Master Lease Agreement - Steelcase Financial Services Inc. and Liberate Technologies


STEELCASE FINANCIAL SERVICES INC.
A STEELCASE COMPANY
-------------------------------------------------------------------------------
MASTER LEASE AGREEMENT                                             NUMBER 12809

THIS MASTER LEASE AGREEMENT is dated and effective as of AUGUST 2, 1999, (the 
'Effective Date'), by and between Steelcase Financial Services Inc., a 
Michigan corporation, located at 1111 44th Street S.E., P.O. Box 3163, Grand 
Rapids, MI 49501-3163 (together with any successors or assigns, the 
'Lessor'), and the Lessee indicated below (the 'Lessee').

LESSEE
Full Legal Name                    Trade Name
LIBERATE TECHNOLOGIES

Mailing Address                    City                    State    Zip
1000 BRIDGE PARKWAY                REDWOOD CITY            CA       94065-

Type of Legal Entity               State of Organization   Date of Establishment
CORPORATION                        DE                      1996

1.  LEASE.  Lessor hereby leases to Lessee and Lessee hereby leases from 
Lessor all of the tangible personal property listed on each Equipment 
Schedule executed from time to time pursuant to this Agreement (each, an 
'Equipment Schedule'). Each Equipment Schedule shall be substantially in the 
form annexed hereto as Annex A, shall incorporate by reference therein all of 
the terms and conditions of this Agreement and shall include such other terms 
and conditions upon which the parties have agreed (each Equipment Schedule, 
together with this Agreement as it relates to such Schedule, is referred to 
herein as a 'Lease'). With respect to each Lease, capitalized terms not 
defined in this Agreement shall have the meanings stated in the applicable 
Equipment Schedule.

2.  NET LEASE.  EACH LEASE IS A NET LEASE, AND LESSEE SHALL PAY ALL COSTS AND 
EXPENSES OF EVERY CHARACTER, WHETHER FORESEEN OR UNFORESEEN, ORDINARY OR 
EXTRAORDINARY, IN CONNECTION WITH THE USE, POSSESSION, STORAGE, MAINTENANCE 
AND REPAIR OF THE EQUIPMENT. LESSEE IS UNCONDITIONALLY OBLIGATED TO PAY 
PERIODIC RENT AND ALL OTHER AMOUNTS DUE UNDER EACH LEASE REGARDLESS OF ANY 
DEFECT IN OR DAMAGE TO THE EQUIPMENT, LOSS OF POSSESSION OR USE OF THE 
EQUIPMENT OR DESTRUCTION OF THE EQUIPMENT FROM ANY CAUSE WHATSOEVER. LESSEE'S 
OBLIGATIONS UNDER EACH LEASE SHALL CONTINUE UNTIL SPECIFICALLY TERMINATED AS 
PROVIDED THEREIN. LESSEE IS NOT ENTITLED TO ANY ABATEMENT, REDUCTION, 
RECOUPMENT, DEFENSE, OR SET-OFF AGAINST PERIODIC RENT OR OTHER AMOUNTS DUE TO 
LESSOR UNDER EACH LEASE, WHETHER ARISING OUT OF SUCH LEASE (INCLUDING ANY 
BREACH, DEFAULT OR MISREPRESENTATION OF LESSOR) OR OUT OF LESSOR'S STRICT 
LIABILITY OR NEGLIGENCE, OR OTHERWISE.

3.  TERM.  The term of this Agreement shall commence on the Effective Date 
and shall continue in effect thereafter as long as any Lease remains in 
effect. The term of each Lease shall commence on the Lease Commencement Date 
as set forth in a Delivery and Acceptance Certificate signed by the Lessee in 
substantially the form annexed hereto as Annex B (the 'Lease Commencement 
Date') and shall continue thereafter for the lease term set forth in the 
applicable Equipment Schedule (the 'Lease Term'). Unless Lessee shall have 
given due notice of the exercise of one of the options available to Lessee 
under Section 13 hereof or shall have given Lessor written notice of 
nonrenewal at least 30 days prior to the expiration of any Lease Term, such 
Lease Term shall automatically renew for successive monthly periods until 
terminated by Lessee or Lessor upon at least 30 days prior written notice.

