<PAGE>

                                 OFFICE LEASE                     Exhibit 10.38

                                    BETWEEN

                      BOARD OF ADMINISTRATION AS TRUSTEE
                            FOR THE POLICE AND FIRE
                          DEPARTMENT RETIREMENT FUND
                      ----------------------------------

                                  "LANDLORD"
                                  ----------


                                      AND


                        FIRSTWORLD COMMUNICATIONS, INC.
                        -------------------------------

                                   "TENANT"
                                   --------

                                 FOR SPACE AT
                             THE BUILDING KNOWN AS

                                "CRESCENT VII"
                       ---------------------------------

                           8390 E. Crescent Parkway
                           ------------------------
                          Greenwood Village, Colorado
                          ---------------------------



                             Dated:  June 28, 1999
                                     -------  ----

<PAGE>

                               TABLE OF CONTENTS

1.  PREMISES; BUILDING; BUILDING COMPLEX; COMMON AREAS.......................  3

2.  LEASE TERM...............................................................  3

3.  RENT; SECURITY DEPOSIT...................................................  3
     3.1.  Base Rent.........................................................  3
     3.2.  Security Deposit..................................................  3

4.  TENANT FINISH AND ACCEPTANCE OF THE PREMISES
     4.1.  Landlord's Work...................................................  4
     4.2.  Postponement of Lease Commencement Date...........................  4
     4.3.  Acceptance of Premises............................................  4
     4.4.  Partial Months; Lease Commencement Certificate....................  5

5.  OPERATING EXPENSES ......................................................  5
     5.1.  Definitions Regarding Operating Expenses..........................  5
     5.2.  Payment of Excess Operating Expenses .............................  7
     5.3.  Partial Years ....................................................  8
     5.4.  Survival of Tenant's Obligation...................................  8
     5.5.  Tenant's Right to Question Excess Operating Expenses..............  8
     5.6.  Operating Expense Adjustments ....................................  8

6.  SERVICES.................................................................  9
     6.1.  Landlord's Services...............................................  9
     6.2.  Excess Usage......................................................  9
     6.3.  Additional Services to Tenant.....................................  9
     6.4.  Interruption of Services.......................................... 10
     6.5.  Notice to Landlord................................................ 10

7.  QUIET ENJOYMENT.......................................................... 10

8.  USE AND OCCUPANCY........................................................ 10

9.  MAINTENANCE AND REPAIRS.................................................. 11
     9.1.  Landlord's Obligations............................................ 11
     9.2.  Tenant's Obligations.............................................. 11

10. ALTERATIONS AND ADDITIONS................................................ 11
     10.1. Alterations by Tenant ............................................ 11
     10.2. Ownership and Removal of Alterations.............................. 12
     10.3. Landlord's ADA Alterations ....................................... 13

11. ENTRY BY LANDLORD ....................................................... 13

12. MECHANICS LIENS ......................................................... 13

13. SUBLETTING AND ASSIGNMENT
     13.1. Tenant's Right.....................................................13



                                       i
<PAGE>

    13.2. Other Restrictions; What Constitutes an Assignment..  14
    13.3. Certain Subleases...................................  14

14. DAMAGE TO PROPERTY; CLAIMS................................  14
    14.1. Landlord Not Liable.................................  14
    14.2. Tenant's Indemnity..................................  15

15. INSURANCE.................................................  15
    15.1. Landlord's Insurance................................  15
    15.2. Tenant's Insurance..................................  15
    15.3. Waiver of Claims and Subrogation....................  16

16. DAMAGE OR DESTRUCTION TO BUILDING.........................  16
    16.1. Repair of Damage....................................  16
    16.2. Termination of Lease................................  17

17. CONDEMNATION..............................................  17

18. ESTOPPEL CERTIFICATE......................................  17
    18.1. Duty to Provide.....................................  17
    18.2. Tenant's Failure to Deliver.........................  17

19. DEFAULT BY TENANT.........................................  18
    19.1. Event of Default....................................  18
    19.2. Remedies of Landlord................................  19
    19.3. Late Charges and Interest...........................  20
    19.4. Mitigation..........................................  21
    19.5. No Waiver...........................................  21
    19.6. Landlord's Lien.....................................  21

20. SUBORDINATION AND ATTORNNMENT.............................  22
    20.1. General.............................................  22
    20.2. Lease Modifications.................................  22

21. SURRENDER AND HOLDING OVER................................  22
    21.1. Surrender...........................................  22
    21.2. Property Not Removed................................  22
    21.3. Holding Over........................................  23

22. LANDLORD DEFAULT..........................................  23

23. NOTICE....................................................  23

24. RULES AND REGULATIONS.....................................  24

25. PARKING...................................................  24

26. RIGHT TO RELOCATE TENANT..................................  24

27. RIGHT TO DEMOLISH BUILDING................................  24

                                      ii
<PAGE>

    27.1.  Notice of Termination.....................       24
    27.1.  Surrender of Premises.....................       24

28. MISCELLANEOUS
    28.1.  Limitation of Landlord's Liability........       25
    28.2.  No Merger.................................       25
    28.3.  Landlord's Use of Common Areas............       25
    28.4.  Covenants are Independent.................       25
    28.5.  Severability..............................       25
    28.6.  Captions and Terms........................       25
    28.7.  Binding Effect; Governing Law.............       26
    28.8.  Tenant's Authority........................       26
    28.9.  Joint and Several.........................       26
    28.10. Acts Binding Landlord.....................       26
    28.11. Changes in the Building; Use of Names.....       26
    28.12. Change in Light or View...................       26
    28.13. No Other Agreements; Amendments...........       26
    28.14. Brokers...................................       27
    28.15. Recordation...............................       27
    28.16. Execution Required........................       27
    28.17. Attorney's Fees...........................       27
    28.18. Time of Essence; Effective Dates..........       27

Exhibits:
---------

EXHIBIT A - Floor Plan of Leased Premises
EXHIBIT B - Legal Description of Building
EXHIBIT C - Tenant Improvement Agreement (Work Letter)
EXHIBIT D - Rules and Regulations
EXHIBIT E - Lease Commencement Certificate

                                      iii
<PAGE>

                                 OFFICE LEASE

                                    PART I

                            BASIC LEASE TERM SHEET

BUILDING:              CRESCENT VII
                       ---------------------------------------------------------
                       8390 E. Crescent Parkway, Greenwood Village, Colorado
                       ---------------------------------------------------------

LEASE DATE:
                       ---------------------------------------------------------
                       Board of Administration as Trustee for the Police and
LANDLORD:              Fire Department Retirement Fund
                       ---------------------------------------------------------
                       Address:  777 North First Street, #750
                                 -----------------------------------------------
                                     San Jose, CA 95112-6311
                       ---------------------------------------------------------
TENANT:                FIRSTWORLD COMMUNICATIONS, INC., a Delaware Corporation
                       ---------------------------------------------------------
                       Address: Prior to 08/01/99 - 7100 E. Belleview Ave., #210
                                -----------------------------------------------
                                                    Greenwood Village, CO 80111
                       ---------------------------------------------------------
                       Notice Address: After 08/01/99 - 8390 E. Crescent Pkwy,
                                       ---------------------------------------
                                       #300, Greenwood Village, CO 80111
                       ---------------------------------------------------------
BUILDING MANAGER:      DTC MANAGEMENT. LLC
                       ---------------------------------------------------------
                       Address: 8350 East Crescent Parkway. Suite 100
                                ------------------------------------------
                       Greenwood Village. CO 80111
                       ---------------------------------------------------------
LANDLORD'S BROKER:     CUSHMAN REALTY CORPORATION
                       ---------------------------------------------------------
TENANT'S BROKER:       FREDERICK ROSS & COMPANY
(if any)
                       ---------------------------------------------------------
LEASED PREMISES:       Suite Number: 300 and 200  Floor:  Third (entire) &
                                                          Second (part)
                                     -----------          ----------------
                       Address: 8390 E. Crescent Parkway,
                                ------------------------------------------------
                                Greenwood Village, CO 80111
                       ---------------------------------------------------------
                       Tenant's Rentable Area: 42,560
                                               ---------------------------------
LEASE TERM:           Lease Commencement Date: 8/l/99 (3rd floor);
                                               l/l/00 (2nd floor)
                                               ---------------------------------

                       Lease Expiration Date: 7/31/02 (Subject to termination
                                                       right outlined in Rider
                                                       to this Lease)
                                              ----------------------------------
                       Lease Term: 3 Years, plus 0 Months
                                  ---           ---
                       Note: Lease term on second floor is 31 months.


                                       1
<PAGE>

BASE RENT          Payable in monthly installments as follows:

                   Mos. 1-5:  $47,636.00     Mos. 13-24: $86,893.33
                   -----------------------------------------------------------
                   Mos. 6-12: $85,120.00     Mos. 25-36: $88,666.67
                   -----------------------------------------------------------

BASE OPERATING
EXPENSES:          Included in the base rent is a 1999 base year.
                   -----------------------------------------------------------
                   Tenant's Pro-Rata Share: 31-52% Building rentable area is
                                            ------
                   135,044

SECURITY DEPOSIT:  None
                   -----------------------------------------------------------

PARKING SPACES:    Number of Parking Spaces:  159 total spaces
                                              --------------------------------
                                               4 "A" spaces   98 surface spaces

                   Location of Parking Spaces: 16 "B" spaces  41 "B" spaces
                                               (no charge)**
                                              --------------------------------

                                                 A spaces $80.00/month
                   Parking Rate at Commencement: B spaces $60.00/month
                                                 -----------------------------

OPTIONS:           See below (*)
                   -----------------------------------------------------------

GUARANTOR:         Name:  NONE
                   -----------------------------------------------------------

                   Address:
                            --------------------------------------------------

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


THIS BASIC LEASE TERM SHEET, together with the General Provisions in Part II
and any Exhibits as Part III, all constitute the entire lease between Tenant and
Landlord for the Leased Premises, made and entered into as of the Lease Date.

[TENANT'S INITIALS APPEAR HERE]                [LANDLORD'S INITIALS APPEAR HERE]
-------------------------------                ---------------------------------
      TENANT'S INITIALS                               LANDLORD'S INITIALS

*  Tenant shall have three (3) consecutive two (2) year options to renew the
   lease. The rental rate shall be at the then prevailing market rates for like
   space at the Crescent project. Tenant will give Landlord no less than six (6)
   months notice to exercise said options.

** Landlord reserves the right to change the location of the 41 B spaces.
<PAGE>

                                    PART II

                              GENERAL PROVISIONS

1.   PREMISES: BUILDING: BUILDING COMPLEX: COMMON AREAS. In consideration of the
     ---------------------------------------------------
payment of the Rent and the performance of Landlord and Tenant's obligations
under the Lease, Landlord hereby leases to Tenant and Tenant leases from
Landlord the premises as described on the Basic Lease Term Sheet and as depicted
on Exhibit A (the "Premises") located in the building on the land described on
   ---------
Exhibit B (the "Building"), together with a non-exclusive right to use all
---------
common areas designated by Landlord for non-exclusive use of the tenants of the
Building. The Building, real property, plazas, landscaped and parking areas,
drives and related easements, common areas. and appurtenances are hereinafter
collectively sometimes called the "Building Complex" whether all or a part of
it. The "Common Areas" include the exterior plazas, Building entrances,
walkways, driveways to the Building, elevators, stairways, common lobbies and
corridors, and other areas designated from time-to-time by Landlord for the use
of all tenants of the Building; but specifically excluding (without limitation)
covered, handicapped and other parking reserved for visitors and for use by
those other than Tenant.

     All inspections of the Premises or Building Complex during construction
under the Work Letter (defined in Paragraph 4) by Tenant its employees,
architects, agents or representatives shall be at Tenant's sole risk, and Tenant
shall indemnify and hold Landlord and its employees. partners, contractors, and
Building Manager harmless from and against any and all injuries, death, damages,
loss, claims, suits and liability arising out of any such inspection, except to
the extent caused by the negligence or willful misconduct of Landlord, its
agents or employees. Tenant shall not prior to the Lease Commencement Date enter
on the Premises or permit others to do so, except during normal work hours at
the Premises and after prior notice to and approval by Landlord and Landlord's
general contractor and subject to compliance with all safety requirements and
other rules of Landlord and the general contractor and the requirements of their
insurers and applicable laws and regulations.

2.   LEASE TERM. The term of the Lease shall commence at 12:01 a.m. on the
     ----------
Lease Commencement Date and shall terminate at 12:00 midnight on the Lease
Expiration Date, as specified on the Basic Lease Term Sheet (the "Primary Lease
Term"). The Primary Lease Term, as it may be extended, is referred to as the
"Lease Term."

3.   RENT: SECURITY DEPOSIT.
     ----------------------

     3.1.  Base Rent. Tenant shall pay to Landlord base rent for the Premises
           ---------
("Base Rent") as specified on the Basic Lease Term Sheet during the Primary
Lease Term. All installments of Base Rent shall be payable in advance, on the
first day of each calendar month during the Lease Term, except that the first
monthly installment of Base Rent shall be due and payable upon execution of this
Lease by Tenant. All Base Rent and Additional Rent (as hereinafter defined),
(collectively, "Rent") shall be paid without notice, demand, deduction, offset,
or abatement (except as otherwise expressly provided in this Lease), at
Landlord's address or at such other place as Landlord from time-to-time
designates in writing. In no event will the total Rent to be paid by Tenant
during any Lease Year ever be less than the Base Rent plus Tenant's Pro Rata
Share of increases in Operating Expenses under Paragraph 5.

                                       3

<PAGE>

4.   TENANT FINISH AND ACCEPTANCE OF THE PREMISES.
     ---------------------------------------------

     4.1. Landlord's Work. If Landlord has agreed to make improvements or to
          ---------------
perform remodeling, work to the Premises, provisions with respect to any such
work are set forth in the work letter attached to this Lease as Exhibit C (the
                                                                ---------
"Work Letter"). Other than as set forth in the Work Letter, Landlord shall have
no obligations for any remodeling or other work in the Premises, and Tenant
shall accept the Premises in their "as-is" condition on the date the Premises
is Ready for Tenant.

     4.2. Postponement of Lease Commencement Date. If Landlord is to complete
          ---------------------------------------
the Tenant Finish Work (as defined in the Work Letter) and the Premises are not
Ready for Tenant on the Lease Commencement Date (except as set forth in the Work
Letter with respect to Tenant Delay), or if Landlord is delayed in delivering
the Premises to Tenant because a prior tenant falls to vacate, the Lease
Commencement Date shall be postponed until the earlier of: (i) the date the
Premises are Ready for Tenant; or (ii) the date Tenant takes occupancy of any
of the Premises, on which date all of the provisions of this Lease shall take
effect, including the payment of Rent. If the Premises are not Ready for Tenant
due to a delay caused by Landlord (and not because of a Tenant Delay, as defined
in the Work Letter), the postponement of Tenant's obligation to pay Rent shall
be in full settlement of all claims which Tenant might otherwise have by reason
of the Premises not being Ready for Tenant on the Lease Commencement Date.
"Ready for Tenant" shall mean either the date that Landlord has substantially
completed any Tenant Finish Work in the Premises to be performed by Landlord in
the Work Letter, or, if Landlord has no obligations to do Tenant Finish Work,
the date the Premises is delivered to Tenant. A certificate of substantial
completion from the architect (or other representative of Landlord) in charge of
supervising the Tenant Finish Work (if any) shall be the date the Premises are
Ready for Tenant.

