<PAGE>

                                                                  EXHIBIT 10.7

                                LEASE AGREEMENT
                                   (NNN R&D)
                            BASIC LEASE INFORMATION

Lease Date:                   August 11, 1999

Landlord:                     LINCOLN-RECP OLD OAKLAND OPCO, LLC,
                              a Delaware limited liability company

Landlord's Address:           c/o Legacy Partners Commercial, Inc.
                              101 Lincoln Centre Drive, Fourth Floor
                              Foster City, California 94404-1167

Tenant:                       NetFlix.com,
                              a Delaware corporation

Tenant's Address:             Before Commencement Date:
                              750 University Avenue
                              Los Gatos, California 95032-7606
                              Attention: Barry McCarthy

                              After Commencement Date:
                              750 University Avenue
                              Los Gatos, California 95032-7607
                              Attention: Barry McCarthy

Premises:                     Approximately 31,830 rentable square feet as shown
                              on Exhibit A
                                 ---------

Premises Address:             2219 Old Oakland Road
                              San Jose, California 95131-1402

Building:                     Approximately 55,976 rentable square feet
Lot (Building's tax parcel):  APN 237-01-044
Park:                         Approximately 138,366 rentable square feet

Term:                         November 1, 1999 ("Commencement Date"), through
                              October 31, 2004 ("Expiration Date")

Base Rent ((P)3):             Thirty Six Thousand Six Hundred Five and 00/100
                              Dollars ($36,605.00) per month

Adjustments to Base Rent:     November 1, 2000             $38,196.00
                              November 1, 2001             $39,788.00
                              November 1, 2002             $41,379.00
                              November 1, 2003             $42,971.00

Security Deposit ((P)4):      Two Hundred Nineteen Thousand Six Hundred-Thirty
                              and 00/100 Dollars ($219,630.00), subject to the
                              adjustments set forth in Section 4 of the Lease.

*Tenant's Share of Operating Expenses ((P)6.1):       56.86% of the Building,
                                                      23% of the Park
*Tenant's Share of Tax Expenses ((P)6.2):             23% of the Park
*Tenant's Share of Common Area Utility Costs ((P)7):  56.86% of the Building,
                                                      23% of the Park
*Tenant's Share of Utility Expenses ((P)7):           23% of the Building
*The amount of Tenant's Share of the expenses as referenced above shall be
subject to modification as set forth in this Lease.

Permitted Uses ((P)9):       Fulfillment and distribution center of DVD rental
                             including general office and administration,
                             marketing, R&D, storage, distribution and light
                             manufacturing, but only to the extent permitted by
                             the City of San Jose and all agencies and
                             governmental authorities having jurisdiction
                             thereof.

Unreserved
Parking Spaces:              One hundred twenty-seven (127) non-exclusive and
                             non-designated spaces

Broker ((P)38):              Cornish & Carey Commercial for Tenant
                             Grubb & Ellis for Landlord

                                       1
<PAGE>

Exhibits:      Exhibit A -  Premises, Building, Lot and/or Park
               Exhibit B -  Tenant Improvements
               Exhibit C -  Rules and Regulations
               Exhibit D -  Covenants, Conditions and Restrictions
                            (Intentionally omitted)
               Exhibit E -  Hazardous Materials Disclosure Certificate - Example
               Exhibit F -  Change of Commencement Date - Example
               Exhibit G -  Tenant's Initial Hazardous Materials Disclosure
                            Certificate
               Exhibit H -  Sign Criteria (Intentionally omitted)
               Exhibit I -  Subordination, Non-Disturbance and Attornment
                            Agreement

                                       2
<PAGE>

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>

  SECTION                                                                       PAGE
  -------                                                                       ----
<S>        <C>                                                                  <C>

     1.   Premises.........................................................      4
     2.   Adjustment of Commencement Date; Condition of the Premises.......      4
     3.   Rent.............................................................      5
     4.   Security Deposit.................................................      5
     5.   Tenant Improvements..............................................      6
     6.   Additional Rent..................................................      6
     7.   Utilities........................................................      8
     8.   Late Charges.....................................................      9
     9.   Use of Premises..................................................      9
    10.   Alterations and Additions; and Surrender of Premises.............     10
    11.   Repairs and Maintenance..........................................     11
    12.   Insurance........................................................     12
    13.   Waiver of Subrogation............................................     14
    14.   Limitation of Liability and Indemnity............................     14
    15.   Assignment and Subleasing........................................     15
    16.   Ad Valorem Taxes.................................................     16
    17.   Subordination....................................................     16
    18.   Right of Entry...................................................     17
    19.   Estoppel Certificate.............................................     17
    20.   Tenant's Default.................................................     18
    21.   Remedies for Tenant's Default....................................     18
    22.   Holding Over.....................................................     19
    23.   Landlord's Default...............................................     20
    24.   Parking..........................................................     20
    25.   Sale of Premises.................................................    .20
    26.   Waiver...........................................................     20
    27.   Casualty Damage..................................................     20
    28.   Condemnation.....................................................     22
    29.   Environmental Matters/Hazardous Materials........................     22
    30.   Financial Statements.............................................     24
    31.   General Provisions...............................................     25
    32.   Signs............................................................     26
    33.   Mortgagee Protection.............................................    .26
    34.   Quitclaim........................................................     27
    35.   Modifications for Lender.........................................     27
    36.   Warranties of Tenant.............................................     27
    37.   Compliance with Americans with Disabilities Act..................     27
    38.   Brokerage Commission.............................................     28
    39.   Quiet Enjoyment..................................................     28
    40.   Landlord's Ability to Perform Tenant's Unperformed Obligations...     28
    41.   Tenant's Early Termination Option:...............................     28
</TABLE>

                                       3
<PAGE>

                                LEASE AGREEMENT

Date:     This Lease is made and entered into as of the Lease Date set forth on
          Page 1. The Basic Lease Information set forth on Page 1 and this Lease
          are and shall be construed as a single instrument.

1.   PREMISES

     Landlord hereby leases the Premises to Tenant upon the terms and conditions
contained herein. Landlord hereby grants to Tenant a license for the right to
use, on a non-exclusive basis, parking areas and ancillary facilities located
within the Common Areas of the Park, subject to the terms of this Lease.
Landlord and Tenant hereby agree that for purposes of this Lease, as of the
Lease Date, the rentable square footage area of the Premises, the Building, the
Lot and the Park shall be deemed to be the number of rentable square feet as set
forth in the Basic Lease Information on Page 1. Tenant hereby acknowledges that
the rentable square footage of the Premises may include a proportionate share of
certain areas used in common by all occupants of the Building and/or the Park
(for example an electrical room or telephone room). Tenant further agrees that
the number of rentable square feet of the Building, the Lot and the Park may
subsequently change after the Lease Date commensurate with any modifications to
any of the foregoing by Landlord, and Tenant's Share shall accordingly change.

2.   ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES

     2.1  If Landlord cannot deliver possession of the Premises on the
Commencement Date, Landlord shall not be subject to any liability nor shall the
validity of the Lease be affected; provided, the Lease Term and the obligation
to pay Rent shall commence on the date possession is tendered in the condition
required under this Lease (including the substantial completion of the Tenant
Improvements), with all governmental permits required for such improvements, and
the Base Rent Adjustment dates and the Expiration Date shall be extended
commensurately. In the event the Commencement Date and/or the Expiration Date of
this Lease is other than the Commencement Date and/or Expiration Date specified
in the Basic Lease Information, as the case may be, Landlord and Tenant shall
execute a written amendment to this Lease, substantially in the form of
Exhibit F hereto, wherein the parties shall specify the actual commencement
---------
date, expiration date and the date on which Tenant is to commence paying Rent.
The word "Term" whenever used herein refers to the initial term of this Lease
and any extension thereof. By taking possession of the Premises, Tenant shall be
deemed to have accepted the Premises in good condition and state of repair.
Tenant hereby acknowledges and agrees that neither Landlord nor Landlord's
agents or representatives has made ally representations or warranties as to the
suitability, safety or fitness of the Premises for the conduct of Tenant's
business, Tenant's intended use of the Premises or for any other purpose.
Landlord shall deliver possession of the Premises with tile roof, HVAC system,
electrical, plumbing and lighting in good working condition, all carpets
cleaned, walls and ceiling in good repair "like new". Landlord shall repair, at
its sole cost and expense, after receipt of Tenant's written notice thereof,
which notice must be delivered to Landlord within the first ninety (90) days of
the term of this Lease, any (i) defects in the Premises, and (ii) any mechanical
and electrical systems serving the Premises which are not in good working order
to the extent Tenant has not caused such systems to not be in good working
order. If Tenant fails to timely deliver to Landlord any such written notice of
the aforementioned defects or deficiencies within said 90-day period, Landlord
shall have no obligation to perform any such work thereafter, except as
specifically provided in this Lease.

Notwithstanding the foregoing to the contrary, (A) in the event that for reasons
other than the occurrence of a Force Majeure Delay (as hereinafter defined) or a
Tenant Delay (as hereinafter defined) the substantial completion of the Tenant
Improvements ("T.I. Completion") has not occurred by the date which is one
hundred twenty (120) days after the date the Lease is fully executed
("Termination Date"), Tenant may elect to terminate the Lease. Termination of
the Lease by Tenant as provided for herein shall be the sole and exclusive
remedy of Tenant for Landlord's failure to deliver the Premises. Tenant shall
exercise the right to terminate provided for herein by giving Landlord written
notice of its intent to so terminate ("Termination Notice"). The Termination
Notice shall be given, if at all, on or before the date which is five (5) days
after the Termination Date. Termination of the Lease shall be effective sixty
(60) days after Landlord's receipt of the Termination Notice. In the event that
Tenant gives the Termination Notice, and in the further event that during such
sixty (60) day period, the TI Completion Date occurs, the Tenant shall not be
entitled to terminate the Lease as provided for herein. For purposes of this
paragraph the term "Force Majeure Delay" shall mean any actual delay beyond the
reasonable control of Landlord in completion of the Tenant Improvements which is
not a Tenant Delay and which is caused by, without limitation, any one or more
of the following: (a) wars; (b) fire; (c) earthquake, flood or other natural
disaster, (d) unusual and unforeseeable delay not within the reasonable control
of Landlord; (e) casualties; (f) other acts of God; or (g) governmental action
or inaction (including failure, refusal or delay in issuing permits, approvals
and/or

                                       4
<PAGE>

authorizations), or injunction, permit appeal or court order requiring cessation
of construction taking place in the Premises.

The Term "Tenant Delay" shall mean any delay in completion of the Tenant
Improvements resulting from any or all of the following: (i) Tenant's failure to
timely perform any of its obligations under the Lease, including any failure to
complete on or before the date due thereof, any actual item which is Tenant's
responsibility to complete or perform; (ii) Tenant's delay in approving plans,
specifications, drawings, and any other documents setting forth and/or
describing the Tenant Improvements, including, without limitation, the Final
Drawings, beyond those periods of time permitted by the terms of the Lease;
(iii) Tenant's changes to Landlord and Tenant approved plans, specifications,
drawings or any other documents describing and/or depicting the Tenant
Improvements; (iv) Tenant's request for materials, finishes, or installations
which are not readily available or which are incompatible with Landlord's
standard materials, finishes or installations for the Premises; (v) Tenant's use
or occupancy of the Premises during the construction of the Tenant Improvements
or any act or failure to act by Tenant in connection with its use or occupancy
of the Premises during the construction of the Tenant Improvements. Upon
termination of the Lease by Tenant pursuant to the terms of this paragraph,
Landlord shall promptly return all prepaid Rent to Tenant.

     2.2  In the event Landlord permits Tenant to occupy the Premises prior to
the Commencement Date, such occupancy shall be at Tenant's sole risk and subject
to all the provisions of this Lease, including, but not limited to, the
requirement to pay Rent and the Security Deposit, and to obtain the insurance
required pursuant to this Lease and to deliver insurance certificates as
required herein. Landlord shall permit Tenant to enter the Premises following
full execution of this Lease, prior to the Commencement Date, for the purpose of
installing its furniture, equipment, data, telecommunications and cabling
systems and trade fixtures. Such use of the Premises shall be subject to all of
the provisions the Lease, except the obligation to pay any Rent thereunder. In
addition to the foregoing, Landlord shall have the right to impose such
additional conditions on Tenant's early entry as Landlord shall deem
appropriate. Landlord shall not allow any other tenant to occupy the portion of
the Building adjacent to the Premises until the demising wall is installed.

3.   RENT

     On the date that Tenant executes this Lease, Tenant shall deliver to
Landlord the original executed Lease, the Base Rent (which shall be applied
against the Rent payable for the first month Tenant is required to pay Base
Rent), the Security Deposit, and all insurance certificates evidencing the
insurance required to be obtained by Tenant under Section 12 of this Lease.
Tenant agrees to pay Landlord, without prior notice or demand, or abatement,
offset, deduction or claim, the Base Rent specified in the Basic Lease
Information, payable in advance at Landlord's address specified in the Basic
Lease Information on the Commencement Date and thereafter on the first (1st) day
of each month throughout the balance of the Term of the Lease. In addition to
the Base Rent set forth in the Basic Lease Information, Tenant shall pay
Landlord in advance on the Commencement Date and thereafter on the first (1st)
day of each month throughout the balance of the Term of this Lease, as
Additional Rent, Tenant's Share of Operating Expenses, Tax Expenses, Common Area
Utility Costs, and Utility Expenses. Tenant shall also pay to Landlord as
Additional Rent hereunder, immediately on Landlord's demand therefor, any and
all costs and expenses incurred by Landlord to enforce the provisions of this
Lease, including, but not limited to, costs associated with the delivery of
notices, delivery and recordation of notice(s) of default, attorneys' fees,
expert fees, court costs and filing fees (collectively, the "Enforcement
Expenses"). The term "Rent" whenever used herein refers to the aggregate of all
these amounts. If Landlord permits Tenant to occupy the Premises without
requiring Tenant to pay rental payments for a period of time, the waiver of the
requirement to pay rental payments shall only apply to waiver of the Base Rent
and Tenant shall otherwise perform all other obligations of Tenant required
hereunder. The Rent for any fractional part of a calendar month at the
commencement or termination of the Lease term shall be a prorated amount of the
Rent for a full calendar month based upon a thirty (30) day month. The prorated
Rent shall be paid on the Commencement Date and the first day of the calendar
monthinwhich the date of termination occurs, as the case may be.