4.  RENT.  Lessee agrees to pay Periodic Rent in the amount specified in each 
Equipment Schedule (the 'Periodic Rent'). The initial Periodic Rent payment 
for each Lease shall be due on the date the Equipment is accepted by Lessee 
and subsequent Periodic Rent payments shall be due as specified on the 
applicable Equipment Schedule. All Periodic Rent and other amounts payable 
under each Lease (collectively referred to herein as 'Rent') shall be paid to 
Lessor at the address specified on the applicable Equipment Schedule or at 
such other address as Lessor may specify thereafter in writing. If any 
Periodic Rent or other Rent payment is not paid within 10 days of its due 
date, Lessee agrees to pay as additional Rent a late charge equal to 5% of 
such unpaid Rent payment plus 1 1/2% per month of any amount due and unpaid 
for more than 30 days, or, if less, the maximum amount permitted under 
applicable law. Periodic Rent payable during any automatic renewal period 
described in Section 3 hereof shall be equal to the highest Periodic Rent 
payable during the initial Lease Term.

    Lessee hereby agrees that the amount of the Periodic Rent payments and 
Purchase Option Price under each Lease shall be adjusted to reflect any 
change in the Cost to Lessor set forth in the applicable Equipment Schedule as 
a result of Equipment change orders or returns, invoicing errors or other 
similar events. In the event of any such adjustment, Lessor will furnish to 
Lessee a written notice stating the final Cost to Lessor, Periodic Rent and 
Purchase Option Price.

5.  DISCLAIMER OF WARRANTIES.  LESSEE ACKNOWLEDGES AND AGREES THAT: (a) EACH 
ITEM OF EQUIPMENT IS OF A TYPE, DESIGN, QUALITY AND MANUFACTURE SELECTED BY 
LESSEE, ACCEPTABLE TO LESSEE AND SUITABLE FOR LESSEE'S PURPOSES; (b) LESSOR 
IS NOT THE MANUFACTURER OR SUPPLIER OF THE EQUIPMENT OR THE REPRESENTATIVE OF 
EITHER; (c) LESSOR IS NOT REQUIRED TO ENFORCE ANY MANUFACTURER'S WARRANTIES 
ON BEHALF OF ITSELF OR LESSEE; (d) LESSOR HAS NOT INSPECTED AND IS NOT 
OBLIGATED TO INSPECT THE EQUIPMENT; (e) LESSOR LEASES THE EQUIPMENT TO LESSEE 
AS IS WITHOUT WARRANTY OR REPRESENTATION EITHER EXPRESS OR IMPLIED, AND THE 
LESSOR EXPRESSLY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, AS TO (i) THE 
TITLE, CONDITION, FITNESS FOR USE FOR A PARTICULAR PURPOSE, DESIGN, 
COMPLIANCE WITH SPECIFICATIONS, OPERATION, OR MERCHANTABILITY THEREOF, (ii) 
THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCERNABLE, (iii) THE 
ABSENCE OF INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT OR (iv) ANY 
OTHER MATTER WHATSOEVER, IT BEING AGREED THAT ALL SUCH RISKS, AS BETWEEN THE 
LESSOR AND THE LESSEE, ARE TO BE BORNE BY THE LESSEE.

6.  USE, OPERATION AND RETURN OF EQUIPMENT.

    (a) Lessee agrees at its own expense to: (i) maintain the Equipment in 
good appearance and condition, reasonable wear and tear excepted; and (ii) 
use the Equipment in the manner for which it was intended and in compliance 
with all applicable laws and manufacturer requirements and recommendations.

    (b) Lessee agrees not to attach to the Equipment any accessory, 
equipment, or device not leased from Lessor unless it is easily removable 
without damaging the Equipment. Lessee agrees to pay all costs for parts, 
alterations, and additions to the Equipment (including those required by 
law), all of which immediately shall become the property of Lessor. Lessor 
and Lessee intend that the Equipment shall remain personal property to Lessor.

    (c) Provided that no Default, as defined herein, has occurred and is 
continuing, Lessee is authorized on behalf of Lessor to enforce in its own 
name (and at its own expense) any warranty, indemnity, or rights to damages 
relating to the Equipment which Lessor has against the supplier of such 
Equipment.