     4.3. Acceptance of Premises. Taking possession of the Premises by Tenant
          ----------------------
shall be conclusive evidence that the Premises are Ready for Tenant and of
satisfactory completion of any Tenant Finish Work which Landlord has agreed to
perform in the Work Letter, subject to any punch list items that do not
materially interfere with Tenant's use of the Premises.

                                       4
<PAGE>

     4.4. Partial Months: Lease Commencement Certificate. If the Lease
          ----------------------------------------------
Commencement Date does not begin on the First day of a month, Tenant shall pay
proportionate Rent in advance for the partial month and the partial month shall
be considered part of the first Lease Year (as defined in 5.1). In the event the
Lease Commencement Date is delayed, the Lease Expiration Date shall be extended
so that the Primary Lease Term will continue for the full period set forth in
the Basic Lease Term Sheet. At the request of either parry, Landlord and Tenant
shall execute a Lease Commencement Certificate, the form of which is attached
hereto as Exhibit E, setting forth among other things the Lease Commencement
                  --
Date and the Lease Expiration Date.

5.   OPERATING EXPENSES.
     -------------------

     5.1. Definitions Regarding Operating Expenses. The following terms have the
          ----------------------------------------
following meanings with respect to their use in this Lease:

          a. "Base Operating Expenses" is the amount specified on the Basic
Lease Term Sheet. It is understood and acknowledged by Tenant that Landlord has
not made any representation or given Tenant any assurances regarding current or
Base Operating Expenses or Additional Rent resulting from the calculation of
Base Operating Expenses (any estimates provided by Landlord are non-binding
estimates only). In the event that the actual Operating Expenses during any year
are less than the Base Operating Expenses, Tenant shall not be entitled to any
refund, credit or other form of reimbursement.

*See attached Rider

          b. "Building Rentable Area" means the square footage of the Building
determined by measurement in accordance with the methods of measuring rentable
area and usable area as described in the Standard Method for Measuring Floor
Area in Office Buildings, ANSI Z65.1-1996, as promulgated by the Building Owners
and Managers Association (BOMA) International as modified for application to
Denver office buildings. Building Rentable Area is stipulated to be as shown on
the Basic Lease Term Sheet. If there is a significant change in the Building
Rentable Area as a result of an addition to the Building, partial destruction,
modification to building design. or similar cause which causes a reduction or
increase thereto on a permanent basis. Landlord shall make such adjustments in
the computations as shall be necessary to provide for any such change.

          c. "Tenant's Pro Rata Share" means the percentage specified on the
Basic Lease Term Sheet. In the event Tenant, at any time during the Lease Term,
leases additional space in the Building, Tenant's Pro Rata Share shall be
recomputed by dividing the total rentable square footage of space then being
leased by Tenant (including any additional space) by the Building Rentable Area,
and the resulting percentage figure shall become Tenant's Pro Rata Share.

          d. "Lease Year" means each calendar year during the Lease Term, except
that the first Lease Year shall begin on the Lease Commencement Date and end on
December 31 of that year, and the last Lease Year shall begin on January 1 of
the calendar year in which this Lease expires or is terminated and end on the
date it expires or terminates. If the first or last Lease Year is less than 12
months. Operating Expenses for these years shall be prorated.

          e. "Operating Expenses" means all operating expenses of any kind or
nature (except as otherwise expressly provided in this subsection) as reasonably
determined by Landlord and which are incurred in connection with the ownership,
operation and maintenance of the Building Complex. Operating Expenses shall
include, but not be limited to:

             i. All real property taxes and assessments levied against the
Building Complex by any governmental or quasi-governmental authority, including
any taxes, assessments,

                                       5
<PAGE>

reassessments, surcharges, imposition, or other service, tax or other fees of a
nature now in effect or which shall hereafter be levied on the Building Complex
as a result of the use, ownership or operation of the Building Complex or for
any other reason. whether in lieu of or in addition to, any current real estate
taxes and assessments; provided, however, in no event shall the terms "taxes" or
"assessments include any federal or state income taxes levied or assessed on
Landlord, unless those taxes are a substitute for real property taxes
(collectively referred to as "Taxes"). Expenses incurred by Landlord for tax
consultants and in contesting the amount or validity of any Taxes shall be
included in such computations. "Assessments" shall include general and special
assessments, license tax, business license fee, business license tax, commercial
rental tax, levy, charge penalty or tax, imposed by any authority having the
direct power to tax, including any city, county state or federal government, or
any school, agricultural, lighting, water, drainage or other improvement or
special district, against the Premises, the Building or Building Complex or any
legal or equitable interest of Landlord therein. For the purposes of this Lease,
any special assessments shall be deemed payable in such number of installments
as is permitted by law, whether or not actually so paid;

              ii.    Costs of cleaning and other supplies, tools, materials and
equipment;

              iii.   Costs incurred in connection with obtaining and providing
energy for the Building Complex, including costs of propane, butane, natural
gas, steam, electricity, solar energy and fuel oils, coal or any other energy
sources as well as costs for heating, ventilation, and air conditioning services
("HVAC");

              iv.    Costs of water and sanitary and storm drainage services;

              v.     Costs of security services (if any) and janitorial
services;

              vi.    Costs of maintenance, repairs, alterations, improvements
and replacements, including materials, labor, equipment and maintenance
contracts; and

              vii.   Costs of maintenance and replacement of landscaping; and
costs of maintenance, repair, resurfacing, striping and repairing parking areas
and Common Areas, including trash, ice and snow removal;

              viii.  Insurance premiums in connection with the insurance carried
by Landlord in accordance with Paragraph 15, including fire and all-risk
coverage, together with loss of rent endorsement; the part of any claim required
to be paid under the deductible portion of any insurance policy carried by
Landlord in connection with the Building Complex; public liability insurance and
any other insurance carried by Landlord on the Building Complex;

              ix.    Labor costs, including wages and other payments, costs to
Landlord of workmen's compensation and disability insurance, payroll taxes,
fringe benefits, pension, profit sharing and all legal fees and other costs or
expenses incurred in resolving any labor dispute;

              x.     Professional building management fees and costs of
Building management space occupied by the Building Manager or its agents;

              xi.    Legal, accounting, inspection, and consultation fees
(including fees charged by consultants retained by Landlord for services that
are designed to produce a reduction in Operating Expenses or to reasonably
improve the operation, maintenance or state of repair of the

                                       6
<PAGE>

Building Complex) incurred in the ordinary course of operating the Building
Complex; and a general overhead and administrative charge equal to 2% percent of
all Operating Costs.

          xii.  The costs of capital improvements and structural repairs and
replacements made in or to the Building Complex or the cost of any machinery or
equipment installed in the Building Complex in order to conform to any
applicable laws, ordinances, rules, regulations or orders of any governmental or
quasi-governmental authority having jurisdiction over the Building Complex
("Required Capital Improvement"); the costs of any capital improvements and
structural repairs and replacements designed primarily to reduce Operating
Expenses ("Cost Savings Improvements"); and a reasonable annual reserve for all
other capital improvements and structural repairs and replacements reasonably
necessary to permit Landlord to maintain the Building Complex. The expenditures
for Cost Savings Improvements shall be limited in any year to the amount of the
resulting reduction of Operating Expenses; and

          xiii. Any other expense which under generally accepted real estate
standard for Class A buildings in the Denver Tech Center area would be
considered Operating Expenses.

          f. "Operating Expenses" shall not include (i) costs of work, including
painting and decorating and tenant improvement work, which Landlord performs for
any tenant in the Building which is not for the benefit of all or most tenants
of the Building; (ii) costs of repairs or other work occasioned by fire,
windstorm or other insured casualty to the extent of insurance proceeds received
by Landlord; (iii) leasing commissions, advertising expenses, and other costs
incurred in leasing space in the Building; (iv) costs of repairs or rebuilding
necessitated by condemnation; (v) any interest on borrowed money or debt
amortization on Landlord's mortgages on the Building, except as specifically set
forth above; or (vi) depreciation on the Building.

     5.2. Payment of Excess Operating Expenses. It is hereby agreed that
          ------------------------------------
commencing with the first Lease Year and continuing each month thereafter
through the Lease Term, Tenant shall pay to Landlord as Additional Rent at the
same time as Base Rent is paid an amount equal to 1/12 of Landlord's estimate of
Tenant's Pro Rata Share of the increase in Operating Expenses for the particular
Lease Year in excess of the Base Operating Expenses (the "Excess Operating
Expense"). Landlord shall deliver to Tenant, as soon as practicable following
the end of any Lease Year, an estimate of the Excess Operating Expenses for the
new Lease Year (the "Budget Sheet"). Until receipt of the Budget Sheet, Tenant
shall continue to pay its current monthly Tenant's Pro Rata Share of Excess
Operating Expenses based upon the estimate for the preceding Lease Year. If the
Budget Sheet reflects an estimate of Tenant's Pro Rata Share of Excess Operating
Expenses for the new Lease Year greater than the amount actually paid to the
date of receipt of the Budget Sheet for the new Lease Year, Tenant shall pay
such amount to Landlord within 30 days of receipt of the Budget Sheet. Upon
receipt of the Budget Sheet Tenant shall thereafter pay the amount of its
monthly Tenant's Pro Rata Share of the Excess Operating Expenses as set forth in
the Budget Sheet. As soon as practicable following the end of any Lease Year,
but not later than May 1, Landlord shall submit to Tenant a statement in
reasonable detail describing the computations of the Excess Operating Expenses
setting forth the exact amount of Tenant's Pro Rata Share of the increase, if
any, in Operating Expenses for the Lease Year just completed, and the
difference, if any, between the actual Tenant's Pro Rata Share of the increase
in Operating Expenses for the Lease Year just completed and the estimated amount
of Tenant's Pro Rata Share of the Excess Operating Expenses for such Lease Year
(the "Statement"). Notwithstanding the foregoing, Landlord's failure to deliver
the Statement to Tenant on or before May 1 shall not be a waiver of Landlord's
rights under this Paragraph. If the actual Tenant's Pro Rata Share of the Excess
Operating Expenses for the period covered by the Statement is higher than the
estimated Tenant's Pro Rata Share of the Excess Operating Expenses which Tenant

                                       7
<PAGE>

previously paid during the Lease Year just completed. Tenant shall pay to
Landlord the difference within 30 days following receipt of the Statement from
Landlord. If the actual Tenant's Pro Rata Share of the Excess Operating Expenses
for the period covered by the Statement is less than the estimated Tenant's Pro
Rata Share of the Excess Operating Expenses which Tenant previously paid during
the Lease Year just completed, Landlord shall credit the excess against any sums
then owing or next becoming due from Tenant under this Lease. In no event will
Rent be less than Base Rent. In the event the Building is not fully occupied
during any particular Lease Year, Landlord shall adjust those Operating Expenses
which are affected by the occupancy rates for the particular Lease Year, or part
of it, as the case may be, to reflect an occupancy of not less than 95% percent
of the Building Rentable Area.

     5.3. Partial Years. If the Lease Term covers a period of less than a full
          -------------
calendar year during the first or last Lease Years, Tenant's Pro Rata Share of
the increase in Operating Expenses for the partial year shall be calculated by
proportionately reducing Operating Expenses to reflect the number of months in
that year.

     5.4. Survival of Tenant's Obligation. Landlord's and Tenant's
          -------------------------------
responsibilities with respect to the Excess Operating Expense survive the
expiration or termination of this Lease and Landlord shall have the right to
retain the Security Deposit, or so much thereof as it deems necessary, to secure
Tenant's obligations attributable to the Lease Year in which this Lease
terminates.

     5.5  Tenant's Right to Question Excess Operating Expenses. If Tenant
          ----------------------------------------------------
questions the amount of Excess Operating Expenses as shown by the Statement,
Tenant shall notify Landlord within 30 days after receipt of the Statement. If
Tenant does not give Landlord notice within that time period. Tenant shall have
waived its right to dispute the Statement. If Tenant timely gives notice, it
shall have 90 days after giving notice to hire, at Tenant's sole expense, an
accredited member of the Colorado Society of CPA's ("Tenant's Accountants"), to
examine Landlord's books and records for the purpose of verifying the accuracy
of the Statement. If Tenant's Accountants determine that an error has been made,
notice describing the error in reasonable detail must be given to Landlord
during that 90-day period, or the right to question the Statement shall be
waived. and if such a notice is given, Landlord and Tenant shall endeavor to
agree upon the matter within the following 30 days. All information disclosed
to Tenant or Tenant's Accountants in connection with any such review shall be
kept confidential by Tenant and Tenant's Accountants and shall not be disclosed
or used by Tenant or Tenant's Accountants for any reason other than to verify
information set forth in the Statement. Notwithstanding the pendency of any
dispute over any particular Statement. Tenant shall continue to pay Landlord the
amount of the adjusted monthly installments of Additional Rent based upon the
Statement until the dispute is resolved. Delay by Landlord in submitting any
Statement for any Lease Year shall not affect the provisions of this Paragraph
or constitute a waiver of Landlord's rights as set forth herein for that or any
subsequent Lease Year.

     5.6. Operating Expense Adjustments. Notwithstanding anything in this Lease
          -----------------------------
to the contrary, if any lease entered into by Landlord with any tenant in the
Building is on a "net" basis, or provides for a different basis of computation
for any Operating Expenses with respect to its leased premises, then, to the
extent that Landlord determines that an adjustment should be made in making the
computations of Operating Expenses under this Lease. Landlord may modify the
computation of Base Operating Expenses, Building Rentable Area, and Operating
Expenses for any Lease Year in order to eliminate or otherwise modify any such
expenses which are paid for in whole or in part by that tenant. Furthermore,
Landlord shall also be permitted to make such adjustments and modifications to
the provisions of this Paragraph as shall be reasonably necessary, to achieve
the intent of this Lease or the intention of the parties hereto.