4.   SECURITY DEPOSIT

     Upon Tenant's execution of this Lease, Tenant shall deliver to Landlord, as
a Security Deposit for the performance by Tenant of its obligations under this
Lease, the amount specified in the Basic Lease Information. If Tenant is in
default, Landlord may, but without obligation to do so, use the Security
Deposit, or any portion thereof, to cure the default or to compensate Landlord
for all damages sustained by Landlord resulting from Tenant's default,
including, but not limited to the Enforcement Expenses. Tenant shall,
immediately on demand, pay to Landlord a sum equal to the portion of the
Security Deposit so applied or used so as to replenish the amount of the
Security Deposit held to increase such deposit to the amount initially deposited
with Landlord. As soon as practicable after the termination of this Lease,
Landlord shall return the Security Deposit to Tenant, less such amounts as are
reasonably necessary, as determined solely by Landlord, to remedy Tenant's
default(s) hereunder or to

                                       5
<PAGE>

otherwise restore the Premises to a clean and safe condition, reasonable wear
and tear excepted. If the cost to restore the Premises exceeds the amount of the
Security Deposit, Tenant shall promptly deliver to Landlord any and all of such
excess sums as reasonably determined by Landlord. Landlord shall not be required
to keep the Security Deposit separate from other funds, and, unless otherwise
required by law, Tenant shall not be entitled to interest on the Security
Deposit. In no event or circumstance shall Tenant have the right to any use of
the Security Deposit and, specifically, Tenant may not use the Security Deposit
as a credit or to otherwise offset any payments required hereunder, including,
but not limited to, Rent or any portion thereof. Notwithstanding the foregoing,
on the third anniversary of the Commencement Date of the Lease, or following
Tenant's public offering of its stock and subsequent achievement of a net worth
of at least Forty Million Dollars ($40,000,000.00) and such net worth is then
sustained for three consecutive financial quarters and substantiated by
financial reports provided by Tenant to Landlord, which ever event occurs
sooner, and, so long as Tenant has not been in material default of the Lease
beyond any applicable cure period, the Security Deposit shall be reduced to
Forty Two Thousand Nine Hundred Seventy-One and 00/100 Dollars ($42,971.00). In
the event that the Security Deposit is reduced, as set forth herein, Landlord
and Tenant shall execute an Amendment to the Lease signifying such reduction in
the Security Deposit and the excess amount of Security Deposit held by Landlord
shall be immediately returned to Tenant.

5.   TENANT IMPROVEMENTS

     Tenant hereby accepts the Premises as suitable for Tenant's intended use
and as being in good operating order, condition and repair, "AS IS", except as
specified in Exhibit B attached hereto or elsewhere expressed in this Lease.
Landlord or Tenant, as the case may be, shall install and construct the Tenant
Improvements (as such term is defined in Exhibit B hereto) in accordance with
the terms, conditions, criteria and provisions set forth in Exhibit B. Landlord
and Tenant hereby agree to and shall be bound by the terms, conditions and
provisions of Exhibit B. Tenant acknowledges and agrees that neither Landlord
nor any of Landlord's agents, representatives or employees has made any
representations as to the suitability, fitness or condition of the Premises for
the conduct of Tenant's business or for any other purpose, including without
limitation, any storage incidental thereto. Any exception to the foregoing
provisions must be made by express written agreement by both parties.

6.   ADDITIONAL RENT

     It is intended by Landlord and Tenant that this Lease be a "triple net
lease." The costs and expenses described in this Section 6 and all other sums,
charges, costs and expenses specified in this Lease other than Base Rent are to
be paid by Tenant to Landlord as additional rent (collectively, "Additional
Rent").

     6.1  Operating Expenses: In addition to the Base Rent set forth in Section
3, Tenant shall pay Tenant's Share, which is specified in the Basic Lease
Information, of all Operating Expenses as Additional Rent. The term "Operating
Expenses" as used herein shall mean the total amounts paid or payable by
Landlord in connection with the ownership, maintenance, repair and operation of
the Premises, the Building and the Lot, and where applicable, of the Park
referred to in the Basic Lease Information. The amount of Tenant's Share of
Operating Expenses shall be reviewed from time to time by Landlord and shall be
subject to modification by Landlord if there is a change in the rentable square
footage of the Premises, the Building and/or the Park. These Operating Expenses
may include, but are not limited to:

          6.1.1  Landlord's cost of repairs to, and maintenance of, the roof,
the roof membrane and the exterior walls of the Building;

          6.1.2  Landlord's cost of maintaining the outside paved area,
landscaping and other common areas for the Park. The term "Common Areas" shall
mean all areas and facilities within the Park exclusive of the Premises and the
other portions of the Park leasable exclusively to other tenants. The Common
Areas include, but are not limited to, interior lobbies, mezzanines, parking
areas, access and perimeter roads, sidewalks, rail spurs, landscaped areas and
similar areas and facilities;

          6.1.3  Landlord's annual cost of insurance insuring against fire and
extended coverage (including, if Landlord elects, "all risk" or "special
purpose" coverage) and all other insurance, including, but not limited to,
earthquake, flood and/or surface water endorsements for the Building, the Lot
and the Park (including the Common Areas), rental value insurance against loss
of Rent in an amount equal to the amount of Rent for a period of at least six
(6) months commencing on the date of loss, and subject to the provisions of
Section 27 below, any deductible;

          6.1.4  Landlord's cost of: (i) modifications and/or new improvements
to the Building, the Common Areas and/or the Park occasioned by any rules, laws
or regulations effective subsequent to the date on which the Building was
originally constructed; (ii) reasonably necessary replacement improvements to
the Building, the Common Areas and the Park after the Lease Date; and (iii) new

                                       6
<PAGE>

improvements to the Building, the Common Areas and/or the Park that reduce
operating costs (to the extent of the reduction) or improve life/safety
conditions, all as reasonably determined by Landlord, provided, however, if any
of the foregoing are in the nature of capital improvements, then the cost of
such capital improvements shall be amortized over the life of the improvement at
an interest rate reasonably determined by Landlord, and Tenant shall pay
Tenant's Share of the monthly amortized portion of such costs (including
interest charges) as part of the Operating Expenses herein;

          6.1.5  If Landlord elects to so procure, Landlord's cost of
preventative maintenance, and repair contracts including, but not limited to,
contracts for elevator systems and heating, ventilation and air conditioning
systems, lifts for disabled persons, and trash or refuse collection;

          6.1.6  Landlord's cost of security and fire protection services for
the Building and/or the Park, as the case may be, if in Landlord's sole
discretion such services are provided;

          6.1.7  Landlord's cost for the maintenance and repair of any rail spur
and rail crossing, and for the creation and negotiation of, and pursuant to, any
rail spur or track agreements, licenses, easements or other similar
undertakings;

          6.1.8  Landlord's cost of supplies, equipment, rental equipment and
other similar items used in the operation and/or maintenance of the Park;

          6.1.9  Landlord's cost for the repairs and maintenance items set forth
          in Section 11.2 below; and

          6.1.10 Landlord's cost for the management and administration of the
Premises, the Building and/or Park or any part thereof, including, without
limitation, a property management fee, accounting, auditing, billing, postage,
salaries and benefits for clerical and supervisory employees, whether located on
the Park or off-site, payroll taxes and legal and accounting costs and all fees,
licenses and permits related to the ownership, operation and management of the
Park in an amount not to exceed three percent (3%) of the gross rents of the
Park for the calendar year, or the amounts charged by comparable buildings in
the area, whichever is less.

                 Notwithstanding anything to the contrary herein, Operating
Expenses shall not include and Tenant shall in no event have any obligation to
perform or to pay directly, or to reimburse Landlord for, any of the following
repairs, maintenance, improvements, replacements, premiums, claims, charges,
costs and expenses (collectively, "Costs"): (a) Costs occasioned by casualties
excluding any deductibles or by the exercise of the power of eminent domain to
the extent insurance proceeds subject to Section 24 of this Lease or a
condemnation award is actually received by Landlord for such purposes; (b) Costs
of any renovation, improvement or redecorating of any other premises in the
Park; (c) Costs, including commissions, incurred in connection with negotiations
or disputes with any other occupant (or prospective occupant) of the Park; (d)
expense reserves; (e) interest, charges and fees incurred on debt; (f) Costs
associated with the investigation, presence and/or remediation of Hazardous
Materials (hereafter defined) present in, on or about the Premises, the Building
or the Park, unless such costs and expenses are the responsibility of Tenant as
provided in Section 29 of this Lease, in which event such costs and expenses
shall be paid solely by Tenant in accordance with the provisions of Section 29
of this Lease; and (g) Costs incurred by Landlord with respect to the
performance of its obligations in Section 11.3 below.

     6.2  Tax Expenses: In addition to the Base Rent set forth in Section 3,
Tenant shall pay its share, which is specified in the Basic Lease Information,
of all real property taxes applicable to the land and improvements included
within the Lot on which the Premises are situated and one hundred percent (100%)
of all personal property taxes now or hereafter assessed or levied against the
Premises or Tenant's personal property. The amount of Tenant's Share of Tax
Expenses shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord if there is a change in the rentable square footage of
the Premises, the Building and/or the Park. Tenant shall also pay one hundred
percent (100%) of any increase in real property taxes attributable, in
Landlord's sole discretion, to any and all alterations, Tenant Improvements or
other improvements of any kind, which are above standard improvements
customarily installed for similar buildings located within the Building or the
Park (as applicable), whatsoever placed in, on or about the Premises for the
benefit of, at the request of, or by Tenant. The term "Tax Expenses" shall mean
and include, without limitation, any form of tax and assessment (general,
special, supplemental, ordinary or extraordinary), commercial rental tax,
payments under any improvement bond or bonds, license fees, license tax,
business license fee, rental tax, transaction tax, levy, or penalty imposed by
authority having the direct or indirect power of tax (including any city,
county, state or federal government, or any school, agricultural, lighting,
drainage or other improvement district thereof) as against any legal or
equitable interest of Landlord in the Premises, the Building, the Lot or the
Park, as against Landlord's right to rent, or as against Landlord's business of
leasing the Premises or the occupancy of Tenant or any other tax, fee, or
excise, however described, including, but not limited to, any value added tax,
or any tax imposed in substitution (partially or totally) of any tax previously
included within the definition of real property taxes, or any additional tax the
nature of which was previously included within the definition of real property
taxes. The term "Tax

                                       7
<PAGE>

Expenses" shall not include any franchise, estate, inheritance, net income, or
excess profits tax imposed upon Landlord, any assessments in excess of the
amount which would be payable if such tax or assessment expense were paid in
installments over the longest permitted term, any increases in taxes due to the
improvement of the Park for the sole use of other occupants.

     6.3  Payment of Expenses: Landlord shall estimate Tenant's Share of the
Operating Expenses and Tax Expenses for the calendar year in which the Lease
commences. Commencing on the Commencement Date, one-twelfth (1/12th) of this
estimated amount shall be paid by Tenant to Landlord, as Additional Rent, and
thereafter on the first (1st) day of each month throughout the remaining months
of such calendar year. Thereafter, Landlord may estimate such expenses as of the
beginning of each calendar year during the Term of this Lease and Tenant shall
pay one-twelfth (1/12th) of such estimated amount as Additional Rent hereunder
on the first (1st) day of each month during such calendar year and for each
ensuing calendar year throughout the Term of this Lease. Tenant's obligation to
pay Tenant's Share of Operating Expenses and Tax Expenses shall survive the
expiration or earlier termination of this Lease.

     6.4  Annual Reconciliation: By June 30th of each calendar year, or as soon
thereafter as reasonably possible, Landlord shall endeavor to furnish Tenant
with an accounting of actual Operating Expenses and Tax Expenses. Within thirty
(30) days of Landlord's delivery of such accounting, Tenant shall pay to
Landlord the amount of any underpayment. Notwithstanding the foregoing, failure
by Landlord to give such accounting by such date shall not constitute a waiver
by Landlord of its right to collect any of Tenant's underpayment at any time.
Landlord shall credit the amount of any overpayment by Tenant toward the next
estimated monthly installment(s) falling due, or where the Term of the Lease has
expired, refund the amount of overpayment to Tenant. If the Term of the Lease
expires prior to the annual reconciliation of expenses Landlord shall have the
right to reasonably estimate Tenant's Share of such expenses, and if Landlord
determines that an underpayment is due, Tenant hereby agrees that Landlord shall
be entitled to deduct such underpayment from Tenant's Security Deposit. If
Landlord reasonably determines that an overpayment has been made by Tenant,
Landlord shall refund said overpayment to Tenant as soon as practicable
thereafter. Notwithstanding the foregoing, failure of Landlord to accurately
estimate Tenant's Share of such expenses or to otherwise perform such
reconciliation of expenses, including without limitation, Landlord's failure to
deduct any portion of any underpayment from Tenant's Security Deposit, shall not
constitute a waiver of Landlord's right to collect any of Tenant's underpayment
at any time during the Term of the Lease or at any time after the expiration or
earlier termination of this Lease.

     6.5  Audit: After delivery to Landlord of at least thirty (30) days prior
written notice, Tenant, at its sole cost and expense through any accountant
designated by it, shall have the right to examine and/or audit the books and
records evidencing such costs and expenses for the previous one (1) calendar
year, during Landlord's reasonable business hours but not more frequently than
once during any calendar year. The results of any such audit (and any
negotiations between the parties related thereto) shall be maintained strictly
confidential by Tenant and its accounting firm and shall not be disclosed,
published or otherwise disseminated to any other party other than to Landlord
and its authorized agents. Landlord and Tenant shall use their best efforts to
cooperate in such negotiations and to promptly resolve any discrepancies between
Landlord and Tenant in the accounting of such costs and expenses.