Form:         ML1001                                             Page 1 of 4
Rev: August 29, 1997




STEELCASE FINANCIAL SERVICES INC.
A STEELCASE COMPANY
-------------------------------------------------------------------------------
LIBERATE TECHNOLOGIES                                                     12809

     (d) Not later than the expiration date of each Lease Term, Lessee 
agrees, at its own expense and risk, to: (i) effect any repairs necessary to 
place the applicable Equipment in the same condition as when received by 
Lessee, reasonable wear and tear excepted; (ii) cause such Equipment to be 
disassembled and crated in a workmanlike manner in accordance with the 
manufacturer's recommendations (if any); and (iii) deliver such Equipment, 
freight prepaid, to a carrier selected by Lessor for shipment to a location 
in the continental U.S. selected by Lessor. 'Reasonable wear and tear' does 
not include (i) burns, tears in material or large scratches, gouges, dents, 
discolorations or stains, (ii) damage to drawers, runners, or locks such that 
they are not in good working order or (iii) the loss of all keys for any 
locks.

     (e) If Lessee shall, for any reason whatsoever, fail to return any 
Equipment at the time required by the applicable Lease, the obligations of 
Lessee as provided in such Lease shall continue in effect with respect to 
such Equipment until such Equipment is returned to the Lessor, and the amount 
of each Periodic Rent payment shall be equal to the highest Periodic Rent 
payment during the Lease Term of such Lease. However, this Section 6(e) shall 
not be construed as permitting Lessee to fail to meet its obligation to 
return the Equipment in accordance with the requirements of the applicable 
Lease or constitute waiver of any Default.

7.   LOSS OR DAMAGE. Lessee shall bear the risk of any disappearance of, 
damage to or loss of any item of Equipment from any cause whatsoever (a 
'Casualty Occurrence'). Lessee shall promptly notify Lessor in writing of any 
Casualty Occurrence. Upon a Casualty Occurrence: (a) if the affected 
Equipment is repairable, Lessee shall, at Lessee's expense, promptly restore 
the Equipment to good repair, condition and working order in accordance with 
the manufacturer's recommendations and to the reasonable satisfaction of 
Lessor; or (b) if the affected Equipment is an actual or constructive total 
loss or otherwise is not repairable, Lessee shall pay to Lessor on or before 
the next Periodic Rent Payment Date (such payment date, the 'Casualty Payment 
Date') an amount equal to the sum of (i) all amounts due and unpaid under the 
applicable Lease as of the Casualty Payment Date (including all Periodic Rent 
payments in respect of such Equipment, which shall be pro rated to the 
Casualty Payment Date, and any indemnity obligations), plus (ii) the present 
value of all future Periodic Rent payments for such Equipment, discounted on 
an annual basis at a discount rate equal to the ask yield to maturity of the 
U.S. Treasury Bill issue maturing in 180 days (or the issue maturing closest 
thereto), as published in the Wall Street Journal for the immediately 
preceding Rent Payment Date (or the next preceding business day if such date 
is not a business day), which Lessee agrees is a commercially reasonable 
rate (the 'Discount Rate') from the scheduled payment dates to the Casualty 
Payment Date, plus (iii) the present value of the greater of (x) the 
anticipated residual value of the affected Equipment at the end of the 
relevant Lease Term, as determined by the Lessor for purposes of calculating 
the relevant Periodic Rent and Purchase Option Price or (y) the then expected 
fair market value of the affected Equipment at the end of the relevant Lease 
Term, in each case discounted on an annual basis at the Discount Rate from 
the expiration of the Lease Term to the Casualty Payment Date; provided, that 
if the Purchase Option Price is a fixed amount, the value calculated pursuant 
to the foregoing clause (iii) shall not exceed the present value of such 
fixed Purchase Option Price, discounted on an annual basis at the Discount 
Rate from the expiration date of the relevant Lease term to the Casualty 
Payment Date. If Lessee is required to repair the affected Equipment pursuant 
to clause (a) of the foregoing sentence, the insurance proceeds actually 
received by Lessor, if any, pursuant to Section 8 hereof shall be applied 
first to pay any amounts then due under this Agreement or any Lease and then 
shall be paid to Lessee upon proof satisfactory to Lessor that such repair 
has been completed as required herein. In the event Lessee is obligated to pay 
to Lessor the amounts set forth in clause (b) of the foregoing sentence, 
Lessee shall be entitled to a credit against such amounts equal to the amount 
of insurance proceeds actually received by Lessor, if any, pursuant to 
Section 8 hereof on account of such Equipment and upon payment in full of all 
amounts set forth in such clause (b), Lessor shall assign to Lessee and 
Lessee's insurers, as their interests may appear, all of Lessor's interest 
in such Equipment on an as is, where is basis, without representation or 
warranty, express or implied, and the Lease in respect of such Equipment 
shall terminate.