                                       8
<PAGE>

6.   SERVICES.
     --------

     6.1.  Landlord's Services. Subject to the provisions of subparagraph 6.4.
           -------------------
Landlord in accordance with standards established by Landlord from, time to time
for the Building, agrees: (1) to furnish running water for use in lavatories and
drinking fountains (and to the Premises if the Space Plans for the Premises so
provide); (2) to furnish, during Ordinary Business Hours, as hereinafter
defined, heated or cooled air to the Premises as may, in the judgment of
Landlord, be reasonably required for the comfortable use and occupancy of the
Premises, provided that the requirements of this Lease for occupancy and use of
the Premises are complied with by Tenant and provided it is used only for
standard office use; (3) to provide, during Ordinary Business Hours, the general
use of passenger elevators (if there are on the date of this Lease elevators in
the Building) for ingress and egress to and from the Premises; (4) to provide to
the Premises the standard janitorial services provided for other tenants of the
Building (including such window washing of the outside of exterior windows as
may, in the judgment of Landlord, be reasonably required), after Ordinary
Business Hours five days each week, excluding Holidays: and (5) to cause
electric current to be supplied to the Premises for all of Tenant's Standard
Electrical Usage. "Tenant's Standard Electrical Usage" means electrical
consumption for the standard tenant lighting used in the Building and ordinary
office equipment that operates on standard 110 voltage and does not require
special or additional ventilation or air conditioning. "Ordinary Business Hours"
as used herein means 7:00 a.m. to 6:00 p.m. Monday through Friday and 8:00 a.m.
to 12:00 p.m. on Saturdays, Holidays excepted. "Holidays," as used herein, means
New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
Christmas Day, and such other national holidays as may be observed by national
banks in Denver, Colorado.

     6.2.  Excess Usage.  "Excess Usage" means any usage of electricity (1)
           ------------
during other than Ordinary Business Hours: or (2) in an amount in excess of
Tenant's Standard Electrical Usage; or (3) for "Special Equipment"; or (4) for
any requirement for standard HVAC services during other than Ordinary Business
Hours. "Special Equipment" means (a) any equipment consuming more than 0.5
kilowatts at rated capacity, (b) any equipment requiring a voltage other than
110 volts, single phase. or (c) equipment that requires the use of self-
contained HVAC units. If Tenant desires Excess Usage, it shall give Landlord at
least 24 hours prior notice, and Landlord shall use reasonable efforts to supply
it, at the expense of Tenant, at Landlord's standard rate as established by it
from time to time. Tenant shall reimburse Landlord for reasonable costs incurred
by Landlord in providing services for Excess Usage. Reasonable costs shall
include Landlord's costs for materials, additional wear and tear. on equipment,
utilities, and labor (including fringe benefits and overhead costs). Computation
of Landlord's cost for providing Excess Usage will be made by Landlord's
engineer, based on his engineering survey of Tenant's Excess Usage. Tenant shall
also reimburse Landlord for all costs of supplementing the Building HVAC System
and/or extending or supplementing any electrical service, as Landlord may
determine is necessary, as a result of Tenant's Excess Usage. Prior to
installation or use by Tenant of any equipment which will result in Excess
Usage or operation of the Premises for extended hours on an ongoing basis,
Tenant shall notify Landlord of such intended installation or use and obtain
Landlord's consent. In addition, Landlord shall have the right, if it determines
based on its reasonable judgment that Tenant is using electric current in excess
of Tenant's Standard Electrical Usage, to require Tenant at Tenant's sole cost
and expense, to install a check meter and/or flow meter to determine the amount
of such Excess Usage, and the cost of the check meter and/or flow meter,
including monitoring, installation and repair, shall be paid by Tenant.

     6.3.  Additional Services to Tenant. If Tenant requires janitorial or other
           -----------------------------
services in addition to those required to be provided to all other tenants of
the Building, Tenant shall pay for those services monthly as Additional Rent. In
addition, Tenant shall pay as Additional Rent monthly with Base Rent


                                       9
<PAGE>

any and all charges for utility services supplied and materials furnished
directly to the Premises. It is also understood and agreed that Tenant shall pay
the cost of replacing light bulbs and/or tubes and ballast used in all lighting
in the Premises other than the standard tenant lighting used in the Building.

     6.4. Interruption of Services. Landlord may discontinue, reduce, or curtail
          ------------------------
heating, air conditioning, elevator, electrical, janitorial, lighting, or other
services, or any of them, at such times as it may be necessary by reason of
accident, repairs, alterations, improvements, strikes, lockouts, riots, acts of
God, application of Laws (as hereinafter defined) or due to any other happening
beyond the control of Landlord. In the event of any interruption, reduction, or
discontinuance of Landlord's services Landlord shall, if possible, give advance
notice to Tenant, but Landlord shall not be liable for damages to Tenant or any
other party as a result thereof nor shall the occurrence of any such event in
any way be construed as an eviction of Tenant, cause or permit an abatement,
reduction or set off of Rent or operate to release Tenant from any of Tenant's
obligations under this Lease.

     6.5. Notice to Landlord. Tenant shall promptly notify Landlord or the
          ------------------
Building Manager of any interruption in the Building services or of any defects
in the Building or Building systems of which Tenant becomes aware and of which
Landlord is not aware, including defects in pipes, electric wiring, and HVAC
equipment. In addition, Tenant shall provide Landlord with prompt notification
of any matter or condition of which it becomes aware which may cause injury or
damage to the Building, the Building Complex, or to any person or property.

7.   QUIET ENJOYMENT. Subject to the provisions of this Lease, all Laws and
     ---------------
any mortgage, easement covenants, reservations or other encumbrances on the
Building Complex, Landlord agrees to warrant and defend Tenant in the quiet
enjoyment and possession of the Premises during the Lease Term against any
person claiming under Landlord, so long as Tenant complies with its obligations
to pay Rent and performs all of its other obligations under this Lease.

8.   USE AND OCCUPANCY. The Premises shall be used and occupied as business
     -----------------
offices for the operation of Tenants business (the "Permitted Use") and for no
other purpose, and Tenant shall use it in a careful, safe, and proper manner,
and pay on demand for any damage, including repair of damage, to the Building
Complex caused by the use, act or neglect by Tenant, Tenant's agents or
employees, or any other person entering upon the Premises under express or
implied invitation of Tenant. Tenant shall at its sole cost, comply with all
applicable federal, state, city, quasi-governmental and utility provider laws,
statutes, ordinances, orders, codes, rules, regulations, covenants and
restrictions now or hereafter in effect, including the Americans With
Disabilities Act ("ADA") and all environmental laws (collectively referred to as
"Laws") applicable to Tenant's use, occupancy or alteration of the Premises, and
Tenant shall obtain all permits or licenses required for its business conducted
at the Premises. Tenant shall not commit waste or permit waste to be committed
or cause or permit any unpleasant odor or noise or other nuisance in or from the
Premises or on the Building Complex. Tenant shall not use the Premises for any
use that causes an increase in rates or cancellation of any insurance policy
covering the Building Complex. Tenant shall not store, keep, use, sell, dispose
of or offer for sale in, upon or from the Premises or the Building Complex any
article or substance prohibited by any insurance policy covering the Building
Complex or the Premises nor shall Tenant keep, store, produce, dispose of or
release on, in or from the Premises or the Building Complex (or allow others to
do so) any substance which may be deemed an infectious waste, hazardous waste,
hazardous or toxic material, or hazardous substance under any Laws (collectively
called "Hazardous Materials") except customary office and cleaning supplies
stored and used in accordance with Laws. Tenant represents and warrants to
Landlord that it shall not brine onto or allow other to bring any Hazardous
Materials onto the Building Complex, and that it has received no notice or
complaint from any governmental authority or third party that the business it

                                      10
<PAGE>

intends to operate in the Premises or that any property or materials it intends
to keep or allow on the Building Complex or in the Premises is a Hazardous
Material or violates any Laws. Tenant shall give prompt notice to Landlord of
any such notice or complaint it has received or does receive in the future.
Tenant shall pay when due any taxes assessed with respect to Tenant's use or
occupancy of the Premises and Tenant's Property (as defined in Paragraph 10) and
any Alterations made by Tenant.

9.   MAINTENANCE AND REPAIRS.
     -----------------------

     9.1. Landlord's Obligations. Landlord shall, subject to reimbursement as
          ----------------------
part of Operating Expenses, to the extent deemed reasonably necessary by
Landlord for operations of the Building Complex, repair and maintain: the
structural portions of the Building, elevators and escalators (if any),
plumbing, air conditioning, heating and electrical systems installed or
furnished by Landlord, the Building roof, the curtain wall, including all glass
connections at the perimeter of the Building, all exterior doors, including any
exterior plate glass within the Building, Building telephone and electrical
closets owned or operated by Landlord, the Common Areas of the Building Complex,
landscaping, and interior portions of the Building above and below grade which
are not within space leased to Tenant or other tenants in the Building.
Landlord shall have no obligation to make improvement to or to repair or
maintain the Premises during the Lease Term except as expressly required in this
Lease or in the Work Letter.

     9.2. Tenant's Obligations. Tenant, at Tenant's sole cost and expense,
          --------------------
except for services furnished by Landlord pursuant to Paragraph 6 and Landlord's
obligations under Paragraph 9.1, shall maintain, in good order, condition,
repair, and appearance the Premises, including the interior surfaces of the
ceilings (if damaged or discolored due in whole or in part to the act, neglect,
omission or fault of Tenant), walls and floors, all doors, interior glass
partitions or glass surfaces (not exterior windows) and pipes, electrical
wiring, switches, fixtures and other special items exclusively serving the
Premises, subject to the provisions of Paragraph 14. In the event Tenant fails
to maintain the Premises as required by this Paragraph 9.2, Landlord shall give
Tenant notice to do such acts as are required by this Paragraph 9.2. If within a
reasonable time not to exceed 30 days following Landlord's notice, Tenant fails
to perform its obligations under this Paragraph 9.2, or if those obligations
cannot reasonably be completed within 30 days, fails to promptly commence such
work and diligently pursue it to completion within a reasonable time not to
exceed 90 days, then Landlord shall have the right, but shall not be required,
to do such acts and expend such funds at the expense of Tenant as are reasonably
required to perform those obligations, without curing Tenant's default. The
funds so expended plus 20% of such amounts as an overhead/administrative charge
shall be due and payable by Tenant within 10 days after receipt of Landlord's
invoice. Landlord shall have no liability to Tenant for any damage,
inconvenience or interference with the use of the Premises by Tenant as a result
of performing or not performing any such obligations.

10.  ALTERATIONS AND ADDITIONS
     -------------------------

     10.1. Alterations by Tenant. Except as expressly provided in the Work
           ---------------------
Letter, Tenant shall make no alterations, additions or improvements to the
Premises or the Building Complex (the "Alterations"), including the installation
of equipment or machinery which requires modifications to existing electrical
outlets or increases Tenant's usage of electricity beyond Tenant's Standard
Electrical Usage without obtaining the prior written consent of Landlord. Tenant
shall submit any such request to Landlord at least 30 days prior to the
commencement of the Alterations. Landlord may impose, as a condition to its
consent, and at Tenant's sole cost, such requirements as Landlord may deem
necessary in its judgment, including the manner in which the Alterations are
done, the material to be used, the

                                      11
<PAGE>

architect and contractor by whom the work is to be performed and the times
during which the work is to be accomplished, approval of all plans and
specifications, and the procurement of all licenses and permits. Landlord shall
be entitled to or to require Tenant to post notices on and about the Premises
with respect to Landlord's non-liability for the Alterations and Tenant shall
not permit those notices to be defaced or removed. Tenant further agrees not to
connect any apparatus, machinery or device to the Building systems, including
electric wires, water pipes, fire, safety, heating and mechanical systems,
without the prior written consent of Landlord. Alterations which Tenant is
permitted to make shall be performed in a good and workmanlike manner and in
compliance with this Lease.

     If Landlord permits any Alterations, then prior to the commencement of
those Alterations, Tenant shall deliver to Landlord certificates (and copies of
the policies if requested by Landlord) issued by insurance companies qualified
to do business in the state where the Premises are located evidencing that
workmen's compensation, public liability insurance and property damage
insurance, builder's risk coverage (if applicable) all in amounts, with
companies and on forms satisfactory to Landlord, are in force and maintained by
all such contractors and subcontractors engaged by Tenant to perform the work.
All such policies shall name Landlord as an additional insured and shall provide
that they may not be canceled or modified without 30 days' prior notice to
Landlord.

     Tenant, at its sole cost and expense, shall cause any permitted Alterations
to be performed in compliance with all applicable requirements of insurance
policies. Laws, and governmental bodies having jurisdiction, in such manner as
not to interfere with other tenants or interfere with, delay, or impose any
additional expense Upon Landlord in the construction, maintenance or operation
of the Building Complex, and so as to maintain harmonious labor relations in the
Building and to not disturb other tenants' use of their premises or interfere
with Landlord's operation of the Building Complex. In addition, Tenant, at its
sole cost and expense, shall be responsible for the acquisition of auxiliary
aids, required under the ADA, including all Alterations required: (i) as a
result of Tenant, or any subtenant, assignee or concessionaire, being a Public
Accommodation (as defined in the ADA); (ii) as a result of the Premises being a
Commercial Facility (as defined in the ADA); (iii) as a result of any leasehold
improvements made to the Premises by or on behalf of Tenant, or any subtenant,
assignee or concessionaire (whether or not Landlord's consent to such leasehold
improvements was obtained); or (iv) as a result of the employment by Tenant, or
any subtenant, assignee or concessionaire, of any individual with a disability.

     10.2. Ownership and Removal of Alterations. All Alterations, whether made
           ------------------------------------
by Landlord or Tenant, including all counters, screens, grilles, cabinetry work,
partitions, paneling, carpeting, drapes or other window coverings and light
fixtures (but not including Tenant's Property, as defined below), shall be
deemed a part of the real estate and the property of Landlord and shall remain
upon and be surrendered with the Premises without disturbance or injury, at the
end of the Lease Term, unless Landlord, by notice given to Tenant no later than
15 days after the end of the Lease Term or Tenant's possession, shall elect to
have Tenant remove all or any of the Alterations, and in that event, Tenant
shall promptly remove those Alterations. Any such removal, whether required or
permitted by Landlord, shall be at Tenant's sole cost and expense, and Tenant
shall restore and repair any damage caused by the removal. All movable
partitions, machines and equipment which are installed in the Premises by or for
Tenant, without expense to Landlord, which can be removed without damage to or
defacement of the Building or the Premises, and all unattached furniture,
furnishings and other articles of personal property owned by Tenant and located
in the Premises (all of which are herein called "Tenant's Property") shall be
and remain the property of Tenant and may be removed by it at any time during
the Lease Term, subject to the provisions of this Lease. However, if any of
Tenant's Property is removed, Tenant shall

                                      12
<PAGE>

repair or pay the cost of repairing any damage to the Building Complex or the
Premises resulting from the removal.

     10.3. Landlord's ADA A1terations. Landlord shall, subject to reimbursement
           --------------------------
as part of Operating Expenses, be responsible for any alterations, modifications
or improvements to any Common Areas of the Building Complex which are required
by the ADA.

11.  ENTRY BY LANDLORD. Landlord, the Building Manager and their employees,
     -----------------
contractors and agents shall have the right to enter the Premises at all
reasonable times after advance notice to Tenant (except in the case of an
emergency or to provide janitorial services, which shall require no notice) for
the purpose of inspecting it, to supply any services to be provided by Landlord,
to show it to prospective purchasers, investors or Mortgagees, to make such
alterations, repairs, maintenance, improvements or additions to the Premises or
to the Building as Landlord may deem necessary or desirable, and during the last
270 days of the Lease Term or after an Event of Default to show it to
prospective tenants. Landlord may for these purposes, if Tenant is not present,
enter the Premises by means of a master key. Any such entry shall not entitle
Tenant to an abatement of Rent or any other claim against Landlord, except for
Landlord's negligence or willful misconduct.