7.   UTILITIES

     Utility Expenses, Common Area Utility Costs and all other sums or charges
set forth in this Section 7 are considered part of Additional Rent. In addition
to the Base Rent set forth in Section 3 hereof, Tenant shall pay the cost of all
water, sewer use, sewer discharge fees and sewer connection fees, gas, heat,
electricity, refuse pickup, janitorial service, telephone and other utilities
billed or metered separately to the Premises and/or Tenant. Tenant shall also
pay Tenant's Share of any assessments or charges for utility or similar purposes
included within any tax bill for the Lot on which the Premises are situated,
including, without limitation, entitlement fees, allocation unit fees, and/or
any similar fees or charges, and any penalties related thereto. For any such
utility fees or use charges that are not billed or metered separately to Tenant,
including without limitation, water and refuse pick up charges, Tenant shall pay
to Landlord, as Additional Rent, without prior notice or demand, on the
Commencement Date and thereafter on the first (1st) day of each month throughout
the balance of the Term of this Lease the amount which is attributable to
Tenant's use of the utilities or similar services, as reasonably estimated and
determined by Landlord based upon factors such as size of the Premises and
intensity of use of such utilities by Tenant such that Tenant shall pay the
portion of such charges reasonably consistent with Tenant's use of such
utilities and similar services ("Utility Expenses"). If Tenant disputes any such
estimate or determination, then Tenant shall either pay the estimated amount or
cause the Premises to be separately metered at Tenant's sole expense. In
addition, Tenant shall pay to Landlord Tenant's Share of any Common Area utility
costs, fees, charges or expenses ("Common Area Utility Costs"). Tenant shall pay
to Landlord one-twelfth (1/12th) of the estimated amount of Tenant's Share of
the Common Area Utility Costs on the Commencement Date and thereafter on the
first (1st) day of each month throughout the balance of the Term of this Lease
and any reconciliation thereof shall be substantially in the same

                                       8
<PAGE>

manner as specified in Section 6.4 above. The amount of Tenant's Share of Common
Area Utility Costs shall be reviewed from time to time by Landlord and shall be
subject to modification by Landlord if there is a change in the rentable square
footage of the Premises, the Building and/or the Park. Tenant acknowledges that
the Premises may become subject to the rationing of utility services or
restrictions on utility use as required by a public utility company,
governmental agency or other similar entity having jurisdiction thereof.
Notwithstanding any such rationing or restrictions on use of any such utility
services, Tenant acknowledges and agrees that its tenancy and occupancy
hereunder shall be subject to such rationing restrictions as may be imposed upon
Landlord, Tenant, the Premises, the Building or the Park, and Tenant shall in no
event be excused or relieved from any covenant or obligation to be kept or
performed by Tenant by reason of any such rationing or restrictions. Tenant
further agrees to timely and faithfully pay, prior to delinquency, any amount,
tax, charge, surcharge, assessment or imposition levied, assessed or imposed
upon the Premises, or Tenant's use and occupancy thereof. Notwithstanding
anything to the contrary contained herein, if permitted by applicable Laws,
Landlord shall have the right at any time and from time to time during the Term
of this Lease to either contract for service from a different company or
companies (each such company shall be referred to herein as an "Alternate
Service Provider") other than the company or companies presently providing
electricity service for the Building or the Park (the "Electric Service
Provider") or continue to contract for service from the Electric Service
Provider, at Landlord's sole discretion. Tenant hereby agrees to cooperate with
Landlord, the Electric Service Provider, and any Alternate Service Provider at
all times and, as reasonably necessary, shall allow Landlord, the Electric
Service Provider, and any Alternate Service Provider reasonable access to the
Building's electric lines, feeders, risers, wiring, and any other machinery
within the Premises.

8.   LATE CHARGES

     Any and all sums or charges set forth in this Section 8 are considered part
of Additional Rent. Tenant acknowledges that late payment (the fifth day of each
month or any time thereafter) by Tenant to Landlord of Base Rent, Tenant's Share
of Operating Expenses, Tax Expenses, Common Area Utility Costs, and Utility
Expenses or other sums due hereunder, will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of such costs being extremely
difficult and impracticable to fix. Such costs include, without limitation,
processing and accounting charges, and late charges that may be imposed on
Landlord by the terms of any note secured by any encumbrance against the
Premises, and late charges and penalties due to the late payment of real
property taxes on the Premises. Therefore, if any installment of Rent or any
other sum due from Tenant is not received by Landlord when due, Tenant shall
promptly pay to Landlord all of the following, as applicable: (a) an additional
sum equal to ten percent (10%) of such delinquent amount (except on the first
occasion that a late fee is charged in which case the additional sum shall be
equal to eight percent (8%) plus interest on such delinquent amount at the rate
equal to the prime rate plus three percent (3%) for the time period such
payments are delinquent as a late charge for every month or portion thereof that
such sums remain unpaid, (b) the amount of seventy-five dollars ($75) for each
three-day notice prepared for, or served on, Tenant, (c) the amount of fifty
dollars ($50) relating to checks for which there are not sufficient funds.
Notwithstanding the foregoing, no late charge shall be due if Tenant has not
been delinquent beyond the grace period in its payment of rent owed under this
Lease during the one (1) year period preceding the rent delinquency in question.
If Tenant delivers to Landlord a check for which there are not sufficient funds,
Landlord may, at its sole option, require Tenant to replace such check with a
cashier's check for the amount of such check. The parties agree that this late
charge and the other charges referenced above represent a fair and reasonable
estimate of the costs that Landlord will incur by reason of late payment by
Tenant. Acceptance of any late charge or other charges shall not constitute a
waiver by Landlord of Tenant's default with respect to the delinquent amount,
nor prevent Landlord from exercising any of the other rights and remedies
available to Landlord for any other breach of Tenant under this Lease. If a late
charge or other charge becomes payable for any three (3) installments of Rent
within any twelve (12) month period, then Landlord, at Landlord's sole option,
can either require the Rent be paid quarterly in advance, or be paid monthly in
advance by cashier's check or by electronic funds transfer.

9.   USE OF PREMISES

     9.1  Compliance with Laws, Recorded Matters, and Rules and Regulations: The
Premises are to be used solely for the purposes and uses specified in the Basic
Lease Information and for no other uses or purposes without Landlord's prior
written consent, which consent shall not be unreasonably withheld or delayed so
long as the proposed use (i) does not involve the use of Hazardous Materials
other than as expressly permitted under the provisions of Section 29 below, (ii)
does not require any additional parking in excess of the parking spaces already
licensed to Tenant pursuant to the provisions of Section 24 of this Lease, and
(iii) is compatible and consistent with the other uses then being made in the
Park and in other similar types of buildings in the vicinity of the Park, as
reasonably determined by Landlord. The use of the Premises by Tenant and its
employees, representatives, agents, invitees, licensees, subtenants, customers
or contractors (collectively, "Tenant's Representatives") shall be subject to,
and at all times in compliance with, (a) any and all applicable laws,
ordinances, statutes, orders and regulations as same exist from time to time
(collectively, the "Laws"), (b) any and all documents, matters or instruments,
including without limitation, any declarations of covenants,

                                       9
<PAGE>

conditions and restrictions, and any supplements thereto, each of which has been
or hereafter is recorded in any official or public records with respect to the
Premises, the Building, the Lot and/or the Park, or any portion thereof
(collectively, the "Recorded Matters"), and (c) any and all rules and
regulations set forth in Exhibit C, attached to and made a part of this Lease,
                         ---------
and any other reasonable rules and regulations promulgated by Landlord now or
hereafter enacted relating to parking and the operation of the Premises, the
Building and the Park (collectively, the "Rules and Regulations"). Tenant agrees
to, and does hereby, assume full and complete responsibility to ensure that the
Premises are adequate to fully meet the needs and requirements of Tenant's
intended operations of its business within the Premises, and Tenant's use of the
Premises and that same are in compliance with all applicable Laws throughout the
Term of this Lease. Notwithstanding the foregoing, Tenant shall be solely
responsible for the payment of all costs, fees and expenses associated with any
modifications, improvements or alterations to the Premises, Building, the Common
Areas and/or the Park occasioned by the enactment of, or changes to, any Laws
arising from Tenant's particular use of the Premises or alterations,
improvements or additions made to the Premises regardless of when such Laws
became effective.

     9.2  Prohibition on Use: Tenant shall not use the Premises or permit
anything to be done in or about the Premises nor keep or bring anything therein
which will in any way conflict with any of the requirements of the Board of Fire
Underwriters or similar body now or hereafter constituted or in any way increase
the existing rate of or affect any policy of fire or other insurance upon the
Building or any of its contents, or cause a cancellation of any insurance
policy. No auctions may be held or otherwise conducted in, on or about the
Premises, the Building, the Lot or the Park without Landlord's written consent
thereto, which consent may be given or withheld in Landlord's sole discretion.
Tenant shall not do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of Landlord, other tenants
or occupants of the Building, other buildings in the Park, or other persons or
businesses in the area, or injure or annoy other tenants or use or allow the
Premises to be used for any unlawful or objectionable purpose, as determined by
Landlord, in its reasonable discretion, for the benefit, quiet enjoyment and use
by Landlord and all other tenants or occupants of the Building or other
buildings in the Park; nor shall Tenant cause, maintain or permit any private or
public nuisance in, on or about the Premises, Building, Park and/or the Common
Areas, including, but not limited to, any offensive odors, noises, fumes or
vibrations. Tenant shall not damage or deface or otherwise commit any waste in,
upon or about the Premises. Tenant shall not place or store, nor permit any
other person or entity to place or store, any property, equipment, materials,
supplies, personal property or any other items or goods outside of the Premises
for any period of time. Tenant shall not permit any animals, including, but not
limited to, any household pets, to be brought or kept in or about the Premises.
Tenant shall place no loads upon the floors, walls, or ceilings in excess of the
maximum designed load permitted by the applicable Uniform Building Code or which
may damage the Building or outside areas; nor place any harmful liquids in the
drainage systems; nor dump or store waste materials, refuse or other such
materials, or allow such to remain outside the Building area, except for any
non-hazardous or non-harmful materials which may be stored in refuse dumpsters
or in any enclosed trash areas provided. Tenant shall honor the terms of all
Recorded Matters relating to the Premises, the Building, the Lot and/or the
Park. Tenant shall honor the Rules and Regulations. If Tenant fails to comply
with such Laws, Recorded Matters, Rules and Regulations or the provisions of
this Lease, Landlord shall have the right to collect from Tenant a reasonable
sum as a penalty, in addition to all rights and remedies of Landlord hereunder
including, but not limited to, the payment by Tenant to Landlord of all
Enforcement Expenses and Landlord's costs and expenses, if any, to cure any of
such failures of Tenant, if Landlord, at its sole option, elects to undertake
such cure.

10.  ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES

     10.1  Alterations and Additions: Tenant shall not install any signs,
fixtures, improvements, nor make or permit any other alterations or additions to
the Premises without the prior written consent of Landlord which shall not be
unreasonably withheld. If any such alteration or addition is expressly permitted
by Landlord, Tenant shall deliver at least fifteen (15) days prior notice to
Landlord, from the date Tenant intends to commence construction, sufficient to
enable Landlord to post a Notice of Non-Responsibility. In all events, Tenant
shall obtain all permits or other governmental approvals prior to commencing
any of such work and deliver a copy of same to Landlord. All alterations and
additions shall be installed by a licensed contractor approved by Landlord, at
Tenant's sole expense in compliance with all applicable Laws (including, but not
limited to, the ADA as defined herein), Recorded Matters, and Rules and
Regulations. Tenant shall keep the Premises and the property on which the
Premises are situated free from any liens arising out of any work performed,
materials furnished or obligations incurred by or on behalf of Tenant. As a
condition to Landlord's consent to the installation of any fixtures, additions
or other improvements, Landlord may require Tenant to post and obtain a
completion and indemnity bond for up to one hundred percent (100%) of the cost
of the work. Tenant may request, upon submission of its written request to
complete such alterations or additions, that Landlord inform Tenant at that time
if Tenant will be required to remove such alterations or additions, upon
Tenant's vacancy of the Premises, Landlord may, but shall have no obligation to,
provide Landlord's determination, along with approval of the requested
alterations or additions, as to whether such alterations or additions shall be
required to be removed upon Tenant's vacancy.

                                       10
<PAGE>

     Notwithstanding anything to the contrary contained herein, Tenant may
install, make and permit to be made improvements, alterations and additions to
the Premises without first obtaining Landlord's written consent thereto,
provided that such improvements, alterations or additions to the Premises (a)
are not structural and do not affect the structural integrity of the Premises
and/or the Building, and/or (b) do not require the issuance of a building permit
by the City of San Jose, and/or (c) do not require penetrations to the roof of
the Building, and provided further that the cumulative cost of all such
improvements, alterations and additions does not exceed ten thousand and 00/100
dollars ($10,000.00) in the aggregate over each twelve month period of the Term
("Permitted Improvements"). In all events, Tenant shall be required to submit to
Landlord, at least ten (10) business days prior to commencement of any
improvements, written notification of Tenant's intention to complete
improvements along with all plans, specifications, or construction drawings of
such improvements or alterations, Tenant shall cause all Permitted Improvements
to be installed by a licensed contractor and Tenant shall keep the Premises and
the property on which the Premises are situated free from any liens arising out
of any work performed, materials furnished or obligations incurred by or on
behalf of Tenant. Upon Landlord's request, at Tenant's sole expense, all such
Permitted Improvements installed by Tenant shall be removed and the Premises
shall be restored to its original condition at the expiration or earlier
termination of this Lease.

     10.2  Surrender of Premises: Upon the termination of this Lease, whether by
forfeiture, lapse of time or otherwise, or upon the termination of Tenant's
right to possession of the Premises, Tenant will at once surrender and deliver
up the Premises, together with the fixtures (other than trade fixtures),
additions and improvements which Landlord has notified Tenant, in writing, that
Landlord will require Tenant not to remove, to Landlord in good condition and
repair (including, but not limited to, replacing all light bulbs and ballasts
not in good working condition) and in the condition in which the Premises
existed as of the Commencement Date, except for reasonable wear and tear, and
casualty and condemnation, subject to the provisions of Section 27 and Section
28. Reasonable wear and tear shall not include any damage or deterioration to
the floors of the Premises arising from the use of forklifts in, on or about the
Premises (including, without limitation, any marks or stains of any portion of
the floors), and any damage or deterioration that would have been prevented by
proper maintenance by Tenant or Tenant otherwise performing all of its
obligations under this Lease. Upon such termination of this Lease, Tenant shall
remove all tenant signage, trade fixtures, furniture, furnishings, personal
property, and any additions, and improvements unless Landlord requests, in
writing, that Tenant not remove some or all of such fixtures (other than trade
fixtures), additions or improvements installed by, or on behalf of Tenant or
situated in or about the Premises. By the date which is twenty (20) days prior
to such termination of this Lease, Landlord shall notify Tenant in writing of
those fixtures (other than trade fixtures), alterations, additions and other
improvements which Landlord shall require Tenant not to remove from the
Premises. Tenant shall repair any damage caused by the installation or removal
of such signs, trade fixtures, furniture, furnishings, fixtures, additions and
improvements which are to be removed from the Premises by Tenant hereunder. If
Landlord fails to so notify Tenant at least twenty (20) days prior to such
termination of this Lease, then Tenant shall remove all tenant signage,
alterations, furniture, furnishings, trade fixtures, additions and other
improvements (other than the Tenant Improvements) installed in or about the
Premises by, or on behalf of Tenant. Tenant shall ensure that the removal of
such items and the repair of the Premises will be completed prior to such
termination of this Lease.