8.   INSURANCE. Lessee agrees, at its own expense, to keep the Equipment 
insured with companies acceptable to Lessor and to maintain primary coverage 
consisting of (a) actual cash value all risk insurance on the Equipment, 
naming Lessor and Lessee as sole loss payees, as their interests may appear, 
and (b) combined limit public liability and property damage insurance of not 
less than $1,000,000 per occurrence (or such other amounts as Lessor 
reasonably may require by notice to Lessee) naming Lessee as insured and 
Lessor as an additional insured. The insurance shall provide for not less 
than 30 days prior written notice to Lessor of any material change, 
cancellation or non-renewal of the policy. Premiums for all such insurance 
shall be prepaid. Lessee shall deliver evidence of such insurance to Lessor 
upon request, and shall promptly provide to Lessor all information pertinent 
to any occurrence which may become the basis of a claim. Lessee will not make 
claims adjustments with insurers except with Lessor's prior written consent.

9.   REPRESENTATIONS AND WARRANTIES OF LESSEE. Lessee represents and warrants 
to Lessor that as of the date hereof:

     (a) Lessee has adequate power and capacity to enter into this Agreement 
and each Lease, any documents relating to the purchase of Equipment and any 
other documents required to be delivered in connection herewith or therewith 
(collectively, the 'Documents'); the Documents have been duly authorized, 
executed, and delivered by Lessee and constitute valid, legal, and binding 
agreements, enforceable in accordance with their terms; there are no legal or 
other proceedings presently pending or threatened against Lessee which may 
impair its ability to perform under the Documents or affect the validity 
thereof; and all information which has been supplied to Lessor is accurate and 
complete.

     (b) Lessee's execution of the Documents and its leasing of the Equipment 
does not and will not (i) violate Lessee's organizational documents or any 
judgment, order or law applicable to this Agreement or any Lease or Lessee; 
(ii) violate or require consent under any agreement to which Lessee is a 
party or to which Lessee's property is subject; or (iii) result in the creation 
of any lien, security interest, or other encumbrance upon the Equipment 
except in favor of the Lessor.

     (c) All financial data of Lessee or of any consolidated group of 
companies of which it is a member ('Lessee Group') delivered to Lessor have 
been prepared in accordance with generally accepted accounting principles 
applied on a consistent basis with prior periods and fairly present the 
financial position and results of operations of Lessee, or of the Lessee 
Group, as of the stated date and for the indicated periods. Since the date of 
the most recently delivered financial data, there has been no material 
adverse change in the financial or operating condition of the Lessee or of 
the Lessee Group.

     (d) If Lessee is a corporation, partnership or limited liability 
company, it is and will be validly existing and in good standing under the 
laws of the state of its organization; the persons signing the Lease are 
acting with the full authority of the board of directors, partners, members 
or managers, as the case may be, and such persons hold the offices indicated 
below their signatures, which are genuine.