12.  MECHANICS LIENS. Tenant has no right or authority to impose or permit any
     ---------------
lien or claim against the Premises, the Building, the Building Complex or its
interest in or under this Lease. Tenant shall pay all costs for work done by or
for Tenant in the Premises (including work performed by Landlord or its
contractor at Tenant's request following the commencement of the Primary Lease
Term) and Tenant will keep the Premises and the Building Complex free and clear
of all mechanics' and other liens on account of work done by or for Tenant or
persons claiming under it, excluding any Tenant Finish Work performed by
Landlord pursuant to the Work Letter. Tenant agrees to indemnify, defend, and
save Landlord harmless of and from all liability, loss, damage, costs, or
expenses, including attorneys' fees, on account of any claims of any nature
whatsoever for work performed or for materials or supplies furnished to Tenant
or persons claiming under Tenant. Should any such claims be made or liens be
recorded against the Premises, the Building or the Building Complex or should
any action affecting the title thereto be commenced as a result of any such
work, Tenant shall cause the claim to be satisfied before being recorded, or if
the claim or lien is recorded to be removed of record within five days after
recording. If Tenant desires to contest any claim or lien, Tenant shall give
notice to Landlord of Tenant's intent to contest it and, within five days after
the recording of any such liens, Tenant shall either furnish to Landlord
adequate security satisfactory to Landlord of at least 150% of the amount of
the claim, plus estimated costs and interest or bond over any lien under CRS
38-22-131 and as soon as possible thereby have the lien against the Premises.
Building and Building Complex discharged and released in full. If a final
judgment establishing the validity or existence of any lien for any amount is
entered, Tenant shall immediately pay and satisfy it. If Tenant fails to pay any
amount in the time periods provided herein, Landlord may (but without being
required to do so) pay such lien or claim and any costs, and the amount so paid,
plus 20% of such amounts as an overhead/administration charge, together with
reasonable attorneys' fees incurred in connection therewith, shall be
immediately due from Tenant to Landlord.

13.  SUBLETTING AND ASSIGNMENT.
     -------------------------

     13.1. Tenant's Right. Tenant cannot assign this Lease or sublet all or any
           --------------
part of the Premises without the prior written consent of Landlord, *If Tenant
wants to assign this Lease or sublet all or a portion of the Premises, Tenant
shall first notify Landlord in writing of the name of the proposed assignee or
sub-tenant and the proposed use of the Premises, and provide such financial and
other

*which consent shall not be unreasonably withheld.

                                      13
<PAGE>

information as Landlord may reasonably require about the proposed assignee or
subtenant. It shall not be unreasonable for Landlord to withhold its consent to
a proposed assignment or sublease for any reason, including, if (i) the
reputation, financial responsibility, or business of the proposed assignee or
subtenant is unacceptable to Landlord; (ii) the intended use of the Premises by
the proposed assignee or subtenant violates any Laws or requires modifications
to the Premises or the Building Complex to comply with Laws; (iii) if the
proposed assignee or subtenant is a present tenant of the Building. Tenant shall
have no right to assign this Lease or sublet any part of the Premises if a
notice of default has been delivered by Landlord to Tenant, which default has
not been cured, or if an Event of Default exists under this Lease, either at the
time of Tenant's request for Landlord's consent to an assignment or sublease or
at the time the assignment or sublease is scheduled to commence.

     13.2. Other Restrictions: What Constitutes an Assignment. Any assignment or
           --------------------------------------------------
subletting consented to by Landlord shall be in writing in a form acceptable to
Landlord. This Lease cannot be assigned or sublet by operation of law. Any
transfer of this Lease by a sale of all or substantially all of Tenant's assets,
merger, consolidation, liquidation, or change in ownership of or power to vote
the majority of outstanding stock of Tenant or, if Tenant is a partnership, any
withdrawal, replacement, or substitution of any partner or partners, either
general or limited, whether as the result of a single or series of transactions,
shall not constitute an assignment for purposes of this Paragraph 13. Any
assignment or subletting shall not affect the liability of the Tenant under this
Lease or release Tenant from its obligations. Consent by Landlord to any
assignment or sublease shall not relieve the Tenant from the requirement of
obtaining the prior written consent of Landlord to any subsequent assignment or
subletting and Landlord's consent to one assignment or subletting shall not
waive Landlord's right to refuse to consent to a subsequent request. If Landlord
consents to Tenant's request to assign this Lease or sublet all or a portion of
the Premises. Tenant shall pay Landlord, at the time consent is given, in
consideration for Landlord's written consent to the assignment or sublease, an
amount equal to $500 as a subletting/assignment fee. In addition, Tenant or
Tenant's assignee or sublessee shall be solely responsible for all costs
incurred in altering the Premises to conform to Laws due to any change in the
intended use of the Premises. If Tenant collects any rent or other amounts from
an assignee or subtenant in excess of the Rent for any monthly period, Tenant
shall pay Landlord the excess monthly, as and when received; and after a default
by Tenant under this Lease, Landlord shall have the right to collect any Rent
directly from any subtenant (or from any assignee from which is it not already
collecting directly). *See attached Rider

14.  DAMAGE TO PROPERTY: CLAIMS.
     --------------------------

     14.1. Landlord Not Liable. Neither Landlord nor the Building Manager or
           -------------------
their employees or agents shall have any liability for, and Tenant shall neither
hold nor attempt to hold Landlord the Building Manager and their employees and
agents liable for any injury or damage, either proximate or remote, occurring
through or caused by fire, water, steam, or any repairs, alterations, injury,
accident, or any other cause to or within the Premises, to Tenant's Property or
other personal property of Tenant or

                                      14
<PAGE>

                        *except that caused by negligence or default of Landlord
others kept in the Premises or stored in other parts of the Building and/or
Common Areas, or for property of Tenant or others entrusted to employees of the
Building, or for loss of property by theft or otherwise (including loss or
damage in the parking areas) *by reason of the negligence or default of other
occupants or any other person or otherwise, and the keeping or storing of all
property of Tenant in the Building, Common Areas and/or Premises shall be at the
sole risk of Tenant, unless caused by the negligence or willful misconduct of
Landlord.

     14.2.  Tenant's Indemnity. Subject to provisions of Paragraph 15.3, Tenant
            ------------------
hereby agrees to indemnify, defend, and save Landlord and Building Manager
harmless of and from all actions, suits, fines, penalties, liability, loss,
damages, costs, or expenses, including reasonable attorneys' fees, resulting
from Tenant's use or occupancy of the Premises, or on account of injuries to the
person or property of Tenant or any third party, including any other tenant in
the Building Complex or to any other person rightfully in the Building Complex
for any purpose whatsoever, where the injuries are caused by the negligence,
acts or misconduct of the Tenant, Tenant's agents, servants or employees, or of
any other person entering upon the Premises under express or implied invitation
of Tenant, or resulting from any breach of this Lease by Tenant.

15.  INSURANCE.
     ---------

     15.1.  Landlord's Insurance. Landlord agrees to carry and maintain
            --------------------
commercial general liability insurance against personal injury, including death
and property damage, in or about the Building Complex (excluding Tenant's
Property), in such amounts as Landlord *deems appropriate. Landlord shall
maintain casualty insurance for the Building Complex, the shell and core of the
Building and the Premises (other than the insurance Tenant is required to carry
on the Premises) in such amounts, from such companies, and on such terms and
conditions, including insurance for loss of rent, as Landlord deems
appropriate from time to time.                     *reasonably


     15.2.  Tenant's Insurance.  Tenant shall, at its own cost, at all times
            ------------------
during the Lease Term, procure and maintain:

            a.   Worker's Compensation Insurance, statutory coverage A and
Employers Liability Insurance with limits of $100,000 bodily injury by accident,
each accident, $500,000 limit for bodily injury by disease, and $100,000 bodily
injury by disease, each employee, each covering all persons employed by Tenant;

            b.   Insurance against all risks of direct physical loss to all of
Tenant's property in an amount equal to their full replacement cost;

            c.   Commercial General Liability Insurance, including coverage for
bodily injury and property damage, personal injury (deleting the exclusion on
employees and contractual liability), products and completed operations
contractual liability, owner's protective liability, and broad form property
damage with the following limits of liability: $1,000,000 any one occurrence
$1,000,000 personal injury and advertising any one occurrence, $2,000,000
general aggregate (other than products/completed operations) $2,000,000
products/completed operations aggregate limit $3,000,000 fire damage any one
fire, and $5,000 medical expense any one person such limits shall be endorsed to
apply at each of Tenant's locations.

            d.   Business Automobile Insurance insuring Tenant's liability
arising out of the ownership, maintenance, or use of hired, non-owned, and owned
automobiles with minimum limits of $1,000,000 per occurrence combined single
limit bodily injury and property damage.

                                      15







<PAGE>

     All such insurance shall be procured from responsible insurance company or
companies licensed to do business in the State where the Premises are located,
with an A.M. Best's ratings of not less than "A" and a Financial rating of not
less than "XI" in the most current available Best's Insurance Reports, and
shall be otherwise satisfactory to Landlord. All such policies (except Workmen's
Compensation) shall name Landlord and Building Manager as "additional
insureds," and shall be primary insurance over any other collectible insurance
by the Landlord or the Building Manager, and shall provide that it cannot be
canceled, non-renewed, or materially altered, without first giving 30-days prior
written notice to the Landlord. All such policies shall be on an Occurrence Form
and not on a Claims-Made Basis.

     Tenant shall provide certificate(s) and if requested certified copies of
the policies, of such insurance to Landlord ten days prior to commencement of
the Lease Term and at least 30 days prior to their renewal date. The limits of
Tenant's insurance shall not, under any circumstances, limit the liability of
Tenant under this Lease.

     15.3. Waiver of Claims and Subrogation. Each party hereby waives and
           --------------------------------
releases the other party and its respective officers, directors, partners,
members, agents, representatives and employees, from any claim (including a
claim for negligence) which it might otherwise have against the other party for
loss, damage or destruction to its real and personal property (including the
Building, Building Complex, Premises and Tenant's Property) or for loss of
business arising out of or related to the use and occupancy of the Premises
occurring during the Lease Term which is insured or capable of being insured
against under insurance required under this Paragraph 15. Tenant also waives all
such rights of recovery against the Building Manager. Each party shall notify
its insurance carrier of this waiver provision and obtain an appropriate waiver
of subrogation provision in its policies.

16.  DAMAGE OR DESTRUCTION TO BUILDING.
     ---------------------------------

     16.1. Repair of Damage. In the event that the Premises or the Building is
           ----------------
damaged by fire or other insured casualty and insurance proceeds have been made
available to Landlord to repair the damage by the insurer and any Mortgagees,
the damage shall be repaired by and at the expense of Landlord to the extent of
the insurance proceeds, provided that the Premises can be made fit for
occupancy, in Landlord's reasonable opinion, within 180 days after the
occurrence of the damage without the payment of overtime or other premiums.
Until the repairs and restoration are completed, Rent shall be abated to the
extent of any recovery by Landlord under its loss of rent insurance related to
the Premises in proportion to the part of the Premises which is unusable by
Tenant in the conduct of its business as the result of the casualty, as may be
reasonably determined by Landlord (but there shall be no abatement of Rent by
reason of any portion of the Premises being unusable for a period of five days
or less or as set forth below). Landlord agrees to notify Tenant within 60 days
after the casualty if it estimates that it will be unable to repair and restore
the Premises within 180 days, which will state the approximate length of time
Landlord estimates will be required to complete the repairs and restoration, in
which event Landlord in its notice or Tenant in a notice given to Landlord
within 15 days thereafter may terminate this Lease effective 30 days from the
date of such notice (the "Termination Date"). However, Tenant may not terminate
this Lease or receive an abatement of Rent, as above stated, if the damage to
the Premises or the Building is in whole or in part the result of the act,
omission, fault or negligence of Tenant, its agents, contractors, employees,
licensees or invitees. In the event this Lease is terminated, Tenant shall pay
Rent until the Termination Date and shall forthwith surrender the Premises in
accordance with Paragraph 21.1. If Tenant fails so to surrender the Premises,
Landlord may reenter and take possession of the Premises and remove Tenant and
the property and Alterations Tenant is required to remove under Paragraph 10,
at Tenant's expense. Except as provided in this Paragraph 16, there shall be no
abatement of rent and no liability of Landlord by reason of any damage to or
interference with Tenant's business or property aris-

                                      16
<PAGE>

ing from the casualty or the making of any such repairs, alterations or
improvements in or to the Building Complex or Premises. Tenant understands that
Landlord will not carry insurance of any kind on Tenant's Property, or any
Alterations installed in the Premises by or on behalf of Tenant, and that
Landlord shall not be obligated to repair any damage or replace any of Tenant's
Property or any such Alterations, which shall be Tenant's responsibility.

     16.2. Termination of Lease. In addition to the reason stated in 16.1 above,
           --------------------
if the Building or Building Complex is substantially damaged, to the extent that
Landlord, in its reasonable judgment, determines that it would be uneconomical
to reconstruct or repair the damage (although the Premises may not be affected,
or if affected, can be repaired within 180 days) and Landlord, within 60 days
after the damage, decides not to reconstruct or repair the damage, then
notwithstanding anything contained herein to the contrary, upon notice to that
effect given to Tenant within that 60-day period, Tenant shall pay Rent,
properly apportioned up to date of such termination, this Lease shall terminate
on the date provided in Landlord's notice of termination, and both parties
shall be released and discharged from all further obligations hereunder (except
those obligations which expressly survive termination of the Lease Term). A
total destruction of the Building or the Building Complex shall automatically
terminate this Lease as of the date of the destruction.

17.  CONDEMNATION. If the entire Premises or substantially all of the Premises
     ------------
or any portion of the Building Complex which shall render the Premises
untenantable shall be taken by eminent domain or by condemnation or shall be
conveyed in lieu of any such taking, then this Lease, at the option of either
Landlord or Tenant exercised by either party giving notice to the other of such
termination within 30 days after such taking or conveyance, shall as of the date
Tenant is dispossessed of the Premises terminate and the Rent shall be
apportioned as of that date; and Tenant shall surrender the Premises as required
in this Lease to Landlord and Landlord may reenter and take possession of the
Premises on that date. In the event less than all of the Premises shall be taken
by that proceeding, Landlord shall promptly repair the Premises as nearly as
possible to its condition immediately prior to the taking, unless Landlord
elects not to reconstruct or rebuild for the same reasons provided in Paragraph
16.2. In the event of any such taking or conveyance, Landlord shall receive the
entire award or consideration for the portion of the Building or Building
Complex so taken.