11.  REPAIRS AND MAINTENANCE

     11.1  Tenant's Repairs and Maintenance Obligations: Except for those
portions of the Building to be maintained by Landlord, as provided in Sections
11.2 and 11.3 below, Tenant shall, at Tenant's sole cost and expense, keep and
maintain the Premises and the adjacent dock and staging areas in good, clean and
safe condition and repair to the reasonable satisfaction of Landlord including,
but not limited to, repairing any damage caused by Tenant or Tenant's
Representatives and replacing any property so damaged by Tenant or Tenant's
Representatives. Without limiting the generality of the foregoing, Tenant shall
be solely responsible for maintaining, repairing and replacing (a) components of
all mechanical systems, heating, ventilation and air conditioning systems
exclusively serving the Premises, except in the event that the entire
replacement of such systems is necessary, then such cost shall be subject to
Section 6.1.4 of the Lease, (b) all plumbing, electrical wiring and equipment
serving the Premises, (c) all interior lighting (including, without limitation,
light bulbs and/or ballasts) and exterior lighting serving the Premises or
adjacent to the Premises, (d) all glass, windows, window frames, window
casements, skylights, interior and exterior doors, door frames and door closers,
(e) all roll-up doors, ramps and dock equipment, including without limitation,
dock bumpers, dock plates, dock seals, dock levelers and dock lights, (f) all
tenant signage, (g) lifts for disabled persons serving the Premises, (h)
sprinkler systems, fire protection systems and security systems, (i) all
partitions, fixtures, equipment, interior painting, and interior walls and
floors of the Premises and every part thereof (including, without limitation,
any demising walls contiguous to any portion of the Premises).

     11.2  Reimbursable Repairs and Maintenance Obligations: Subject to the
provisions of Sections 6 and 9 of this Lease and except for (i) the obligations
of Tenant set forth in Section 11.1 above, (ii) the obligations of Landlord set
forth in Section 11.3 below, and (iii) the repairs rendered necessary by

                                       11
<PAGE>

the intentional or negligent acts or omissions of Tenant or any of Tenant's
Representatives, Landlord agrees, at Landlord's expense, subject to
reimbursement pursuant to Section 6 above, to keep in good repair the plumbing
and mechanical systems exterior to the Premises, any rail spur and rail
crossing, the roof, roof membranes, exterior walls of the Building, signage
(exclusive of tenant signage), and exterior electrical wiring and equipment,
exterior lighting, exterior glass, exterior doors/entrances and door closers,
exterior window casements, exterior painting of the Building (exclusive of the
Premises), and underground utility and sewer pipes outside the exterior walls of
the Building. For purposes of this Section 11.2, the term "exterior" shall mean
outside of and not exclusively serving the Premises. Unless otherwise notified
by Landlord, in writing, that Landlord has elected to procure and maintain the
following described contract(s), Tenant shall procure and maintain (a) the
heating, ventilation and air conditioning systems preventative maintenance and
repair contract(s); such contract(s) to be on a bimonthly or quarterly basis, as
reasonably determined by Landlord, and (b) the fire and sprinkler protection
services and preventative maintenance and repair contract(s) (including, without
limitation, monitoring services); such contract(s) to be on a bi-monthly or
quarterly basis, as reasonably determined by Landlord. Landlord reserves the
right, but without the obligation to do so, to procure and maintain (i) the
heating, ventilation and air conditioning systems preventative maintenance and
repair contract(s), and/or (ii) the fire and sprinkler protection services and
preventative maintenance and repair contract(s) (including, without limitation,
monitoring services). If Landlord so elects to procure and maintain any such
contract(s), Tenant will reimburse Landlord for the cost thereof in accordance
with the provisions of Section 6 above. If Tenant procures and maintains any of
such contract(s), Tenant will promptly deliver to Landlord a true and complete
copy of each such contract and any and all renewals or extensions thereof, and
each service report or other summary received by Tenant pursuant to or in
connection with such contract(s).

     11.3  Landlord's Repairs and Maintenance Obligations: Except for repairs
rendered necessary by the intentional or negligent acts or omissions of Tenant
or any of Tenant's Representatives, Landlord agrees, at Landlord's sole cost and
expense, to (a) keep in good repair the structural portions of the floors,
foundations and exterior perimeter walls of the Building (exclusive of glass and
exterior doors), and (b) replace the structural portions of the roof of the
Building (excluding the roof membrane) as, and when, Landlord determines such
replacement to be necessary in Landlord's reasonable discretion.

     11.4  Tenant's Failure to Perform Repairs and Maintenance Obligations:
Except for normal maintenance and repair of the items described above, Tenant
shall have no right of access to or right to install any device on the roof of
the Building nor make any penetrations of the roof of the Building without the
express prior written consent of Landlord. If Tenant refuses or neglects to
repair and maintain the Premises and the adjacent areas properly as required
herein and to the reasonable satisfaction of Landlord within applicable cure
periods, Landlord may, but without obligation to do so, at any time make such
repairs and/or maintenance without Landlord having any liability to Tenant for
any loss or damage that may accrue to Tenant's merchandise, fixtures or other
property, or to Tenant's business by reason thereof, except to the extent any
damage is caused by the willful misconduct or gross negligence of Landlord or
its authorized agents and representatives. In the event Landlord makes such
repairs and/or maintenance, upon completion thereof Tenant shall pay to
Landlord, as additional rent, the Landlord's costs for making such repairs
and/or maintenance, plus twenty percent (20%) for overhead, upon presentation of
a bill therefor, plus any Enforcement Expenses. The obligations of Tenant
hereunder shall survive the expiration of the Term of this Lease or the earlier
termination thereof. Tenant hereby waives any right to repair at the expense of
Landlord under any applicable Laws now or hereafter in effect respecting the
Premises.

12.  INSURANCE

     12.1  Types of Insurance: Tenant shall maintain in full force and effect at
all times during the Term of this Lease, at Tenant's sole cost and expense, for
the protection of Tenant and Landlord, as their interests may appear, policies
of insurance issued by a carrier or carriers reasonably acceptable to Landlord
and its lender(s) which afford the following coverages: (i) worker's
compensation: statutory limits; (ii) employer's liability, as required by law,
with a minimum limit of $100,000 per employee and $500,000 per occurrence; (iii)
commercial general liability insurance (occurrence form) providing coverage
against any and all claims for bodily injury and property damage occurring in,
on or about the Premises arising out of Tenant's and Tenant's Representatives'
use and/or occupancy of the Premises. Such insurance shall include coverage for
blanket contractual liability, fire damage, premises, personal injury, completed
operations, products liability, personal and advertising, and a plate-glass
rider to provide coverage for all glass in, on or about the Premises including,
without limitation, skylights. Such insurance shall have a combined single limit
of not less than One Million Dollars ($1,000,000) per occurrence with a Two
Million Dollar ($2,000,000) aggregate limit and excess/umbrella insurance in the
amount of Two Million Dollars ($2,000,000). If Tenant has other locations which
it owns or leases, the policy shall include an aggregate limit per location
endorsement. If necessary, as reasonably determined by Landlord, Tenant shall
provide for restoration of the aggregate limit; (iv) comprehensive automobile
liability insurance: a combined single limit of not less than $2,000,000 per
occurrence and insuring Tenant against liability for claims arising out of the
ownership, maintenance, or use of any owned, hired

                                       12
<PAGE>

or non-owned automobiles; (v) "all risk" or "special purpose" property
insurance, including without limitation, sprinkler leakage, boiler and machinery
comprehensive form, if applicable, covering damage to or loss of any personal
property, trade fixtures, inventory, fixtures and equipment located in, on or
about the Premises, and in addition, coverage for flood, earthquake, if flood
and earthquake was available at commercially reasonable rates, and business
interruption of Tenant, together with, if the property of Tenant's invitees is
to be kept in the Premises, warehouser's legal liability or bailee customers
insurance for the full replacement cost of the property belonging to invitees
and located in the Premises. Such insurance shall be written on a replacement
cost basis (without deduction for depreciation) in an amount equal to one
hundred percent (100%) of the full replacement value of the aggregate of the
items referred to in this subparagraph (v); and (vi) such other insurance as may
otherwise be reasonably required by any of Landlord's lenders or joint venture
partners.

     12.2  Insurance Policies: Insurance required to be maintained by Tenant
shall be written by companies (i) licensed to do business in the State of
California, (ii) domiciled in the United States of America, and (iii) having a
"General Policyholders Rating" of at least A:X (or such higher rating as may be
required by a lender having a lien on the Premises) as set forth in the most
current issue of "A.M. Best's Rating Guides." Any deductible amounts under any
of the insurance policies required hereunder shall not exceed Ten Thousand
Dollars ($10,000) unless specifically agreed to by Landlord on a case by case
basis. Tenant shall deliver to Landlord certificates of insurance and true and
complete copies of any and all endorsements required herein for all insurance
required to be maintained by Tenant hereunder at the time of execution of this
Lease by Tenant. Tenant shall, at least thirty (30) days prior to expiration of
each policy, furnish Landlord with certificates of renewal or "binders" thereof.
Each certificate shall expressly provide that such policies shall not be
cancelable or otherwise subject to reduction except after thirty (30) days prior
written notice to the parties named as additional insureds as required in this
Lease (except for cancellation for nonpayment of premium, in which event
cancellation shall not take effect until at least ten (10) days' notice has been
given to Landlord). Tenant shall have the right to provide insurance coverage
which it is obligated to carry pursuant to the terms of this Lease under a
blanket insurance policy, provided such blanket policy expressly affords
coverage for the Premises and for Landlord as required by this Lease.

     12.3  Additional Insureds and Coverage: Landlord, any property management
company and/or agent of Landlord for the Premises, the Building, the Lot or the
Park, and any lender(s) of Landlord having a lien against the Premises, the
Building, the Lot or the Park shall be named as additional insureds under all of
the policies required in Section 12.1(iii) above. Additionally, such policies
shall provide for severability of interest. All insurance to be maintained by
Tenant shall, except for workers' compensation and employer's liability
insurance, be primary subject to any waiver of subrogation, without right of
contribution from insurance maintained by Landlord. Any umbrella/excess
liability policy (which shall be in "following form") shall provide that if the
underlying aggregate is exhausted, the excess coverage will drop down as primary
insurance. The limits of insurance maintained by Tenant shall not limit
Tenant's liability under this Lease. It is the parties' intention that the
insurance to be procured and maintained by Tenant as required herein shall
provide coverage for any and all damage or injury arising from or related to
Tenant's operations of its business and/or Tenant's or Tenant's Representatives'
use of the Premises and/or any of the areas within the Park, whether such events
occur within the Premises (as described in Exhibit a hereto) or in any other
                                           ----------
areas of the Park. It is not contemplated or anticipated by the parties that the
aforementioned risks of loss be borne by Landlord's insurance carriers, rather
it is contemplated and anticipated by Landlord and Tenant that such risks of
loss be borne by Tenant's insurance carriers pursuant to the insurance policies
procured and maintained by Tenant as required herein.

     12.4  Failure of Tenant to Purchase and Maintain Insurance: In the event
Tenant does not purchase the insurance required in this Lease or keep the same
in full force and effect throughout the Term of this Lease (including any
renewals or extensions), Landlord may, but without obligation to do so, purchase
the necessary insurance and pay the premiums therefor. If Landlord so elects to
purchase such insurance, Tenant shall promptly pay to Landlord as Additional
Rent, the amount so paid by Landlord, upon Landlord's demand therefor. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
Additional Rent, any and all Enforcement Expenses and damages which Landlord may
sustain by reason of Tenant's failure to obtain and maintain such insurance. If
Tenant fails to maintain any insurance required in this Lease, Tenant shall be
liable for all losses, damages and costs resulting from such failure.

     12.5  Landlord's Insurance: Landlord shall maintain in full force and
effect during the Term of this Lease, subject to reimbursement as provided in
Section 6, policies of insurance which afford such coverages as are commercially
reasonable and as is consistent with other properties in Landlord's portfolio.
Landlord shall also procure such additional insurance coverage as Tenant shall
reasonably request Landlord to obtain; provided, however, notwithstanding
anything to the contrary contained herein, Tenant shall pay, and shall be solely
responsible for, any and all costs, premiums and expenses of any such additional
insurance, as Additional Rent, and Tenant shall pay same to Landlord within ten
(10) days of Landlord's demand therefor. Landlord shall obtain and keep in force
during the Term of this

                                       13
<PAGE>

Lease, as an item of Operating Expenses, a policy or policies in the name of
Landlord, with loss payable to Landlord and to the holders of any mortgages,
deeds of trust or ground leases on the Premises ("Lender(s)"), insuring loss or
damage to the Building, including all improvements, fixtures (other than trade
fixtures) and permanent additions. However, all alterations, additions and
improvements made to the Premises by Tenant (other than the Tenant Improvements)
shall be insured by Tenant rather than by Landlord. The amount of such insurance
procured by Landlord shall be equal to one hundred percent (100%) of the full
replacement cost of the Building (excluding the cost of excavation and
installation of footings), including all improvements and permanent additions as
the same shall exist from time to time, or the amount required by Lenders. At
Landlord's option, such policy or policies shall insure against all risks of
direct physical loss or damage (including, without limitation, the perils of
earthquake), including coverage for any additional costs resulting from debris
removal and reasonable amounts of coverage for the enforcement of any ordinance
or law regulating the reconstruction or replacement of any undamaged sections of
the Building required to be demolished or removed by reason of the enforcement
of any building, zoning, safety or land use laws as the result of a covered
cause of loss. If any such insurance coverage procured by Landlord has a
deductible clause, the deductible shall not exceed commercially reasonable
amounts, and in the event of any casualty, the amount of such deductible shall
be an item of Operating Expenses as so limited. Notwithstanding anything to the
contrary contained herein, to the extent the cost of maintaining insurance with
respect to the Building and/or any other buildings within the Park is increased
as a result of Tenant's acts, omissions, alterations, improvements (including
without limitation, the Tenant Improvements), use or occupancy of the Premises,
Tenant shall pay one hundred percent (100%) of, and for, such increase(s) as
Additional Rent.

13.  WAIVER OF SUBROGATION

     Notwithstanding anything to the contrary in this Lease, Landlord and Tenant
hereby mutually waive their respective rights of recovery against each other for
any loss of, or damage to, either parties' property to the extent that such loss
or damage is insured by an insurance policy required to be in effect at the time
of such loss or damage or would have been insured had the waiving party carried
the type of insurance required to be carried by such party under this Lease.
Each party shall obtain any special endorsements, if required by its insurer
whereby the insurer waives its rights of subrogation against the other party.
This provision is intended to waive fully, and for the benefit of the parties
hereto, any rights and/or claims which might give rise to a right of
subrogation in favor of any insurance carrier. The coverage obtained by Tenant
pursuant to Section 12 of this Lease shall include, without limitation, a waiver
of subrogation endorsement attached to the certificate of insurance. The
provisions of this Section 13 shall not apply in those instances in which such
waiver of subrogation would invalidate such insurance coverage or would cause
either party's insurance coverage to be voided or otherwise uncollectible.
Notwithstanding anything to the contrary in this Lease, all of Landlord's and
Tenant's repair and indemnity obligations under this Lease shall be subject to
the waiver contained in this paragraph.

