Francisco as it may be adjusted
from time to time, or (ii) the maximum interest rate permitted by Law.

                                  ARTICLE TWO

                             PRE-TERM CONSTRUCTION

     2.1  Obligations of the Parties:  Landlord shall be obligated to install
certain improvements on the Shopping Center prior the Commencement Date in
accordance with the provisions of the Construction Agreement attached to the
Lease as Exhibit C.

                                 ARTICLE THREE

                                 TERM OF LEASE

     3.1  Term of Lease.  The term of this Lease shall begin on the Commencement
Date and, unless extended pursuant to Article 4 hereof, shall terminate upon the
expiration of the twenty-fifth (25th) Lease Year.

     3.2  Commencement Date.  The term "Commencement Date" shall mean that date
upon which all of the following have been achieved or have occurred, subject to
the provisions of subparagraph A and B hereof:  (i)  Landlord has achieved
Substantial Completion of the Premises Improvements and the Common Area
Improvements, pursuant to Exhibit C; (ii) all governmental approvals have been
issued which are necessary to permit Tenant to legally occupy the Premises for
the uses permitted by this Lease, and to open for business to customers; and
(iii) the Premises have been "Ready for Tenant's Fixturing" (as defined in
Section 7D of Exhibit C") for more than ninety (90) days and Tenant has not been
prevented from entering the Premises for the purpose of installing its personal
property, fixtures, appliances and equipment.  Notwithstanding the foregoing,
the following shall apply:

          A.  The Commencement Date shall occur no later than the date on which
Tenant opens the Premises for business to customers; and

          B.  The Commencement Date shall not occur between November 15 of any
year and the following January 31; provided, however, that if Tenant opens the
Premises for business to customers during such period, the Commencement Date
shall be the date on which Tenant so opens the Premises for business to
customers.

                                  ARTICLE FOUR

                               OPTIONS TO EXTEND

     4.1  Grant of Option to Extend.  Tenant shall have five (5) independent and
successive options to extend the initial Lease Term for five (5) Years for each
such option to extend.

     4.2  Exercise of Option.  Tenant may exercise any of the options to extend
granted to it by this Article at any time prior to the expiration of the then
Lease Term (as it may have previously been extended pursuant to this Article) by
delivering written notice of such election to Tenant, subject to the following
limitations:

          (a)  No exercise of an option to extend shall be effective if Tenant
is in default of its obligations under this Lease, Tenant has received written
notice of such default from Landlord, such default may be cured but has not been
cured, and any applicable grace or notice periods under this Lease have expired.

          (b)  If this Lease is terminated, Tenant's options to extend shall
also terminate.

          (c)  If on the date there remains one hundred eighty (180) days before
the expiration of the then Lease Term (as it may have been previously extended
by Tenant pursuant to this Article), Tenant has not given Landlord written
notice of its election to extend the Lease Term pursuant to any remaining option
to extend that it may have, Landlord shall notify Tenant in writing ("Landlord's
Reminder") that the Lease will expire on the scheduled expiration date.  If
Tenant then fails to give Landlord written notice of its election to extend the
Lease Term pursuant to a then existing option within ten (10) days following
delivery to Tenant of Landlord's Reminder, all remaining options to extend
granted to Tenant pursuant to this Article shall terminate

     4.3  Terms of Lease During Extension Period.  If Tenant exercises any
option to extend the Lease Term pursuant to this Article, it shall lease the
Premises from Landlord, and Landlord shall lease the Premises to Tenant, on all
of the terms and conditions contained in this Lease during such extension period
(including all obligation to pay Percentage Rent pursuant to Section 5.3),
except that (i) the Base Monthly Rent may be adjusted pursuant to Section 5.2
for such extension period, and (ii) nothing herein shall be construed to grant
to Tenant any additional options to extend the Term (i.e., if Tenant exercises
the first option to extend, there shall thereafter only remain four (4) more
options to extend the Lease Term as provided in paragraph 4.1).

                                  ARTICLE FIVE

                                      RENT

     5.1  Base Monthly Rent.  Tenant agrees to pay Landlord, and Landlord agrees
to accept during the initial Lease Term, at such place as Landlord shall from
time to time designate by notice to Tenant, a base monthly rent ("Base Monthly
Rent") of Forty Thousand Eight Hundred Two Dollars ($40,802) per month;
provided, however, that if the Premises Construction Costs paid by Landlord are
less than One Million Eight Hundred Thousand Dollars ($l,800,000) as determined
pursuant to Exhibit C, the Base Monthly Rent of Forty Thousand Eight Hundred Two
Dollars ($40,802) shall be reduced by an amount equal to one-twelfth (l/12th) of
the product obtained by multiplying (i) ninety-five thousandths (.095) by (ii)
the difference between One Million Eight Hundred Thousand Dollars ($1,800,000)
and the amount of Premises Construction Costs actually paid by Landlord.  Base
Monthly Rent shall be payable in equal monthly installments, in advance, on the
first day of each and every calendar month during the Lease Term commencing on
the Commencement Date and on the first day of each month thereafter during the
Lease Term; provided, however that all Base Monthly Rent and other payments
hereunder shall be apportioned based on the actual days in the period to which
the Base Monthly Rent or payment applies.

     5.2  Base Monthly Rent During Extension Periods.  If the Lease Term is
extended pursuant to Article 4 hereof, then Tenant shall pay Base Monthly Rent
during each such extension period(s) in a monthly amount equal to seventy-five
percent (75%) of the amount derived by dividing sixty (60) into the total Base
Monthly Rent plus Percentage Rent paid by Tenant to Landlord during the five (5)
Lease Years immediately preceding the commencement of the extension period in
question; provided, however, that in no event shall the Base Monthly Rent for
any extension period be less than the Base Monthly Rent due during the period
immediately preceding the extension period in question.  If the Base Monthly
Rent payable during any extension period exceeds the Base Monthly Rent payable
during the initial Lease Term, then Tenant shall receive a credit against the
Percentage Rent payable during each Lease Year during such extension period that
is equal to the positive difference between (i) the Base Monthlv Rent that
became due during the Lease Year in question, and (ii) the Base Monthly Rent
that would have become due during the Lease Year in question had the Base
Monthly Rent been equal to the rent payable during the initial Lease Term
pursuant to paragraph 5.1.  Such credit shall be non-cumulative.  By way of
example only, (i) if during the Lease Year in question during an extension
period the Base Monthly Rent is Forty-Five Thousand Dollars ($45,000) per month
resulting in a total of Five Hundred Forty Thousand Dollars ($540,000) due as
Base Monthly Rent for the entire Lease Year in question, (ii) if during the same
Lease Year the Percentage Rent that is otherwise payable is Seventy-Five
Thousand Dollars ($75,000), then (iii) Tenant shall be entitled to a credit of
Fifty Thousand Three Hundred Seventy-Six Dollars ($50,376) against the
Seventy-Five Thousand Dollars ($75,000) of Percentage Rent that is due, so that
Tenant is only obligated to make a cash payment of Twenty-Four Thousand Six
Hundred Twenty-Four Dollars ($24,624) to satisfy its obligation to pay
Percentage Rent for the Lease Year in question during the extended term.  The
figure of $50,376 used in the preceding example is the difference between
$540,000 (the total Base Monthly Rent payable during the Lease Year in question
that occurs during the extended period) and the amount of $489,624 (which is the
total Base Monthly Rent that would have been payable during the Lease Year in
question at the rate of $40,802 per month, which is equal to the Base Monthly
Rent payable during the initial Lease Term pursuant to paragraph 5.1, assuming
that no adjustment is required by said paragraph 5.1).

     5.3  Percentage Rent.

          A.  Percentage Rent Formula.  In addition to Base Monthly Rent, during
the Lease Term, if Gross Sales (as hereinafter defined) exceed Twelve Million
Dollars ($12,000,000), then Tenant shall pay to Landlord as "Percentage Rent"
the amounts set forth below to the right of the total Gross Sales for such Lease
Year:

             GROSS SALES                              TOTAL
            FOR LEASE YEAR                     PERCENTAGE RENT DUE

 $12,000,000 or less                  None
 $12,000,001 to $17,000,000           2% of amount of Gross Sales in excess
                                      of $12,000,000 up to $17,000,000
 $17,000,001 and up                   $100,000 plus 1% of amount of Gross
                                      Sales in excess of $17,000,000

     By way of example only, if Gross Sales for the Lease Year in question is
$19,000,000, the Percentage Rent for that Lease Year would be $120,000.

          B.  Calculation of Gross Sales for First Lease Year.  If the
Commencement Date is a date other than February 1st, the first Lease Year will
be more or less than twelve (12) months, and accordingly the method for
calculating Percentage Rent shall be adjusted as provided in the Section to
avoid distortion.  If, for the period commencing with the Commencement Date and
terminating on the first anniversary of said date (the "First Twelve Months"),
Gross Sales exceed Twelve Million Dollars ($12,000,000), a hypothetical
"Percentage Rent" for the First Twelve Months shall be calculated in accordance
with the table set forth in Section 5.3, based on the total Gross Sales for the
First Twelve Months.  Such hypothetical "Percentage Rent" shall be multiplied by
a fraction, the numerator of which shall be the number of days in the first
Lease Year and the denominator of which shall be three hundred sixty-five (365).
If the first Lease Year is less than twelve (12) months, such amount shall be
the Percentage Rent due for the first Lease Year and shall be due and payable
within thirty (30) days after the end of the First Twelve Months.  If the First
Lease Year is more than twelve (12) months, then (i) such hypothetical
"Percentage Rent" for the First Twelve Months shall be multiplied by a fraction,
the numerator of which shall be the number of days in the first Lease Year in
excess of 365 days and the denominator of which shall be 365, (ii) the result of
such multiplication shall then be added to the Percentage Rent for the last
twelve (12) month period of the first Lease Year based on the table set forth in
Section 5.3 above, and (iii) that sum shall be the total Percentage Rate for the
first Lease Year.  It is understood that Gross Sales during a portion of the
first Lease Year will be used twice in calculating Percentage Rent for the first
Lease Year if it is more than twelve (12) months, but such double counting shall
be rectified by the proration formula above and shall not increase Tenant's
total Percentage Rent obligations hereunder.  By way of example only, (i) if the
Commencement Date is October 1, 1988 and accordingly the first Lease Year
commences on October 1, 1988 and ends on January 31, 1990, (ii) Gross Sales for
the period beginning October 1, 1988 and ending September 30, 1989 total
$14,000,000, (iii) Gross Sales for the period beginning February 1, 1989 and
ending January 31, 1990 total $15,000,000, then (iv) Percentage Rent payable for
the first Lease Year commencing October 1, 1988 and ending January 31, 1990
would be $53,479.45.

          C.  Method of Payment.  Percentage Rent shall be paid by Tenant within
ninety (90) days after the end of each Lease Year.  Each such payment of
Percentage Rent shall be accompanied by a statement setting forth Gross Sales
made during the preceding Lease Year signed by an officer of the Tenant's
operating division in charge of the Premises.

          D.  Definition of Gross Sales.  For the purpose of determining the
Percentage Rent to be paid hereunder, "Gross Sales" shall mean the total
receipts (determined at the time of sale) from all merchandise and services sold
or rendered in the Premises by Tenant or any subtenant, concessionaire, or
licensee, whether for cash or on a charge, credit or time basis (without reserve
or deduction for inability or failure to collect), less the selling price of any
goods returned by any customer (to the extent that the selling price of any such
returned goods has been included in Gross Sales) and less that part of the sales
price of merchandise which is paid by the trading in of other merchandise of the
customer (although the proceeds from the subsequent sale of such trade-in
merchandise shall be included in Gross Sales hereunder) and further expressly
excluding the following:

          1.  Sales at a discount to employees of Tenant or a subtenant,
     concessionaire, or licensee;

          2.  Revenues derived from service charges made for credit
     transactions, delivery charges for products sold from the Premises, sales
     from vending machines, income from the sale of stamps, money orders,
     express checks, and bank checks, check-cashing receipts, revenues from
     lockers, public toilets, and telephones, all sums received from the sale of
     tickets of admission to theatrical, circus, church and sports events, and
     all sums received from the sale of such other items as form an
     inconsequential part of the business of Tenant or any subtenant,
     concessionaire, or licensee:

          3.  All sums representing so-called "sales taxes" collected directly
     from customers, based upon present and future laws of the federal, state or
     local government, and collected by Tenant or any subtenant, licensee or
     concessionaire in the operation of its business on the Premises, and any
     other tax, excise or duty which is levied or assessed against Tenant or any
     subtenant, licensee or concessionaire by any federal, state, municipal, or
     local authority based on sales of specific merchandise on the Premises, or
     the privilege or license to sell or distribute specific merchandise from
     the Premises, whether or not the amount thereof is passed on to, or
     collected by, Tenant or any subtenant, licensee or concessionaire from any
     purchaser thereof;

          4.  The transfer of merchandise by Tenant, or a subtenant, licensee or
     concessionaire, or any subsidiary of any of them from the Premises to
     another store or a place of business owned or operated by Tenant, or a
     subtenant, licensee or concessionaire, all of which shall not constitute a
     sale;

          5.  Proceeds from the sale of gift certificates or like vouchers;
     provided, however, that when any such certificate or voucher is redeemed
     for merchandise at the Premises (whether said certificate or voucher was
     initially sold at the Premises or at another location), then the retail
     price of the goods allocable to such redemption shall be included in Gross
     Sales;

          6.  Donations of merchandise to non-profit charitable and religious
     institutions:

          7.  Service charges, finance charges, interest and discounts
     attributable to "charge accounts" and credit cards to the extent the same
     are paid by customers, or to the extent the same are paid by or charged to
     Tenant or any subtenant, licensee or concessionaire by any credit company;

          8.  Charges for labor performed outside of the Premises or arranged by
     a "Home Improvement" or "Decorations" department of Tenant or any of its
     subtenants, licensees, or concessionaires, but including the receipts from
     the sale of merchandise from the Premises in connection therewith: and

          9.  Sums received in partial payment for merchandise sold upon the
     "layaway" or "will call" basis, provided said sums shall be included in
     Gross Sales when the sale has been concluded by delivery of the merchandise
     to the customer.  Any such partial payments that are forfeited by customers
     also shall be included in Gross Sales.

          E.  Arbitration.  Any dispute with respect to proper exclusions from
Gross Sales may be submitted to arbitration in the manner provided in Section
20.6.

     5.4  Records.  Within twelve (12) months after Landlord's receipt of
Tenant's statement of Gross Sales and not more frequently than once per Lease
Year, Landlord and its agents or representatives may inspect Tenant's records of
sales made in the Premises to determine the propriety of Tenant's statement.
Such inspection shall be conducted at Tenant's accounting offices, wherever such
offices are now or hereafter located.  Any claim by Landlord for revision of any
statement of Gross Sales or Percentage Rent, which claim is not made to Tenant
within twelve (12) months after the date of delivery of such statement to
Landlord, shall be deemed waived by Landlord.  If Landlord discovers that Tenant
has under-reported its Gross Sales by more than three percent (3%) of Tenant's
actual Gross Sales, then Tenant shall promptly pay the reasonable cost of the
Landlord's audit, plus the amount of the deficiency in Percentage Rent.  Except
as to the level of disclosure customarily required by prospective mortgagees and
purchasers of Landlord's interest in the Premises, Landlord agrees to hold in
confidence all sales figures and other information obtained from Tenant's
records.  Tenant makes no representation or warranty as to the sales which it
expects to make in the Premises.

                                  ARTICLE SIX

                                     TAXES

     6.1  Personal Property Taxes.  Tenant shall pay, prior to delinquency, all
taxes levied against its personal property and trade fixtures located on the
Premises.  If the assessed value of Landlord's property is increased by
inclusion of Tenant's personal property and trade fixtures located on the
Premises, then Tenant shall pay to Landlord upon demand the portion of taxes
attributable to Tenant's property and fixtures.

     6.2  Real Estate Taxes.

          A.  Definition.  As used herein, the term "Real Estate Taxes" shall
mean the following:  (i) ad valorem real property taxes; (ii) assessments for
public improvements, services, or benefits (subject to Subsection 6.2C hereof);
and (iii) any other tax or charge imposed by any governmental or quasi
governmental authority having the power to tax or levy assessments which is
levied or assessed against the Shopping Center or the rent payable pursuant to
this Lease.  The term "Real Estate Taxes" shall not include any estate,
inheritance, succession, capital levy, corporate franchise, excess profits,
transfer or income tax of Landlord.  If any assessments are levied against the
Shopping Center, Landlord may elect to either pay the assessment in full or
allow the assessment to go to bond.  If Landlord pays the assessment in full,
Tenant shall pay to Landlord each time payment of Real Estate Taxes as made a
sum equal to that which would have been payable (as both principal and interest)
had Landlord allowed the assessment to go to bond.