18.  ESTOPPEL CERTIFICATE.
     --------------------

     18.1. Duty to Provide. Tenant agrees at any time and from time to time on
           ---------------
or before ten days after written request by Landlord, to execute, acknowledge
and deliver to Landlord an estoppel certificate certifying (i) that this Lease
is unmodified and in full force and effect (or if there have been modifications,
that it is in full force and effect as modified, and stating the modifications),
(ii) that there have been no defaults by Landlord (to the best of Tenant's
knowledge) or by Tenant (or, if there have been defaults, describing the
default), (iii) the date to which Rent and other charges have been paid in
advance, if any, (iv) that Tenant claims no present charge, lien, claim or
offset against Rent, (v) that Rent is not prepaid for more than one month in
advance, and (vi) such other matters as may be reasonably required by Landlord,
any Mortgagee or prospective Mortgagee, or any potential purchaser of the
Building. It is intended that any such statement delivered pursuant to this
Paragraph may be relied upon by any prospective purchaser of all or any portion
of Landlord's interest, or by any Mortgagee or prospective Mortgagee.

     18.2. Tenant's Failure to Deliver. Tenant acknowledges that it may be
           ---------------------------
difficult, if not impossible, for Landlord to sell or finance the Building
without such an estoppel certificate from Tenant, and that Landlord would not
enter into this Lease without Tenant's agreement to provide such an

                                      17

<PAGE>

estoppel certificate. Tenant's failure to deliver the estoppel certificate in
the time and manner provided herein shall constitute an Event of Default. In
addition, Tenant agrees to pay any damages incurred by Landlord as a result of
Tenant's failure (including costs or damages resulting from a lost sale or
financing) which a court with proper jurisdiction determines to be appropriate.
In addition, in the event that Tenant does not execute and deliver the statement
required by this Paragraph 18, Tenant shall be in default under this Lease and
hereby grants to Landlord a power of attorney coupled with an interest to
act as Tenant's attorney in fact for the purpose of executing and delivering the
estoppel certificate required by this Paragraph 18.

19.  DEFAULT BY TENANT.
     -----------------

     19.1.  Event of Default. Each one of the following events is referred to
            ----------------
as an "Event of Default":

            a.  Any failure by Tenant to pay Rent on the due date unless the
failure is cured within 7 business days after notice by Landlord; however,
Tenant is not entitled to more than two notices of delinquent payments of Rent
during any calendar year and, if thereafter during that calendar year any Rent
is not paid when due, an Event of Default shall automatically occur;

            b.  If Tenant's interest in this Lease or in the Premises, or if all
or a substantial part of Tenant's Property, is seized or taken by process of law
or otherwise and is not released within 15 days;

            c.  Commencement by or against Tenant of a proceeding under any
provision of federal or state law relating to insolvency, bankruptcy, or
reorganization ("Bankruptcy Proceeding"), unless dismissed within 60 days after
commencement; the insolvency of Tenant or execution by Tenant of an assignment
for the general benefit of creditors; the convening by Tenant of a meeting of
its creditors or any significant class thereof for purposes of effecting a
moratorium upon or extension or composition of its debts; or the failure of
Tenant generally to pay its debts as they mature;

            d.  If a guarantor of this Lease, if any, or a general partner or
member of Tenant (if Tenant is a partnership, venture or company), becomes a
debtor under any Bankruptcy Proceeding, or becomes subject to receivership or
trusteeship proceedings, whether voluntary or involuntary; unless a substitute
guarantor, acceptable to Landlord in light of the responsibilities of Tenant
under this Lease, is provided to Landlord within 15 days;

            h.  If Tenant fails to perform or breaches any of the other
agreements, terms, covenants or conditions hereof on Tenant's part to be
performed (other than the obligation to pay Rent or any other charges payable
hereunder), and that default continues for a period of 20 days after notice by
Landlord to Tenant; provided, however, that if Tenant cannot reasonably cure the
default within 20 days,

                                      18
<PAGE>

Tenant shall not be in default if it commences to cure the default within that
15 days and diligently pursues it to completion within a reasonable period of
time, not to exceed 60 days.

     19.2. Remedies of Landlord. If any one or more Event of Default occurs,
           --------------------
Landlord shall have the right at Landlord's election, then or at any time
thereafter, in addition to its other rights and remedies under this Lease or any
Laws, to do any one or more of the following:

           a. Without demand or notice except as required by Laws, to enter and
retake possession of the Premises or any part of it and expel Tenant and those
claiming through or under Tenant and remove the effects of both or either,
without being guilty of trespass and without prejudice to any remedies for
unpaid of Rent or other breach of this Lease. If Landlord elects to enter and
retake possession pursuant to legal proceedings or pursuant to any notice
provided for by Laws, Landlord may, from time to time, without terminating this
Lease, relet the Premises or any part of it, in Landlord's or Tenant's name but
for the account of Tenant, for such periods (which may be greater or less than
the period which would otherwise have constituted the balance of the Lease Term)
and on such conditions and upon such other terms (which may include, among other
terms, leasing and brokerage fees, concessions of free rent and alteration and
repair of the Premises) as Landlord, in its sole discretion, may determine, and
Landlord shall be entitled to collect all the rents from the reletting. Landlord
shall in no way be responsible or liable for any failure to relet the Premises
or any part of it, or for any failure to collect any rent due upon reletting.
No such entry or repossession or notice by Landlord shall be construed as an
election on Landlord's part to terminate this Lease, unless written notice of
termination is given to Tenant. Landlord reserves the right following any such
entry and/or reletting to exercise its right to terminate this Lease by giving
Tenant notice, in which event the Lease will terminate as specified in that
notice.

           b. If Landlord takes possession of the Premises without terminating
this Lease, Tenant shall pay to Landlord (i) the Rent and other sums payable
under this Lease, less (ii) the net proceeds, if any, of any reletting of the
Premises after deducting all of Landlord's expenses incurred in connection with
the reletting, including all repossession costs, leasing and brokerage fees,
concessions, attorneys' fees, expenses of employees, alteration and repair costs
("Reletting Expenses"). If, in connection with any reletting, the new lease
term extends beyond the Lease Term or the premises covered thereby include other
premises not part of the Premises, a fair apportionment of the Rent received
from the reletting and the Reletting Expenses will be made in determining the
net proceeds received from the reletting. In determining the net proceeds, any
rent concessions will be apportioned over the term of the new lease. Tenant
shall pay the amount due under this paragraph to Landlord monthly on the days on
which Rent is due under this Lease.

           c. To give Tenant notice of termination of this Lease on the date
specified in that notice, and on that date Tenant's right to possession of the
Premises shall cease and this Lease shall terminate except as to Tenant's
liability as provided below. In the event this Lease is terminated pursuant to
the provisions of this subparagraph (c), Tenant shall remain liable to Landlord
for damages in an amount equal to the Rent and other amounts which would have
been owing by Tenant for the balance of the Lease Term had this Lease not
terminated, less the net proceeds, if any, from reletting of the Premises by
Landlord subsequent to termination, after deducting the Reletting Expenses.
Landlord shall be entitled to collect such damages from Tenant monthly on the
days on which Rent would have been payable if this Lease had not been
terminated. Alternatively, if this Lease is terminated, Landlord at its option
may recover immediately from Tenant as damages for loss of the bargain and not
as a penalty an amount equal to the worth at the time of termination of the
excess, if any, of the Rent payable under this Lease for the balance of the
Lease Term over the then Reasonable Rental Value of the Premises for the

                                      19
<PAGE>

same period. "Reasonable Rental Value" shall be the amount of rent Landlord can
obtain for the remaining balance of the Lease Term, taking into account a
reasonable period for reletting, after deducting all estimated Reletting
Expenses.

          d. Advance such monies, and take such other action, for Tenant's
account as reasonably may be required to perform Tenant's obligation or to
mitigate any default or Event of Default, but no such advance or action shall
cure the default or Event of Default. Tenant agrees to reimburse Landlord for
any such advances, as Additional Rent, upon demand from Landlord. Any such
advance, and any cost or expense so incurred, shall bear interest at the rate of
1-1/2% per month, compounded monthly, until paid by Tenant.

          e. Suits for the recovery of Rent and damages may be brought by
Landlord, from time to time, at Landlord's election, and nothing herein shall be
deemed to require Landlord to wait until each installment is due or until the
expiration of the Lease Term. Each right and remedy provided for in this Lease
shall be cumulative and in addition to every other right or remedy provided for
in this Lease or now or hereafter existing at law or equity or otherwise,
including, but not limited to, suits for injunctive relief and specific
performance. The exercise or beginning of the exercise by Landlord of any one or
more rights or remedies shall not preclude the simultaneous or later exercise by
Landlord of other rights or remedies. All costs incurred by Landlord in
connection with collecting Rent or other amounts and damages owing by Tenant or
to enforce any provision of this Lease, shall also be recoverable by Landlord
from Tenant.

          f. No failure by Landlord to insist upon the strict performance of any
agreement, term, covenant or condition hereof or to exercise any right or
remedy, and no acceptance of full or partial Rent during, the continuance of any
such breach shall constitute a waiver of any such breach or agreement, term,
covenant, or condition, except by written instrument executed by Landlord or
relieve Tenant from the obligation to make the full payment as and when due. No
waiver shall affect or alter this Lease, and each and every agreement, term,
covenant, and condition hereof shall continue in full force and effect with
respect to any other then existing or subsequent breach.

          g. Nothing contained in this Lease shall limit or prejudice the right
of Landlord to obtain as liquidated damages in any bankruptcy or similar
proceeding the maximum amount allowed by Law at the time such damages are
proven, whether or not the amount is greater, equal to, or less than the amounts
recoverable, either as damages or Rent, referred to in any of the preceding
provisions of this Paragraph 19.2.

   19.3.  Late Charges and Interest.
          -------------------------

          a. Rent or other amounts owed by Tenant which are not received by
Landlord by the 5th day after the date they are due shall be subject to a late
charge of 5% of the amount due. Additionally, if Rent is not received by
Landlord within 15 days after it is due (or after notice of default, if notice
is required), the amount due shall be subject to an additional 5% late charge.
Rent and all other monetary obligations under this Lease not received by
Landlord when due shall also bear interest at the rate of 2% per month,
compounded monthly, from the date due until fully received by Landlord. Tenant
acknowledges that late payments will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which would be impossible or
extremely difficult to ascertain. Those costs include processing and accounting
charges, interest and late charges imposed by Mortgagees, and other general and
administrative expenses. Tenant agrees that the late charges and interest
contemplated by this Paragraph represent a fair and reasonable estimate of the
costs which Landlord will incur as a result of any such late payments by Tenant.
Acceptance of late charges and interest by Landlord shall not constitute a
waiver of

                                      20
<PAGE>

Tenant's default with respect to any overdue amount, or prevent Landlord from
exercising any other rights or remedies under this Lease.

           b. If Landlord does not receive any payment of Rent on or before the
dates set forth in this Lease on more than two occasions in any Lease Year, then
in addition to the late charges provided for in subparagraph (a) above, Tenant
shall pay a habitual late charge of 5% for every payment received by Landlord
after the first day of each subsequent month, until all payments of Rent have
been received by Landlord on or before the first day of every subsequent month
for at least 12 consecutive months.

     19.4. Mitigation. Notwithstanding anything to the contrary contained
           ----------
elsewhere in this Lease, if Landlord terminates Tenant's right of possession
without terminating this Lease, Landlord shall use reasonable efforts to relet
the Premises so as to mitigate its damages pursuant to this Paragraph 19,
provided, however, that so long as Landlord uses such reasonable efforts
Landlord shall in no way be responsible or liable for any failure to relet the
Premises, or any part of it, or for any failure to collect any Rent due upon any
such reletting; and Landlord shall not be required to spend its own funds, to
give priority (or even equal opportunity) to the Premises over other rental
space owned by Landlord or its affiliates or to compromise in any way the terms,
uses or credit worthiness of a tenant upon or to which it would customarily
lease space such as the Premises; and Landlord shall be entitled, in its sole
discretion, to seek a single tenant for the entire Premises, even though it may
take a substantially longer period to obtain such a tenant and its efforts may
be unsuccessful; and this requirement shall not affect in any way Tenant's
obligation to obtain Landlord's consent under Paragraph 13.

     19.5. No Waiver. No payments of Rent or money by Tenant to Landlord after
           ---------
notice of termination or after termination of this Lease, in any manner, shall
reinstate, continue, or extend the term of this Lease or affect any notice given
to Tenant prior to the payment, it being agreed that after the service of notice
of termination or the commencement of a suit or other final judgment granting
Landlord possession of the Premises, Landlord may receive and collect any sums
of Rent due or an other sums of money, whether as Rent or otherwise, and
exercise Landlord's rights and remedies hereunder, and shall not waive any
default or notice or in any manner affect any pending suit or judgment.

                                      21
<PAGE>

20.  SUBORDINATION AND ATTORNMENT.
     ----------------------------

     20.1. General. This Lease, and all rights of Tenant under it, at
           -------
Landlord's option shall be subordinate to any ground leases, deeds of trust,
mortgages and security agreements, including leasehold mortgages and building
loan agreements, now or hereafter placed upon the Building or the Building
Complex (including all advances made thereunder), and to all amendments,
renewals, replacements and extensions thereof (collectively, "Mortgage"), but
only if and when any Lessor or Mortgagee (as defined below) executes and
delivers to Tenant a non-disturbance and attornment agreement reasonably
acceptable to Landlord, Tenant and the Lessor or Mortgagee, under which, among
other provisions which may be included (1) Tenant agrees to recognize and attorn
to the Lessor or Mortgagee if it becomes the Landlord under this Lease, and (2)
the Lessor or Mortgagee (on behalf of itself and its successors and assigns in
interest) agrees to recognize Tenant's rights under this Lease as long as Tenant
is not in default under this Lease, notwithstanding defaults under any such
ground lease or Mortgage or foreclosure, receivership or sale thereunder. If any
holder of a Mortgage ("Mortgagee") or the lessor of any ground lease ("Lessor")
elects to have this Lease made superior to the lien of its Mortgage and gives
notice to Tenant, this Lease will be deemed prior to that Mortgage, whether this
Lease is dated prior or subsequent to the date of that Mortgage. In confirmation
of this non-disturbance and attornment, subordination or superior position, as
the case may be. Tenant shall promptly execute and deliver to Landlord (or such
other party so designated by Landlord) at Tenant's own cost and expense, within
10 days after request from Landlord any instruments as may be reasonably
required for this purpose by Mortgagee or Lessor, in recordable form if
requested. If Tenant fails to do so within that 10-day period, Tenant shall be
in default under this Lease, and Tenant hereby irrevocably grants to Landlord a
power of attorney coupled with an interest to act as Tenant's attorney-in-fact
for the purposes of executing whatever documents are necessary to evidence such
subordination or superior position. Tenant agrees to attorn to all successor
owners of the Building, whether such ownership is acquired by sale, foreclosure
of a Mortgage, or otherwise.