14.  LIMITATION OF LIABILITY AND INDEMNITY

     Except to the extent of damage resulting from the gross negligence or
willful misconduct of Landlord or its authorized representatives or Landlord's
material default of this Lease beyond any applicable cure periods, Tenant agrees
to protect, defend (with counsel acceptable to Landlord) and hold Landlord and
Landlord's lenders, partners, members, property management company (if other
than Landlord), agents, directors, officers, employees, representatives,
contractors, shareholders, successors and assigns and each of their respective
partners, members, directors, employees, representatives, agents, contractors,
shareholders, successors and assigns (collectively, the "Indemnitees") harmless
and indemnify the Indemnitees from and against all liabilities, damages, claims,
losses, judgments, charges and expenses (including reasonable attorneys' fees,
costs of court and expenses necessary in the prosecution or defense of any
litigation including the enforcement of this provision) arising from or in any
way related to, directly or indirectly, (i) Tenant's or Tenant's
Representatives' use of the Premises, Building and/or the Park, (ii) the conduct
of Tenant's business, (iii) from any activity, work or thing done, permitted or
suffered by Tenant in or about the Premises, (iv) in any way connected with the
Premises or with the improvements or personal property therein, including, but
not limited to, any liability for injury to person or property of Tenant,
Tenant's Representatives, or third party persons, and/or (v) Tenant's failure to
perform any covenant or obligation of Tenant under this Lease. Tenant agrees
that the obligations of Tenant herein shall survive the expiration or earlier
termination of this Lease.

     Except to the extent of damage resulting from the gross negligence or
willful misconduct of Landlord or its authorized representatives or Landlord's
default of this Lease and failure to cure such default beyond any applicable
cure period, to the fullest extent permitted by law, Tenant agrees that neither
Landlord nor any of Landlord's lender(s), partners, members, employees,
representatives, legal representatives, successors or assigns shall at any time
or to any extent whatsoever be liable, responsible or in any way accountable for
any loss, liability, injury, death or damage to persons or property which at any
time may be suffered or sustained by Tenant or by any person(s) whomsoever who
may at any time be using, occupying or visiting the Premises, the Building or
the Park, including, but not limited to, any

                                       14
<PAGE>

acts, errors or omissions by or on behalf of any other tenants or occupants of
the Building and/or the Park. Tenant shall not, in any event or circumstance, be
permitted to offset or otherwise credit against any payments of Rent required
herein for matters for which Landlord may be liable hereunder. Landlord and its
authorized representatives shall not be liable for any interference with light
or air, or for any latent defect in the Premises or the Building, subject to the
repair requirements in Section 2.1.

15.  ASSIGNMENT AND SUBLEASING

     15.1  Prohibition: Except as expressly set forth herein with respect to a
Related Entity, Tenant shall not assign, mortgage, hypothecate, encumber, grant
any license or concession, pledge or otherwise transfer this Lease
(collectively, "assignment"), in whole or in part, whether voluntarily or
involuntarily or by operation of law, nor sublet or permit occupancy by any
person other than Tenant of all or any portion of the Premises without first
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld. Tenant hereby agrees that Landlord may withhold its
consent to any proposed sublease or assignment if the proposed sublessee or
assignee or its business is subject to compliance with additional requirements
of the ADA (defined below) and/or Environmental Laws (defined below) beyond
those requirements which are applicable to Tenant, unless the proposed sublessee
or assignee shall (a) first deliver plans and specifications for complying with
such additional requirements and obtain Landlord's written consent thereto, and
(b) comply with all Landlord's conditions for or contained in such consent,
including without limitation, requirements for security to assure the lien-free
completion of such improvements. If Tenant seeks to sublet or assign all or any
portion of the Premises, Tenant shall deliver to Landlord at least fifteen (15)
days prior to the proposed commencement of the sublease or assignment (the
"Proposed Effective Date") the following: (i) the name of the proposed assignee
or sublessee; (ii) such information as to such assignee's or sublessee's
financial responsibility and standing as Landlord may reasonably require; and
(iii) the aforementioned plans and specifications, if any. Within ten (10) days
after Landlord's receipt of a written request from Tenant that Tenant seeks to
sublet or assign all or any portion of the Premises, Landlord shall deliver to
Tenant a copy of Landlord's standard form of sublease or assignment agreement
(as applicable), which instrument shall be utilized for each proposed sublease
or assignment (as applicable), and such instrument shall include a provision
whereby the assignee or sublessee assumes all of Tenant's obligations hereunder
and agrees to be bound by the terms hereof. As Additional Rent hereunder, Tenant
shall pay to Landlord a fee in the amount of five hundred dollars ($500) plus
Tenant shall reimburse Landlord for actual reasonable legal and other expenses
incurred by Landlord in connection with any actual or proposed assignment or
subletting. In the event the sublease or assignment (1) by itself or taken
together with prior sublease(s) or partial assignment(s) covers or totals, as
the case may be, more than twenty-five percent (25%) of the rentable square feet
of the Premises or (2) is for a term which by itself or taken together with
prior or other subleases or partial assignments is greater than seventy-five
percent (75%) of the period remaining in the Term of this Lease as of the time
of the Proposed Effective Date, then Landlord shall have the right, to be
exercised by giving written notice to Tenant, to recapture the space described
in the sublease or assignment. If such recapture notice is given, it shall serve
to terminate this Lease with respect to the proposed sublease or assignment
space, or, if the proposed sublease or assignment space covers all the Premises,
it shall serve to terminate the entire term of this Lease in either case, as of
the Proposed Effective Date. Notwithstanding the foregoing Landlord's recapture
rights shall not apply to a Related Entity. However, no termination of this
Lease with respect to part or all of the Premises shall become effective without
the prior written consent, where necessary, of the holder of each deed of trust
encumbering the Premises or any part thereof. Within fifteen (15) days of
Landlord's receipt of Tenant's written request to sublease or assign the Lease
or upon Landlord's notice to recapture to Tenant, Landlord will contact the
holder of each deed of trust encumbering the Premises and attempt to obtain the
required approval of such transaction. If this Lease is terminated pursuant to
the foregoing with respect to less than the entire Premises, the Rent shall be
adjusted on the basis of the proportion of square feet retained by Tenant to the
square feet originally demised and this Lease as so amended shall continue
thereafter in full force and effect. Each permitted assignee or sublessee,
including without limitation, a Related Entity, shall assume and be deemed to
assume this Lease and shall be and remain liable jointly and severally with
Tenant for payment of Rent and for the due performance of, and compliance with
all the terms, covenants, conditions and agreements herein contained on Tenant's
part to be performed or complied with, for the term of this Lease. No assignment
or subletting shall affect the continuing primary liability of Tenant (which,
following assignment, shall be joint and several with the assignee), and Tenant
shall not be released from performing any of the terms, covenants and conditions
of this Lease. Tenant hereby acknowledges and agrees that it understands that
Landlord's accounting department may process and accept Rent payments without
verifying that such payments are being made by Tenant, a permitted sublessee or
a permitted assignee in accordance with the provisions of this Lease. Although
such payments may be processed and accepted by such accounting department
personnel, any and all actions or omissions by the personnel of Landlord's
accounting department shall not be considered as acceptance by Landlord of any
proposed assignee or sublessee nor shall such actions or omissions be deemed to
be a substitute for the requirement that Tenant obtain Landlord's prior written
consent to any such subletting or assignment, and

                                       15
<PAGE>

any such actions or omissions by the personnel of Landlord's accounting
department shall not be considered as a voluntary relinquishment by Landlord of
any of its rights hereunder nor shall any voluntary relinquishment of such
rights be inferred therefrom. For purposes hereof, and except with respect to a
Related Entity, in the event Tenant is a corporation, partnership, joint
venture, trust or other entity other than a natural person, ally change in the
direct or indirect ownership of Tenant which results in a transfer of the
controlling interest of Tenant (51% or more of stock) by one party prior to a
public offering shall be deemed to be an assignment within the meaning of this
Section 15 and shall be subject to all the provisions hereof provided however
that the sale or other transfer of stock by Tenant shall not constitute a
"change in ownership" requiring the prior written consent of Landlord if the
sale or other transfer is traded through an exchange or over the counter. Except
for a permissible assignment to a Related entity, any and all options, first
rights of refusal, tenant improvement allowances and other similar rights
granted to Tenant in this Lease, if any, shall not be assignable by Tenant
unless expressly authorized in writing by Landlord. Notwithstanding anything to
the contrary contained herein, so long as Tenant delivers to Landlord (1) at
least fifteen (15) business days after written notice of its intention to assign
or sublease the Premises to any Related Entity, which notice shall set forth the
name of the Related Entity, (2) a copy of the proposed agreement pursuant to
which such assignment or sublease shall be effectuated, and (3) such other
information concerning the Related Entity as Landlord may reasonably require,
including without limitation, information regarding any change in the proposed
use of any portion of the Premises and any financial information with respect to
such Related Entity, and so long as Landlord approves, in writing of any change
in the proposed use of the subject portion of the Premises, then Tenant may
assign this Lease or sublease any portion of the Premises to any Related Entity
without having to obtain the prior written consent of Landlord thereto. For
purposes of this Lease the term "Related Entity" shall mean and refer to (a) any
corporation or entity which controls, is controlled by or is tinder common
control with Tenant, as all of such terms are customarily used in the industry,
(b) an entity related to Tenant by merger, consolidation non bankruptcy,
reorganization, or government action, or (c) a purchaser of substantially all of
Tenant's assets, all with an equal or greater net worth as Tenant has as of the
proposed transfer date.

     15.2  Excess Sublease Rental or Assignment Consideration: In the event of
any sublease or assignment of all or any portion of the Premises, except for
Related Entity transfers or stock transfers, where the rent or other
consideration provided for in the sublease or assignment either initially or
over the term of the sublease or assignment exceeds the Rent or pro rata portion
of the Rent, as the case may be, for such space reserved in the Lease, Tenant
shall pay the Landlord monthly, as Additional Rent, at the same time as the
monthly installments of Rent are payable hereunder, seventy-five percent (75%)
of the excess of each such payment of rent or other consideration in excess of
the Rent called for hereunder net of Tenant's reasonable costs to effectuate
such assignment or sublease, limited to actual commissions paid, reasonable
attorney's fees and standard tenant improvements installed by Tenant
specifically for such transfer.

     15.3  Waiver: Notwithstanding any assignment or sublease, or any
indulgences, waivers or extensions of time granted by Landlord to any assignee
or sublessee, or failure by Landlord to take action against any assignee or
sublessee, Tenant agrees that Landlord may, at its option, proceed against
Tenant without having taken action against or joined such assignee or sublessee,
except that Tenant shall have the benefit of any indulgences, waivers and
extensions of time granted to any such assignee or sublessee.

16.  AD VALOREM TAXES

     Prior to delinquency, Tenant shall pay all taxes and assessments levied
upon trade fixtures, alterations, additions, improvements, inventories and
personal property located and/or installed on or in the Premises by, or on
behalf of, Tenant (other than the Tenant Improvements which Tenant shall pay
Tenant's Share of pursuant to Section 6.2 above) and if requested by Landlord,
Tenant shall promptly deliver to Landlord copies of receipts for payment of all
such taxes and assessments. To the extent any such taxes are not separately
assessed or billed to Tenant, Tenant shall pay the amount thereof as invoiced by
Landlord.

17.  SUBORDINATION

Without the necessity of any additional document being executed by Tenant for
the purpose of effecting a subordination, and at the election of Landlord or any
bona fide mortgagee or deed of trust beneficiary with a lien on all or any
portion of the Premises or any ground lessor with respect to the land of which
the Premises are a part, the rights of Tenant under this Lease and this Lease
shall be subject and subordinate at all times to: (i) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Building or the land upon which the Building is situated or both, and (ii) the
lien of any mortgage or deed of trust which may now exist or hereafter be
executed in any amount for which the Building, the Lot, ground leases or
underlying leases, or Landlord's interest or estate in any of said items is
specified as security. Notwithstanding the foregoing, Landlord or any such
ground lessor, mortgagee, or any beneficiary shall have the right to subordinate
or cause to be subordinated any such ground leases or underlying leases or any
such liens to this Lease. If any ground lease or underlying

                                       16
<PAGE>

lease terminates for any reason or any mortgage or deed of trust is foreclosed
or a conveyance in lieu of foreclosure is made for any reason, Tenant shall,
notwithstanding any subordination and upon the request of such successor to
Landlord, attorn to and become the Tenant of the successor in interest to
Landlord, provided such successor in interest will not disturb Tenant's use,
occupancy or quiet enjoyment of the Premises so long as Tenant is not in default
of the terms and provisions of this Lease. The successor in interest to Landlord
following foreclosure, sale or deed in lieu thereof shall not be (a) liable for
any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership; (b) subject to ally offsets which Tenant
might have against any prior lessor; (c) bound by prepayment of more than one
(1) month's Rent, except in those instances when Tenant pays Rent quarterly in
advance pursuant to Section 8 hereof, then not more than three months Rent; or
(d) liable to Tenant for any Security Deposit not actually received by such
successor in interest to the extent any portion or all of such Security Deposit
has not already been forfeited by, or refunded to, Tenant. Landlord shall be
liable to Tenant for all or any portion of the Security Deposit not forfeited
by, or refunded to Tenant, until and unless Landlord transfers such Security
Deposit to the successor in interest. Tenant covenants and agrees to execute
(and acknowledge if required by Landlord, any lender or ground lessor) and
deliver, within ten (10) days of a demand or request by Landlord and in the form
reasonably requested by Landlord, ground lessor, mortgagee or beneficiary, any
additional documents evidencing the priority or subordination of this Lease with
respect to any such ground leases or underlying leases or the lien of any such
mortgage or deed of trust. Tenant's failure to timely execute and deliver such
additional documents shall, at Landlord's option, constitute a material default
hereunder. It is further agreed that Tenant shall be liable to Landlord, and
shall indemnify Landlord from and against any loss, cost, damage or expense,
incidental, consequential, or otherwise, arising or accruing directly or
indirectly, from any failure of Tenant to execute or deliver to Landlord any
such additional documents, together with any and all Enforcement Expenses.
Notwithstanding any of the foregoing, prior to the Commencement Date, Landlord
shall use reasonable efforts to cause the lender under any existing mortgages or
deeds of trust encumbering the Building promptly to execute a nondisturbance and
attornment agreement in a form mutually and reasonably acceptable to the
beneficiary, Landlord and Tenant similar to the form attached in Exhibit I to
this Lease. The subordination of this Lease to future loans is conditioned upon
the execution by any such future lender to a nondisturbance agreement reasonably
satisfactory to the beneficiary, Landlord and Tenant.