          B.  Tenant's Obligation to Pay.  Tenant shall pay in the manner and
within the time specified within Subsection 6.2E Tenant's Proportionate Share
(defined and calculated as provided in Subsection 1.2M) of any Real Estate Taxes
which become due and payable upon the Shopping Center during each Lease Year
included within the period commencing with the Commencement Date and ending with
the expiration of the initial and any extension term or terms of this Lease.  As
an alternative to calculation of Tenant's obligation to pay its fair share of
Real Estate Taxes based upon the definition contained in Subsection 1.2M,
Landlord may propose an allocation of Real Estate Taxes which become due and
payable upon the Shopping Center and Tenant shall pay its share of such Real
Estate Taxes as allocated by Landlord so long as Landlord demonstrates to
Tenant's reasonable satisfaction that the allocations made by Landlord of such
Real Estate Taxes to the various components of the Shopping Center are fair and
reasonable and are based upon the information used by the tax assessor
(including assessors' work sheets or such other information as may be reasonably
available to Landlord) establishing the amount of such Real Estate Taxes.  If
this alternative calculation is used, Tenant shall pay (i) one hundred percent
(100%) of all Real Estate Taxes fairly allocable to the Building; (ii) one
hundred percent (100%) of all Real Estate Taxes fairly allocable to the land
immediately beneath the Building and all areas that Tenant has the exclusive
right to use; (iii) Tenant's Proportionate Share of Real Estate Taxes fairly
allocable to the land and improvements that are within the Common Area that are
not devoted to the exclusive use of any other tenant of the Shopping Center and
are not within the Shop Pads.  Should the County Assessor establish a separate
tax parcel containing the Premises and an equitable portion of the Common Area,
and thereafter separately assess taxes applicable to such parcel and the
improvements located thereon, then notwithstanding the foregoing, either
Landlord or Tenant may elect that Tenant's share of Real Estate Taxes shall be
the taxes allocated by the County Assessor to such tax parcel provided Landlord
and Tenant have each approved the boundaries established for the tax parcel as
constituting an equitable division of the Shopping Center for Real Estate Tax
purposes.  Notwithstanding anything contained herein, Tenant shall not be
obligated to pay any Real Estate Taxes allocable to the Shop Pads or any other
buildings and the land immediately beneath them that are within the Shopping
Center which are reserved to the exclusive use of Landlord or any other party.
Should Landlord and Tenant be unable to reach agreement as to the fair share of
Real Estate Taxes required to be paid by Tenant, either Landlord or Tenant may
require that the matter be determined by arbitration as provided for within
Section 20.6.

          C.  Future Voluntary and Existing Assessments.  Notwithstanding
anything contained herein, the parties agree as follows:

     (1)  Tenant shall only be obligated to pay up to Four Thousand Dollars
($4,000) per tax fiscal year on account of the assessments affecting the
Shopping Center which are described in the exceptions to title attached to the
Lease as Exhibit F.  This limit on Tenant's obligation shall be pro rated for
any partial tax fiscal year during the Lease Term.  Landlord shall be
responsible for any other amount owed pursuant to such assessments without a
right of reimbursement from Tenant.

     (2)  Landlord shall be obligated to pay, without a right of reimbursement
from Tenant, any future assessments not described in the title exceptions
attached to the Lease as Exhibit F if all of the following are true with respect
to the future assessment in question: (i) such assessments were authorized by a
vote or approval of the required number of benefitted property owners, (ii)
Landlord voted in favor of or approved such assessments (either as owner of the
Shopping Center or as owner of other property effected by such assessments), and
(iii) Tenant did not approve in writing such assessments (which approval shall
not be unreasonably withheld).

          D.  Adjustments.  The Real Estate Taxes for each Lease Year shall be
the Real Estate Taxes due and payable during said Lease Year.  All taxes shall
be apportioned between Landlord and Tenant as of the dates of commencement and
termination of this Lease.  In addition, if any Lease Year shall be greater than
or less than twelve (12) months, or if the Real Estate Tax year shall be
changed, an appropriate adjustment shall be made.  If there shall be more than
one taxing authority, the Real Estate Taxes for any period shall be the sum of
the Real Estate Taxes for said period attributable to each taxing authority.

          E.  Manner of Payment.  Landlord shall submit to Tenant true copies of
the bill for any Real Estate Taxes for each tax year or portion of a tax year
included within the Lease Term and, not less than thirty (30) days prior to the
date when such Real Estate Taxes would become delinquent, shall bill Tenant for
any amount that may be payable by Tenant.  Said bill shall be accompanied by a
proper computation of the amount payable by Tenant and such amount shall be paid
by Tenant at least ten (10) days before the date or dates of delinquency of such
Real Estate Taxes.  If Tenant shall not have received such bill at least thirty
(30) days prior to the time for payment, Tenant shall not be required to make
payment until twenty (20) days after receipt of said bill.

          F.  Right to Contest.  Tenant, at its sole cost, shall have the right
at any time to seek a reduction in the assessed valuation of the Premises and
the Common Area or to contest any Real Estate Taxes that are to be reimbursed or
paid by Tenant.  If Tenant seeks a reduction or contests the Real Estate Taxes,
Tenant's failure to pay such taxes shall not constitute a default under this
Lease as long as Tenant complies with the provisions of this paragraph.
Landlord shall not be required to join in any proceeding or contest brought by
Tenant, unless the provisions of any law require that the proceeding or contest
be brought by or in the name of Landlord or any owner of the Premises.  In that
case, Landlord shall join in the proceeding or contest, or permit it to be
brought in Landlord's name, as long as Landlord is not required to bear any
cost.  On final determination of the proceeding or contest, Tenant shall
immediately pay or discharge any decision or judgment rendered, together with
all costs, charges, interests, and penalties incidental to the decision or
judgment.  If, after Tenant has made a payment of Real Estate Taxes, Landlord
receives a refund of any portion of taxes on which such payment was based,
Landlord shall promptly pay Tenant's portion of the refund to Tenant.  Landlord
shall take such action as is reasonably requested by Tenant for the purpose of
making payment to the tax collector, obtaining information and other data from
the county or city tax assessor, and instituting and maintaining any proceeding
or contest allowed under this paragraph with respect to all Real Estate Taxes in
connection with the Premises.  Notwithstanding the foregoing if Tenant elects
not to pay when due an installment of taxes the amount of which is being
contested, Tenant shall provide security satisfactory to Landlord's lender to
assure that taxes as determined together with interest and penalties, if any,
will be paid and that in no event shall any tax sale be permitted to occur,
taxes assessed to be paid under protest if necessary to prevent a tax sale.

          G.  Receipts.  Landlord shall pay when due all Real Estate Taxes and
other taxes and assessments assessed against the Shopping Center and shall
provide Tenant with copies of receipted tax bills promptly after receipt of the
same from the taxing authorities; provided, however, that to the extent Tenant
has not performed its obligation to pay Real Estate Taxes pursuant to this
Article, or Tenant is exercising its right to delay payment in connection with
its right to contest a tax pursuant to Subsection 6.2F, Landlord shall be
excused from paying that portion of the Real Estate Taxes not paid by Tenant.

                                 ARTICLE SEVEN

                      MAINTENANCE, REPAIR AND ALTERATIONS

     7.1  Tenant's Repairs.  Subject to the provisions of Section 7.2, Section
15.3, and Articles 16 and 17, and the other provisions of this Lease, Tenant
shall, during the Lease Term:  (i) repair and maintain the interior of the
Building; (ii) repair, maintain, and replace when necessary all elements of the
pick-up station that are part of the Premises; (iii) repair and maintain the
exterior surfaces of the Building (including the roof membrane, except that
Landlord shall be responsible for the repair, maintenance, and replacement of
the roof membrane during the first five years of the Lease Term as provided in
Section 7.2); and (iv) repair and maintain the HVAC equipment servicing the
Premises. In discharging the foregoing obligations, Tenant shall have the
benefit of any warranties or guarantees issued by third parties with respect to
the Building or any equipment installed therein, and Landlord shall reasonably
cooperate to make such guarantees and warranties available to such Tenant.

     7.2  Landlord's Repairs.  Subject to the provisions of Section 15.3 and
Articles 16 and 17 below, Landlord shall at its sole cost and without right of
reimbursement from Tenant: (i) repair, maintain, and replace when necessary
utility services (water, sewer, gas, and electrical) up to the point of entry to
the Building; (ii) perform any maintenance, repair, or replacement of the roof
membranes the need for which, is identified prior to the fifth (5th) anniversary
of the Commencement Date; and (iii) maintain, repair, and replace when necessary
the structural portions of the Building, including the floor slab, bearing
walls, foundations, and structural roof.  Landlord shall also make any repairs
required (i) because of the settling of the Premises (including all repairs
required as a result of the existing soil and ground water conditions), or (ii)
as a result of the act, default or negligence of Landlord, its employees,
agents, licensees or contractors.  Notwithstanding the foregoing , if damage to
the premises is caused by Tenant, its agents, employees, or contractors, to the
extent the cost to repair or restore such damage is not covered by insurance,
Tenant shall be responsible for the cost of such repair or restoration.  Tenant
hereby waives the benefits of California Civil Code Section 1941, but only to
the extent that Section 1941 imposes obligations on Landlord which exceed
Landlord's obligations under this Lease.

     7.3  Requirements of Law.  If any federal, state or municipal government or
any department or division thereof has condemned or hereafter shall condemn the
Premises or Shopping Center or any part thereof as unsafe or as not in
conformity with all Legal Requirements, or if any federal, state or municipal
government or any department or division thereof has ordered or hereafter shall
order any alterations or repairs thereof, Landlord shall immediately at its sole
cost and expense make such alterations and repairs as may be necessary to comply
with Legal Requirements (the validity of which Landlord shall be entitled to
contest) ("Required Work"), the following shall apply:

          A.  Landlord and Tenant shall each have the right to contest the
validity of any Required Work.  Tenant's right to do so shall be governed by the
provisions of Subsection 6.2F to the extent applicable.

          B.  Tenant shall perform any Required Work that must be made to the
Premises at Tenant's sole cost and expense that is required because of Tenant's
particular and specific use of the Premises, and which is not being generally
required to be made to other similar buildings in the same jurisdiction governed
by the governmental authority in question.

          C.  If Tenant is not required to perform the Required Work pursuant to
Subsection 7.3B above, then Landlord shall perform the Required Work.  If the
Required Work relates to a Legal Requirement that was in effect as of the
Effective Date of the Lease, Landlord shall perform the Required Work at its
sole cost, without a right of reimbursement from Tenant.  To the extent any
Required Work to be performed by Landlord interferes with Tenant's use of the
Premises, Tenant shall be entitled to an abatement of Base Monthly Rent to the
extent the performance of the Required Work interferes with Tenant's use of the
Premises.

          D.  If Landlord is required to perform the Required Work and such
Required Work does not relate to a Legal Requirement in effect as of the
Effective Date of the Lease, then Tenant shall contribute to the cost of the
Required Work in the form of additional rent payable during the remainder of the
Lease Term.  The amount of additional rent Tenant is to pay with respect to each
Required Work shall be determined as follows:

               (1)  All costs paid by Landlord to perform the Required Work
shall be amortized over the useful life of the improvement, with interest on the
unamortized balance at the then prevailing market rate Landlord would pay if it
borrowed funds to construct such improvements from an institutional lender.
Landlord shall inform Tenant of the monthly amortization payment that would be
required to so amortize such costs (with interest) over such useful life of the
improvement, and shall also provide Tenant with the information upon which such
determination is based.

               (2)  If the Required Work is not performed on the Building or any
other element of the Premises, but is performed in the Common Area or other part
of the Shopping Center, as additional rent Tenant shall pay an amount equal to
Tenant's Proportionate Share of such monthly amortization payment.  If the
Required Work relates to the Building or other element of the Premises, Tenant
shall pay as additional rent an amount equal to such monthly amortization
payment.  Tenant's obligation to pay such additional rent shall continue for
each month after the Required Work in question is completed until the first to
occur of (i) the expiration of the Lease Term, or (ii) the end of the term over
which such costs were amortized.  Such amount shall be due at the same time Base
Monthly Rent is due.  If by reason of such Legal Requirements or the work done
by Landlord in connection therewith, Tenant is deprived of the use of the
Premises, then the Base Monthly Rent and other charges payable by Tenant to
Landlord hereunder shall be abated in proportion to the time during which, and
to that portion of the Premises of which, Tenant shall be deprived as a result
thereof.  All such alterations and repairs shall be done in accordance with
plans and specifications approved by Tenant, which approval shall not be
unreasonably withheld.  Notwithstanding the above, if such condemnation or Legal
Requirement is the direct result or is caused by Tenant's particular and
specific use of the Premises (the validity and applicability of which Tenant
shall be entitled to contest), then Tenant shall immediately at Tenant's own
cost and expense comply therewith, and no abatement of rent shall be granted.

     7.4  Tenant's Alterations.

          A.  Non-Structural Alterations.  Tenant shall have the right, without
Landlord's prior consent, at its sole cost and expense to make such
nonstructural alterations and changes to such parts of the Premises as Tenant
shall deem expedient or necessary for its purposes.

          B.  Structural Alterations.  Tenant may make structural alterations
and additions to the Premises, if Tenant has first obtained Landlord's written
consent; provided, however, that Landlord's written consent shall not be
required with respect to any structural, alteration or addition to the Premises
that costs less than Twenty-Five Thousand Dollars ($25,000) to make.

          C.  Cooperation By Landlord.  Landlord shall execute and deliver upon
request of Tenant such instrument or instruments embodying the approval of
Landlord, and shall otherwise cooperate at no cost to Landlord as may be
required by any public or quasi-public authority for the issuance of any
license, variance or permit required for the making of alterations, changes
and/or installations in, to or upon the Premises by Tenant.

          D.  Notices.  Tenant shall give Landlord ten (10) days' prior notice
of the commencement of construction of all alterations costing in excess of
$25,000, so that Landlord may post notices of non-responsibility.

     7.5  Permits.  Each party shall procure all necessary permits before making
any repairs, alterations, other improvements or installations to the Premises
and/or Shopping Center, or a portion thereof, including without limitation, any
alterations made pursuant to Section 7.3.  Each party shall give written notice
to the other of any repairs required of the other pursuant to the provisions of
this Article, and the party responsible for such repairs shall promptly commence
such repairs and to prosecute the same to completion diligently, subject only to
Excusable Delays.

     7.6  Mechanic's Liens.  Subject to performances by the other party of any
applicable reimbursement obligation under this Lease, each party (i) shall pay
promptly when due the entire cost of any work done by it on the Premises so that
the Premises at all times shall be free of liens for labor and materials, and
(ii) shall save harmless and indemnify the other from and against any and all
injury, loss, claims or damage to any person or property occasioned by or
arising out of the doing of any such work by such party or its employees, agents
or contractors.  Such work shall be done with materials of good quality and in a
good and workmanlike manner, and shall comply with all Legal Requirements.

                                 ARTICLE EIGHT

                                  COMMON AREA

     8.1  Grant of Easement and Right to Use.  Landlord shall continuously and
without interruption make available, and hereby grants and demises to Tenant, a
non-exclusive easement and the right for Tenant, its subtenants and their
respective agents, employees, contractors, customers, guests, licensees and
invitees (in common with Landlord and all persons, firms and corporations
conducting business within the Shopping Center and their respective customers,
guests, licensees, invitees, subtenants, employees and agents) to use those
portions of the Shopping Center shown as "Common Area" on Exhibit B-l for
ingress, egress, parking, and all purposes for which such areas would
customarily be used.  Landlord may not subdivide the Shopping Center unless the
following conditions are satisfied:  (i) Tenant approves the configuration of
the subdivision; and (ii) Landlord causes to be prepared, recorded, and made
effective a set of covenants, conditions and restrictions which are consistent
with and protect the rights granted to Tenant by this Lease and which have been
approved by Tenant and to which Tenant is a party.