     20.2. Lease Modifications. If, in connection with the procurement,
           -------------------
continuation or renewal of any financing for the Building or the Building
Complex, the Mortgagee requests reasonable modifications of this Lease, Tenant
will not unreasonably withhold its consent, provided the modifications does not
adversely affect any rights of Tenant under this Lease or decrease the
obligations of Landlord under this Lease.

21.  SURRENDER AND HOLDING OVER.
     --------------------------

     21.1. Surrender. Upon the expiration or termination of this Lease or
           ---------
termination of Tenant's right of possession, Tenant shall promptly surrender the
Premises to Landlord broom clean, in good order and condition, ordinary wear and
tear and loss by fire or other insured casualty excepted (except as otherwise
provided in Paragraphs 15 and 16), and Tenant shall remove Tenant's Property and
the Alterations and other property as required under Paragraph 10. If Tenant
fails to vacate the Premises on a timely basis as required, Tenant shall be
liable to Landlord for all costs incurred by Landlord as a result of that
failure, including, but not limited to, any amounts required to be paid to third
parties who were to have occupied the Premises.

     21.2. Property Not Removed. All Tenant's Property not removed from the
           --------------------
Premises upon the termination of this Lease or of Tenant's right of possession
for any cause whatsoever shall conclusively be deemed to have been abandoned and
may be appropriated, sold, stored, destroyed, or otherwise

                                      22
<PAGE>

disposed of by Landlord without notice to Tenant or any other person and without
obligation to account therefor, Tenant shall pay Landlord all expenses incurred
in so doing.

     21.3. Holding Over. If, after the termination of this Lease or of Tenant's
           ------------
right of possession, Tenant remains in possession of the Premises and continues
to pay Rent, and Landlord consents to the possession and accepts the Rent,
without any written agreement, the holding over shall be deemed a tenancy from
month-to-month, under all the provisions of this Lease, but at a monthly Rent
equivalent to 150% of the monthly installments of Rent paid by Tenant
immediately prior to the termination or the current market rental rate for the
Premises, whichever is greater. If, after the termination of this Lease or of
Tenant's right of possession, Tenant remains in possession without Landlord's
consent, Landlord will suffer damages, the amount of which will be difficult to
determine; therefore, Tenant shall pay to Landlord as liquidated damages an
amount equal to 150% of the Rent calculated on a per diem basis, applicable
under the Lease in the month immediately prior to the termination. All such Rent
shall be payable in advance on the same day of each month. The month-to-month
tenancy may be terminated by either party upon 10 days' notice prior to the end
of any such monthly period. Nothing contained herein shall be construed as
obligating Landlord to accept any Rent tendered by Tenant after any such
termination or as obligating Landlord to consent to any holding over, or as
relieving Tenant of its liability under this Lease.

22. LANDLORD DEFAULT. In the event of an alleged default on the part of Landlord
    ----------------
under this Lease, Tenant shall give notice to Landlord and shall afford Landlord
a reasonable opportunity to cure the default. Notice to Landlord of any such
alleged default shall be ineffective unless notice is simultaneously delivered
to any Mortgagee as hereafter provided. Tenant agrees to give all Mortgagees, by
certified mail, return receipt requested, a copy of any notice of default served
upon Landlord, provided that prior to such notice Tenant has been notified, in
writing (by way of notice of Assignment of Rents and Leases, or otherwise), of
the address of such Mortgagee. Tenant further agrees that if Landlord shall have
failed to cure the default within the time provided, then the Mortgagee shall
have an additional 30 days following a second notice from Tenant within which to
cure the default. If the default cannot be cured within that time, Mortgagee
shall have such additional time as may be necessary provided that within the 30
days, Mortgagee has commenced and is diligently pursuing the remedies necessary
to cure such default (including, but not limited to, commencement of foreclosure
proceedings, if necessary, to effect its cure). Tenant may be entitled to
equitable relief and actual damages, but not consequential or punitive damages,
incurred by Tenant as a result of any default by Landlord, but shall not be
entitled to any abatement of or offset against Rent until it receives a final
judgment authorizing it to do so.

23. NOTICE. All notices, demands or statements required or permitted to be given
    ------
to Landlord shall be in writing and shall be deemed duly served when received or
refused to be received in the United States mail, postage prepaid, certified or
registered, return receipt requested, addressed to Landlord at Landlord's
address shown on the Basic Lease Term Sheet or at the most recent address of
which Landlord has notified Tenant in writing. All notices, demands or
statements required or permitted to be given to Tenant shall be in writing and
shall be deemed duly served when received to any officer or agent of Tenant (or
a partner or member of Tenant if Tenant is a partnership or other entity or to
Tenant individually if Tenant is a sole proprietor) or manager of Tenant whose
office is in the Building, or when received in the United States mail, postage
prepaid, certified or registered, return receipt requested, addressed to Tenant
at the Premises, or, prior to Tenant's taking possession of the Premises, to the
address known to Landlord as Tenant's principal office address. Either party
shall have the right to designate in writing, served as above provided, a
different address to which notice is to be delivered. This Paragraph shall not
prohibit notice from being given as provided in Rule 4 of Colorado Rules of
Civil Procedure, as amended from time to time.

                                      23
<PAGE>

24.  RULES AND REGULATIONS. The rules and regulations attached as Exhibit D are
     ---------------------                                        ---------
deemed a part of this Lease, and Tenant agrees that Tenant and its employees,
agents or any others permitted by Tenant to occupy or enter the Premises shall
at all times abide by those rules and regulations. Tenant agrees that Landlord
may change the rules and regulations for the Premises and the Building Complex
from time to time (including the addition of rules and regulations regarding
parking), and Tenant agrees to abide by them upon receipt of notice of the
change.

25.  PARKING. Tenant shall have the right to use the number of parking spaces
     -------
indicated on the Basic Lease Term Sheet on an unassigned, non-exclusive basis.
Tenant shall pay Landlord's monthly rate, as it may change from time to time, at
the rate stated on the Basic Lease Term Sheet. Tenant shall receive one bill
monthly for all those spaces, and the parking space rent shall be paid to
Landlord as Additional Rent at the same time and place as Base Rent. Landlord
shall use reasonable diligence to make those spaces available; however, the
abatement of Tenant's obligation to pay for unavailable spaces during any period
shall constitute Tenant's sole remedy. All vehicles parked in the parking spaces
are at the sole risk of Tenant, Tenant's agents and invitees and Landlord shall
have no liability for loss or damage.

                                      24
<PAGE>
28.  MISCELLANEOUS.
     -------------

     28.1. Limitation of Landlord's Liability. The term "Landlord" as used in
           ----------------------------------
this Lease, so far as covenants or obligations on the part of Landlord are
concerned, shall mean and include only the owner or owners of the Building at
the time in question and, in the event of any transfer or transfers of the title
thereto, Landlord herein named (and in the case of any subsequent transfers or
conveyances, the then grantor) shall be automatically released, from and after
the date of the transfer or conveyance, of all liability as respects the
performance of any covenants or obligations on the part of Landlord thereafter
to be performed, provided that the Security Deposit then held by Landlord or the
then grantor at the time of the transfer shall be delivered to or credited to
the purchase price paid by the grantee. Notwithstanding anything to the
contrary contained herein, Landlord's liability under this Lease shall be
limited to Landlord's interest in the Building Complex, and Tenant shall not and
cannot seek any recovery or deficiency against any other assets or against any
partners, lenders, officers, directors, or employees of Landlord or against the
Building Manager.

     28.2. No Merger. The termination of this Lease shall not be a merger, and
           ---------
such termination shall, at the option of Landlord, either terminate all
subleases and subtenancies or operate as an assignment to Landlord of any or all
such subleases or subtenancies.

     28.3. Landlord's Use of Common Areas. Tenant agrees that Landlord has the
           ------------------------------
right to use the Common Areas for the general benefit of the Building Complex,
including for the purposes of completing or making repairs or alterations in any
portion of the Building. Landlord may use the Building Complex, the Common Areas
and one or more of the street entrances to the Building Complex as may be
necessary in Landlord's judgment to complete any such work or for other purposes
in connection with Landlord's management or operation of the Building Complex.

     28.4. Covenants are Independent. This Lease shall be construed as though
           -------------------------
the covenants between Landlord and Tenant are independent and not dependent, and
subject to Paragraph 22, Tenant shall not be entitled to any set off of the Rent
or other amounts owing hereunder against Landlord if Landlord fails to perform
its obligations.

     28.5. Severability. If any provision of this Lease is held by a court of
           ------------
competent jurisdiction to be illegal, invalid, or unenforceable under any Laws,
it is the intention of the parties that the remainder of this Lease shall not be
affected and that the illegal, invalid, or unenforceable provision be replaced
by a provision (or construed to be) as similar in terms as possible and be
legal, valid, and enforceable.

     28.6. Captions and Terms. The caption of each Paragraph is added as a
           ------------------
matter of convenience only and shall have no effect on the construction of any
provision or provisions of this Lease. The words "include" and "including" when
used in this Lease are intended in their illustrative sense, not as a
limitation, and the terms that follow such words are illustrative and not
exclusive. References to "provisions" of this Lease refers to all of the
provisions, terms, conditions, covenants and agreements in this Lease. The words
"shall" and "will" have the same meaning.

                                      25
<PAGE>

     28.7.  Binding Effect: Governing Law. Subject to Paragraphs 13 and 28.1,
            -----------------------------
this Lease shall inure to the benefit of, and be binding upon, Landlord and
Tenant and their respective heirs, administrators, successors and assigns. This
Lease is subject to and shall be construed in accordance with Colorado law.

     28.8.  Tenant's Authority. Tenant and the party executing this Lease on
            ------------------
behalf of Tenant represent to Landlord that they are authorized to do so by
requisite action of Tenant and that this Lease is binding on Tenant, and agree,
upon request, to deliver to Landlord a resolution or similar document or opinion
of counsel to that effect.

     28.9.  Joint and Several. If there are more than one entity or person which
            -----------------
are the Tenant under this Lease, the obligations imposed upon Tenant under this
Lease shall be joint and several.

     28.10. Acts Binding Landlord. No act or thing done by Landlord or
             -----------------------
Landlord's agents during the term, including any agreement to accept the
surrender of the Premises or to amend or modify this Lease, shall be binding on
Landlord, unless in writing and signed by a person authorized to bind Landlord.
The delivery of keys to Landlord, or Landlord's agents, employees, or officers
shall not operate as a termination of this Lease or a surrender of the Premises.
No payment by Tenant or receipt by Landlord of a lesser amount than the full
monthly Rent and all other amounts owing, as herein stipulated, shall be deemed
to be other than on account of the earliest due Rent or other amounts, nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment as Rent be deemed an accord and satisfaction. Landlord may accept any
such check or payment without prejudice to Landlord's right to recover the
balance owed or to pursue any other remedy available to Landlord.

     28.11. Changes in the Building: Use of Names. Landlord shall have the
            -------------------------------------
right at any time to change the name of the Building, to increase the size of
the Building Complex by adding additional land, to construct other buildings or
improvements on any portion of the Building Complex or to change the location
and/or character of or to make alterations of or additions to the Building
Complex so long as the alterations and changes do not unreasonably interfere
with Tenant's occupancy of the Premises. In the event any additional buildings
are constructed or Landlord increases the size of the Building Complex, Landlord
and Tenant shall execute an amendment to this Lease which incorporates any
necessary modifications, additions, and adjustments. Tenant shall not use the
Building's name for any purpose other than as a part of its business address,
and Tenant shall not use the names Denver Technological Center, DTC, Crescent or
any variation, without Landlord's prior written approval and a license from the
owner of those tradenames. Any use of any of those names by Tenant shall
constitute a default under this Lease.

     28.12. Change in Light or View. Tenant agrees that no diminution of light,
            -----------------------
air, or view by any structure that may hereafter be erected (whether or not by
Landlord) shall entitle Tenant to any reduction of Rent or other charges under
this Lease, result in any liability of Landlord to Tenant, or in any way affect
this Lease or Tenant's obligations under it.

     28.13. No Other Agreements: Amendments. Tenant acknowledges and agrees that
            -------------------------------
it has not relied upon any statements, representations, agreements, or
warranties by Landlord, its agents or employees, except those expressed in this
Lease and that no amendment or modification of this Lease shall be valid or
binding unless in writing and executed by the parties hereto in the same manner
as the execution of this Lease, and that this Lease incorporates all prior
discussions and agreements.

                                      26
<PAGE>
     28.14. Brokers. Tenant represents and warrants to Landlord that no broker
            -------
or agent negotiated or was instrumental in the negotiation or consummation of
this Lease, except Landlord's Broker and any Tenant's Broker specified in the
Basic Lease Term Sheet. Tenant agrees to indemnify and hold Landlord harmless
from and against any loss, expense, cost or liability incurred by Landlord as a
result of a claim by any other broker or finder, whether or not meritorious,
claiming through Tenant. Tenant acknowledges Landlord is not liable for any
representations by Landlord's Broker or Tenant's Broker regarding the Premises,
the Building, the Building Complex or this Lease.

     28.15. Recordation. Tenant shall not record or permit to be recorded this
            -----------
Lease or any memorandum of it; and any such recording shall be an Event of
Default.

     28.16. Execution Required. Submission of this Lease or any letter regarding
            ------------------
it for examination or signature by Tenant shall not grant to Tenant an option or
right to lease the Premises; and this Lease shall not be effective as a lease or
otherwise binding on either party until execution and delivery by both Landlord
and Tenant.

     28.17. Attorney's Fees. If either party brings an action to enforce any
            ---------------
provision of this Lease, the prevailing party shall be entitled to recover its
reasonable attorney's fees, as determined by the court.

     28.18. Time of Essence: Effective Dates. Time is of the essence herein and,
            --------------------------------
unless waived by Landlord (which it shall have the right, but not the
obligation, to so do), this Lease is contingent upon execution and delivery by
Tenant to Landlord no later than 5:00 p.m. on _______________, ______ without
any changes which are not approved by Landlord. This Lease shall become
effective only upon execution by Landlord and delivery of a fully-executed copy
of this Lease to Tenant.
*See attached Rider.

                                        "Landlord"

                                        BOARD OF ADMINISTRATION AS TRUSTEE FOR
                                        THE POLICE AND FIRE DEPARTMENT
                                        RETIREMENT FUND



                                        By: /s/ EDWARD F. OVERTON
                                            -----------------------------------
                                                 As its: Secretary
                                                         ----------------------


                                        "Tenant"

                                        FIRSTWORLD COMMUNICATIONS, INC.
                                        ---------------------------------------
                                        A DELAWARE CORPORATION



                                        By: /s/ SHELDON S. OHRINGER
                                            -----------------------------------
                                                 As its: President & CEO
                                                         ----------------------


                                        By: /s/ SCOTT M. CHASE
                                            -----------------------------------
                                            SVP, Corporate & Government Affairs

Attest:



By: /s/ CHRISTOPHER J. KUELLING
    ------------------------------
Title: Senior Corporate Counsel
       ---------------------------

                                      27
<PAGE>

                             RIDER TO OFFICE LEASE
                             ---------------------

                                    Between
                     Board of Administration as Trustee for
                 the Police and Fire Department Retirement Fund
                                      and
                        FirstWorld Communications, Inc.
                  Pertaining to Crescent VII Office Building

   Tenant shall have the option to terminate this Lease at any time on the
   following conditions:

   1.  Tenant must give notice of its election to terminate this Lease at least
six months before the termination date. The termination date can be no earlier
than July 31, 2001.