10.  COVENANTS OF LESSEE.

     (a) Lessee agrees that title to each item of Equipment shall remain with 
the Lessor at all times and the Lessee shall have no right, title or interest 
therein except as expressly set forth in each Lease. Lessee agrees that it 
will keep the Equipment free and clear from all claims, liens, and 
encumbrances (except in favor of the Lessor) and will not assign, sublet, or 
grant a security interest in the Equipment or in any Lease without Lessor's 
prior written consent. As additional security for the performance of Lessee's 
obligations hereunder and under each Lease, Lessee hereby grants to Lessor a 
first priority security interest in its interest in the Equipment and any 
proceeds thereof. Lessee irrevocably appoints Lessor (acting directly or 
through any agent) its attorney-in-fact to execute such UCC financing 
Statements as Lessor shall deem necessary or expedient to perfect or protect 
such security interest, and Lessee agrees to execute and deliver, at Lessee's 
expense, such other or additional documents or instruments as Lessor shall 
reasonably deem necessary or expedient to perfect or protect such security 
interest. Lessee shall notify Lessor in writing, with full particulars, 
within 10 days after it learns of the attachment of any lien to any Equipment 
and of the Equipment's location.


Form:         ML1001                                             Page 2 of 4
Rev: August 29, 1997



STEELCASE FINANCIAL SERVICES INC.
A STEELCASE COMPANY
-------------------------------------------------------------------------------

LIBERATE TECHNOLOGIES                                                     12809


    (b) LESSEE COVENANTS AND AGREES THAT THE EQUIPMENT WILL NOT BE USED FOR 
PERSONAL, FAMILY OR HOUSEHOLD PURPOSES, AND WILL BE USED SOLELY FOR 
COMMERCIAL OR BUSINESS PURPOSES.

    (c) Lessee shall not relocate any unit of Equipment from the Equipment 
Location set forth in the applicable Equipment Schedule without the prior 
written approval of Lessor (which shall not be unreasonably withheld). Lessee 
agrees to notify Lessor immediately in writing of any change in Lessee's 
corporate or business name or in the location of its chief executive office.

    (d) Upon reasonable written notice to Lessee, Lessor may inspect the 
Equipment during normal business hours. At Lessor's request, Lessee will 
attach identifying labels to each unit of Equipment in a location reasonably 
suitable for such labels and in a form approved by Lessor showing Lessor's 
ownership interest therein.

    (e) Lessor may assign this Agreement and/or any Lease. Lessee waives and 
agrees not to assert against any assignee any defense, set off, recoupment, 
claim or counterclaim which Lessee has or may at any time have against Lessor 
for any reason whatsoever; provided that no such assignment shall extinguish 
or impair any rights Lessee may have against Lessor.

    (f) Upon Lessor's request, Lessee shall within 90 days of the close of 
each fiscal year of Lessee, deliver to Lessor duplicate copies of Lessee's 
balance sheet and profit and loss statement, certified by a recognized firm 
of certified public accountants. Upon request, Lessee will deliver to Lessor 
duplicate copies of Lessee's most recent quarterly financial report.

    (g) At the request of Lessor, upon execution of this Agreement and each 
Equipment Schedule pursuant hereto, Lessee shall provide Lessor with copies 
of the resolutions or other actions or documents authorizing such execution, 
certified by an appropriate officer of Lessee and such other documents as 
Lessor may reasonably request.

    (h) If more than one Lessee is named in this Lease, the liability of each 
Lessee shall be joint and several.

    (i) Lessee hereby agrees that any action by Lessee against Lessor for any 
default under this Agreement or any Lease shall be commenced within one year 
after the cause of action accrues.

    (j) Lessee acknowledges that Lessee has selected the manufacturer and 
supplier of the Equipment to be leased under each Lease and that: (i) Lessor 
has not selected, manufactured or supplied any Equipment and will acquire 
Equipment only in connection with the applicable Lease thereof; and (ii) 
Lessee is entitled under Article 2A of the Uniform Commercial Code (the 
'UCC') to the promises and warranties, including those of any third party, 
provided to Lessor by the supplier of the Equipment in connection with or as 
part of the contract by which Lessor acquires the Equipment, and Lessee is 
entitled to communicate with the supplier of the Equipment and to receive an 
accurate and complete statement of those promises and warranties, including 
any disclaimers and limitations thereof or of any remedies.

    (k) To the extent permitted by applicable law, Lessee hereby waives all 
rights and remedies conferred upon a lessee in respect of each Lease under 
Article 2A of the UCC.