     8.2  Restrictions on Use of Common Area.  The Premises and the other areas
of the Shopping Center upon which the construction of buildings and similar
improvements is permitted are shown on Exhibit B-1 as the "Shops" and are
defined herein as the "Shop Pads".  Landlord agrees that at no time shall any
buildings, or other structures be erected upon the Common Area (except bumper
guards, curbs, landscape planters, lighting standards, and landscaping
improvements required by applicable governmental authorities, and pylon and
directional signs in the locations, if any, shown on Exhibit B-1 or otherwise
approved by Tenant), nor shall Landlord alter the parking layout, the parking
facilities, or the ingress-egress areas to the Shopping Center or the site of
the Shop Pads shown on Exhibit B-1, without the prior written approval of
Tenant.  Tenant shall have the right to approve the size and style of any pylon
or directional signs located in the Common Area, but in no event shall Tenant be
obligated to approve any such sign or other structure which substantially
interferes with or impedes the visibility of Tenant's signs located in the
Shopping Center.  Landlord agrees as follows with respect to the Shop Pads:  (i)
no buildings (other than the Building) shall be constructed in the Shopping
Center except within the Shop Pads; (ii) any building constructed on either of
the Shop Pads shall be single story building, the area of which does not exceed
the area of the Shop Pad on which it is constructed; (iii) any building
constructed on either of the Shop Pads shall be of a design that is consistent
with the PUD zoning applicable to the Shopping Center as of the Effective Date;
and (iv) any buildings constructed on either of the Shop Pads may not be used
for the uses specified in Subsections 11.2A and 11.2B.

     8.3  Duties of Landlord.  Landlord shall repair and maintain the Common
Area in a first class and clean condition and shall pay all costs and expenses
of whatsoever nature necessary therefor, such obligation to include but not be
limited to:

          (a)  Maintaining signs, landscaped areas, lighting standards and
     parking area surfaces (including stripe painting and the removal of
     standing water therefrom), and removing rubbish and other refuse and
     debris;

          (b)  Keeping the Common Area well illuminated during those hours of
     darkness when Tenant is conducting its business on the Premises and until
     one (1) hour after closing of Tenant's business;

          (c)  Providing at least 204 parking spaces within the Common Area;

          (d)  Paying all Real Estate Taxes applicable to the Common Area;

          (e)  Maintaining and paying for "all-risk" insurance on the
     improvements that are part of the Common Area; and

          (f)  Paying all wages, workers' compensation insurance, unemployment
     taxes and other costs and expenses of employees and independent contractors
     necessary to maintain and operate the Common Area.

     8.4  Reimbursement by Tenant.

          A.  Definition of Common Area Maintenance Costs.  Tenant shall
reimburse Landlord for Tenant's Proportionate Share of the Common Area
Maintenance Costs.  The term "Common Area Maintenance Costs" shall mean all
direct costs and expenses reasonably paid or incurred by Landlord during the
Lease Year in question in performing its obligations pursuant to Section 8.3.
Notwithstanding the foregoing or anything to the contrary in this Lease, in no
event shall "Common Area Maintenance Costs" include or shall Tenant otherwise be
required to reimburse Landlord for any of the following:  (i) the cost of
repairing or replacing any portion of the Common Area or Landlord's
Construction, the original construction of which was defective or not
constructed substantially in accordance with the specifications approved by
Tenant; (ii) any payments made by Landlord on account of assessments applicable
to the Common Areas which either do not relate to installment payments which are
payable during the Lease Term or on account of those assessments existing as of
the Effective Date which are more particularly described in Exhibit F (except as
may otherwise be required by Subsection 6.2C); (iii) any fee to or charge by
Landlord or any other person and/or entity for management, supervision, profit
and/or general overhead to the extent that the total of any such fees or charges
for the billing period in question exceeds five percent (5%) of all other Common
Area Maintenance Costs for the same period (excluding Real Estate Taxes,
insurance premiums, and capital improvements); (iv) depreciation, ground lease
payments, mortgage payments, or reserves; (v) interest and other cost and
charges for Landlord's financing; (vi) late charges, penalties and unearned
discounts occasioned by Landlord's late payments; (vii) promotional and
advertising costs; (viii) costs incurred as a consequence of the act, default or
negligence of Landlord, other occupants of the Shopping Center or their agents,
employees and contractors; (ix) expenditures required to be capitalized under
generally accepted accounting principles, except to the extent of the amortized
cost of such item based on its useful life that is allocable to the billing
period in question; (x) costs not reimburseable to Landlord by all other tenants
of the Shopping Center; (xi) merchant association or similar dues and fees.

          B.  Method of Payment.  The reimbursement of Landlord by Tenant of
Tenant's Proportionate Share of the Common Area Maintenance Costs shall be
payable within thirty (30) days following Landlord's written demand therefor,
which demand shall be made no more often than once every three (3) calendar
months and no less often than once each Lease Year; provided, however, that
Landlord and Tenant may agree from time to time with respect to particular Lease
Year(s) that Tenant will pay with each installment of Base Monthly Rent and
without further demand by Landlord, an equal monthly installment of Landlord's
good faith estimate of the Common Area Maintenance Costs for the present Lease
Year, based on prior costs incurred exclusive of extraordinary expenditures, if
such estimate is subject to annual adjustment based on the actual Common Area
Maintenance Costs.  Tenant's obligation to pay its Tenant's Proportionate Share
of the Common Area Maintenance Costs is expressly conditioned upon its prior
receipt of a written demand by Landlord accompanied by such statements, bills,
invoices or other documentation, certified by Landlord, as shall be necessary or
reasonably appropriate for a proper analysis of such charges; except that during
any Lease Year when Tenant shall have paid monthly installments of Common Area
Maintenance Costs, Landlord shall provide such documentation to Tenant once,
within sixty (60) days after the expiration of such Lease Year, and Landlord and
Tenant shall adjust the Common Area Maintenance Costs for such Lease Year within
thirty (30) days after Tenant's receipt of said documentation.  Tenant's
Proportionate Share of the Common Area Maintenance Costs for the first and last
Lease Year shall be appropriately and equitably apportioned.

          C.  Audit.  Landlord shall keep good and accurate books and records in
accordance with generally accepted accounting principles concerning the
operation, maintenance and management of the Common Area.  Such books and
records, and the underlying invoices and other original documentation, shall be
kept by Landlord and made available for inspection by Tenant for a period of at
least one (1) year after the expiration of the period to which such books,
records, and original documentation relates.  Tenant and its agents shall have
the right at any time and from time to time during normal business hours to
inspect and copy such books and records.  Any dispute with respect to the
propriety of an inclusion in or exclusion from Common Area Maintenance Cost may
be submitted to arbitration in the manner provided in Section 20.6.

     8.5 Repair of Common Area.

          A.  Notice to Tenant.  Landlord shall notify Tenant in writing at
least ten (10) days prior to the commencement of any reconstruction, repairing
or repaving of the Common Area.  If such reconstruction, repair or repaving
substantially impedes or interferes with normal access to the Premises in a
manner which interferes with Tenant's business therein, and such condition
continues in excess of five (5) days after notice to Landlord from Tenant, then
the Base Monthly Rent and other charges payable by Tenant to Landlord shall
abate until such work no longer substantially impedes or interferes with normal
access to the Premises.

          B.  Destruction of Other Improvements.  If at any time during the term
of this Lease any building in the Shopping Center, other than the Building
included in the Premises, is damaged or destroyed partially or totally by fire,
the elements or any other casualty or occurrence, Landlord shall within a
reasonable time (but in no event later than three (3) months after such damage
or destruction) commence the rebuilding or demolishing of any such building and
diligently prosecute such rebuilding or demolition to completion.  If the
building is demolished, Landlord shall clean-up all rubbish and debris and level
and grade and pave such area so that the same shall be in good, safe and
presentable condition for use as a parking area by Tenant and other occupants of
the Shopping Center.  Nothing herein shall prohibit Landlord from rebuilding at
some future date on any area where such damaged or destroyed building was
located, subject to the limitations contained in this Lease.

     8.6  Indemnity and Insurance.  Landlord shall indemnify and hold Tenant
harmless from and against any and all claims, liabilities, judgments, damages or
causes of action (i) for injury to any person or property while on or about the
Common Area, unless caused by the negligence or default of Tenant or its agents
or employees acting within the course and scope of their employment or agency,
or (ii) which arise or are claimed to arise from the acts, default or negligence
of Landlord, or its agents, employees and contractors.  For the purpose of so
protecting Tenant, Landlord shall pay for and keep in full force and effect a
comprehensive general liability insurance policy covering the Common Area within
the Shopping Center, with liability limits of Five Million Dollars ($5,000,000)
and such other policy provisions as are commercially reasonable.  The liability
limits for such insurance shall be subject to periodic adjustment at the request
of either Landlord or Tenant to such new limits as are then commercially
reasonable under the circumstances or are required by an institutional lender
whose loan is secured by the Shopping Center; provided, however, that (i) Tenant
may not request that such limits be adjusted more frequently than every three
(3) years during the Lease Term; and (ii) any dispute concerning what liability
limits or other policy provisions are required by this Section 8.6 shall be
settled by arbitration conducted in the manner described in Section 20.6.
Tenant shall be named as an additional insured in such policy and a copy of such
insurance policy, or a certificate evidencing such coverage, shall be delivered
to Tenant by Landlord on or prior to the Commencement Date.  Said certificate
and policy shall provide that the policy shall not be cancelled or materially
changed without at least ten (10) days' prior written notice to Tenant, that the
policy is in addition to, and does not contribute with, any other insurance
carried by Tenant, and that the coverage of the policy with respect to any
insured is not defeated as a consequence of the acts or omission of any other
party. Renewal certificates or policies shall be delivered to Tenant not fewer
than fifteen (15) days prior to the expiration date of the expiring policy
theretofore furnished pursuant to this Section.  The insurance that Landlord is
required to carry pursuant to this Section 8.6 may be issued as a primary policy
or be part of a blanket policy if the blanket policy specifically provides that
the amount of insurance required by this Section shall be in no way prejudiced
by other losses covered by the policy.  If the blanket policy is prejudiced by
other losses, Landlord must carry sufficient excess or umbrella coverage such
that total coverage is in no way prejudiced by other losses.

                                  ARTICLE NINE

                                   UTILITIES

     Tenant shall promptly pay for all utilities furnished to the Premises from
and after the Commencement Date, including water, gas and electricity.  If the
Premises are rendered unfit for retail use because of an interruption in water,
electricity, fire protection, sewer or other utility service or for any other
reason and not due to the fault of Tenant, and such condition continues for a
period that is longer than the greater of sixty (60) days or the period of
Tenant's business interruption insurance coverage (if any), then Tenant shall
have the option to terminate this Lease.  Notwithstanding the foregoing, if the
Premises are so made unfit for retail use as a result of a breach by Landlord of
its obligations under this Lease or because of the negligence or willful
misconduct of Landlord, its agents, employees or contractors, in addition to
such right to terminate, Tenant shall be entitled to an abatement of base
Monthly Rent and Additional Rent in proportion to the interference with Tenant's
use of the Premises resulting therefrom

                                  ARTICLE TEN

                         INDEMNITY AND PUBLIC LIABILITY

     Tenant shall save Landlord harmless and indemnify Landlord from and against
any and all claims, damages or causes of action for damages to any person or
property while in or on the Premises, unless caused by the acts, negligence or
default of Landlord, its employees, agents, licensees or contractors.  Tenant
shall maintain, with respect to the Premises, public liability insurance with
limits of Five Million Dollars ($5,000,000) and such other policy provisions as
are commercially reasonable, which (i) names Landlord as an additional insured
and (ii) is primary insurance which provides that the insurer shall be liable
for the full amount of the loss up to and including the full amount of liability
set forth in the declarations without the right of contribution from any other
insurance coverage of Landlord.  The liability limits for such insurance shall
be subject to periodic adjustment at the request of either Landlord or Tenant to
such new limits as are then commercially reasonable under the circumstances or
are required by an institutional lender whose loan is secured by the Shopping
Center; provided, however, that (i) Landlord may not request that such limits be
adjusted more frequently than every three (3) years during the Lease Term; and
(ii) any dispute concerning what liability limits or other policy provisions are
required by this Article Ten shall be settled by arbitration conducted in the
manner described in Section 20.6.  All such insurance may be carried under a
blanket policy covering the Premises and any other stores and facilities of
Tenant.  A copy of the certificate of insurance shall be delivered to Landlord
upon Landlord's written request therefor and no such policy shall be cancellable
without fifteen (15) days' prior written notice to Landlord.

                                 ARTICLE ELEVEN

                                      USE

     11.1  Permitted Uses.  The Premises may be used and occupied for the
operation of an Orchard Supply Hardware retail store, or for any other lawful
purpose except those uses described in Subsection 11.2A.  Nothing in this Lease
shall be construed to require Tenant to conduct business in the Premises.

     11.2  Prohibited Uses.

          A.  Uses Unrelated to Tenant's Use.  No portion of the Shopping Center
may be used for any of the following purposes: adult bookstores, pornographic
shops, amusement centers (including but not limited to bowling alleys, skating
rinks, racquetball courts, dance halls, amusement arcades and movie theaters),
flea markets, billiard rooms, health spas, bars (other than in connection with a
"sit down" restaurant), car washes, massage parlors, schools, automotive service
centers, or motorcycle shops.  No portion of the Shopping Center may be used for
office uses; provided, however, that (i) minor management offices incidental to
restaurant or retail uses are permitted; (ii) offices that are essentially
retail in character are permitted (e.g., travel agencies, real estate or
security brokerage firms, retail financial institutions such as banks, and
financial services companies).

          B.  Restriction on Competitive Uses.  So long as Tenant or an assignee
or sublessee of Tenant's interest in the Premises is operating a retail home
improvement center on the Premises, Landlord shall not lease, rent or occupy any
portion of the Shopping Center, other than the Premises, or permit any portion
of the Shopping Center, other than the Premises, to be occupied by any person or
entity for use principally as a retail home improvement center or as a retail
store engaged in the sale of building supplies, hardware, paint, garden
supplies, electrical supplies, and plumbing supplies.

          C.  Remedies.  Landlord's failure to comply with this Section 11.2
shall be deemed a material default hereunder, entitling Tenant to all remedies
available at law or in equity for such breach, including the remedies of
damages, injunctive relief, and specific performance.  In addition, Landlord and
Tenant agree that if any third party uses any part of the Shopping Center in
violation of Subsections 11.2A or 11.2B and Landlord does not promptly commence
legal action to terminate such use within thirty (30) days following written
demand therefor by Tenant and thereafter diligently prosecutes such legal action
to completion, then if Tenant so elects and in addition to any other remedy that
it may have, during the period beginning with the expiration of said fifteen
(15) day period and ending when Landlord commences such legal action, or during
any period when Landlord is not diligently prosecuting such legal action to
completion, (i) any Gross Sales made by Tenant during such period shall be
excluded from determining the amount of Percentage Rent due for the Lease Year
during which such default continues; and (ii) Tenant may withhold any payment of
Percentage Rent that is due with such withheld Percentage Rent becoming due and
payable (without interest) at such time as Landlord's default pursuant to this
Section is cured.

                                 ARTICLE TWELVE

                           ASSIGNMENT AND SUBLETTING

     Tenant shall have the absolute right, without Landlord's consent, to
transfer and assign this Lease or to sublet all or any portion of the Premises
to:  (i) any entity which will use the Premises for any lawful retail use; (ii)
a subsidiary, affiliate, division or corporation controlled by Tenant or
Tenant's parent corporation; (iii) a successor corporation related to Tenant or
Tenant's parent corporation by merger, consolidation, non-bankruptcy
reorganization, or government action; or (iv) a purchaser of substantially all
of the assets of Tenant or Tenant's parent corporation.  With respect to any
proposed assignment or sublease other than those enumerated above, Tenant must
obtain Landlord's prior written consent, which shall not be unreasonably
withheld or delayed.  In the event Tenant assigns its interest in this Lease,
Tenant shall not be relieved of liability for the performance of the obligations
of the Tenant under this Lease unless Landlord consents in writing to such
release, which consent shall not be unreasonably withheld.

                                ARTICLE THIRTEEN

                                   FIXTURES

     All counters, shelving, light fixtures, and other equipment and trade
fixtures installed by or at the expense of Tenant, and all movable additions and
improvements made to the Premises by or at the expense of Tenant, which can be
removed without causing structural damage, shall remain the property of Tenant.
Tenant may, but shall not be obligated to, remove the same or any part thereof
at any time or times during the term hereof; provided, however, that Tenant, at
its sole cost and expense, shall make any repairs occasioned by such removal.