   2.  Tenant must not be in default under this Lease or the Agreement on the
date Tenant gives notice of its election to terminate or on the date this Lease
is to terminate.

   3.  If this Lease terminates pursuant to the provisions of this Rider, Tenant
shall pay a termination fee of one month's rent (equal to the last month of paid
rent) plus all unamortized tenant finish costs ($6.00 per rentable square foot
amortized at 11%).

   4.  If all these conditions have been met, this Lease shall terminate and
Tenant shall vacate the Premises in accordance with this Lease on the date
stated in Tenant's notice of termination and Tenant shall be fully released from
all obligations under the Lease subject to leaving the space broom clean and
normal wear and tear accepted. If all these conditions are not met, this option
to terminate and any election under it shall be void and of no effect.

Section 5. Operating Expenses
           ------------------

   5.1.a (cont'd.) It is understood that Tenant shall have a 1999 base year
based on actual 1999 operating expenses and taxes.

A. Exclusions to Operating Expenses

   1. Costs associated with the operation of the business of the ownership or
   entity which constitutes "Landlord", as distinguished from the costs of
   building operations, including, but not limited to, partnership accounting
   and legal matters, costs of defending any lawsuits with any mortgagee (except
   as the actions of Tenant may be in issue), costs of selling, syndicating,
   financing, mortgaging or hypothecating any of Landlord's interest in the
   Building, costs of any disputes between Landlord and its employees (it any)
   not engaged in Building operation, disputes of Landlord with Building
   management, or outside fees paid in connection with disputes with other
   tenants.

   2. Costs incurred in connection with the construction of the Building or in
   connection with any major change in the Building, including but not limited
   to, correcting defects in, or inadequacy of, the initial design or
   construction of the Building, except for any cost associated with changes in
   the code.

   3.  Depreciation, interest and principal payments on mortgages and other debt
   costs, if any.

   4.  Expenses directly resulting from the gross negligence of Landlord, its
   agents, servants or employees.
<PAGE>

5.   Legal fees, space planner's fees, real estate broker's leasing commissions,
     and advertising expenses incurred in connection with the original
     development or original leasing of the Building or future leasing of the
     Building.

6.   Costs for which Landlord is reimbursed by its insurance carrier or any
     other tenant's insurance carrier.

7.   Any bad debt loss, rent loss, or reserves for bad debts or rent loss.

8.   The expense of extraordinary services provided to other tenants in the
     Building.

9.   The wages of any employee who does not devote substantially all of his or
     her time to the Building.

10.  Fines and penalties.

11.  Amounts paid as ground rental by Landlord.

12.  Costs incurred due to Landlord's failure to comply with laws enacted on or
     before the date the Building's Temporary Certificate of Occupancy was
     validly issued; however, Tenant shall be responsible for any cost to comply
     with any law or code due to Tenant's use.

13.  Costs incurred by landlord with respect to goods and services (including
     utilities sold and supplied to tenants and occupants of the Building) to
     the extent that Landlord is entitled to reimbursement for such costs.

14.  Costs, including permit, license and inspection costs, incurred with
     respect to the installation of tenant improvements made for new tenants in
     the Building or incurred in renovating or otherwise improving, decorating,
     painting or redecorating vacant space for tenants or other occupants of the
     Building.

15.  Costs of alterations or improvements to the Premises or the Premises of
     other tenants.

16.  All items and services for which Tenant or any other tenant in the Building
     reimburses Landlord or which Landlord provides selectively to one or more
     tenants (other than Tenant) without reimbursement.

17.  Electric power costs for which any tenant directly contracts with the local
     public service company.

18.  Expenses and costs not normally, in accordance with generally accepted
     accounting principles, included by landlords of first class institutional
     office buildings.

B.   Discounts

     It is understood that Common Area Operating Expenses shall be reduced by
     all cash discounts, trade discounts, or quantity discounts received by
     landlord or Landlord's managing agent in the purchase of any goods,
     utilities or services in connection with the operation of the Building.
     Landlord shall make payments for goods, utilities and services in a timely
     manner to obtain the maximum possible discount. If capital items which are
     customarily purchased by landlords of first class office buildings in the
     same area all leased, rather than purchased, by Landlord, the decision by
     landlord to lease the item in
<PAGE>

   question shall not serve to increase Tenant's proportionate share of
   Operating Costs beyond that which would have applied had the item in question
   been purchased. In the calculation of any expenses hereunder, it is
   understood that no expense shall be charged more than once.

Section 13. Subletting and Assignment
            -------------------------

   13.2 (cont'd.) Tenant shall have the right, without Landlord's approval, to
sublet or assign its Premises, or any part thereof, to any successor of
FirstWorld Communications resulting from a merger, consolidation, sale or
acquisition or to any entity affiliated with FirstWorld Communications so long
as in the event of merger, consolidation, sale or acquisition, the resulting
entity has an equal or greater net worth than FirstWorld Communications.

Section 29. Signage
            -------

   Landlord shall use its best efforts to create lobby identity acceptable to
Tenant. All associated costs shall be the responsibility of Tenant.

Section 30. Building Antennas and Microwave
            -------------------------------

   Tenant shall have the right, at its own expense, to install and operate
satellite or microwave receiving or transmitting dishes and other related
equipment on the roof of the Building at no charge for the term of the lease.
Tenant shall pay only actual operating and maintenance expenses attributable to
the use of the antennae and microwave. Such use shall be subject to receipt of
all required government approvals and shall not interfere with Building systems
or helipad. Specifications of such equipment shall be mutually agreed upon.

Exhibit C (continued) - Tenant Finish Allowance

Tenant shall be entitled to draw upon the Tenant Finish Allowance from time to
time by submitting a request for payment to Landlord upon such form reasonably
approved by Landlord. Subject to such request for payment being in compliance
with the requirements hereof, Landlord shall disburse the amount of such request
for payment to Tenant or its contractors and/or subcontractors. All requests for
payment shall be subject to the following requirements: (i) such requests for
payment shall be certified by Tenant, its general contractor and its architect;
(ii) Tenant shall submit to Landlord original mechanic's lien waivers executed
by all contractors, subcontractors and suppliers for all work and services
performed and materials supplied with respect to such request for payment and
otherwise in form in substance reasonably acceptable to Landlord; and (iii) all
other reasonable requirements of any lender of Landlord. Notwithstanding
anything to the contrary, Landlord shall not be obligated to disburse the final
draw upon the Tenant Finish Allowance until the following requirements have been
satisfied, in addition to the requirements provided in the preceding sentence:
(i) Tenant, its general contractor and its architect shall certify substantial
completion of the Tenant Finish Work to Landlord; (ii) Tenant shall submit to
Landlord original final mechanic's lien waivers executed by Tenant's general
contractor, subcontractors and suppliers for all work and services performed and
material supplied with respect to the Tenant Finish Work and otherwise in form
and substance reasonably acceptable to Landlord; (iii) Tenant shall provide to
landlord an original, unconditional Certificate of Occupancy for the Demised
Premises; and (iv) Tenant shall provide copies of all warranties, operation and
maintenance manuals, and record drawings (consisting of one reverse mylar sepia
and two blueprint copies) of the Tenant Finish.
<PAGE>

                                  EXHIBIT A

                            DESCRIPTION OF PREMISES


                           [FLOOR PLAN APPEARS HERE]

------------------------------------------------------------------------------
                          L E V E L   T W O   P L A N




                           [FLOOR PLAN APPEARS HERE]
------------------------------------------------------------------------------
                        L E V E L   T H R E E   P L A N


                                 VII CRESCENT

                                      A-1
<PAGE>

                                   EXHIBIT B

                               LEGAL DESCRIPTION

RESCENT PARCEL VII
------------------

PARCEL OF LAND LOCATED IN THE NORTHEAST QUARTER OF SECTION 16, TOWNSHIP 5
SOUTH, RANGE 67 WEST OF THE SIXTH PRINCIPAL MERIDIAN, DENVER TECHNOLOGICAL
CENTER, CITY OF GREENWOOD VILLAGE, COUNTY OF ARAPAHOE, STATE OF COLORADO AND
BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTH QUARTER CORNER OF SECTION 16, TOWNSHIP 5 SOUTH, RANGE 67
WEST OF THE SIXTH PRINCIPAL MERIDIAN; THENCE ALONG THE NORTH LINE OF THE
NORTHEAST QUARTER OF SAID SECTION 16 N89'52'59"E, A DISTANCE OF 1,074.00 FEET
HENCE LEAVING SAID NORTH LINE S00'07'01"E, A DISTANCE OF 467.54 FEET TO THE TRUE
POINT OF BEGINNING; THENCE ALONG A NON-TANGENT CURVE TO THE LEFT HAVING A RADIUS
OF 590.00 FEET, AN ARC LENGTH OF 77.15 FEET, A CENTRAL ANGLE OF 07'29'32" AND A
CHORD WHICH BEARS S69'19'05"E, A DISTANCE OF 77.09 FEET TO A POINT OF COMPOUND
CURVATURE; THENCE ALONG A CURVE TO THE LEFT HAVING A RADIUS OF 70.00 FEET, AN
ARC LENGTH OF 144.89 FEET. A CENTRAL ANGLE OF 10'46'54" AND A CHORD WHICH BEARS
S78'27'18"E, A DISTANCE OF 144.68 FEET TO A POINT ON THE WESTERLY RIGHT-OF-WAY
LINE OF DTC BOULEVARD; THENCE ALONG SAID RIGHT-OF-WAY LINE, A NON-TANGENT LINE
S00'36'55"W. A DISTANCE OF 476.46 FEET; THENCE DEPARTING SAID RIGHT-OF-WAY LINE
S89'53'15"W, A DISTANCE OF 335.60 FEET; THENCE N00-33'34"E A DISTANCE OF 5.79
FEET; THENCE N85'45'52"W A DISTANCE OF 8.08 FEET; THENCE N4'14'08"E A DISTANCE
OF 144.60 FEET; THENCE S85'45'52"E A DISTANCE OF 11.00 FEET TO A POINT OF
CURVATURE; THENCE 6.28 FEET ALONG THE ARC OF A CURVE TO THE LEFT HAVING A RADIUS
OF 4.00 FEET, A CENTRAL ANGLE OF 90'00'00" AND A CHORD WHICH BEARS 49'14'08"E A
DISTANCE OF 5.66 FEET TO A POINT OF TANGENCY; THENCE N4'14'08"E A STANCE OF
29.27 FEET TO A POINT OF CURVATURE; THENCE 15.92 FEET ALONG THE ARC OF A CURVE
TO THE RIGHT HAVING A RADIUS OF 36.00 FEET. A CENTRAL ANGLE OF 25'20'14" AND A
CHORD WHICH BEARS N16'54'15"E A DISTANCE OF 15.79 FEET TO A POINT OF TANGENCY;
THENCE N29'34'22"E A DISTANCE OF 115.60 FEET TO A POINT OF CURVATURE; HENCE 5.71
FEET ALONG THE ARC OF A CURVE TO THE LEFT HAVING A RADIUS OF 14.00 FEET, A
CENTRAL ANGLE OF 23'23'12" AND A CHORD WHICH BEARS N17'52'46"E A DISTANCE OF
5.67 FEET TO A POINT OF REVERSE CURVATURE; THENCE 97.42 FEET ALONG THE ARC OF
CURVE TO THE RIGHT HAVING A RADIUS OF 271.00 FEET, A CENTRAL ANGLE OF 20'35'51"
AND A CHORD WHICH BEARS N16'29'05"E A DISTANCE OF 96.90 FEET TO A POINT OF
TANGENCY; THENCE N26'47'00"E A DISTANCE OF 42.78 FEET; THENCE N12'49'41"W A
STANCE OF 18.93 FEET TO THE TRUE POINT OF BEGINNING.

SAID PARCEL CONTAINS 150614 SQUARE FEET (3.46 ACRES) MORE OR LESS.

                                      B-1
<PAGE>
                                   EXHIBIT C

                         TENANT IMPROVEMENT AGREEMENT



     This Agreement is a part of the Office Lease entered into by BOARD OF
                                                                  --------
ADMINISTRATION AS TRUSTEE FOR THE POLICE AND FIRE DEPARTMENT RETIREMENT FUND,
----------------------------------------------------------------------------
as Landlord, and FIRSTWORLD COMMUNICATIONS, INC. , as Tenant, pertaining to the
                 -------------------------------
CRESCENT VII Building (the "Lease").  Except as expressly provided to the
------------
contrary herein, all initially capitalized terms used in this Agreement shall
have the same meaning as set forth in the Lease to which this Exhibit C is
                                                              ---------
attached.

     1.  Base Building Improvements. Landlord, at its expense, shall construct
         --------------------------
in or for the Premises the following improvements with Building standard
materials and installation (the "Base Building Improvements"):

         a.  Structure: Subfloor, bearing walls, exterior weather walls;
columns, beams and roof or ceiling;

         b.  Floors: Bare finish, concrete slab floors;

         c.  Electrical: Primary electrical distribution system to the floor of
the Building on which the Premises are located;

         d.  Heating, Ventilation and Air Conditioning: Primary heating,
ventilation and air conditioning distribution system, installed and ready for
connection to the variable volume and/or mixing air distribution boxes and
supply and return ductwork to be provided as part of the Tenant Finish Work (as
defined below).

         e.  Telephone: A telephone terminal panel serving the Premises,
installed in a reasonable location designated by Landlord;

         f.  Plumbing: Building standard restroom plumbing and fixtures in the
Common Areas (unless the Premises includes the entire floor) on the floor of the
Building on which the Premises are located; and

         g.  Fire Safety System: Primary distribution for the fire safety system
required by applicable code (including, without limitation, fire sprinklers and
alarms) installed and ready for connection to the fire safety system for the
Premises to be provided as part of the Tenant Finish Work.

     2.  Preliminary Space Plans. Promptly after the effective date of the
         -----------------------
Lease, Tenant shall have its space planners prepare plans and specifications
(the "Space Plans") for all leasehold improvements in addition to the Base
Building Improvements (the "Tenant Finish Work"), which Space Plans shall be
sufficient to obtain a bid for the construction of the Tenant Finish Work.
Within 10 days after the effective date of the Lease, Tenant shall furnish to
Landlord all information necessary regarding the Space Plans. Landlord shall
deliver to Tenant any comments it may have to the Space Plan within seven days
after receipt, and the Space Plans shall be finalized within 30 days after the
date of the Lease. The Space Plans shall be prepared at Tenant's expense.