    (l) Lessee acknowledges and agrees that to the extent that the Periodic 
Rent under any Lease is deemed to include finance charges ('interest'), 
Lessee agrees to pay all such Interest. The rate of any such deemed Interest 
is not intended to exceed the maximum amount of interest permitted to be 
charged or collected by applicable law. If such Interest exceeds such 
maximum, then the Interest payable will be reduced to the legally permitted 
maximum amount of interest, and any excessive interest will be used to reduce 
the deemed principal amount of Lessee's obligation or refunded.

11. INDEMNIFICATION.

    (a) Taxes. Lessee agrees to indemnify and hold Lessor harmless on an 
after tax basis from all fees, taxes (excluding taxes on Lessor's net 
income), levies, assessments or withholdings of any nature together with 
penalties and interest (collectively, 'Taxes') assessed against Lessor, Lessee, 
this Agreement, any Lease or the Equipment, arising out of the purchase 
(including purchase by Lessee), sale, ownership, delivery, leasing, 
possession, use, operation, or return of the Equipment or any proceeds 
thereof. Lessee shall pay Lessor on demand as additional Rent any Taxes paid 
by Lessor.

    (b) General. Lessee agrees, whether or not any Equipment Schedules are 
executed hereunder, to assume liability for, and does hereby agree to 
indemnify, protect, save and keep harmless the Lessor from and against any 
and all liabilities, obligations, losses, damages, penalties, claims 
(including claims by any employee of the Lessee or any of its contractors), 
actions, suits and related costs, expenses and disbursements, including 
reasonable legal fees and expenses of whatsoever kind and nature ('Losses), 
imposed on, asserted against or incurred by Lessor, in any way relating to or 
arising out of (i) this Agreement or any Lease, including the enforcement 
thereof or (ii) the construction, financing, purchase, acceptance, rejection, 
installation, ownership, delivery, lease, sublease, possession, use, 
operation, maintenance, repair, condition, sale (including pursuant to 
Section 12 hereof), abandonment or return of the Equipment (including 
without limitation latent and other defects, whether or not discoverable by 
the Lessor or the Lessee, and any claim for patent, trademark or copyright 
infringement or arising under the strict liability doctrine in tort); 
provided, that Lessee shall not be obligated to indemnify Lessor for any 
Losses to the extent resulting from the Lessor's willful misconduct, gross 
negligence or willful breach of this Agreement or any Lease.

12. DEFAULT.

    (a) Each of the following events shall constitute a default hereunder (a 
'Default') whether voluntary or involuntary, by operation of law or otherwise: 
(i) Lessor has not received a Periodic Rent payment or any other Rent within 
10 days after its due date; or (ii) Lessee violates any other term of this 
Agreement or any Lease and fails to correct such violation within 30 days after 
written notice thereof from Lessor; or (iii) Lessee or any guarantor becomes 
insolvent, is liquidated or dissolved, stops doing business, or assigns its 
rights or property for the benefit of creditors; or (iv) a petition is filed 
by or against Lessee or any guarantor under Title 11 of the United States 
Code or any successor or similar law; or (v) (for individuals) Lessee or any 
guarantor dies or a guardian is appointed for such person; or (vi) Lessee (or 
any affiliate) is in default under or fails to fulfill the terms of any other 
agreement between Lessee and lessor or any affiliate of either; or (vii) the 
Equipment or any part thereof is abused, illegally used or misused; or (viii) 
any representation or warranty made by Lessee or any guarantor herein or in 
any Lease or in any statement, certificate or agreement furnished in 
connection therewith shall prove to be untrue in any material respect as of 
the date made.

    (b) At any time after a Default hereunder and during the continuance 
thereof, Lessor may declare this Agreement and each Lease to be in default 
and at any time thereafter the Lessor may do any one or more of the 
following: (i) cancel this Agreement and/or all or part of any Lease; (ii) 
proceed by appropriate action to enforce performance at Lessee's expense of 
the applicable covenants and terms of the applicable Lease or to recover 
damages (including reasonable attorneys' fees) for the breach thereof; (iii) 
demand that the Lessee, and in such case the Lessee shall, return all or any 
part of the Equipment promptly in the manner required by and in accordance 
with Section 6 hereof as if such Equipment were being returned at the end of 
the Lease Term; (iv) enter, with or without legal process, any premises and 
take possession of all or any part of the Equipment without any liability to 
Lessee by reason of such entry; (v) sell, lease or otherwise dispose of all 
or any part of the Equipment at a public or private sale, which may be 
conducted where the Equipment is then located, with or without display of the 
Equipment; (vi) declare immediately due and payable all sums due and to 
become due under this Agreement and each Lease; (vii) demand that the Lessee, 
and in such case the Lessee shall, pay to Lessor as liquidated damages for 
loss of a