                                ARTICLE FOURTEEN

                                     SIGNS

     14.1  Exterior Signs.  Tenant shall have the right, in conformity with
applicable Legal Requirements, to erect and thereafter to replace:  (i) signs on
the front, side, roof and sidewalks of the Building and the other structures
within the Premises, and (ii) illuminated signs in the Common Area.  Tenant
shall erect, maintain and replace all such signs at Tenant's sole cost and
expense, except to the extent included in Landlord's obligations in Article 2
and Article 7 hereof.  Landlord shall not impair the visibility of any Tenant's
signs.  Subject to all Legal Requirements (including necessary city and county
approvals) at all times Tenant shall have the right to maintain a monument sign
(i) of a size and design that is compatible with the design criteria applicable
to the Shopping Center and the surrounding developments and which also complies
with all Legal Requirements, and (ii) is in the location in the Common Area
along Market Place that is shown on Exhibit B-1 and in the location adjacent to
Bollinger Canyon Road shown on Exhibit B-2.  The parties acknowledge that as of
the Effective Date Landlord is the owner of the real property along Bollinger
Canyon Road that is intended to be the location of a monument sign as shown on
Exhibit B-2.  Landlord grants to Tenant the right to have Tenant's business
(specifically including the trade name "Orchard Supply Hardware") identified on
a monument sign that shall be constructed by Landlord in that location and
maintained by Landlord throughout the Lease Term, which manner of identification
shall be of a design, size, and prominence on such sign that is acceptable to
Landlord and Tenant and complies with all Legal Requirements.  Landlord shall
use all reasonable efforts to secure all necessary governmental approvals for
the installation of the signs described in this Section 14.1; provided, however,
that nothing herein shall imply a warranty by Landlord as to the availability of
such building and monument signs.  Landlord's obligation being limited to
providing such signage as may be approved by the City of San Ramon pursuant to
application processed by Landlord with due diligence.  Landlord shall create an
easement appurtenant to Lot 4 which will permit Landlord to erect, maintain and
replace the sign and adjacent landscape on Bollinger Canyon Road in accordance
with the easement, which easement shall be submitted to Tenant for its review
and approval prior to the conveyance of the property upon which the easement is
located.

     14.2  Interior Signs.  Tenant shall have the right, at its sole risk and
expense and in conformity with all Legal Requirements, to install and maintain
its usual and customary signs and fixtures in the interior of the Premises,
including without limitation, flat paper signs in the interior

                                ARTICLE FIFTEEN

                               CASUALTY INSURANCE

     15.1  All-Risk Insurance.  During the course of the construction of the
Premises Improvements by Landlord described in Exhibit C, Landlord shall
maintain full replacement cost "builder's risk" casualty insurance (excluding
earthquake and flood) for the Premises Improvements, the cost of which shall be
a Premises Construction Cost, as defined in Section 5B of Exhibit C.  After the
Commencement Date Tenant shall obtain and maintain an "all-risk" policy of
casualty insurance (excluding earthquake and flood) on the Building and all
other improvements constituting the Premises, which insurance may be carried
under a blanket insurance policy.  Such insurance shall be for the mutual
benefit of Landlord and Tenant (and any insitututional mortgagee as defined in
Article 19 hereof), as named insureds as their interests may appear.  The amount
of such insurance shall not be less than the full replacement cost of the
Building and the other insured improvements.  Certificates evidencing all such
insurance shall be delivered to Landlord upon Landlord's written request.  All
insurance required by this Section (i) shall be primary insurance without a
right of contribution from any other insurance, (ii) shall be in a form
reasonably satisfactory to Landlord, (iii) shall be carried with companies
reasonably acceptable to Landlord (iv) shall provide that such policy shall not
be subject to cancellation or change except after at least thirty (30) days
prior written notice to Landlord, and (v) shall not have a "deductible" in
excess of that which is commercially reasonable and has been approved by
Landlord.  Tenant shall pay, at the time such premiums become due, the premiums
for the "all risk" casualty insurance carried by it pursuant to this Section

     15.2  Insurance Proceeds.

          A.  Claim Adjustment; Escrow.  In the event of any damage to or
destruction of the Premises after the Effective Date, Landlord and Tenant shall
adjust the loss and settle all claims with the insurance companies issuing the
casualty policies.For the purposes hereinafter stated, Landlord and Tenant
hereby irrevocably assign the proceeds from such insurance policies to an escrow
account to be established at a mutually agreeable national or state bank having
its principal office in the State of California.  Subject to the provisions of
Article 16, such funds shall be used for the repair, restoration, rebuilding and
replacement of the Premises and any damaged portion of the Common Area.  All
insurance proceeds shall be paid into said escrow account, which account shall
require the signature of both Landlord and Tenant for withdrawals.

          B.  Disbursement for Restoration.  Subject to the provisions of
Article 16, in the event of such damage or destruction, the restoring party
shall be entitled to withdrawals from such escrow account upon presentation of
the following:  (i) bills for labor and materials expended in repair,
restoration, rebuilding or replacement; (ii) the restoring party's sworn
statement that the labor and materials for which payment is being made have been
furnished or delivered on site; and (iii) the certificate of a supervising
architect (selected by Landlord and Tenant and approved by the institutional
first mortgagee, if any) certifying that the work being paid for has been
completed in accordance with the work drawings and specifications previously
approved by Landlord and Tenant, and in a first-class, good and workmanlike
manner in accordance with all applicable Legal Requirements.  Any fees payable
to the supervising architect shall be paid out of the insurance proceeds.

          C.  Excess Proceeds.  Subject to the provisions of Article 16, any
excess insurance proceeds not needed to pay the cost to repair, restore or build
and replace the Premises shall be paid to Landlord and Tenant in the following
order of priority:  (i) first, to Tenant until Tenant has recovered the total
amount contributed by Tenant toward the payment of Premises Construction Costs
pursuant to Exhibit C, which in any event shall not exceed One Hundred Thousand
Dollars ($100,000); and (ii) thereafter, any remaining insurance proceeds shall
be paid to Landlord.

          D.  Insufficient Proceeds.  If the insurance proceeds available for
any repair, restoration, rebuilding or replacement required by Section 16.2 are
inadequate to pay the cost thereof, Tenant shall pay the deficiency.

     15.3  Waiver of Subrogation.  The parties hereto release each other, and
their respective agents, employees, and subtenants, from any liability for
injury to any person or damage to property that is caused by or results from any
risk insured against under any valid and collectible insurance policy carried by
either of the parties which contains a waiver of subrogation by the insurer and
is in force at the time of such injury or damage; provided, however, that any
such person or entity shall not be released from such liability to the extent
any damages resulting from such injury or damage are not covered by the recovery
obtained by the insured from such insurance if the insurance in question permits
such a partial release in connection with obtaining a waiver of subrogation from
the insurer.  This release shall be in effect only so long as the applicable
insurance policy contains a clause to the effect that this release shall not
affect the right of the insured to recover under such policy.  Each party shall
use its best efforts to cause each insurance policy obtained by it to provide
that the insurer waives all right of recovery by way of subrogation against the
other party and its agents, employees, and subtenants in connection with any
injury or damage covered by such policy.  If, however, any insurance policy
cannot be obtained with such a waiver of subrogation, then the party obtaining
such insurance shall notify the other party of that fact and thereupon shall be
relieved of the obligation to obtain such a waiver of subrogation rights from
the insurer with respect to the particular insurance involved.  Tenant agrees
that in the event of a sale of the Premises by Landlord, that to the extent
permitted by the particular insurer involved, the above waiver of subrogation
shall continue in favor of the original Landlord hereunder, its officers,
employees, agents and representatives, as well as be in favor of any such
purchaser and its officers, employees, agents and representatives.

                                ARTICLE SIXTEEN

                               DAMAGE AND REPAIR

     16.1  Abatement or Adjustment of Rent.  If the whole or any part of the
Premises shall be damaged or destroyed by fire or other casualty after the
Effective Date and before the termination hereof, then in every case the Base
Monthly Rent and other charges payable by Tenant to Landlord hereunder shall be
abated or adjusted, as the case may be, in proportion to that portion of the
Premises of which Tenant shall be deprived on account of such damage or
destruction or the work of repair, restoration, rebuilding or replacement and
the interference with Tenant's use of the Premises occasioned by any of the
foregoing; provided, however, that the Base Monthly Rent will not be so abated
to the extent Tenant actually receives business interruption insurance proceeds
allocable to such rent obligation if Tenant elects to carry such Insurance.  Any
dispute with respect to the proper adjustment to or abatement of Base Monthly
Rent and other charges payable hereunder may be submitted to arbitration in the
manner provided in Section 20.6.

     16.2  Repairs and Restoration.

          A.  Obligation to Restore.  Unless this Lease is terminated, Landlord
agrees that in the event damage by any peril occurs to the Common Area at any
time, Landlord forthwith shall proceed to repair, restore, replace or rebuild
the Common Area to substantially the condition in which the same existed
immediately prior to such damage, in accordance with working drawings and
specifications approved by Landlord and Tenant.  Landlord shall diligently
prosecute said work to completion without delay or interruption, except for
Excusable Delays.  Unless this Lease is terminated, in the event damage by any
peril occurs to the Premises, Tenant shall proceed to repair and restore the
Premises to substantially the condition in which the same existed immediately
prior to such event.

          B.  Tenant's Right to Terminate.  Notwithstanding the foregoing, if
(i) a building permit for any repairs, rebuilding or restoration required
hereunder cannot be obtained within six (6) months of the date of such damage or
destruction is not obtained, or (ii) the destruction event occurs prior to the
Commencement Date and as a consequence of such event Substantial Completion of
the Common Area Improvements and the Premises Improvements cannot be achieved by
December 1, 1990 (subject to extension by Excusable Delays), then in any such
event Tenant may terminate this Lease by giving Landlord written notice of
Tenant's election to so terminate this Lease within ninety (90) days after the
occurrence of the event which gives rise to Tenant's right to terminate.

          C.  Damage by Uninsured Peril.  Notwithstanding the foregoing, Tenant
shall have the option to terminate this Lease upon the occurrence of the
following:  (i) the Premises are damaged by a peril not covered by the insurance
required to be carried pursuant to Section 15.1 and are not covered by valid and
collectible insurance in effect at the time of such damage, or if covered by
insurance not required by Section 15.1, there is applicable a deductible which
exceeds One Hundred Thousand Dollars ($100,000); (ii) the estimated cost to
repair such damage exceeds insurance proceeds, if any, as may be made available
by an amount in excess of One Hundred Thousand Dollars ($l00,000); and (iii)
Landlord does not agree in writing to pay or cause to be paid the amount by
which the cost to restore the damage is in excess of One Hundred Thousand
Dollars ($100,000) over and above insurance proceeds, if any, available.

          D.  Damage at End of Term.  Notwithstanding the foregoing, if such
damage or destruction (i) shall occur during the last five (5) Lease Years of
the initial term of this Lease Term, as the same may be extended, and (ii) shall
cost more than twenty-five percent (25%) of the full replacement cost of the
Building (minus the cost of excavation, footings and foundations) to restore,
then either party may terminate this Lease as of the date of such damage or
destruction by giving written notice to the other party within sixty (60) days
thereafter of its election to so terminate, unless Tenant within thirty (30)
days after receipt of any such notice from Landlord shall give notice to
Landlord of its intention to extend the term of this Lease in accordance with
any option or right Tenant may have as provided in Article 4 hereof, in which
case this Lease shall not be terminated although notice of termination may
previously have been given by Landlord; in such case, Landlord's notice of
termination shall be void and of no effect and Tenant shall repair and restore
the Premises as required by this Lease.

          E.  Effect of Termination.  In the event of termination of this Lease
pursuant to the provisions of this Section 16.2, this Lease shall terminate, the
Base Monthly Rent and any other sums payable by Tenant to Landlord hereunder
shall be apportioned between Landlord and Tenant as of the date of the
termination of this Lease, and the parties shall be mutually released hereunder
from all liability and obligations hereunder thereafter arising.  Out of the
insurance proceeds collected as a result of damage to the Premises, Tenant shall
be entitled to recieve that amount equal to the lesser of Two Hundred Thousand
Dollars ($200,000) or the product obtained by multiplying (i) all Premises
Construction Costs paid by Tenant by (ii) a fraction, the numerator of which is
the number of months remaining in the Lease Term (including any extension
periods where Tenant exercises its option prior to the event of damage) and the
denominator of which is the total number of months in the Lease Term (as it may
have been so extended prior to the event of damage).

     16.3  Acceptance of Premises After Reconstruction.  If the Premises are
destroyed or damaged and the Lease is not terminated, then if Tenant is required
to repair, restore and/or rebuild the damaged portion of the Premises as above
provided, Tenant shall proceed with due diligence to contract with licensed
contract for the required construction and shall thereafter diligently cause
such contractor to proceed with said construction and Tenant shall not be
required to accept delivery of possession of the affected portion of the
Premises nor to commence paying Base Monthly Rent and other charges at the rate
originally provided in this Lease (i.e., without abatement other than as
provided within Section 16.1) until the earlier of (a) the date on which Tenant
recommences to conduct business on affected portion of the Premises or (b)
ninety (90) days after the date on which (i) Tenant's contractor has caused the
affected portion of the Premises to be completed as nearly as practicable to the
condition existing immediately prior to such destruction or damage and in
compliance with all laws, ordinances, regulations and requirements of
governmental authorities having jurisdiction thereof and the National Board of
Fire Underwriters, and (ii) Tenant acting with due diligence has obtained all
requisite permits necessary for Tenant to conduct is business on the affected
portion of the Premises, such permits having been issued by the appropriate
legal authorities.

                               ARTICLE SEVENTEEN

                                  CONDEMNATION

     17.1  Total Taking.  If, after the execution of this Lease and prior to the
expiration of the term hereof, if the whole of the Premises shall be taken by
exercise of the power of eminent domain by any public or private authority, or
conveyed by Landlord to said authority in lieu of such taking, then this Lease
and the term hereof shall terminate as of the date of such taking.
Notwithstanding the foregoing, Tenant may elect to to continue to occupy the
Premises, subject to the terms and provisions of this Lease, for all or such
part as Tenant may elect, of the period between the date of such taking and the
date that possession of the Premises must be surrendered to the taking
authority.  In which event, the Base Monthly Rent and other charges payable by
Tenant to Landlord hereunder shall be apportioned between Landlord and Tenant as
of the date of termination of this Lease

     17.2  Partial Taking.

          A.  Rights to Terminate.  After the Effective Date and prior to the
expiration of the Lease Term, if any public or private authority takes less than
the whole of the Premises by exercise of the power of eminent domain, or if
Landlord shall make a conveyance to said authority in lieu of such taking, and
such taking:

          (a)  Occurs prior to the Commencment Date; or

          (b)  Results in a reduction by ten percent (10%) or more of the ground
     floor area of the Building or any other improvements constituting the
     Premises: or

          (c)  Results in the elimination of twenty-five percent (25%) or more
     parking spaces in the Common Area: or

          (d)  Results in a taking of a portion of the Common Area which
     substantially impedes or interferes with access to the Premises or results
     in a taking of any access to the Shopping Center, which substantially
     impedes or interferes with access to the Shopping Center, (unless, in
     either case, Landlord promptly provides an adequate substitute within sixty
     (60) days after the taking);

then Ten  ant may, at its election, terminate this Lease by giving Landlord
written notice of such election within thirty (30) days after Tenant shall have
received notice of such taking or conveyance. In the event of termination by
Tenant under the provisions of this Section 17.2, this Lease and the term hereof
shall cease and terminate as of the date of such taking.

     B.  Apportionment of Rent.  Notwithstanding the foregoing, Tenant may elect
to continue to occupy the Premises, subject to the terms and provisions of this
Lease, for all or such part, as Tenant may elect, of the period between the date
of such taking and the date that possession of the Premises must be surrendered
to the taking authority.  In which event, the Base Monthly Rent and other
charges payable by Tenant to Landlord hereunder shall be apportioned between
Landlord and Tenant as of the date of termination or this Lease.