18.  RIGHT OF ENTRY

     Tenant grants Landlord or its agents the right to enter the Premises at all
reasonable times upon 24 hours notice (except in cases of emergency) for
purposes of inspection, exhibition, posting of notices, repair or alteration.
Any such entry by Landlord and Landlord's agents shall comply with all
reasonable security measures of Tenant and shall not impair Tenant's operations
more than reasonably necessary. At Landlord's option, Landlord shall at all
times have and retain a key with which to unlock all the doors in, upon and
about the Premises, excluding Tenant's vaults and safes. It is further agreed
that Landlord shall have the right to use any and all means Landlord deems
necessary to enter the Premises in an emergency. Landlord shall have the right
to place "for rent" or "for lease" signs on the outside of the Premises, the
Building and in the Common Areas. Landlord shall also have the right to place
"for sale" signs on the outside of the Building and in the Common Areas. Tenant
hereby waives any claim from damages or for any injury or inconvenience to or
interference with Tenant's business, or any other loss occasioned thereby except
for any claim for any of the foregoing to the extent arising out of the gross
negligence or willful misconduct of Landlord or its authorized representatives.

19.  ESTOPPEL CERTIFICATE

     Tenant shall execute (and acknowledge if required by any lender or ground
lessor) and deliver to Landlord, within ten (10) days after Landlord provides
such to Tenant, a statement in writing certifying that this Lease is unmodified
and in full force and effect (or, if modified, stating the nature of such
modification), the date to which the Rent and other charges are paid in advance,
if any, acknowledging that there are not, to Tenant's knowledge, any uncured
defaults on the part of Landlord hereunder or specifying such defaults as are
claimed, and such other matters as Landlord may reasonably require. Any such
statement may be conclusively relied upon by Landlord and any prospective
purchaser or encumbrancer of the Premises. Tenant's failure to deliver such
statement within such time shall be conclusive upon the Tenant that (a) this
Lease is in full force and effect, without modification except as may be
represented by Landlord; (b) there are no uncured defaults in Landlord's
performance; and (c) not more than one month's Rent has been paid in advance,
except in those instances when Tenant pays Rent quarterly in advance pursuant to
Section 8 hereof, then not more than three month's Rent has been paid in
advance. Failure by Tenant to so deliver such certified estoppel certificate
shall be a material default of the provisions of this Lease. Tenant shall be
liable to Landlord, and shall indemnify Landlord from and against any loss,
cost, damage or expense, incidental, consequential, or otherwise, arising or
accruing directly or indirectly, from any failure of Tenant to execute or
deliver to Landlord any such certified estoppel certificate, together with any
and all Enforcement Expenses.

                                       17
<PAGE>

20.  TENANT'S DEFAULT

     The occurrence of any one or more of the following events shall, at
Landlord's option, constitute a material default by Tenant of the provisions of
this Lease:

     20.1  The abandonment of the Premises by Tenant or the vacation of the
Premises by Tenant which would cause any insurance policy to be invalidated or
otherwise lapse. Tenant agrees to notice and service of notice as provided for
in this Lease and waives any right to any other or further notice or service of
notice which Tenant may have under any statute or law now or hereafter in
effect;

     20.2  The failure by Tenant to make any payment of Rent, Additional Rent or
any other payment required hereunder within five (5) days of written notice of a
delinquency. Tenant agrees that such written notice by Landlord shall serve as
the statutorily required notice under the Law (including without limitation, any
unlawful detainer statutes), and Tenant further agrees to notice and service of
notice as provided for in this Lease and waives any right to any other or
further notice or service of notice which Tenant may have under any statute or
law now or hereafter in effect on the date said payment is due.;

     20.3  The failure by Tenant to observe, perform or comply with any of the
conditions, covenants or provisions of this Lease (except failure to make any
payment of Rent and/or Additional Rent) and such failure is not cured within (i)
thirty (30) days of the date on which Landlord delivers written notice of such
failure to Tenant for all failures other than with respect to Hazardous
Materials (defined in Section 29 hereof), and (ii) ten (10) days of the date on
which Landlord delivers written notice of such failure to Tenant for all
failures in any way related to Hazardous Materials. However, Tenant shall not be
in default of its obligations hereunder if such failure cannot reasonably be
cured within such thirty (30) or ten (10) day period, as applicable, and Tenant
promptly commences, and thereafter diligently proceeds with same to completion,
all actions necessary to cure such failure as soon as is reasonably possible,
but in no event shall the completion of such cure be later than sixty (60) days
after the date on which Landlord delivers to Tenant written notice of such
failure, unless Landlord, acting reasonably and in good faith, otherwise
expressly agrees in writing to a longer period of time based upon the
circumstances relating to such failure as well as the nature of the failure and
the nature of the actions necessary to cure such failure thirty (30) days after
written notice of such failure, or such longer time as may reasonably be
required to cure the default;

     20.4  The making of a general assignment by Tenant for the benefit of
creditors, the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation, or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action,
the failure to remove or discharge the same within sixty (60) days of such
filing, the appointment of a receiver or other custodian to take possession of
substantially all of Tenant's assets or this leasehold, Tenant's insolvency or
inability to pay Tenant's debts or failure generally to pay Tenant's debts when
due, any court entering a decree or order directing the winding up or
liquidation of Tenant or of substantially all of Tenant's assets, Tenant taking
any action toward the dissolution or winding up of Tenant's affairs, the
cessation or suspension of Tenant's use of the Premises, or the attachment,
execution or other judicial seizure of substantially all of Tenant's assets or
this leasehold;

     20.5  Tenant's use or storage of Hazardous Materials in, on or about the
Premises, the Building, the Lot and/or the Park other than as expressly
permitted by the provisions of Section 29 below; or

     20.6  The making of any intentional material misrepresentation or omission
by Tenant in any materials delivered by or on behalf of Tenant to Landlord
pursuant to this Lease.

21.  REMEDIES FOR TENANT's DEFAULT

     21.1  Landlord's Rights: In the event of Tenant's material default under
this Lease, Landlord may terminate Tenant's right to possession of the Premises
by any lawful means in which case upon delivery of written notice by Landlord
this Lease shall terminate on the date specified by Landlord in such notice and
Tenant shall immediately surrender possession of the Premises to Landlord. In
addition, the Landlord shall have the immediate right of re-entry whether or not
this Lease is terminated, and if this right of re-entry is exercised following
abandonment of the Premises by Tenant, Landlord may consider any personal
property belonging to Tenant and left on the Premises to also have been
abandoned. No re-entry or taking possession of the Premises by Landlord pursuant
to this Section 21 shall be construed as an election to terminate this Lease
unless a written notice of such intention is given to Tenant. If Landlord relets
the Premises or any portion thereof, (i) Tenant shall be liable immediately to
Landlord for all costs Landlord incurs in reletting the Premises or any part
thereof, including, without limitation, broker's commissions, expenses of
cleaning, redecorating, and further improving the Premises and other similar
costs (collectively, the "Reletting Costs"), and (ii) the rent received by
Landlord from

                                       18
<PAGE>

such reletting shall be applied to the payment of, first, any indebtedness from
Tenant to Landlord other than Base Rent, Operating Expenses, Tax Expenses,
Common Area Utility Costs, and Utility Expenses; second, all costs including
maintenance, incurred by Landlord in reletting; and, third, Base Rent, Operating
Expenses, Tax Expenses, Common Area Utility Costs, Utility Expenses, and all
other sums due under this Lease. Any and all of the Reletting Costs shall be
fully chargeable to Tenant and shall not be prorated or otherwise amortized in
relation to any new lease for the Premises or any portion thereof. After
deducting the payments referred to above, any sum remaining from the rental
Landlord receives from reletting shall be held by Landlord and applied in
payment of future Rent as Rent becomes due under this Lease. In no event shall
Tenant be entitled to any excess rent received by Landlord. Reletting may be for
a period shorter or longer than the remaining term of this Lease. No act by
Landlord other than giving written notice to Tenant shall terminate this Lease.
Acts of maintenance, efforts to relet the Premises or the appointment of a
receiver on Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to possession. So
long as this Lease is not terminated, Landlord shall have the right to remedy
any default of Tenant, to maintain or improve the Premises, to cause a receiver
to be appointed to administer the Premises and new or existing subleases and to
add to the Rent payable hereunder all of Landlord's reasonable costs in so
doing, with interest at the maximum rate permitted by law from the date of such
expenditure.

     21.2  Damages Recoverable: If Tenant's right to possession is terminated by
Landlord because of a breach or default under this Lease, then Landlord may
recover from Tenant all damages suffered by Landlord as a result of Tenant's
failure to perform its obligations hereunder, including, but not limited to, the
cost of any Tenant Improvements constructed by or on behalf of Tenant pursuant
to Exhibit B hereto to the extent allocated to the remainder of the Lease term,
   ---------
the portion of any broker's or leasing agent's commission incurred with respect
to the leasing of the Premises to Tenant for the balance of the Term of the
Lease remaining after the date on which Tenant is in default of its obligations
hereunder, and all Reletting Costs, and the worth at the time of the award
(computed in accordance with paragraph (3) of Subdivision (a) of Section 1951.2
of the California Civil Code) of the amount by which the Rent then unpaid
hereunder for the balance of the Lease Term exceeds the amount of such loss of
Rent for the same period which Tenant proves could be reasonably avoided by
Landlord and in such case, Landlord prior to the award, may relet the Premises
for the purpose of mitigating damages suffered by Landlord because of Tenant's
failure to perform its obligations hereunder; provided, however, that even
though Tenant has abandoned the Premises following such breach, this Lease shall
nevertheless continue in full force and effect for as long as Landlord does not
terminate Tenant's right of possession, and until such termination, Landlord
shall have the remedy described in Section 1951.4 of the California Civil Code
(Landlord may continue this Lease in effect after Tenant's breach and
abandonment and recover Rent as it becomes due, if Tenant has the right to
sublet or assign, subject only to reasonable limitations) and may enforce all
its rights and remedies under this Lease, including the right to recover the
Rent from Tenant as it becomes due hereunder. The "worth at the time of the
award" within the meaning of Subparagraphs (a)(l) and (a)(2) of Section 1951.2
of the California Civil Code shall be computed by allowing interest at the rate
of ten percent (10%) per annum. Tenant waives redemption or relief from
forfeiture under California Code of Civil Procedure Sections 1174 and 1179, or
under any other present or future law, in the event Tenant is evicted or
Landlord takes possession of the Premises by reason of any default of Tenant
hereunder.

     21.3  Rights and Remedies Cumulative: The foregoing rights and remedies of
Landlord are not exclusive; they are cumulative in addition to any rights and
remedies now or hereafter existing at law, in equity by statute or otherwise, or
to any equitable remedies Landlord may have, and to any remedies Landlord may
have under bankruptcy laws or laws affecting creditor's rights generally. In
addition to all remedies set forth above, if Tenant materially defaults under
this Lease, any and all Base Rent waived by Landlord under Section 3 above shall
be immediately due and payable to Landlord and all options granted to Tenant
hereunder shall automatically terminate, unless otherwise expressly agreed to in
writing by Landlord.

     21.4  Waiver of a Default: The waiver by Landlord of any default of any
provision of this Lease shall not be deemed or construed a waiver of any other
default by Tenant hereunder or of any subsequent default of this Lease, except
for the default specified in the waiver.

22.  HOLDING OVER

     If Tenant holds possession of the Premises after the expiration of the Term
of this Lease with Landlord's consent, Tenant shall become a tenant from month-
to-month upon the terms and provisions of this Lease, provided the monthly Base
Rent during such hold over period shall be 150% of the Base Rent due on the last
month of the Lease Term, payable in advance on or before the first day of each
month. Acceptance by Landlord of the monthly Base Rent without the additional
fifty percent (50%) increase of Base Rent shall not be deemed or construed as a
waiver by Landlord of any of its rights to collect the increased amount of the
Base Rent as provided herein at any time. Such month-to-month tenancy shall not
constitute a renewal or extension for any further term. All options, if any,
granted under the terms of this Lease shall be deemed automatically terminated
and be of no force or effect during said month-to-

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<PAGE>

month tenancy. Tenant shall continue in possession until such tenancy shall be
terminated by either Landlord or Tenant giving written notice of termination to
the other party at least thirty (30) days prior to the effective date of
termination. This paragraph shall not be construed as Landlord's permission for
Tenant to hold over. Acceptance of Base Rent by Landlord following expiration or
termination of this Lease shall not constitute a renewal of this Lease.

23.  LANDLORD'S DEFAULT

     Landlord shall not be deemed in breach or default of this Lease unless
Landlord fails within a reasonable time to perform an obligation required to be
performed by Landlord hereunder. For purposes of this provision, a reasonable
time shall not be less than thirty (30) days after receipt by Landlord of
written notice specifying the nature of the obligation Landlord has not
performed; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days, after receipt of written notice, is
reasonably necessary for its performance, then Landlord shall not be in breach
or default of this Lease if performance of such obligation is commenced within
such thirty (30) day period and thereafter diligently pursued to completion.

24.  PARKING

     Tenant shall have a license to use the number of non-designated and non-
exclusive parking spaces specified in the Basic Lease Information. Landlord
shall exercise reasonable efforts to insure that such spaces are available to
Tenant for its use.

25.  SALE OF PREMISES

     In the event of any sale of the Premises by Landlord or the cessation
otherwise of Landlord's interest therein, Landlord shall be and is hereby
entirely released from any and all of its obligations to perform or further
perform under this Lease and from all liability hereunder accruing from or after
the date of such sale; and the purchaser, at such sale or any subsequent sale of
the Premises shall be deemed, without any further agreement between the parties
or their successors in interest or between the parties and any such purchaser,
to have assumed and agreed to carry out any and all of the covenants and
obligations of the Landlord under this Lease. For purposes of this Section 25,
the term "Landlord" means only the owner and/or agent of the owner as such
parties exist as of the date on which Tenant executes this Lease. A ground lease
or similar long term lease by Landlord of the entire Building, of which the
Premises are a part, shall be deemed a sale within the meaning of this Section
25. Tenant agrees to attorn to such new owner provided such new owner does not
disturb Tenant's use, occupancy or quiet enjoyment of the Premises so long as
Tenant is not in default of any of the provisions of this Lease.

26.  WAIVER

     No delay or omission in the exercise of any right or remedy of Landlord on
any default by Tenant shall impair such a right or remedy or be construed as a
waiver. The subsequent acceptance of Rent by Landlord after default by Tenant of
any covenant or term of this Lease shall not be deemed a waiver of such default,
other than a waiver of timely payment for the particular Rent payment involved,
and shall not prevent Landlord from maintaining an unlawful detainer or other
action based on such breach. No payment by Tenant or receipt by Landlord of a
lesser amount than the monthly Rent and other sums due hereunder shall be deemed
to be other than on account of the earliest Rent or other sums due, nor shall
any endorsement or statement on any check or accompanying any check or payment
be deemed an accord and satisfaction; and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance of such
Rent or other sum or pursue any other remedy provided in this Lease. No failure,
partial exercise or delay on the part of the Landlord in exercising any right,
power or privilege hereunder shall operate as a waiver thereof.