Form:         ML1001                                             Page 3 of 4
Rev: August 29, 1997




STEELCASE FINANCIAL SERVICES INC.
A STEELCASE COMPANY
-------------------------------------------------------------------------------
LIBERATE TECHNOLOGIES                                                     12809

bargain and not as a penalty (the 'Liquidated Damages') an amount equal to 
the sum of (A) all amounts due and unpaid under each Lease (including any 
indemnity obligations) plus interest thereon from the due date thereof at a 
per annum interest rate equal to the prime rate of interest then in effect as 
published in The Wall Street Journal, plus 2 percentage points (the 'Default 
Rate:); plus (B) the present value of all future Periodic Rent payments for 
such Equipment, discounted on an annual basis at the Discount Rate from the 
scheduled payment dates; plus (C) the present value of the greater of (x) the 
anticipated residual value of the affected Equipment at the end of the 
relevant Lease Term, as determined by the Lessor for purposes of calculating 
the relevant Periodic Rent and Purchase Option Price or (y) the then expected 
fair market value of the affected Equipment at the end of the relevant Lease 
Term, in each case discounted on an annual basis at the Discount Rate from 
the expiration date of the relevant Lease Term, provided that, 
notwithstanding the foregoing, if the Purchase Option Price is a fixed 
amount, the value calculated pursuant to this clause (C) shall not exceed the 
present value of such fixed Purchase Option Price, discounted on an annual 
basis at the Discount Rate from the expiration date of the relevant Lease 
Term; plus (D) all commercially reasonable costs and expenses incurred by 
Lessor in enforcing Lessor's rights hereunder or under any Lease (including 
without limitation all costs of repossession, recovery, storage, repair, 
sale, re-lease and reasonable attorneys' fees), together with interest 
thereon at the Default Rate; or (viii) exercise any other right or remedy 
which may be available to it under the UCC or any other applicable law. The 
proceeds of any sale or lease will be applied in the following order of 
priorities: (1) to pay all of Lessor's expenses in taking, holding, preparing 
for sale or lease and disposing of Equipment, including all reasonable 
attorneys' fees and legal expenses; then (2) to pay any late charges and all 
interest accrued at the Default Rate; then (3) to pay accrued but unpaid 
Periodic Rent payments, then (4) to pay any unpaid Rent, Liquidated Damages 
and all other due but unpaid sums. Any remaining proceeds shall be paid to 
Lessee. If the proceeds of any sale or lease are not enough to pay the 
amounts owed to Lessor under this Section, Lessee will pay the deficiency.

     (c) In case of failure by the Lessee to procure or maintain insurance, 
or to pay any fees, assessments, charges or taxes arising with respect to the 
Equipment, Lessor shall have the right, but shall not be obligated, to effect 
such insurance or pay such fees, assessments, charges or taxes, as the case 
may be, and, in that event, the cost thereof shall be payable by Lessee to 
Lessor upon demand, together with interest at the Default Rate from the date 
of disbursement by Lessor.

     (d) Lessor's remedies for Default may be exercised instead of or in 
addition to each other or any other legal or equitable remedies. Lessor has 
the right to set off any sums received from any source (including insurance 
proceeds) against Lessee's obligations under each Lease. Lessee waives its 
right to object to the notice of the time or place of sales or lease and to 
the manner and place of any advertising. Lessee waives any defense based on 
statutes of limitations or laches in actions for damages. Lessor's waiver of 
any Default is not a waiver of its rights with respect to a different or 
later Default.