     17.3  Restoration and Abatement of Rent.

     A.  Landlord's Obligation to Restore.  In the event of a taking which would
not entitle Tenant to terminate this Lease, or if Tenant, having such right,
elects not to terminate this Lease, then this Lease and the term thereof shall
continue in full force and effect and Landlord, at Landlord's sole cost and
expense, shall forthwith restore the remaining portions of the Premises,
including any and all improvements, together with the remaining portions of the
Common Area, to an architectural whole in substantially the condition prior to
such taking.  Notwithstanding the foregoing, Landlord shall have the option to
terminate this Lease upon the occurrence o' the following:  (i) the condemnation
award recovered by Landlord is insufficient to pay the entire costs of
restoration required by this Section, and such insufficiency is in excess of One
Hundred Thousand Dollars ($100,000); and (ii) Tenant does not agree in writing
to pay the amount by which the restortion costs exceeds the amount of the
condemnation award recovered by Landlord plus One Hundred Thousand Dollars
($100,000) to be contributed by Landlord or caused to be paid by Landlord.

     B.  Abatement of Rent.  A just proportion of the Base Monthly Rent and
other charges payable by Tenant hereunder, according to the nature and extent of
the injury to the Premises and to Tenant's business, shall be suspended or
abated until the completion of such restoration.  Thereafter, the Base Monthly
Rent and other charges shall be reduced in proportion to the square footage of
the Building remaining after said taking and shall be reduced an equitable
amount for any other portion of the Premises taken or any other substantial
interference with Tenant's rights under this Lease.  Any dispute with respect to
the proper amount of Base Monthly Rent and other charges that should be abated
or suspended during the period of restoration or thereafter may be submitted to
arbitration in the manner provided in Section 20.6.

     17.4  Condemnation Award.  All compensation awarded for any taking under
Sections 17.1 and 17.2 hereof shall be shared by Landlord and Tenant as their
interests may appear; provided, however, that Landlord shall not be entitled to,
and Tenant shall have the sole right to make a claim for and retain any award
made by the appropriating authority for (i) Tenant's loss of business, (ii)
damage to, depreciation of, or cost of removal of fixtures, personality or
improvements installed in the Premises or other portions of the Shopping Center
by or at the expense of Tenant, (iii) the unamortized value of Tenant's
contribution to the Premises Construction Costs, and (iv) any other award made
by the appropriating authority directly to Tenant.

     17.5  Release.  In the event of any termination of this Lease as the result
of the provisions of this Article, the parties shall be mutually released from
all liability and obligations thereafter arising under this Lease.

     17.6  Temporary Taking.

          A.  No Right to Terminate.  If, after the execution of this Lease and
prior to the expiration of the Lease Term the whole of the Premises shall be
taken under power of eminent domain by any public or private authority, or
conveyed by Landlord to said authority in lieu of such taking, for temporary use
or occupancy, the foregoing provisions of this Article shall not apply, and
Tenant shall continue to pay in the manner and at the times specified herein,
the full amount of the Base Monthly Rent and other charges payable by Tenant
hereunder and, except only to the extent that Tenant may be prevented from doing
so pursuant to the terms of the order of the appropriating authority, Tenant
shall perform and observe all the other terms and obligations to be performed
and observed by Tenant, as though such taking had not occurred.

          B.  Award for Temporary Taking.  In the event of any such taking of
the nature referred to in this Section, Tenant shall be entitled to receive the
entire amount of the award made for such taking whether paid by way of damages,
rent or otherwise, unless such period of temporary use or occupancy shall extend
beyond the termination of the Lease, in which case such award shall be
apportioned between Landlord and Tenant as of the date of termination of this
Lease.  Upon the expiration of any such period of temporary use or occupancy,
Tenant shall restore the Premises, as nearly as reasonably possible, to their
condition immediately prior to such taking.  Any portion of the award received
by Tenant as compensation for the cost of restoration of the Premises shall be
applied by Tenant to such restoration and, if such period of temporary use or
occupancy shall extend beyond the termination of the Lease, after deduction of
the unamortized value of Tenant's contribution to the Premises Construction
Costs, any remaining compensation shall be paid to Landlord on the day of
termination of this Lease to the extent not theretofore disbursed by Tenant in
connection with such restoration.

                                ARTICLE EIGHTEEN

                              DEFAULT AND REMEDIES

     18.1  Events of Tenant's Default.  Tenant shall be in default of its
obligations under this Lease if any of the following events occurs:

          (i)  Tenant fails to pay any Base Monthly Rent, Percentage Rent, or
     any other monetary obligation when due and such failure is not cured within
     five (5) business days after delivery of written notice from Landlord
     specifying such failure.

          (ii)  Tenant fails to perform or breaches any other term, covenant, or
     condition of this Lease and Tenant rails to cure such default within thirty
     (30) days after delivery of written notice from Landlord specifying the
     nature of such default; provided, however, that if such default cannot
     reasonably be cured within thirty (30) days, Tenant shall not be in default
     if it commences such cure within said thirty (30) day period.

          (iii)  A court makes or enters a decree or order with respect to
     Tenant or Tenant submits to or seeks a decree or order (or a petition or
     pleading is filed in connection therewith) which: (a) grants, constitutes,
     or seeks an order for relief, appointment of trustee, or confirmation of a
     reorganization plan under the bankruptcy laws of the United States; (b)
     approves as properly filed, or seeks approval of, a petition seeking
     liquidation or reorganization under said bankruptcy laws or any other
     debtor's relief law or statute of the United States or any state thereof;
     or (c) otherwise directs or seeks a winding-up or liquidation of Tenant;
     provided, however, that if any petition, decree or order of the type
     described above is not voluntarily filed or made by Tenant, then Tenant
     shall not be in default until such petition, decree or order remains
     undischarged for a period of one hundred eighty (180) days.

     18.2  Landlord's Remedies.  In the event of any default by Tenant, Landlord
shall have the following remedies, in addition to all other rights and remedies
provided by law or otherwise provided in this Lease:

          A.  Enforce Lease.  Landlord may keep this Lease in effect and enforce
by an action at law or in equity all of its rights and remedies under the Lease,
including the right to recover the rent and other sums as they become due by
appropriate legal action.

          B.  Right to Cure.  Landlord may make any payment or perform any
obligation of Tenant.  All sums paid by Landlord and all necessary costs of such
performance by Landlord shall be reimbursed to Landlord within ten (10) business
days after demand by Landlord as additional rent, and shall bear interest at the
Agreed Interest Rate from the date of disbursement until reimbursement by
Tenant.

          C.  Terminate Lease.  Landlord may, at Landlord's election, terminate
this Lease by giving Tenant written notice of termination, in which event this
Lease shall terminate on the date set forth for termination in such notice.  Any
such termination shall not relieve Tenant from the payment of any sums then due
Landlord or from any claim for damages resulting from Tenant's default.
Following termination of the Lease, and without prejudice to any other remedies
Landlord may have, Landlord may then or any time thereafter:  (i) peaceably
enter the Premises upon voluntary surrender by Tenant or expel or remove Tenant
therefrom together with any other persons occupying it, using such legal
proceedings as are then available; and (ii) remove all property of Tenant
therefrom at Tenant's expense.

          D.  Damages.  If Landlord terminates this Lease, Landlord shall be
entitled, at Landlord's election, to damages in an amount as set forth in
California Civil Code Section 1951.2 as in effect on the Effective Date of this
Lease, including, but not limited to, the right of Landlord to recover the worth
at the time of award of the amount by which the unpaid rent for the balance of
the Lease Term after the time of award exceeds the amount of such rental loss
for the same period that Tenant proves could be reasonably avoided.

     18.3  Tenant's Right to Cure.

          A.  Certain Defaults.  If Landlord shall fail to pay (i) the taxes,
assessments or other charges levied against the Shopping Center (except for any
portion payable by Tenant as to which Tenant is delinquent in payment), or (ii)
any principal or interest due on any mortgages, liens or encumbrances the
foreclosure of which might affect the interest of Tenant hereunder, Tenant may
make such payments and charge to Landlord the amount so paid, and withhold and
deduct from any rents herein reserved the amounts so paid, and any payments in
excess of said rents shall be paid by Landlord to Tenant.

          B.  Other Defaults.  If Landlord shall breach or fail to perform any
agreement or condition in this Lease on Landlord's part to be performed not
covered by Section 18.3A, and if Landlord shall not cure such breach or failure
within thirty (30) days after notice from Tenant specifying such breach or
failure (or, if such breach or failure shall reasonably take more than thirty
(30) days to cure, shall not have commenced to cure the same with the thirty
(30) days and thereafter diligently prosecuted the same to completion), Tenant
may, at Tenant's option, without waiving any claim for damages for breach of
this Lease, at any time thereafter cure such breach or failure for the account
of Landlord and any amount paid or any contractual liability incurred by Tenant
in so doing shall be deemed paid or incurred for the account of Landlord and
Landlord shall reimburse Tenant therefor and save Tenant harmless therefrom;
provided, however, that Tenant may cure any such breach or failure as aforesaid
prior to the expiration of said 30-day period, without notice to Landlord, if an
emergency exists or, after notice to Landlord, if the curing of such breach or
failure prior to the expiration of said 30-day period is reasonably necessary to
protect the Premises or Tenant's interest therein or to prevent injury or damage
to persons or property.  If Landlord shall fail to reimburse Tenant upon demand
for any amount paid or liability incurred for the account of Landlord hereunder,
said amount or liability may be deducted by Tenant from the next due or any
succeeding payments of Base Monthly Rent, Percentage Rent, or other charges
payable by Tenant to Landlord hereunder.  Amounts due Tenant from Landlord
pursuant to this paragraph shall bear interest at the Agreed Interest Rate from
the date of disbursement until reimbursement by Landlord.

          C.  Waiver.  Tenant hereby waives the benefits of California Civil
Code Section 1942, but only to the extent that Section 1942 provides remedies to
Tenant which exceed Tenant's rights and remedies under this Lease.

                                ARTICLE NINETEEN

                   SUBORDINATION, QUIET ENJOYMENT AND ZONING

     19.1  Subordination.

          A.  Obligation to Subordinate.  Upon the request of Landlord in
writing, Tenant shall subordinate this Lease to the lien of any mortgage made by
an institutional lender, the principal amount of which, when added to the
outstanding amounts secured by all other mortgages to which this Lease is
subordinate, does not exceed eighty percent (80%) of the appraisal received by
the lender determining the then fair market value of the property encumbered by
such mortgage; provided, however, that, prior to any such subordination, the
mortgagee shall enter into a written agreement with Tenant in recordable form,
specifying that:  (i) in the event of foreclosure or other action taken under
the mortgage, this Lease and the rights of Tenant hereunder shall not be
disturbed but shall continue in full force and effect and any party acquiring
the Premises through foreclosure shall be obligated to recognize all of the
rights of Tenant and perform all of Landlord's obligations under this Lease so
long as Tenant is not in default hereunder, (ii) the mortgagee or any party
acquiring the Premises through foreclosure (or other action under the mortgage,
which action may include acceptance of a deed in lieu of foreclosure) shall in
no event be:  (a) liable for any act, omission or default of Landlord occurring
prior to the date of acquisition of the Premises, (b) subject to any offsets or
deficiencies which the Tenant might be entitled to assert against Landlord, (c)
bound by an payment of rent or additional rent made by the Tenant to the
Landlord more than thirty (30) days in advance, (d) bound by any amendment or
modification of the Lease made without the written consent of the mortgagee or
its successors in interest, or (e) liable to Tenant for the return of any
security deposit held by Landlord under the Lease unless mortgagee shall acquire
possession of such deposit, in which event such deposit shall be subject to
return to Tenant in accordance with the provisions of the Lease, and; (iii) the
mortgagee shall permit insurance proceeds and condemnation proceeds to be used
for any restoration and repair required by the provisions of Article 16 and
Article 17 hereof.  Tenant agrees that if the mortgagee or any person claiming
under the mortgagee shall succeed to the interest of Landlord in this Lease,
Tenant will recognize said mortgagee or person as its landlord under the terms
of this Lease; provided, however, that said mortgagee or person shall assume all
of the obligations of Landlord hereunder during the period that said mortgagee
or person holds Landlord's interest in the Premises.

          B.  Definitions.  As used herein, the term "mortgage" includes
mortgages, deeds of trust and other similar instruments, and modifications
and extensions thereof.  As used herein, the term "mortgagee" means any
lender which holds a mortgage, or any party which is a beneficiary under
a deed of trust.  As used herein, the term "institutional lender" shall
mean a bank or trust company, savings bank, savings and loan association
company, insurance company, college or university, pension or retirement
fund, credit company, real estate investment trust, or syndication managed
by a national real estate investment firm or brokerage house (e.g.,
JMB Realty, Goldman Sachs, etc.) so long as such institutional lender has
a net worth in excess of Twenty-Five Million Dollars ($25,000,000).

     19.2  Quiet Enjoyment.  Landlord covenants and agrees with Tenant that upon
Tenant's observing and performing all of the terms, covenants and conditions on
Tenant's part to be observed and performed hereunder, Tenant may peaceably and
quietly occupy and enjoy the Premises without hindrance or molestation from
Landlord or any other persons claiming through Landlord.

     19.3  Zoning and Good Title.  Landlord warrants and represents, upon which
warranty and representation Tenant has relied in the negotiation and execution
of this Lease, as follows:

          A.  Landlord is the owner of the Shopping Center in fee simple
     absolute, free and clear of all encumbrances except those shown on Exhibit
     "F" attached hereto;

          B.  Landlord has full right and lawful authority to execute this Lease
     for the term, in the manner, and upon the conditions and provisions herein
     contained;

          C.  There is no legal impediment to the construction and use of the
     Premises as a retail store other than obtaining PUD permit, subdivision
     approval, completion of Design Review Board process of City of San Ramon,
     completion of Planning Commission of City of San Ramon approval process,
     building permits and approval of a development agreement between Landlord
     and the City of San Ramon regarding the construction of certain
     improvements (e.g., construction of a fire line);

          D.  The Shopping Center is not subject to any easements, restrictions,
     zoning ordinances or similar governmental regulations which prevent their
     use for retail store purposes;

          E.  The Premises are presently zoned for retail store use; and

          F.  The Premises are free of Hazardous Materials as of the Effective
Date.

Landlord shall furnish without expense to Tenant, within thirty (30) days after
written request therefor by Tenant, an updated title report covering the
Premises and the Shopping Center showing the condition of title as of the date
of such report.

     19.4  Tenant's Right to Terminate.  If for reasons other than Tenant's act
or omission, a final adjudication (i.e., not subject to further appeal) shall
prohibit the use of the Premises as a retail store, in addition to its other
rights and remedies, Tenant shall have the right to terminate this Lease by so
notifying Landlord within thirty (30) days following such adjudication;
whereupon the unamortized portion of Tenant's contribution to the Premises
Construction Costs shall be paid by Landlord to Tenant within ten (10) days of
Tenant's demand.  As a condition of such right to terminate, Tenant shall fully
cooperate with Landlord and participate in all proceedings relating to the
prohibition of such use, and shall diligently contest any litigation the
objective of which is to prohibit such use.

                                 ARTICLE TWENTY

                                 MISCELLANEOUS

     20.1  Landlord's Right to Enter.  Landlord and its agents may enter the
Premises at all reasonable times to show the Premises to prospective purchasers,
and to make such repairs, improvements, alterations or additions as may be
required by Landlord under the provisions of this Lease.  In making such entry,
Landlord shall not unreasonably interfere with the conduct of Tenant's business.
If as a result of any such entry Tenant is deprived of the use of the Premises,
the Base Monthly Rent and other charges payable by Tenant to Landlord hereunder
shall be abated or adjusted, as the case may be, in proportion to that period of
time during which, and to that portion of the Premises of which, Tenant shall be
deprived as a result thereof.

     20.2  Surrender of Possession.  Upon the expiration or termination of this
Lease, Tenant shall remove its personal property and trade fixtures, and shall
surrender the Premises to Landlord in good condition, damage by fire and
casualty, structural defects, condemnation, maintenance and repairs required to
be performed by Landlord, and reasonable wear and tear excepted.

     20.3  Holding Over.  If Tenant shall continue to occupy the Premises after
the expiration of the term of this Lease, without a written agreement with
Landlord providing for such occupancy, such occupancy shall not be deemed to
extend or renew the term of this Lease, but shall continue as a tenancy at will
from month-to-month.  Such tenancy shall be upon the covenants and conditions
herein contained and at the rental in effect during the last Lease Year,
prorated and payable for the period of such occupancy.