27.  CASUALTY DAMAGE

     27.1  Casualty. If the Premises or any part thereof (excluding any
alterations or improvements installed by or for the benefit of Tenant) shall be
damaged or destroyed by fire or other casualty, Tenant shall give immediate
written notice thereof to Landlord. Within thirty (30) days after receipt by
Landlord of such notice, Landlord shall notify Tenant, in writing, whether the
necessary repairs can reasonably be made: (a) within ninety (90) days; (b) in
more than ninety (90) days but in less than one hundred eighty (180) days; or
(c) in more than one hundred eighty (180) days, from the date of such notice.

          27.1.1  Minor Insured Damage. If the Premises are damaged only to such
extent that repairs, rebuilding and/or restoration can be reasonably completed
within ninety (90) days, this Lease shall not terminate and, provided that
insurance proceeds are available to fully repair the damage, or if Landlord has
failed to procure and maintain the insurance required in Section 12.5, then
Landlord shall provide the insurance proceeds that would have otherwise been
provided therefore. Landlord shall repair

                                       20
<PAGE>

the Premises to substantially the same condition that existed prior to the
occurrence of such casualty, except Landlord shall not be required to rebuild,
repair, or replace any alterations or improvements installed by or for the
benefit of Tenant or any part of Tenant's furniture, furnishings or fixtures and
equipment removable by Tenant. The Rent payable hereunder shall be abated
proportionately from the date Tenant vacates the Premises only to the extent
rental abatement insurance proceeds are received by Landlord and the Premises
are unfit for occupancy.

          27.1.2  Insured Damage Requiring More Than 90 Days To Repair. If the
Premises are damaged only to such extent that repairs, rebuilding and/or
restoration can be reasonably completed in more than ninety (90) days but in
less than one hundred eighty (180) days, then Landlord shall have the option of:
(a) terminating the Lease effective upon the occurrence of such damage, in which
event the Rent shall be abated from the date Tenant vacates the Premises; or (b)
electing to repair the Premises to substantially the same condition that existed
prior to the occurrence of such casualty, provided insurance proceeds are
available to fully repair the damage, or if Landlord has failed to procure and
maintain the insurance required in Section 12.5, then Landlord shall provide the
insurance proceeds that would have otherwise been provided therefore (except
that the Landlord shall not be required to rebuild, repair, or replace any
alterations or improvements installed by or for the benefit of Tenant or any
part of Tenant's furniture, furnishings or fixtures and equipment removable by
Tenant). The Rent payable hereunder shall be abated proportionately from the
date Tenant vacates the Premises only to the extent rental abatement insurance
proceeds are received by Landlord and the Premises are unfit for occupancy. If
Landlord should fail to substantially complete such repairs within one hundred
eighty (180) days after the date on which Landlord is notified by Tenant of the
occurrence of such casualty (such 180-day period to be extended for delays
caused by Tenant or any force majeure events), Tenant may within twenty (20)
days after expiration of such one hundred eighty (180) day period (as same may
be extended), terminate this Lease by delivering written notice to Landlord as
Tenant's exclusive remedy, whereupon all rights of Tenant hereunder shall cease
and terminate twenty (20) days after Landlord's receipt of such notice.

          27.1.3  Major Insured Damage. If the premises are damaged to such
extent that repairs, rebuilding and/or restoration cannot be reasonably
completed within one hundred eighty (180) days, than either Landlord or Tenant
may terminate this Lease by giving written notice within twenty (20) days after
notice from Landlord regarding the time period of repair. If either party
notifies the other of its intention to so terminate the Lease, then this Lease
shall terminate and the Rent shall be abated from the date Tenant vacates the
Premises. If neither party elects to terminate this Lease, Landlord shall
promptly commence and diligently prosecute to completion the repairs to the
Premises, provided insurance proceeds are available to fully repair the damage,
or if Landlord has failed to procure and maintain the insurance required in
Section 12.5, then Landlord shall provide the insurance proceeds that would have
otherwise been provided therefore (except that Landlord shall not be required to
rebuild, repair, or replace any alterations or improvements installed by or for
the benefit of Tenant or any part of Tenant's furniture, furnishings or fixtures
and equipment removable by Tenant). During the time when Landlord is prosecuting
such repairs to completion, the Rent payable hereunder shall be abated
proportionately from the date Tenant vacates the Premises only to the extent
rental abatement insurance proceeds are received by Landlord and only during the
time period that the Premises are unfit for occupancy.

          27.1.4  Damage Near End of Term. Notwithstanding anything to the
contrary contained in this Lease except for the provisions of Section 27.2
below, if the Premises are substantially damaged or destroyed during the last
year of then applicable term of this Lease, Landlord may, at its option, cancel
and terminate this Lease by giving written notice to Tenant of its election to
do so within thirty (30) days after receipt by Landlord of notice from Tenant of
the occurrence of such casualty. If Landlord so elects to terminate this Lease,
all rights of Tenant hereunder shall cease and terminate thirty (30) days after
Tenant's receipt of such notice.

     27.2  Uninsured Casualty. Tenant shall be responsible for and shall pay to
Landlord, as Additional Rent, any deductibles amount under the property
insurance for the Premises and/or the Building. If any portion of the Premises
is damaged and is not fully covered by insurance by insurance proceeds received
by Landlord (and Tenant elects not to pay any such difference) or if the holder
of any indebtedness secured by the Premises requires that the insurance proceeds
be applied to such indebtedness, then Landlord shall have the right to terminate
this Lease by delivering written notice of termination to the other party within
thirty (30) days after the date of notice to Tenant of any such event, whereupon
all rights and obligations shall cease and terminate hereunder, except for those
obligations expressly provided for in this Lease to survive such termination of
the Lease.

     27.3  Tenant's Waiver. Landlord shall not be liable for any inconvenience
or annoyance to Tenant, injury to the business of Tenant, loss of use of any
part of the Premises by Tenant or loss of Tenant's personal property, resulting
in any way from such damage, destruction or the repair thereof, except that,
Landlord shall allow Tenant a fair diminution of Rent during the time and to the
extent the Premises are unfit for occupancy as specifically provided above in
this Section 27. With respect to any damage or destruction which Landlord is
obligated to repair or may elect to repair, Tenant hereby waives

                                       21
<PAGE>

all rights to terminate this Lease or offset any amounts against Rent pursuant
to rights accorded Tenant by any law currently existing or hereafter enacted,
including but not limited to, all rights pursuant to the provisions of Sections
1932(2.), 1933(4.), 1941 and 1942 of the California Civil Code, as the same may
be amended or supplemented from time to time. Whenever Base Rent is to be abated
under this Lease, all Base Rent and Additional Rent shall be equitably abated
based upon the extent to which Tenant's use of the Premises is diminished.


28.  CONDEMNATION

     If twenty-five percent (25%) or more of the Premises is condemned by
eminent domain, inversely condemned or sold in lieu of condemnation for any
public or quasi-public use or purpose ("Condemned"), then Tenant or Landlord may
terminate this Lease as of the date when physical possession of the Premises is
taken and title vests in such condemning authority, and Rent shall be adjusted
to the date of termination. Tenant shall not because of such condemnation assert
any claim against Landlord or the condemning authority for any compensation
because of such condemnation, and Landlord shall be entitled to receive the
entire amount of any award without deduction for any estate of interest or other
interest of Tenant; provided, however, that Tenant shall be entitled to receive,
or to prosecute a separate claim for, a condemnation award for a temporary
taking of the Premises or a portion thereof by a condemnor where this Lease is
not terminated (to the extent such award related to the unexpired Term), or an
award or portion thereof separately designated for relocation and moving
expenses or the interruption of or damage to Tenant's business or as
compensation for Tenant's personal property, trade fixtures or alterations or
for loss of goodwill provided such award is separate from Landlord's award and
provided further such separate award does not diminish or impair the award
otherwise payable to Landlord. If neither party elects to terminate this Lease,
Landlord shall, if necessary, promptly proceed to restore the Premises or the
Building to substantially its same condition prior to such partial condemnation,
allowing for the reasonable effects of such partial condemnation, and a
proportionate allowance shall be made to Tenant, as solely determined by
Landlord, for the Rent corresponding to the time during which, and to the part
of the Premises of which, Tenant is deprived on account of such partial
condemnation and restoration. Landlord shall not be required to spend funds for
restoration in excess of the amount received by Landlord as compensation
awarded.

29.  ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS

     29.1  Hazardous Materials Disclosure Certificate: Prior to executing this
Lease, Tenant has completed, executed and delivered to Landlord Tenant's initial
Hazardous Materials Disclosure Certificate (the "Initial HazMat Certificate"), a
copy of which is attached hereto as Exhibit G and incorporated herein by this
                                    ---------
reference. Tenant covenants, represents and warrants to Landlord that the
information on the Initial HazMat Certificate is true and correct and accurately
describes the use(s) of Hazardous Materials which will be made and/or used on
the Premises by Tenant. Tenant shall commencing with the date which is one year
from the Commencement Date and continuing every year thereafter, complete,
execute, and deliver to Landlord, a Hazardous Materials Disclosure Certificate
("the "HazMat Certificate") describing Tenant's present use of Hazardous
Materials on the Premises, and any other reasonably necessary documents as
requested by Landlord. The HazMat Certificate required hereunder shall be in
substantially the form as that which is attached hereto as Exhibit E.
                                                           ----------

     29.2  Definition of Hazardous Materials: As used in this Lease, the term
Hazardous Materials shall mean and include (a) any hazardous or toxic wastes,
materials or substances, and other pollutants or contaminants, which are or
become regulated by any Environmental Laws; (b) petroleum, petroleum by
products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos
and asbestos containing material, in any form, whether friable or non-friable;
(d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and lead-
containing materials; (g) any other material, waste or substance displaying
toxic, reactive, ignitable or corrosive characteristics, as all such terms are
used in their broadest sense, and are defined or become defined by any
Environmental Law (defined below); or (h) any materials which cause or threatens
to cause a nuisance upon or waste to any portion of the Premises, the Building,
the Lot, the Park or any surrounding property; or poses or threatens to pose a
hazard to the health and safety of persons on the Premises or any surrounding
property.

     29.3  Prohibition; Environmental Laws: Tenant shall not be entitled to use
nor store any Hazardous Materials on, in, or about the Premises, the Building,
the Lot and the Park, or any portion of the foregoing, without, in each
instance, obtaining Landlord's prior written consent thereto. If Landlord
consents to any such usage or storage, then Tenant shall be permitted to use
and/or store only those Hazardous Materials that are necessary for Tenant's
business and to the extent disclosed in the HazMat Certificate and as expressly
approved by Landlord in writing, provided that such usage and storage is only to
the extent of the quantities of Hazardous Materials as specified in the then
applicable HazMat Certificate as expressly approved by Landlord and provided
further that such usage and storage is in full compliance with any and all
local, state and federal environmental, health and/or safety-related laws,

                                       22
<PAGE>

statutes, orders, standards, courts' decisions, ordinances, rules and
regulations (as interpreted by judicial and administrative decisions), decrees,
directives, guidelines, permits or permit conditions, currently existing and as
amended, enacted, issued or adopted in the future which are or become applicable
to Tenant or all or any portion of the Premises (collectively, the
"Environmental Laws"). Tenant agrees that any changes to the type and/or
quantities of Hazardous Materials specified in the most recent HazMat
Certificate may be implemented only with the prior written consent of Landlord,
which consent may be given or withheld in Landlord's sole discretion. Tenant
shall not be entitled nor permitted to install any tanks under, on or about the
Premises for the storage of Hazardous Materials without the express written
consent of Landlord, which may be given or withheld in Landlord's sole
discretion. Landlord shall have the right at all times during the Term of this
Lease to (i) inspect the Premises, (ii) conduct tests and investigations to
determine whether Tenant is in compliance with the provisions of this Section
29, and (iii) request lists of all Hazardous Materials used, stored or otherwise
located on, under or about any portion of the Premises and/or the Common Areas.
The cost of all such inspections, tests and investigations shall be borne solely
by Tenant, if Landlord reasonably determines that Tenant or any of Tenant's
Representatives are directly or indirectly responsible in any manner for any
contamination revealed by such inspections, tests and investigations. The
aforementioned rights granted herein to Landlord and its representatives shall
not create (a) a duty on Landlord's part to inspect, test, investigate, monitor
or otherwise observe the Premises or the activities of Tenant and Tenant's
Representatives with respect to Hazardous Materials, including without
limitation, Tenant's operation, use and any remediation related thereto, or (b)
liability on the part of Landlord and its representatives for Tenant's use,
storage, disposal or remediation of Hazardous Materials, it being understood
that Tenant shall be solely responsible for all liability in connection
therewith.

     29.4  Tenant's Environmental Obligations: Tenant shall give to Landlord
immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about any portion of the Premises or in any
Common Areas. Tenant, at its sole cost and expense, covenants and warrants to
promptly investigate, clean up, remove, restore and otherwise remediate
(including, without limitation, preparation of any feasibility studies or
reports and the performance of any and all closures) any spill, release,
discharge, disposal, emission, migration or transportation of Hazardous
Materials arising from or related to the intentional or negligent acts or
omissions of Tenant or Tenant's Representatives such that the affected portions
of the Park and any adjacent property are returned to the condition existing
prior to the appearance of such Hazardous Materials. Any such investigation,
clean up, removal, restoration and other remediation shall only be performed
after Tenant has obtained Landlord's prior written consent, which consent shall
not be unreasonably withheld so long as such actions would not potentially have
a material adverse long-term or short-term effect on any portion of the
Premises, the Building, the Lot or the Park. Notwithstanding the foregoing,
Tenant shall be entitled to respond immediately to an emergency without first
obtaining Landlord's prior written consent. Tenant, at its sole cost and
expense, shall conduct and perform, or cause to be conducted and performed, all
closures as required by any Environmental Laws or any agencies or other
governmental authorities having jurisdiction thereof. If Tenant fails to so
promptly investigate, clean up, remove, restore, provide closure or otherwise so
remediate, Landlord may, but without obligation to do so, take any and all steps
necessary to rectify the same and Tenant shall promptly reimburse Landlord, upon
demand, for all costs and expenses to Landlord of performing investigation,
clean up, removal, restoration, closure and remediation work. All such work
undertaken by Tenant, as required herein, shall be performed in such a manner so
as to enable Landlord to make full economic use of the Premises, the Building,
the Lot and the Park after the satisfactory completion of such work.