13.  OPTIONS.

     So long as no Default has occurred and is continuing, upon the 
expiration of any Lease, Lessee shall have the option (i) to purchase all but 
not less than all of the Equipment leased under such Lease on an AS IS, WHERE 
IS basis without representation or warranty, for a cash purchase price equal 
to the lesser of the Purchase Option Price (plus applicable sales tax) stated 
on the applicable Equipment Schedule or the Equipment's Fair Market Value 
(plus any applicable sales taxes) determined as of the end of the applicable 
Lease Term; or (ii) to extend the Lease Term of such Lease at the then Fair 
Market Rental of the Equipment for an additional 24 months, or such other 
term as may be approved by Lessor in its sole discretion. Lessee may exercise 
the foregoing options only by giving irrevocable written notice thereof to 
Lessor at least 90 days before the end of the Lease Term or, if the Lease 
Term has been automatically renewed for one or more monthly periods as 
provided in Section 3 hereof, at least 30 days before the end of the Lease 
Term. If the Lease is renewed, the Lessee's obligations (other than the 
amount of the Periodic Rent payments) shall remain unchanged. 'Fair Market 
Value' or 'Fair Market Rental' means the price or rental which a willing 
buyer or lessee (who is neither a lessee in possession nor a used equipment 
dealer) would pay for the Equipment in an arm's length transaction to a 
willing seller or lessor who is under no compulsion to sell or lease. In 
determining 'Fair Market Value,' the Equipment shall be assumed to have been 
maintained as required by the Lease and returned in full compliance with 
Section 6(d) hereof. In determining 'Fair Market Rental,' the equipment shall 
be assumed to have been maintained as required by the Lease and, in the case 
of Equipment which requires installation, to be installed in the facility of 
the prospective lessee.

14.  MISCELLANEOUS.

     (a) Time is of the essence of this Lease. So long as there is no 
Default, Lessor shall not interfere with Lessee's quiet enjoyment of the 
Equipment.

     (b) All required notices will be considered to have been given if sent by 
registered or certified mail or overnight courier service to the Lessor or 
Lessee at the address stated on the applicable Equipment Schedule, or at such 
other place as such addressee may have designated in writing.

     (c) Each Lease constitutes the entire agreement of the parties with 
respect to the lease of the Equipment and supersedes and incorporates all 
prior oral or written agreements or statements. Neither this Agreement nor 
any Lease may be changed except by written agreement signed by authorized 
representative of the party against whom it is to be enforced. If any 
provision of this Agreement or any Lease is declared invalid under applicable 
law, the affected provision will be considered omitted or modified to conform 
to applicable law. All other provisions will remain in full force and effect.

     (d) All of Lessor's rights (including indemnity rights) under this 
Agreement and each Lease shall survive any expiration or termination of each 
Lease and this Agreement and shall be enforceable by Lessor.

     (e) This Agreement and each Lease shall be deemed to be made in Michigan 
and shall be governed by and construed in accordance with internal Michigan 
law applicable to contracts made and performed in Michigan without regard to 
conflicts of laws principles. LESSEE WAIVES ALL RIGHTS TO TRIAL BY JURY IN 
ANY LITIGATION ARISING FROM OR RELATED TO THIS AGREEMENT OR ANY LEASE AND 
LESSEE SUBMITS TO THE JURISDICTION OF THE FEDERAL DISTRICT COURT FOR THE 
WESTERN DISTRICT OF MICHIGAN OR ANY STATE COURT OF COMPETENT JURISDICTION 
WITHIN KENT COUNTY, MICHIGAN AND WAIVES ANY RIGHT TO ASSERT THAT ANY ACTION 
INSTITUTED BY LESSOR IN ANY SUCH COURT IS IN THE IMPROPER VENUE OR SHOULD BE 
TRANSFERRED TO A MORE CONVENIENT FORUM.

LESSOR:                                LESSEE:

STEELCASE FINANCIAL SERVICES, INC.     LIBERATE TECHNOLOGIES

                                       /s/ Mitchell E. Kertzman
----------------------------------     ----------------------------------------
Signature                              Signature

                                       Mitchell E. Kertzman
----------------------------------     ----------------------------------------
Print or Type Name                     Print or Type Name

                                       CEO and President
----------------------------------     ----------------------------------------
Print or Type Title                    Print or Type Title

                                       August 16, 1999
----------------------------------     ----------------------------------------
Date                                   Date


Form:         ML1001                                             Page 4 of 4
Rev: August 29, 1997