     20.4  Waivers.  Failure of either party to complain of any act or omission
on the part of the other party, no matter how long the same may continue, shall
not be deemed to be a waiver by said party of any of its rights hereunder.  No
waiver by either party at any time, express or implied, of any breach of any
provision of this Lease shall be deemed a waiver of a breach of any other
provision of this Lease or a consent to any subsequent breach of the same or any
other provision.  If any action by either party shall require the consent or
approva1 of the other party, the other party's consent to or approval of such
action on any one occasion shall not be deemed a consent to or approval of said
action on any subsequent occasion or a consent to or approval of any other
action on the same or any subsequent occasion.  Any and all rights and remedies
which either party may have under this Lease or at law or in equity shall be
cumulative, and shall not be deemed inconsistent with each other; and no one of
them, whether exercised or not, shall be deemed to be an exclusion of any other,
and any or all of such rights and remedies may be exercised at the same time.

     20.5  Payment and Performance Under Protest.

          A.  Payment.  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 such party shall thereafter have the right to
institute suit for the recovery of such sum, or to have the dispute settled by
arbitration as hereinafter provided.  If it shall be adjudged or determined that
there was no legal obligation to pay such sum or any part thereof, the party
paying such sum shall be entitled to recover such sum or so much thereof as it
was not required to pay.

          B.  Performance.  If at any time a dispute shall arise between the
parties hereto as to any work to be performed by either of them under the
provisions hereof, the party against whom the obligation to perform the work is
asserted may perform such work and pay the costs thereof "under protest" and the
performance of such work shall in no event be regarded as a voluntary
performance, and such party shall thereafter have the right to institute suit
for the recovery of the costs of such work, or proceed to have the dispute
settled by arbitration.  If it shall be adjudged or determined that there was no
legal obligation to perform such work or any part thereof, the party performing
such work shall be entitled to recover the costs of such work or the cost of so
much thereof as it was not required to perform.

     20.6  Arbitration.

          A.  Obligation to Arbitrate.  The parties hereto shall not be deemed
to have agreed to determine any dispute arising out of this Lease by arbitration
unless specifically provided for herein.  In any case for which arbitration is
specifically provided hereunder, the party desiring arbitration shall so notify
the other party in writing and shall in such notice appoint a person as
arbitrator on its behalf.  Within ten (10) days after receipt of such notice,
the other party by written notice to the original party shall appoint a second
person as arbitrator on its behalf.  The arbitrators thus appointed shall as
promptly as possible determine such matter; provided however, that:

       (i)  If the second arbitrator shall not have been appointed within the
     ten-day period as aforesaid, the first arbitrator shall proceed to
     determine such matter and shall render its decision and award in writing
     within thirty (30) days after the expiration of said ten-day period.

       (ii)  If the two arbitrators are unable to agree within ten (10) days
     after the appointment of the second arbitrator, then they shall give
     written notice to the parties of their failure to agree, and the parties
     shall mutually appoint a third arbitrator.  If the parties fail to agree
     upon the selection of such third arbitrator within ten (10) days after the
     arbitrators appointed by the parties give notice as aforesaid, then within
     five (5) days thereafter, either party may upon notice to the other party
     request such appointment by the American Arbitration Association (or any
     successor organization) or, in its failure or inability to act, may apply
     to a court of competent jurisdiction for a court appointment of a third
     arbitrator.

       (iii)  Within thirty (30) days after the appointment of the third
     arbitrator the arbitrators shall render their decision and award in
     writing, upon the concurrence of at least two of them.  Such decision and
     award, or the decision and award of the single arbitrator as provided in
     subsection (a) hereof, shall be final and conclusive on the parties, and
     counterpart copies thereof shall be delivered to each of the parties.  In
     rendering such decision and award, the arbitrator(s) shall not add to,
     subtract from or otherwise modify the provisions of this Lease.  Judgment
     may be had on the decision and award of the arbitrators so rendered in any
     court of competent jurisdiction.

     B.  Procedure.  Each arbitrator must be qualified and impartial, and must
have at least ten (10) years' experience in the County of Contra Costa (or such
other county as is mutually agreeable to Landlord and Tenant) in the State of
California in a calling connected with the matter of the dispute.  The
arbitration shall be conducted, to the extent consistent with this Section 20.6,
in accordance with the prevailing rules of the American Arbitration Association
(or any successor organization).  If there is more than one arbitrator, each
party shall pay the fees and expenses of the arbitrator appointed by such party,
plus one-half (1/2) of the fees and expenses of the third arbitrator and all
other expenses of the arbitration (other than the fees and disbursements of
attorneys or witnesses for each party).  If there is only one arbitrator, the
fees and expenses of such arbitrator shall be borne by the parties equally.

     20.7  Notices.  All notices and other communications authorized or required
hereunder shall be in writing and shall be given by mailing the same by
certified mail or registered mail, return receipt requested, postage prepaid.
Any such notice or other communication shall be deemed to have been given when
received by the party to whom such notice or other communication shall be
addressed.  If intended for Landlord, such notice shall be mailed to the address
first above written or such other address as Landlord may hereafter designate by
notice to Tenant; if intended for Tenant, such notice shall be mailed to Orchard
Supply Hardware at 6450 Via del Oro, San Jose, California 95119, Attention:
Director of Real Estate, with a copy to Wickes Companies, Inc. at 3340 Ocean
Park Boulevard, Suite 200, Santa Monica, California 90405, Attention: Ronald
Strongwater, or such other address or addresses as Tenant may hereafter
designate by notice to Landlord.

     20.8  Excusable Delay.  In the event that Landlord or Tenant shall be
delayed in or prevented from the performance of any act (other than Tenant's
obligation to make payments of rent, additional rent and other charges required
hereunder) by reason of any fine or other casualty loss, strikes, lockouts,
unavailability of materials, failure of power, restrictive governmental laws or
regulations, riots, insurrections, the act, failure to act or default of the
other party, war or other reason beyond its control (an "Excusable Delay"), then
performance of such act shall be excused for the period of the delay and the
period for the performance of such act shall be extended for a period equivalent
to the period of such delay.  Notwithstanding the foregoing, lack of funds shall
not be deemed to be a cause beyond the control of either party.

     20.9  Waiver of Landlord's Lien.  Within ten (l0) days of request by
Tenant, Landlord shall execute any document necessary to waive any right, title,
lien, or interest in Tenant's trade fixtures or equipment located in the
Premises.  Such waiver may require Landlord to grant to the party requiring
Tenant to obtain such waiver a license to enter the Premises in order to
assemble, inventory, or remove the equipment covered by the lien waiver,
provided that such party repairs any damage caused by such removal.

     20.10  Estoppel Certificates.  At any time and from time, upon written
request from the other, Landlord and Tenant shall execute, acknowledge and
deliver to the other, or to any person designated by the other, a statement in
writing certifying:  (i) that the Lease is unmodified and is in full force and
effect or, if there have been modifications, that the same is in full force and
effect as modified (stating the modifications); (ii) that the other party is not
in default in the performance of its covenants hereunder or, if there have been
such defaults, specifying the same; and (iii) the dates to which the rent and
other charges have been paid hereunder.

     20.ll  Recordation.  Simultaneously herewith, Landlord and Tenant have
entered into a memorandum of lease for recording.  Upon the commencement of the
Lease Term, Landlord and Tenant shall enter into a recordable agreement in the
form attached hereto as Exhibit G.

     20.12  Invalidity of Particular Provision.  If any term or provision of
this Lease or the application hereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, then the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby, and each term and provision of this Lease shall be valid and
enforceable to the fullest extent permitted by law.

     20.13  Announcement of Tenant's Store.  Within thirty (30) days after
giving Landlord written notice of its intention to do so, Tenant may erect, at
Tenant's expense, an appropriate sign on the Shopping Center announcing the
coming of Tenant's store.

     20.14  Captions and Definitions of Parties.  The captions of the sections
of this Lease are for convenience only and are not a part of this Lease and do
not in any way limit or modify the terms and provisions of this Lease.  The word
"Landlord" and the pronouns referring thereto shall mean, where the context so
admits or requires, the persons, firm or corporation named herein as Landlord or
the mortgagee in possession of the land and building comprising the Premises.
If there is more than one Landlord, the covenants of Landlord shall be the joint
and several obligation of each of them.  Any pronoun herein shall be read in the
singular or plural number and in such gender as the context may require.

     20.15  No Partnership.  Nothing contained herein shall be deemed or
construed as creating the relationship of principal and agent or of partnership
or of joint venture between the parties hereto, it being understood and agreed
that neither any provision contained herein, nor any acts of the parties hereto,
shall be deemed to create any relationship between the parties hereto other than
the relationship of landlord and tenant.

     20.16  Transfer of Title.  Landlord shall not convey its interest in the
Shopping Center until it has fully performed all of its obligations pursuant to
Article Two without the prior written consent of Tenant.  Thereafter, Landlord
and its successors in interest shall have the right to transfer their interests
in the Premises and the Shopping Center at any time and to any person or entity
without the consent of Tenant.  In the event of any transfer by Landlord, the
Landlord originally named herein (and in the case of any subsequent transfer,
the transferor) shall be relieved of all liability for the performance of the
obligations of the Landlord under this Lease which accrue after the date of
transfer only if its transferee agrees in writing for the benefit of Tenant to
assume and be bound by the terms of this Lease and to perform all obligations of
the Landlord hereunder; provided, however, that under no circumstances shall
Pacific Quadrant Development Company be released from its obligation under
Article Two of this Lease.  Landlord shall promptly notify Tenant in writing of
any change in the ownership of the Premises, giving the name and address of the
new owner and instructions regarding the payment of rent.  In the event of any
change in or transfer of Landlord's title in and to the Premises or any part
thereof (whether voluntary or involuntary, or by act of Landlord or by operation
of law), Tenant shall be under no obligation to pay rents or other charges
thereafter accruing, until Tenant shall have been notified in writing of such
change in title and given satisfactory proof thereof; the withholding of rents
or other charges payable by Tenant to Landlord hereunder in the meantime shall
not be deemed a default by Tenant.

     20.17  Successors and Assigns.  Except as otherwise provided in this Lease,
the covenants, agreements, terms and provisions of this Lease shall be bind upon
and inure to the benefit of Landlord and Tenant and their respective successors,
assigns, heirs, executors and administrators.

     20.18  Brokerage.  Landlord and Tenant each represent and warrant to the
other that they have not dealt with any real estate agent or broker in
connection with this transaction, other than Gallagher & Miersch, whose
commission shall be paid by Landlord.

     20.19  Reasonable Expenditures.  Any expenditure by a party permitted or
required under this Lease, for which such party is entitled to demand and does
demand reimbursement from the other party, shall be limited to the fair market
value of the goods and services involved, shall be reasonably incurred, and
shall be substantiated by documentary evidence available for inspection and
review by the other party or its representative during normal business hours.

     20.20  Approvals.  Unless expressly indicated otherwise, whenever this
Lease requires the approval or consent of either Landlord or Tenant, such
approval or consent shall not be unreasonably withheld or delayed.

     20.21  Entire Agreement.  This document contains the entire and only
agreement between the parties, and no oral statement or representations or prior
written matter not contained in this instrument shall have any force and effect.
This Lease shall not be modified in any way except by a writing executed by both
parties.

     IN WITNESS WHEREOF,  the parties hereto have executed this lease by their
respective officers thereunto duly authorized.


LANDLORD:                                    TENANT:

PACIFIC QUADRANT DEVELOPMENT COMPANY         WICKES COMPANIES, INC.
a California general partnership             A Delaware corporation

By Pacific RIM Development Corporation       /s/

/s/





By The Quadrant Corporation,
a Washington corporation

/s/



RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
James T. Graeb, Esq.
400 Oyster Point Blvd.
Suite 415
So. San Francisco, CA 94080

                      ASSIGNMENT AND ASSUMPTION OF LEASES

THIS AGREEMENT dated June 2, 1999 (the "Agreement"), is entered into by and
between DINESH MANIAR, an individual, ("Assignor") and Montgomery Realty Group,
Inc., a Nevada corporation ("Assignee").

                                  WITNESSETH:

WHEREAS, Assignor is the lessor under certain leases executed with respect to
that certain real property commonly known as the Keker & Van Nest Office
Building located at 710 Sansome Street, San Francisco, California, and more
particularly described in Exhibit "A" attached hereto and incorporated herein by
this reference.

WHEREAS, Assignor desires to assign its interest as lessor in the Leases to
Assignee, and Assignee desires to accept the assignment thereof;

NOW, THEREFORE, in consideration of the promises and conditions contained
herein, the parties hereby agree as follows:

1. Assignor hereby assigns to Assignee all of its right, title and interest in
and to the Leases herein described.

2. Assignor warrants and represents that as of the date hereof.

(a) The attached list includes all of the Leases affecting the property being
acquired by Assignee from Assignor. As of the date hereof, there are no
assignments or agreements to assign the Leases to any other party, except for
any assignment incidental to a deed of trust.

(b) The Leases are in full force and effect and there exists no default on the
part of Assignor thereunder, nor does Assignor have any actual knowledge of any
defaults or any acts or events which with the passage of time or the giving of
notice could become defaults thereunder on the part of any tenant thereunder.

3. Assignor hereby agrees to indemnify Assignee against and hold Assignee
harmless from any and all cost, liability, loss, damage or expense, including
without limitation, reasonable attorneys' fees, originating prior to the date
hereof and arising out of the lessor's obligations under the Leases described in
the attachment hereto.

4. Assignee hereby assumes all of the landlord's or lessor's obligations under
the Leases described in the attachment, inclusive, and agrees to indemnify
Assignor against and hold Assignor harmless from any and all cost, liability,
loss, damage or expense, including without limitation, reasonable attorneys'
fees, originating subsequent to the date hereof and arising out of the lessor's
obligations under the Leases.

5. Assignee acknowledges that it has been Assignor's custom and practice to
collect certain common area maintenance expenses and other pass through items
from certain tenants, and to refrain from collecting some of said sums based
upon Assignor's business judgment. Assignee agrees to waive its rights with
respect to any prior forebearances by Assignor as Landlord, and to attempt to
collect such sums only as it is in the best overall interest of the business to
start collecting said sums.

6. In the event of any litigation between Assignor and Assignee arising out of
the obligations of the parties under this Assignment or concerning the meaning
or interpretation of any provision contained herein, the losing party shall pay
the prevailing party's costs and expenses or such litigation, including, without
limitation, reasonable attorney's fees.

7. This Agreement shall be binding on and inure to the benefit of the parties
hereto, their heirs, executors, administrators, successors in interest and
assigns.

IN WITNESS WHEREOF, the Assignor and Assignee have executed this Agreement the
day and year first above written.

ASSIGNOR:

/s/ Dinesh Maniar


ASSIGNEE:

/s/ Clem F. Walker, President
Montgomery Realty Group, Inc.
a Nevada corporation


TENANTS

The following are the tenants subject to this Assignment and Assumption:

Keker & Van Nest, LLP



STATE OF CALIFORNIA      }ss
COUNTY OF CONTRA COSTA   }

On June 2, 1999, before me, E. Boyd, a Notary Public in and for said State,
personally appeared Dinesh Maniar and Clem F. Walker personally known to
me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.

WITNESS my hand and official seal.

Signature /s/ E. Boyd
(official seal)


The land referred to in this Report is situated in the State of California, City
and County of San Francisco, and is described as follows:

BEGINNING at a point on the easterly line of Sansome Street, distant thereon 91
feet and 8 inches northerly from the northerly line of Jackson Street running
thence northerly and along said line of Sansome Street 45 feet and 10 inches;
thence at a right angle easterly 137 feet and 6 inches; thence at a right angle
southerIy 45 feet and 10 inches; thence at a right angle westerly 437 feet and 6
inches to the point of beginning.

BEING a portion of 50 VARA BLOCK No. 33


EXHIBIT A



RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
James T. Graeb, Esq.
400 Oyster Point Blvd.
Suite 415
So. San Francisco, CA 94080

                      ASSIGNMENT AND ASSUMPTION OF LEASES

THIS AGREEMENT dated June 2, 1999 (the "Agreement"), is entered into by and
between DINESH MANIAR, an individual, ("Assignor") and Montgomery Realty Group,
Inc., a Nevada corporation ("Assignee").

                                  WITNESSETH:

WHEREAS, Assignor is the lessor under certain leases executed with respect to
that certain real property commonly known as the Orchard Supply Shopping Center
located at 1041-1061 Market Place, San Ramon, California, and more particularly
described in Exhibit "A" attached hereto.

WHEREAS, Assignor desires to assign its interest as lessor in the Leases to
Assignee, and Assignee desires to accept the assignment thereof;

NOW, THEREFORE, in consideration of the promises and conditions contained
herein, the parties hereby agree as follows:

1. Assignor hereby assigns to Assignee all of its right, title and interest in
and to the Leases herein described.

2. Assignor warrants and represents that as of the date hereof.

(a) The attached list includes all of the Leases affecting the property being
acquired by Assignee from Assignor. As of the date hereof, there are no
assignments or agreements to assign the Leases to any other party, except for
any assignment incidental to a deed of trust.