                                      C-1
<PAGE>

                 **Landlord
     3.  Landlord's Allowance. When the Space Plans are approved in writing by
         --------------------
both Landlord and Tenant, Tenant shall obtain a bid for the construction of the
Tenant Finish Work. Tenant shall promptly notify ** of the amount of the bid or
bids and the amount required to prepare the architectural and engineering
construction drawings for the Tenant Finish Work (the "Estimated Work Cost"). If
the Estimated Work Cost is less than or equal to $6.00 per square foot of the
                                                 -----
Rentable Area of the Premises (the "Landlord's Allowance"), then Landlord shall
proceed in accordance with paragraph 4. The Landlord's Allowance shall be spent
and allocated to the Tenant Finish Work throughout the entire Premises and in
accordance with the Construction Drawings referred to in paragraph 4. Landlord's
Allowance shall be used solely for Tenant Finish Work which will include (i) all
fees and expenses incurred by Tenant in connection with the design and
construction of the Tenant Finish Work. (ii) testing and inspection costs.
Tenant shall not be entitled to any payment or Rent reduction for any part of
the Landlord's allowance not so used.
(SEE ATTACHED RIDER)

     4. Construction of Tenant Finish Work. Tenant shall cause its architect and
        ----------------------------------
engineer to prepare construction drawings and specifications (the "Construction
Drawings") for the Tenant Finish Work, based strictly on the Space Plans, and
shall cause the Tenant Finish Work to be constructed in the Premises in
accordance with the Construction Drawings: provided, however, that Landlord's
contribution toward preparing the Construction Drawings and of constructing the
Tenant Finish Work shall not exceed the Landlord's Allowance. Prior to the
commencement of construction, Tenant shall be given an opportunity to review the
Construction Drawings to confirm that they conform to the Space Plans. Upon
substantial completion of the construction of the Tenant Finish Work and prior
to Tenant's occupancy of the Premises, Tenant shall pay to * the amount, if any,
by which the actual cost of preparing the Construction Drawings and of
constructing the Tenant Finish Work exceeds the Landlord's Allowance.

                             *selected contractor

     If after commencement of the construction of the Tenant Finish Work, Tenant
wants to change the Construction Drawings or scope of the Tenant Finish Work, it
shall notify Contractor. Contractor shall then obtain an estimate of the
additional cost of the Tenant Finish Work, if any, resulting from any such
changes and within 10 days notify Tenant of the additional cost and any
resulting delay in completing the Tenant Finish Work; and within three business
days thereafter, Tenant shall advise contractor whether or not it wants to
proceed with the changes. If Tenant elects to proceed with the changes, it shall
promptly deliver a copy of the revised plans to Landlord for their review and
approval.

                                      C-2
<PAGE>

     6. Substantial Completion: Ready for Tenant. The Tenant Finish Work shall
        ----------------------------------------
be deemed to have been substantially completed and to be Ready for Tenant when
the Tenant has substantially completed the Tenant Finish Work, exclusive of any
punch list work.

     7. General. All drawings, space plans, plans and specifications for any
        -------
improvements or installations in the Premises are expressly subject to
Landlord's prior written approval*. Any approval by Landlord or Landlord's
architects or engineers of any of Tenant's drawings, plans or specifications
which are prepared in connection with construction of improvements in the
Premises shall not in any way constitute a representation or warranty of
Landlord as to the adequacy or sufficiency of the drawings, plans or
specifications, or the improvement to which they relate, for any use, purpose or
condition, but this approval shall merely be the consent of Landlord to Tenant's
construction of improvements in the Premises in accordance with those drawings,
plans or specifications. Failure by Tenant to pay any amount when due under this
Agreement or the failure by Tenant to perform any of its other obligations under
this Agreement shall be an Event of Default under Paragraph 19.1 of the Lease,
entitling Landlord to all of its remedies under the Lease as well as all
remedies otherwise available to Landlord.

             *which shall not be unreasonably withheld or delayed.

                                      C-3
<PAGE>

                                     "Landlord"

                                     BOARD OF ADMINISTRATION AS TRUSTEE FOR THE
                                     POLICE AND FIRE DEPARTMENT RETIREMENT FUND

                                     By: /s/ EDWARD F. OVERTON
                                         ---------------------------------------
                                             As its: Secretary
                                                     ---------------------------

                                     "Tenant"

                                     FIRSTWORLD COMMUNICATIONS, INC.,
                                     -------------------------------------------
                                     A DELAWARE CORPORATION

                                     By: /s/ SHELDON S. OHRINGER
                                         ---------------------------------------
                                             As its: President & CEO
                                                     ---------------------------

Attest:
                                     By: /s/ SCOTT M. CHASE
                                             SVP, Corp & Govt Affairs

By: /s/ CHRISTOPHER J. KUELLING
   -------------------------------
Title: Senior Corporate Counsel
      ----------------------------

                                      C-4

<PAGE>

                                   EXHIBIT D

                             RULES AND REGULATIONS

     It is further agreed that the following rules and regulations shall be and
are hereby made a part of this Lease and Tenant agrees that Tenant's employees
and agents or any others permitted by Tenant to occupy or enter the Premises
will at all times abide by these rules and regulations as they may be amended or
supplemented from time to time. Capitalized terms have the same meaning as used
in the Lease, unless otherwise indicated.

     1.   The sidewalks, entries, passages, corridors, stairways, and elevators
of the Building Complex shall not be obstructed or locked or used for smoking,
storage or loitering by Tenant or Tenant's agents or employees or used for any
purpose other than ingress and egress to and from the Premises, it being
understood and agreed that such access may be obtained only via the elevators
(if any) in the lobby of the Building. The fire doors, including those in the
elevator lobbies, shall not be locked or obstructed by Tenant.

     2.   Furniture, equipment, or supplies will be moved in or out of the
Building only upon the elevator (if any) and access ways designated by Landlord
and then only during such hours and in such manner as may be prescribed by
Landlord. The Landlord shall have the right to approve or disapprove the movers
or moving company employed by Tenant and Tenant shall cause the movers to use
only the loading facilities and elevator designated by Landlord. In the event
Tenant's movers damage the elevator or any part of the Building, Tenant shall
forthwith pay to Landlord the amount required to repair that damage.

     3.   No safe or article, the weight of which may, in the opinion of
Landlord, constitute a hazard or damage to the Building or the Building's
equipment, shall be moved into the Premises. Safes and other equipment, the
weight of which is not excessive, shall be moved into, from, or about the
Building only during such hours and in such manner as shall be prescribed by
Landlord and landlord shall have the right to designate the location of such
articles in the Premises.

     4.   During the entire term of this Lease, Tenant shall, at Tenant's
expense, install and maintain under each and every caster chair a chair pad to
protect the carpeting.

     5.   No sign, advertisement or notice shall be inscribed, painted, or
affixed on any part of the inside or outside of the Building (including windows)
unless of such color, size, and style and in such place upon or in the Building
as shall be first designated by Landlord in writing but there shall be no
obligation or duty on Landlord to allow any sign, advertisement or notice to be
inscribed, painted, or affixed on any part of the inside or outside of the
building. A directory in a conspicuous place, for listing the names of tenants
in the Building will be provided by Landlord. Any necessary revision in the
directory will be made by Landlord at Tenant's expense within a reasonable time
after notice from Tenant of the change making the revision necessary. No
furniture shall be placed in front of the Building or in any lobby or corridor
of the building (whether included wholly within the Premises, or otherwise),
without the prior written consent of Landlord. Landlord shall have the right to
remove all non-permitted signs and furniture, without notice to Tenant, at the
expense of Tenant.

     6.   Tenant shall not do or permit anything to be done in the Premises or
bring or keep anything therein which would in any way increase the rate of fire
insurance on the Building or on property kept therein which would in any way
increase the rate of fire insurance on the Building or on property kept herein,
constitute a nuisance or waste, obstruct or interfere with the rights of other
tenants

                                      D-1
<PAGE>

or in any way injure or annoy them, or conflict with the laws relating to fire
or with any regulations of the fire department, fire insurance underwriters, or
with any insurance policy upon the Building or any part thereof, or conflict
with any of the rules or ordinances of the Department of Health of the City and
County where the Building is located.

     7.  The janitor of the building may at all times keep a passkey and other
agents of Landlord shall at all times be allowed admittance to the Premises.

     8.  Water closets and other water fixtures shall not be used for any
purpose other than that for which they were intended and any damage resulting to
them from misuse on the part of Tenant or Tenant's agents or employees shall be
paid for by Tenant. No person shall waste water by tying back or wedging the
faucets or in any other manner.

     9.  Except for handicapped assistance dogs, no animals shall be allowed in
the offices, halls, corridors, and elevators in the Building. No person shall
disturb the occupants of the Building or adjoining buildings or premises by the
use of any radio, sound equipment, or musical instrument or by the making of
loud or improper noises.

     10. Bicycles or other vehicles shall not be permitted in the offices,
halls, corridors, and elevators in the Building nor shall any obstruction of
sidewalks or entrances of the Building be permitted.

     11. Tenant shall not allow anything to be placed on the outside of the
building, nor shall anything be thrown by Tenant or Tenant's agents or employees
out of the windows or doors or down the corridors, elevator shafts, or
ventilating ducts or shafts of the Building. Tenant, except In case of fire or
other emergency, shall not open any outside window. Tenant must at its own
expense dispose of crates, boxes, or similar large items of refuse which will
not fit into office waste paper baskets. In no event shall Tenant set any such
items in the corridors or other areas of the Building or garage facility.

     12. No additional lock or locks shall be placed by Tenant on any door in
the Building, unless written consent of Landlord shall First have been obtained.
Two keys to the Premises and the toilet rooms, if locked by Landlord, will be
furnished by Landlord and neither Tenant nor Tenant's agents or employees shall
have any duplicate keys made. Landlord shall supply Tenant with such additional
keys as Tenant may require at Tenant's sole cost and expense. At the termination
of this tenancy, Tenant shall promptly return to Landlord all keys to offices,
toilet rooms, or vaults.

     13. No window shades, blinds, screens, draperies, or other window coverings
will be attached or detached by Tenant without Landlord's prior written consent.
Tenant agrees to abide by Landlord's rules with respect to maintaining uniform
curtains, draperies and linings, or blinds at all windows and hallways.

     14. If any Tenant desires telegraphic, telephonic, or other electric
connections, Landlord or Landlord's agents will direct the electricians as to
where and how the wires may be introduced. Without such directions, no boring or
cutting for wires will be permitted. Any such installation and connection shall
be made at Tenant's expense.

     15. Tenant shall not install or operate any steam or gas engine or boiler
or carry on any mechanical business in the Premises. The use of oil, gas, or
inflammable liquids for heating, lighting, or any other purpose is expressly
prohibited. Explosives or other articles deemed extra hazardous shall not be
brought into the Building.

                                      D-2
<PAGE>

     16. Any painting or decorating, as may be agreed to be done by and at the
expense of Landlord, shall be done during regular weekday working hours.
Should Tenant desire such work on Saturdays, Sundays, Legal Holidays, or outside
of regular working hours, Tenant shall pay for the extra cost thereof.

     17. Except as permitted by Landlord, Tenant shall not mark upon, paint
signs upon, cut drill into, drive nails or screws into, or in any way deface the
walls, ceilings, partitions, or floors of the Premises or of the Building and
any defacement, damage, or injury caused by Tenant or Tenant's agents or
employees shall be paid for by Tenant.

     18. Smoking is prohibited in the Building, including all tenants' premises,
inside lobbies, stairwells, bathrooms, and other Common Areas and public areas
of the Building Complex and is restricted in all outside plaza areas of the
Building Complex to specific locations designated by Landlord as smoking areas,
if any.

     19. Tenant shall be entitled to two sets of keys to the Premises. In the
event Tenant needs any additional keys, such keys must be requested from
Landlord. Tenant shall pay to Landlord the actual cost of making such additional
keys. Landlord reserves the right to refuse admittance to the Building at any
time other than during Ordinary Business Hours, to any person not producing a
key to the Premises and/or a pass issued by Landlord. In case of fire, invasion,
riot, public excitement or other commotion, Landlord also reserves the right to
prevent access to the Building while it continues. Landlord shall in no case be
liable for damages for the admission or exclusion of any person to or from the
Building.

     20. No canvassing, soliciting, distribution of hand bills or other written
material, or peddling shall be permitted in the Building on the Building
Complex, and Tenant shall cooperate with Landlord in prevention and elimination
of same.

                                      D-3
<PAGE>

                                   EXHIBIT E

                        LEASE COMMENCEMENT CERTIFICATE

LANDLORD: BOARD OF ADMINISTRATION AS TRUSTEE FOR THE POLICE AND FIRE DEPARTMENT
          RETIREMENT FUND
          ---------------------------------------------------------------------

TENANT:   FIRSTWORLD COMMUNICATIONS, INC., A DELAWARE CORPORATION
          ---------------------------------------------------------------------

        This Lease Commencement Certificate is made by Landlord and Tenant
pursuant to that certain Office Lease (the "Lease") entered into as of ________,
_____, for the Leased Premises known as Suite _____, in the Building known as
_______________ (the "Premises"). This constitutes a supplementary addendum to
the Lease as contemplated by Article 4 of the Lease.

        1. Lease Commencement Date. Landlord and Tenant acknowledge and agree
           -----------------------
that the Lease Commencement Date, as contemplated by Article 4 of the Lease, is
_______________, __________, and the Lease Expiration Date is _______________,
_____. Rent as contemplated by the Lease begins accruing to Landlord's benefit
as of _______________, _____. All covenants in the Lease contemplated to
begin on the Lease Commencement Date shall commence as of the Lease
Commencement Date.

        2. Acceptance of Premises. Tenant has inspected and examined the
           ----------------------
Premises, and Tenant finds the Premises acceptable and satisfactory in all
respects in their current, "as is" condition, except for the "Punchlist Items"
attached hereto (if any). All of the work to be completed by Landlord, as
contemplated by the Lease and the Work Letter (attached as Exhibit C to the
                                                           ---------
Lease), has been fully completed and fulfilled. The attached list of Punchlist
Items constitutes all matters which Tenant does not find fully and completely
acceptable, and as to which Tenant desires Landlord to perform corrective work.

        3. Incorporation in Lease. This Certificate is incorporated into the
           ----------------------
Lease, and forms a supplementary and integral part thereof. This Certificate
shall be construed and interpreted in accordance with all other terms and
provisions of the Lease for all purposes.


                                "Landlord"

                                BOARD OF ADMINISTRATION AS TRUSTEE FOR THE
                                POLICE AND FIRE DEPARTMENT RETIREMENT FUND

                                By: ___________________________________________

                                    As its: ___________________________________

                                "Tenant"

Attest:                         FIRSTWORLD COMMUNICATIONS, INC.,
                                _______________________________________________
                                A DELAWARE CORPORATION

By: __________________________  By: ___________________________________________

Title: _______________________      As its: ___________________________________

                                      E-1