(b) The Leases are in full force and effect and there exists no default on the
part of Assignor thereunder, nor does Assignor have any actual knowledge of any
defaults or any acts or events which with the passage of time or the giving of
notice could become defaults thereunder on the part of any tenant thereunder.

3. Assignor hereby agrees to indemnify Assignee against and hold Assignee
harmless from any and all cost, liability, loss, damage or expense, including
without limitation, reasonable attorneys' fees, originating prior to the date
hereof and arising out of the lessor's obligations under the Leases described in
the attachment hereto.

4. Assignee hereby assumes all of the landlord's or lessor's obligations under
the Leases described in the attachment, inclusive, and agrees to indemnify
Assignor against and hold Assignor harmless from any and all cost, liability,
loss, damage or expense, including without limitation, reasonable attorneys'
fees, originating subsequent to the date hereof and arising out of the lessor's
obligations under the Leases.

5. Assignee acknowledges that it has been Assignor's custom and practice to
collect certain common area maintenance expenses and other pass through items
from certain tenants, and to refrain from collecting some of said sums based
upon Assignor's business judgment. Assignee agrees to waive its rights with
respect to any prior forebearances by Assignor as Landlord, and to attempt to
collect such sums only as it is in the best overall interest of the business to
start collecting said sums.

6. In the event of any litigation between Assignor and Assignee arising out of
the obligations of the parties under this Assignment or concerning the meaning
or interpretation of any provision contained herein, the losing party shall pay
the prevailing party's costs and expenses or such litigation, including, without
limitation, reasonable attorney's fees.

7. This Agreement shall be binding on and inure to the benefit of the parties
hereto, their heirs, executors, administrators, successors in interest and
assigns.

IN WITNESS WHEREOF, the Assignor and Assignee have executed this Agreement the
day and year first above written.

ASSIGNOR:

/s/ Dinesh Maniar


ASSIGNEE:

/s/ Clem F. Walker, President
Montgomery Realty Group, Inc.
a Nevada corporation


TENANTS

The following are the tenants subject to this Assignment and Assumption:

Orchard Supply Hardware - Sears, Roebuck & Co.
Mr. Philly Cheesesteak
MarketPlace Liquors
The Hot Dog Spot



STATE OF CALIFORNIA      }ss
COUNTY OF CONTRA COSTA   }

On June 2, 1999, before me, E. Boyd, a Notary Public in and for said State,
personally appeared Dinesh Maniar and Clem F. Walker personally known to
me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.

WITNESS my hand and official seal.

Signature /s/ E. Boyd
(official seal)



LEGAL DESCRIPTION

REAL PROPERTY in the City of San Ramon, County of Contra Costa, State of
California, described as follows:

PARCEL ONE:

Parcel A as shown on the Parcel Map entitled "Minor Subdivision 902-95" filed
May 22, 1996 in Book 169 of Parcel Maps at Page 13, Contra Costa County Records.

PARCEL TWO:

An easement, not to be exclusive, as an appurtenance to Parcel One above, for
the installation, construction and maintenance of an underground storm drain
over a portion of Lot 5 of Subdivision 6949 (324 M 29), as set forth in the
Declaration of Establishment of Utility and Access Easements and Covenants
recorded September 13, 1988, Book 14576, Page 301, Official Records and First
Amendment recorded September 23, 1988, Book 14608, Page 526, Official Records

PARCEL THREE:

Rights appurtenant to Parcel One above as contained in the Declaration of
Reciprocal Easements executed by Dinesh Maniar, an unmarried man, recorded May
22, 1996, Series No. 96-94292, Official Records.
A.P.No.: 213-702-007


EXHIBIT A




                           CONTRACT FOR MANAGEMENT


     This contract is made effective this 9th day of June, 1999 by and between
Montgomery Realty Group, Inc., a Nevada corporation, ("Owner") having its
principal office at 400 Oyster Point Blvd., Suite 415, South San Francisco,
California, and Diversified Investment & Management Corporation ("Manager") a
duly organized California corporation having its principal place of business at
400 Oyster Point Blvd., Suite 415, South San Francisco, California.

     NOW THEREFORE, in consideration of the mutual promises set forth herein
Owner and Manager agree as follows:

     1. APPOINTMENT OF MANAGER

     Owner hereby appoints Manager as the exclusive representative of Owner to
manager and operate the following properties, collect rents, negotiate leases,
resolve all matters relating to tenants, and to otherwise exercise management
and control over the income and expenses of said properties, which properties
are described as follows:

     A.  The Keker & Van Nest Office Building (the "Office Building") located at
710 Sansome Street, San Francisco, California 94111;

     B.  The OSH Shopping Center (the "OSH Center") located at 1041 - 1061
Market Place, San Ramon, California;

     C.  The San Ramon Shopping Center (the "San Ramon Shopping Center") located
at 1021 Market Place, San Ramon, California;

     D.  The Eccles Project (the "Eccles Project") located at 560 Eccles Avenue,
South San Francisco, California.

The foregoing properties are collective referred to herein as the "Properties".

     2.   COMPENSATION OF MANAGER

     In consideration of its services as property manager, Manager shall be paid
the following:

     A.  The greater of:

          (i) Three percent (3%) of the gross income from the Properties; or

          (ii) the minimum annual fee as follows:

          (a)  During the first year of this contract, the sum of Seven Thousand
Five Hundred Dollars ($7,500.00) per month;

          (b)  During the second year of this contract, the sum of Ten Thousand
Dollars ($10,000.00) per month; and

          (c)  Thereafter the sum of Fifteen Thousand Dollars ($15,000.00) per
month.

     B.  Manager shall be compensated for any operating, financing, capital and
other expenses relating to the Properties, which Manager may pay on behalf of
Owner or retain from rents received from the tenants;

     C.  Reimbursement for such professional fees as Manager may incur, which
professional fees shall be as follows:

          (i)  Legal services at the rate of $175 per hour for in house legal
services and at such other billing rate as the attorney may charge to Manager if
said services are rendered by outside counsel;

          (ii) Accounting services rendered by an in house CPA at the rate of
$120 per hour, or if an independent CPA is used, at such other billing rate as
the accountant may charge to Manager;

          (iii) Brokerage commissions earned by Manager at the following rates:

               (a) For leasing commissions, the aggregate of:

               7% of the First Year Rent
               6% of the Second Year Rent
               6% of the Third Year Rent
               5% of the Fourth Year Rent
               5% of the Fifth Year Rent
               4% of the Sixth Year Rent
               4% of the Seventh Year Rent
               3% of the Eighth Year Rent
               3% of the Ninth Year Rent
               2% of the Tenth Year Rent

     Shall be due and payable to Manager upon the signing of a   written lease.

               (b) For financing transactions:

                One Percent (1%) of the amount financed
     Shall be paid to Manager at the Closing.

               (c) For purchase or sale transactions:

               Three percent (3%) of the purchase or sale price
     Shall be paid at the closing.

     D.  For development or construction of new projects the following rates
shall apply:

          (1)  Project Manager:  $200 per hour

          (2)  Project Management Assistant:  $150 per hour

          (3)  Project Estimator: $150 per hour

          (4)  Project Assistants: $125 per hour

          (5)  Reimbursement of any architectural, planning, permit,
reproduction, or related fees or expenses.

          (6)  An oversight fee of two percent (2%) of all development and
construction costs.

     E.  In the event Manager employs a cooperating broker to rent part or all
of the Properties, the fee of Manager shall be increased to cover the fee of the
cooperating broker to the extent of the participation of the broker in such
activity, but in no event shall the total fee be more than four percent (4%) in
any one year, unless otherwise previously approved by Owner.

     F.  Manager may agree to waive or reduce any of said fees, without
modifying this Agreement and without waiving its right to charge according to
the regular fee schedule above in any future transaction.

     3.  PAYMENTS TO OWNER

     Manager shall remit to Owner at monthly intervals the check of Manager for
the net amount due Owner.  A sum to be determined by Manager, with the approval
of Owner, shall be retained by Manager for the account of Owner as a reserve for
the payment of secured indebtedness, as well as taxes, licenses, insurance,
repairs, and other expenses that may be anticipated, but that are not due at the
time of the remittance to Owner.

     4. AUTHORITY AND POWERS OF MANAGER

     Owner hereby grants Manager the following authority and powers and agrees
to assume the expenses in connection herewith:

     (a)  Manager shall use due diligence to attract and retain lessees of the
Properties.

     (b)  Manager shall take reasonable steps to collect all rent due, or
enforce collection thereof, and shall perform all reasonable acts on behalf and
for the protection of Owner in the collection of such amounts.

     (c)  Manager shall sign, renew and/or cancel leases for such space or
units; collect rents due or to become due and give receipts therefore; terminate
tenancies and sign and serve in the name of Owner such notices as are
appropriate; institute and prosecute action; evict tenants and recover
possession of space or units; sue for and recover, in the name of Owner, rents
and other sums due; and, when expedient, with Owner's prior approval, settle,
compromise, and release such actions or suits or reinstate such tenancies.

     (d)  Manager shall manage the Properties according to sound commercial
practices.

     (e)  Manager, acting in Owner's name, shall take such actions as may be
necessary to enforce all warranties given in connection with construction of the
Properties or with manufactured items included therein.  Owner shall furnish all
necessary documents pursuant to the enforcement of these warranties.

     (f)  Manager shall employ, direct, control, and discharge all persons
performing regular services on the premises.  All such persons shall be
employees of Manager.

     (g)  Manager shall advertise the availability for rental of space or units
of the Properties and to display "for rent" signs thereon.

     (h)  Manager, in its own name shall make contracts for electricity, gas,
fuel, water, telephone, window cleaning, trash or rubbish hauling, and other
services or such of them as Manager shall deem advisable. Manager agrees that
all purchase and service contracts will be entered into at the most favorable
prices and terms available and that such prices and terms shall inure solely for
the benefit of Owner.  Manager shall be under a duty to secure for and credit to
Owner any discount, commissions, or rebates obtainable as a result of such
contract.

     (i)  Subject to the prior written approval of Owner, Manager may establish
tenant qualifications; determine the dollar amount of security deposits and the
dollar amount of cleaning deposits; approve credit standing; and determine the
form of rental agreement to be executed by tenants.

     (j)  Manager shall maintain and repair the Properties in accordance with
sound management practices and local codes.  Such maintenance and repair shall
include, without limitations, cleaning, painting, decorating, plumbing,
carpentry, grounds care, and such other maintenance and repair work as may be
necessary, subject to any limitation imposed by Owner in addition to those
contained herein.

     (k)  Incident to such maintenance and repair, the following provisions will
apply:

          (i)  Special attention will be given to preventative maintenance.
     To the greatest extent feasible, the services of regular maintenance
     employees will be used.

          (ii)  Subject to Owner's prior approval, Manager will contract
     with qualified independent contractors for the maintenance and repair
     of air conditioning systems and for extraordinary repairs beyond the
     capability of regular maintenance employees.

          (iii)  Manager will systematically and promptly receive and
     investigate all service requests from tenants, take such actions
     thereon as may be justified, and keep records of the same.  Emergency
     requests will be received and serviced on an around-the-clock basis.
     Complaints of a serious nature will be reported to Owner after
     investigation.

          (iv) Manager is authorized to purchase all material, equipment,
     tools, appliances, supplies and services necessary to proper
     maintenance and repair

     (l)  Notwithstanding any of the foregoing provisions , the prior approval
of Owner will be required for any expenditure that exceeds Five Thousand Dollars
($5,000) in any one instance for labor, materials, or otherwise in connection
with the maintenance and repair of the Properties, except for recurring expenses
within the limits of the operating budget or emergency repairs involving
manifest danger to persons or property, or expenses required to avoid suspension
of any necessary service to the Properties. In the latter event, Manger will
inform Owner of the facts as promptly as possible.

     (m)  Manager shall obtain contracts, materials, supplies, utilities, and
services on the most advantageous terms to the Properties, and is authorized to
solicit bids, either formal or informal, for those items that can be obtained
from more than one source.  Manager will secure and credit to Owner all
discounts, rebates, or commissions obtainable with respect to purchases, service
contracts, and all other transactions on Owner's behalf.

     (n)  Manager will take such actions as may be necessary to comply promptly
with any and all governmental orders or other requirements affecting the
Properties, whether imposed by federal, state, county, or local authority.
Nevertheless, Manager shall take no such action so long as Owner is contesting,
or has affirmed its intention to contest, any such order or requirement.
Manager will notify Owner in writing of all notices of such orders or other
requirements within 48 hours from the time of their receipt.

     (o)  Manager will furnish, at its own expense, if so requested by Owner, a
fidelity bond in the principal sum of One Million Dollars ($1,000,000), to
protect Owner against misapplication of income from the Properties by Manager or
any employee of Manager.  The other terms and conditions of the bond, and the
surety thereon, will be subject to approval of Owner.

     (p)  From the rental proceeds, Manager shall (1) pay for advertising, (2)
pay all common area utility, repair, maintenance and service bills, (3) pay
salaries of persons employed at the Properties, (4) purchase supplies, and
(5) cause to be made and pay for such maintenance, repairs, and alterations
as may be required for proper operation ofthe Properties.

     (q)  Manager shall service all loans and mortgages on the Properties, pay
all applicable real estate and personal property taxes, licenses, fees, and
payroll taxes, and maintain payroll records and make all necessary returns
required by law.

     (r)  Manager shall at all times during the term hereof maintain a real
estate broker's license in conformity with the laws of the State of California.

     (s)  Maintenance of an occupancy rate of not less than ninety-five percent
(95%), unless Owner shall have given prior consent.

     (t)  Development of janitorial schedules, and the supervision of janitorial
personnel, to ensure proper cleanliness and maintenance of common spaces,
sidewalks, parking lots, and grounds.

     (u)  Writing or taking work or service requests for minor repairs and
maintenance of apartments, common spaces, structures, and grounds.

     (v)  Assignment of such work orders to maintenance personnel, with follow-
up sufficient to insure proper completion in a reasonable length of time.

     (w)  Frequent inspection of grounds, parking lots, common spaces and
apartments for proper cleanliness and maintenance.

     (x)  Keeping an inventory of all capital and non-capital items of personal
property that have a value of One Hundred Dollars ($100) or more.  Such listing
shall include description, with model and serial numbers where appropriate,
value, condition and location.

     (y)  Establishment and maintenance of a bookkeeping system on an accrual
basis that includes a journal, a ledger, and a rent-roll control system.  Such
system should be adjusted to the needs of a Certified Public Accountant for a
yearly audit.

     (z)  At Owner's direction, Manager shall act as Owner's exclusive broker
for all financing, purchase and sale transactions involving the Properties;
provided, however, that Manager may employ the services of a cooperating broker,
with Owner's consent and at Owner's sole cost and expense.

     5.   RECORDS AND REPORTS

     Manager shall be responsible for records and reports as follows:

     (a)  Manager shall establish and maintain a comprehensive system of
records, books, and accounts in a manner satisfactory to Owner.  All records,
books, and accounts will be subject to examination at reasonable hours by any
authorized representative of Owner.

     (b)  With respect to each fiscal year ending during the term of this
agreement, Manager will cause an annual financial report to be prepared by a
certified public accountant or other person acceptable to Owner, based upon the
preparer's examination of the books and records of Owner and Manager.  The
report will be prepared in accordance with the directives of Owner, will be
certified by the preparer and the Manager, and will be submitted to Owner within
45 days after the end of the fiscal year.  Compensation for the preparer's
services will be paid out of the rental income as an expense of the Properties.

     (c)  Manager shall prepare a quarterly report comparing actual and budgeted
figures for receipts and disbursements, and will submit each such report to
Owner within 30 days after the end of the quarter covered.

     (d)  Manager shall furnish such information (including occupancy reports)
as may be requested by Owner from time to time with respect to the financial,
physical, or operational condition of the Properties.

     (e)  By the 11th day of each month, Manager shall furnish Owner with an
itemized list of all delinquent accounts, including rental accounts as of the
10th day of the same month.

     (f)  By the 5th day of each month, Manager will furnish Owner with a
statement of receipts and disbursements during the previous month, and with a
schedule of accounts receivable and payable, and reconciled bank statements for
the rental income account as of the end of the previous month.

     (g)  Except as otherwise provided in this agreement, all bookkeeping,
clerical, and other management overhead expenses (including but not limited to
costs of office supplies and equipment, data processing services, postage,
transportation for managerial personnel, and telephone services) will be borne
by Manager out of its own pocket and will not be treated as Properties expenses.

     (h)  Manager shall furnish Owner and Owner's certified public accountants
with a monthly profit and loss statements, a monthly vacancy report, and a
monthly rental delinquency report showing delinquencies in payment, tenant by
tenant.  Manager shall also furnish Owner with an annual profit and loss
statement at the end of each fiscal year during the term hereof, which report
will be certified by Manager's independent certified public accountants.

     6.  ACCOUNTING AND ACCOUNTS

     Accounting functions will be performed by Manager as follows:

     (a)  Accounting statements.  Manager shall maintain books of account of all
receipts and disbursements incurred in management of the Properties, which
records shall be open to inspection by Owner at all reasonable times. Manager
shall render monthly statements to Owner, showing all receipts and
disbursements.

     (b)  Bank accounts.  Manager shall establish and maintain in a bank, the
deposits of which are insured by the Federal Deposit Insurance Corporation a
separate account for the deposit of rentals.  Manager shall have the authority
to draw on this account for any payments that Manager must make to discharge any
liability or obligations incurred pursuant to this agreement, and for the
payment of the fee of Manager.  All such payments shall be subject to the
limitations of this contract.

     (c)  Bank deposits.  Manager shall establish and maintain in a California
bank the deposits of which are insured by the Federal Deposit Insurance
Corporation, a separate account bearing interest at money market rates for the
deposit of any security required of tenants.

     7.  INSURANCE & TAXES

     Owner shall inform Manager of insurance to be carried with respect to the
Properties and its operations.  Manager shall cause such insurance to be
procured and kept in effect at all times.  Manager shall pay premiums out of the
rental income from the Properties, and the premiums will be treated as operating
expenses.  All insurance will be placed with such companies, on such conditions,
in such amounts, and with such beneficial interests appearing thereon as shall
be acceptable to the Owner and shall be otherwise in conformity with the
mortgage or deed of trust encumbering the Properties.  It is provided, however,
that such insurance will include public liability coverage, with Manager
designated as an insured, in amounts acceptable to Manager as well as Owner.

     Manager will investigate and furnish Owner with full reports as to all
accidents, claims, and potential claims for damage relating to the Properties,
and will cooperate with Owner's insurers in connection therewith.

     Manager, as Owner's broker, will survey, recommend and, on the approval of
the recommendations, place agreed upon insurance coverage for the Properties.
As the insurance broker, Manager will be responsible for offering Owner
insurance coverage normally available for the Properties involved, with reliable
companies, as well as for expediting loss adjustments and maintaining records of
insurance requirements of tenants.  In addition, Manager will act on behalf of
Owner in attempting to conclude claims or disputes with insurance companies.  An
engineering inspection for the safety and protection of Owner's Properties shall
be arranged whenever possible with the insurance carrier, at no cost to Owner.
Owner agrees to consider all reasonable recommendations as a result of the
inspection to minimize both the cost of insurance and the possibility of bodily
injury, personal injury, property damage, and loss of rental income.

     Manager shall be responsible for maintaining workers' compensation
insurance and fidelity bonds covering its personnel who are engaged in the
operation of the Properties.  Manager shall at all times on behalf of Owner
maintain public liability insurance in the minimum amount of One Million Dollars
($1,000,000) for any single occurrence of bodily injury or property damage.

     Manager shall pay real property taxes and other taxes levied and assessed
against the Properties.  Manager shall withhold from gross revenues an amount
equal to the estimated annual taxes and then pay such taxes from this reserve
prior to the delinquency.

     8.  PASS-THROUGH EXPENSES

     Manager shall make timely payment of all taxes, insurance, repairs and
maintenance, together with all common area utilities and other expenses and
shall maintain true and accurate books and records relating to all items
disbursed. Manager shall as soon as permissible pursuant to each lease, pass-
through all expenses which are reimbursable by said tenant pursuant to said
tenant's lease.  In addition to the pass-through expense items, Manager shall
pass-through to tenant, to the extent permitted by said tenant's lease, all
general and administrative expenses of Manager which are reimbursable by tenant
pursuant to its lease.

     9.  NO ENCUMBRANCES

     Manager shall not execute or file for record any instrument that imposes a
restriction on selling, leasing, or occupying the subject Properties.

     10.  REIMBURSEMENT OF MANAGER

     Owner shall reimburse Manager for the amount of all charges paid by Manager
and required for proper operation of the Properties, if necessary funds are not
available to Manager from revenues received from the project or are not
otherwise made available by Owner.

     11.  INDEMNIFICATION OF OWNER

     Subject to the limitation below, Manager shall indemnify Owner against all
liability of any nature whatsoever in connection with management and operation
of the Properties, and against all liability for injury or death of employees,
or any other person, resulting directly from the management and operation of the
Properties.  This section shall not impose any obligation on Manager to
indemnify Owner against the willful misconduct or negligent acts or omissions of
Owner or the Mangers or employees of Owner.

     12.  TERM AND TERMINATION

     The term of this contract shall commence on the effective date as set forth
on page one and shall end on December 31, 2005, unless sooner terminated by
Owner. Termination may be effected at any time by Owner on 30 day's prior
written notice.

     13.  NOTICE

     Any notice required by this agreement shall be delivered by certified mail,
addressed to Owner or Manager at 400 Oyster Point Blvd., Suite 415, South San
Francisco, California 94080, and addressed to Manager at P.O. Box 2304, South
San Francisco, California.

     14. ATTORNEY'S FEES

     In the event of any suit, controversy, claim, or dispute between Owner and
Manager, arising out of or relating to performance or breach of this contract,
the prevailing party shall be entitled to recover reasonable expenses,
attorneys' fees, and costs.

     15.  ENTIRETY; ALTERATION; BINDING EFFECT

     This agreement is entire.  The parties may not alter, amend, or modify it
except by an instrument in writing executed by both.  It includes all
representations of every kind and nature made by either party to the other and
shall be binding on the successors and assigns of the parties.

     16. SUCCESSORS AND ASSIGNS

     This Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors, heirs, administrators and assigns.  Without
being relieved of any liability under this Agreement, Buyer reserves the right
to take title to the Properties in a name or assignee other than Buyer.

     17.  AMENDMENTS

     Except as otherwise provided herein, this Agreement may be amended or
modified by, and only by, a written instrument executed by Owner and Manager.

     18.  GOVERNING LAW

     This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of California.

     19.  TIME OF THE ESSENCE

     Time is of the essence of this Agreement.

     20.  CONFIDENTIALITY

     Owner and Manager shall keep the terms and conditions of the transaction
contemplated by this Agreement confidential and shall not disclose any
information regarding the same without the prior written consent of the other
party.

     21.  ASSIGNMENT

     Anything in this Agreement to the contrary notwithstanding, neither party
to this Agreement may assign any part hereof without the prior consent of the
other party.


                          (Signatures On Next Page)



     IN WITNESS WHEREOF the parties hereto have executed this Agreement on the
date first written above.

OWNER:                        MONTGOMERY REALTY GROUP, INC.
                              a Nevada corporation


                              By:  /s/ Dinesh Maniar
                                 Dinesh Maniar, President




MANAGER:                      DIVERSIFIED INVESTMENT &
                              MANAGEMENT CORPORATION
                              a California corporation




                              By:  /s/ James T. Graeb
                                 James T. Graeb
                                 Senior Vice President



                               PROMISSORY NOTE



Principal Amount: $80,000                                 Interest Rate: 10.00%

      In consideration of value received, receipt of which is hereby
acknowledged, MONTGOMERY REALTY GROUP, INC., a Nevada corporation ("Borrower")
promises to pay to DINESH MANIAR, or order, in lawful money of the United States
of America, the principal amount of Eighty Thousand Dollars ($80,000.00) or so
much as may be outstanding, together with interest on the unpaid principal
balance, payable monthly, at the rate of ten percent (10.00%) per annum, as set
forth below.  All payments under this note shall be made payable to DINESH
MANIAR, or order.

Interest & Principal Payments:  Interest and principal shall be payable monthly,
in six (6) equal monthly installments, due and payable on the first day of each
month, commencing July 1, 1999 and continuing each month thereafter.  Each
monthly payment shall be an amortizing payment inclusive of both interest and
principal.  The amount of the monthly payment shall be Thirteen Thousand Seven
Hundred Twenty Four Dollars and 91 cents ($13,724.91).

Prepayment:  This note may be prepaid, in whole or in part, prior to the
maturity dates set forth above, without a prepayment penalty or other charge
therefore.

Late Charges:  In the event that any interest payment required hereunder is not
paid on the due date and more than five (5) days shall have elapsed since the
due date, then Borrower shall pay to Promisee a late charge equal to ten percent
(10%) of the payment due.

Waiver:  The Promisee may delay or forgo enforcing any of his rights or remedies
under this Note without losing them.  Borrower and any other person who signs,
guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor.  Upon any
change in the terms of this Note, and unless otherwise expressly agreed in
writing, no party who signs this Note, whether as maker, guarantor or
accommodation maker or endorser, shall be released from liability.  All such
parties agree that Promisee may renew or extend (repeatedly and for any length
of time) this Note, or release any party or guarantor or collateral; or impair,
fail to realize upon or perfect Promisee's security interest, if any, and take
such other action deemed necessary by Promisee without the consent of or notice
to anyone.  All such parties agree that Promisee may modify this Note without
the consent of or notice to anyone other than the party with whom this
modification is made.

Attorneys Fees:  This Note shall be governed by the laws of the State of
California.  In the event any action is taken by the Promisee to enforce
collection of any sum due under this Note, the maker agrees to pay, in addition
to all other sums chargeable hereunder, reasonable costs and attorneys fees
incurred in collection of this Note.

Counterparts:  This Note may be executed in counterparts, each of which shall be
deemed an original.


Dated: June 2, 1999


                                   /s/ Clemons F. Walker
                                   -----------------------------
                                   Clemons F. Walker
                                   President
                                   Montgomery Realty Group, Inc.
                                   a Nevada corporation



                                PROMISSORY NOTE


Principal Amount:  $100,000                               Interest Rate:  10.00%


         In  consideration  of  value  received,  receipt  of  which  is  hereby
acknowledged,  Montgomery Realty Group, Inc. a Nevada corporation doing business
in California as Nevada-Montgomery  Realty Group, Inc.  ("Borrower") promises to
pay to Dinesh Maniar ("Lender" or "Promisee"),  or order, in lawful money of the
United States of America,  the principal  amount of One Hundred Thousand Dollars
($100,000.00)  or so much as may be  outstanding,  together with interest on the
unpaid principal balance,  at the rate of ten percent (10.00%) per annum, as set
forth  below.  All  payments  under  this note  shall be made  payable to Dinesh
Maniar, or order.

Interest  Payments:  Interest  shall  accrue  under this note at the rate of Ten
Percent (10%) per annum.  Interest shall be paid monthly, with interest payments
commencing April 1, 2000 and continuing on the first day of each month until the
maturity on March 31, 2001, at which time all accrued but unpaid  interest shall
be due and payable.

Principal  Payment:  All of the  principal  due under this note,  together  with
accrued interest thereon, shall be due and payable on March 31, 2001.

Prepayment: This note may be prepaid, in whole or in part, prior to the maturity
dates set forth above, without a prepayment penalty or other charge therefore.

Waiver:  The Lender may delay or forgo  enforcing  any of his rights or remedies
under this Note without  losing  them.  Borrower and any other person who signs,
guarantees  or  endorses  this  Note,  to  the  extent  allowed  by  law,  waive
presentment, demand for payment, protest and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise  expressly agreed in writing, no
party who signs this Note, whether as maker, guarantor or accommodation maker or
endorser,  shall be released from liability.  All such parties agree that Lender
may renew or  extend  (repeatedly  and for any  length of time)  this  Note,  or
release any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's  security  interest,  if any, and take such other action deemed
necessary by Lender without the consent of or notice to anyone. All such parties
agree that  Lender  may modify  this Note  without  the  consent of or notice to
anyone other than the party with whom this modification is made.

Late Charges:  In the event that any interest payment required  hereunder is not
paid on the due date and more than ten (10) days  shall have  elapsed  since the
due date,  then Borrower  shall pay to Lender a five percent (5%) late charge on
said late payment.


<PAGE>

Event of Default: An Event of Default shall exist if any of the following occur:
(a) failure by Borrower to make any  payment  required by this  Promissory  Note
when due;  (b)  failure by  Borrower  to honor any  material  term,  covenant or
condition as set forth in this  Promissory  Note; or (c) the  commencement  of a
bankruptcy proceeding by Borrower.

Remedies Upon Default:  In the Event of Default as described  above,  the Lender
may, without election of remedies do one or more of the following:  (a) continue
to  collect  payments  as they come due under  this  Note;  (b)  accelerate  the
principal  balance  due under  this Note  such that the full  amount of  accrued
interest and principal  becomes  immediately  payable;  (c) take such actions as
Lender deems appropriate to ensure payment of this Note.

Transferability:   Lender  may  assign,  pledge,  mortgage,  hypothecate,  sell,
transfer,  convey or otherwise dispose of Lender's interest in this Note without
the consent of Borrower or the giving of any notice. The obligations of Borrower
under this Note are not transferable without the written consent of Lender.

Waiver:  The Lender may delay or forgo  enforcing  any of her rights or remedies
under this Note without  losing  them.  Borrower and any other person who signs,
guarantees  or  endorses  this  Note,  to  the  extent  allowed  by  law,  waive
presentment, demand for payment, protest and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise  expressly agreed in writing, no
party who signs this Note, whether as maker, guarantor or accommodation maker or
endorser,  shall be released from liability.  All such parties agree that Lender
may renew or  extend  (repeatedly  and for any  length of time)  this  Note,  or
release any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's  security  interest,  if any, and take such other action deemed
necessary by Lender without the consent of or notice to anyone. All such parties
agree that Lender  modify  this Note  without the consent of or notice to anyone
other than the party with whom this modification is made.

Attorneys  Fees:  This  Note  shall  be  governed  by the  laws of the  State of
California. In the event any action is taken by the Lender to enforce collection
of any sum due under this Note,  the maker  agrees to pay,  in  addition  to all
other sums chargeable hereunder, reasonable costs and attorneys fees incurred in
collection of this Note.

Counterparts:  This Note may be executed in counterparts, each of which shall be
deemed an original.


Dated:   March 27, 2000

                                                  /s/ Dinesh Maniar
                                                  -----------------------------
                                                  Mr. Dinesh Maniar
                                                  President
                                                  Montgomery Realty Group, Inc.


<TABLE> <S> <C>


<ARTICLE>                     5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL  INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF DECEMBER 31, 1999,  AND  STATEMENTS OF OPERATIONS FOR THE YEAR ENDED
DECEMBER  31,  1999,  AND IS  QUALIFIED  IN ITS  ENTIRETY BY  REFERENCE  TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>

<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                              DEC-31-1999
<PERIOD-START>                                 JAN-01-1999
<PERIOD-END>                                   DEC-31-1999
<CASH>                                             134,361
<SECURITIES>                                             0
<RECEIVABLES>                                       31,137
<ALLOWANCES>                                             0
<INVENTORY>                                              0
<CURRENT-ASSETS>                                         0
<PP&E>                                          11,018,884
<DEPRECIATION>                                   2,505,387
<TOTAL-ASSETS>                                  10,397,714
<CURRENT-LIABILITIES>                                    0
<BONDS>                                         12,338,166
                               16,500
                                              0
<COMMON>                                                 0
<OTHER-SE>                                      (2,195,506)
<TOTAL-LIABILITY-AND-EQUITY>                    10,397,714
<SALES>                                          1,367,749
<TOTAL-REVENUES>                                 1,369,977
<CGS>                                                    0
<TOTAL-COSTS>                                      642,960
<OTHER-EXPENSES>                                         0
<LOSS-PROVISION>                                         0
<INTEREST-EXPENSE>                                 925,004
<INCOME-PRETAX>                                   (197,987)
<INCOME-TAX>                                        43,085
<INCOME-CONTINUING>                               (154,902)
<DISCONTINUED>                                           0
<EXTRAORDINARY>                                          0
<CHANGES>                                                0
<NET-INCOME>                                      (154,902)
<EPS-BASIC>                                         (0.010)
<EPS-DILUTED>                                       (0.010)


</TABLE>


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