     29.5  Environmental Indemnity: In addition to Tenant's obligations as set
forth hereinabove, Tenant and Tenant's officers and directors agree to, and
shall, protect, indemnify, defend (with counsel acceptable to Landlord) and hold
Landlord and the other Indemnitees harmless from and against any and all claims,
judgments, damages, penalties, fines, liabilities, losses (including, without
limitation, diminution in value of any portion of the Premises, the Building,
the Lot or the Park, damages for the loss of or restriction on the use of
rentable or usable space, and from any adverse impact of Landlord's marketing of
any space within the Building and/or Park), suits, administrative proceedings
and costs (including, but not limited to, attorneys' and consultant fees and
court costs) arising at any time during or after the Term of this Lease in
connection with or related to, directly or indirectly, the use, presence,
transportation, storage, disposal, migration, removal, spill, release or
discharge of Hazardous Materials on, in or about any portion of the Premises,
the Common Areas, the Building, the Lot or the Park as a result (directly or
indirectly) of the presence of storage, use, release or emission of Hazardous
Materials by Tenant or any of Tenant's Representatives. The written consent of
Landlord to the presence, use or storage of Hazardous Materials in, on, under or
about any portion of the Premises, the Building, the Lot and/or the Park, or the
strict compliance by Tenant with all Environmental Laws shall not excuse Tenant
and Tenant's officers and directors from its obligations of indemnification
pursuant hereto. Tenant shall not be relieved of its indemnification obligations
under the provisions of this Section 29.5 due to Landlord's status as either an
"owner" or "operator" under any Environmental Laws.

                                       23
<PAGE>

     29.6  Survival: Tenant's obligations and liabilities pursuant to the
provisions of this Section 29 shall survive the expiration or earlier
termination of this Lease. If it is determined by Landlord that the condition of
all or any portion of the Premises, the Building, the Lot and/or the Park is not
in compliance with the provisions of this Lease with respect to Hazardous
Materials, including without limitation all Environmental Laws at the expiration
or earlier termination of this Lease, then in Landlord's sole discretion,
Landlord may require Tenant to hold over possession of the Premises until Tenant
can surrender the Premises to Landlord in the condition in which the Premises
existed as of the Commencement Date and prior to the appearance of such
Hazardous Materials except for reasonable wear and tear, including without
limitation, the conduct or performance of any closures as required by any
Environmental Laws. The burden of proof hereunder shall be upon Tenant. For
purposes hereof, the term "reasonable wear and tear" shall not include any
deterioration in the condition or diminution of the value of any portion of the
Premises, the Building, the Lot and/or the Park in any manner whatsoever related
to directly, or indirectly, Hazardous Materials. Any such holdover by Tenant
will be with Landlord's consent, will not be terminable by Tenant in any event
or circumstance and will otherwise be subject to the provisions of Section 22 of
this Lease. This Section 29 constitutes the entire agreement of Landlord and
Tenant regarding Hazardous Materials. No other provision of this Lease shall be
deemed to apply thereto.

     29.7  Disclosure: Pursuant to the provisions of California Health & Safety
Code (S)25359.7 (as amended, supplemented and replaced from time to time),
Landlord hereby discloses to Tenant that as of the Lease Date the Lot contains
certain Hazardous Materials as such Hazardous Materials are more particularly
described and set forth in that certain Phase I Environmental Site Assessment,
dated December 1997, prepared by Brown and Caldwell (the "Environmental
Report"). Landlord acknowledges and agrees that none of the environmental
conditions or presence of Hazardous Materials on, in or under the Lot as
described in the Environmental Report has been in any way caused by Tenant or
any of Tenant's Representatives. Tenant hereby acknowledges and agrees as
follows: (a) prior to executing this Lease a copy has been made available at
Landlord's offices located at 2026 West Winton Avenue in Hayward, California for
Tenant's review; (b) except for permissibly disclosing such information to its
employees and invitees, to maintain the information contained therein strictly
confidential and not to make or disseminate copies of such documents or the
information contained therein to any party or person without first obtaining
Landlord's written consent thereto, (c) not to disseminate or otherwise permit
any employee, agent or other person over which Tenant has lawful authority to
copy, publish or otherwise disseminate the Environmental Report or the
information contained therein (except as may be lawfully compelled or otherwise
required by valid rule, regulation or law); and (d) Landlord has made available
to Tenant the Environmental Report for informational purposes only and Tenant
may not rely upon the information contained in the Environmental Report unless
and until Tenant obtains the environmental firms' written consent to such
reliance thereon by Tenant.

     29.8  Tenant's Exculpation. Tenant shall not be liable for nor otherwise
           ---------------------
obligated to Landlord under any provision of the lease with respect to (i) any
claim, remediation obligation, investigation obligation, liability, cause of
action, attorney's fees, consultants' cost, expense or damage resulting from any
Hazardous Material present in, on or about the Premises or any of the Buildings
in the Park to the extent not caused nor otherwise permitted, directly or
indirectly, by Tenant or Tenant's Representatives; or (ii) the removal,
investigation, monitoring or remediation of any Hazardous Material present in,
on or about the Premises, the Building or the Park caused by any source,
including third parties other than Tenant and Tenant's Representatives, as a
result of or in connection with the acts or omissions of persons other than
Tenant or Tenant's Representatives; provided, however, Tenant shall be fully
liable for and otherwise obligated to Landlord under the provisions of this
Lease for all liabilities, costs, damages, penalties, claims judgments, expenses
(including without limitation, attorneys' and experts' fees and costs) and
losses to the extent (a) Tenant or any of Tenant's Representatives contributes
to the presence of such Hazardous Materials or Tenant and/or any of Tenant's
Representatives exacerbates the conditions caused by such Hazardous Materials,
or (b) Tenant and/or Tenant's Representatives allows or permits persons over
which Tenant or any of Tenant's Representatives has control and/or for which
Tenant or any of Tenant's Representatives are legally responsible for, to cause
such Hazardous Materials to be present in, on, under, through or about any
portion of the Premises, the Building or the Park, or does not take a reasonably
appropriate actions to prevent such persons over which Tenant or any of Tenant's
Representatives has control and/or for which Tenant or any of Tenant's
Representatives are legally responsible from causing the presence of Hazardous
Materials in, on, under, through or about any portion of the Premises, the
Building or the Park.

30.  FINANCIAL STATEMENTS

     Tenant, for the reliance of Landlord, any lender holding or anticipated to
acquire a lien upon the Premises, the Building or the Park or any portion
thereof, or any prospective purchaser of the Building or the Park or any portion
thereof, within ten (10) days after Landlord's request therefor, but not more
often than once annually so long as Tenant is not in material default of this
Lease, shall deliver to Landlord the

                                       24
<PAGE>

then current publicly available audited financial statements of Tenant
(including interim periods following the end of the last fiscal year for which
annual statements are available) which statements shall be prepared or compiled
in accordance with generally accepted accounting principles and shall present
fairly the financial condition of Tenant at such dates and the result of its
operations and changes in its financial positions for the periods ended on such
dates. If an audited financial statement has not been prepared, Tenant shall
provide Landlord with an unaudited financial statement and/or such other
information, the type and form of which are acceptable to Landlord in Landlord's
reasonable discretion, which reflects the financial condition of Tenant.

31.  GENERAL PROVISIONS

     31.1  Time. Time is of the essence in this Lease and with respect to each
and all of its provisions in which performance is a factor.

     31.2  Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.

     31.3  Recordation. Tenant shall not record this Lease or a short form
memorandum hereof without the prior written consent of the Landlord.

     31.4  Landlord's Personal Liability. The liability of Landlord (which, for
purposes of this Lease, shall include Landlord and the owner of the Building if
other than Landlord) to Tenant for any default by Landlord under the terms of
this Lease shall be limited to the actual interest of Landlord and its present
or future partners or members in the Building, and Tenant agrees to look solely
to the Building for satisfaction of any liability and shall not look to other
assets of Landlord nor seek any recourse against the assets of the individual
partners, members, directors, officers, shareholders, agents or employees of
Landlord (including without limitation, any property management company of
Landlord); it being intended that Landlord and the individual partners, members,
directors, officers, shareholders, agents and employees of Landlord (including
without limitation, any property management company of Landlord) shall not be
personally liable in any manner whatsoever for any judgment or deficiency. The
liability of Landlord under this Lease is limited to its actual period of
ownership of title to the Building, and Landlord shall be automatically released
from further performance under this Lease upon transfer of Landlord's interest
in the Premises or the Building.

     31.5  Separability. Any provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provisions hereof and such other provision shall remain in full force and
effect.

     31.6  Choice of Law. This Lease shall be governed by, and construed in
accordance with, the laws of the State of California.

     31.7  Attorneys' Fees. In the event any dispute between the parties results
in litigation or other proceeding, the prevailing party shall be reimbursed by
the party not prevailing for all reasonable costs and expenses, including,
without limitation, reasonable attorneys' and experts' fees and costs incurred
by the prevailing party in connection with such litigation or other proceeding,
and any appeal thereof. Such costs, expenses and fees shall be included in and
made a part of the judgment recovered by the prevailing party, if any.

     31.8  Entire Agreement. This Lease supersedes any prior agreements,
representations, negotiations or correspondence between the parties, and
contains the entire agreement of the parties on matters covered. No other
agreement, statement or promise made by any party, that is not in writing and
signed by all parties to this Lease, shall be binding.

     31.9  Warranty of Authority. Landlord and Tenant each represent and warrant
that (1) the person executing this Lease on such party's behalf is duly and
validly authorized to do so on behalf of the entity it purports to so bind, and
(2) if such party is a partnership, corporation or trustee, that such
partnership, corporation or trustee has full right and authority to enter into
this Lease and perform all of its obligations hereunder. Tenant hereby warrants
that this Lease is valid and binding upon Tenant and enforceable against Tenant.

     31.10  Notices. Any and all notices and demands required or permitted to be
given hereunder to Landlord shall be in writing and shall be sent: (a) by United
States mail, certified and postage prepaid; or (b) by personal delivery; or (c)
by overnight courier, addressed to Landlord at 101 Lincoln Centre Drive, Fourth
Floor, Foster City, California 94404-1167. Any and all notices and demands
required or permitted to be given hereunder to Tenant shall be in writing and
shall be sent: (i) by United States mail, certified and postage prepaid; or (ii)
by personal delivery to any employee or agent of Tenant over the age of eighteen
(18) years of age; or (iii) by overnight courier, all of which shall be
addressed to Tenant

                                       25
<PAGE>

at the address on the front page hereof. Notice and/or demand shall be deemed
given upon the earlier of actual receipt or the third business day following
deposit in the United States mail. Any notice or requirement of service required
by any statute or law now or hereafter in effect, including, but not limited to,
California Code of Civil Procedure Sections 1161, 1161.1, and 1162 (including
any amendments, supplements or substitutions thereof), is hereby waived by
Tenant.

     31.11  Joint and Several. If Tenant consists of more than one person or
entity, the obligations of all such persons or entities shall be joint and
several.

     31.12  Covenants and Conditions. Each provision to be performed by Tenant
hereunder shall be deemed to be both a covenant and a condition.

     31.13  Waiver of Jury Trial. The parties hereto shall and they hereby do
waive trial by jury in any action, proceeding or counterclaim brought by either
of the parties hereto against the other on any matters whatsoever arising out of
or in any way related to this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises, the Building or the Park, and/or any
claim of injury, loss or damage.

     31.14  Underlining. The use of underlining within the Lease is for
Landlord's reference purposes only and no other meaning or emphasis is intended
by this use, nor should any be inferred.

     31.15  Merger. The voluntary or other surrender of this Lease by Tenant,
the mutual termination or cancellation hereof by Landlord and Tenant, or a
termination of this Lease by Landlord for a material default by Tenant
hereunder, shall not work a merger, and, at the sole option of Landlord, (i)
shall terminate all or any existing subleases or subtenancies, or (ii) may
operate as an assignment to Landlord of any or all of such subleases or
subtenancies. Landlord's election of either or both of the foregoing options
shall be exercised by delivery by Landlord of written notice thereof to Tenant
and all known subtenants under any sublease.

32.  SIGNS

     Tenant shall have the right to share the signage with the occupant of the
balance of the Building all signs and graphics of every kind visible in or from
public view or corridors or the exterior of the Premises shall be subject to
Landlord's prior written approval and shall be subject to any applicable
governmental laws, ordinances, and regulations and in compliance with Landlord's
sign criteria as same may exist from time to time or as set forth in Exhibit H
hereto and made a part hereof. Tenant shall remove all such signs and graphics
prior to the termination of this Lease. Such installations and removals shall be
made in a manner as to avoid damage or defacement of the Premises; and Tenant
shall repair any damage or defacement, including without limitation,
discoloration caused by such installation or removal. Landlord shall have the
right, at its option, to deduct from the Security Deposit such sums as are
reasonably necessary to remove such signs, including, but not limited to, the
costs and expenses associated with any repairs necessitated by such removal.
Notwithstanding the foregoing, in no event shall any: (a) neon, flashing or
moving sign(s) or (b) sign(s) which shall interfere with the visibility of any
sign, awning, canopy, advertising matter, or decoration of any kind of any other
business or occupant of the Building or the Park be permitted hereunder. Tenant
further agrees to maintain any such sign, awning, canopy, advertising matter,
lettering, decoration or other thing as may be approved in good condition and
repair at all times.

33.  MORTGAGEE PROTECTION

     Upon any default on the part of Landlord, Tenant will give written notice
by registered or certified mail to any beneficiary of a deed of trust or
mortgagee of a mortgage covering the Premises who has provided Tenant with
notice of their interest together with an address for receiving notice, and
shall offer such beneficiary or mortgagee a reasonable opportunity to cure the
default (which, in no event shall be less than ninety (90) days), including time
to obtain possession of the Premises by power of sale or a judicial foreclosure,
if such should prove necessary to effect a cure. If such default cannot be cured
within such time period, then such additional time as may be necessary will be
given to such beneficiary or mortgagee to effect such cure so long as such
beneficiary or mortgagee has commenced the cure within the original time period
and thereafter diligently pursues such cure to completion, in which event this
Lease shall not be terminated while such cure is being diligently pursued.
Tenant agrees that each lender to whom this Lease has been assigned by Landlord
is an express third party beneficiary hereof. Tenant shall not make any
prepayment of Rent more than one (1) month in advance without the prior written
consent of each such lender, except if Tenant is required to make quarterly
payments of Rent in advance pursuant to the provisions of Section 8 above.
Tenant waives the collection of any deposit from such lender(s) or any purchaser
at a foreclosure sale of such lender(s)' deed of trust unless the lender(s) or
such purchaser shall have actually received and not refunded the deposit. Tenant
agrees to make all payments under this Lease to the lender with the most senior
encumbrance upon receiving a direction, in

                                       26
<PAGE>

writing, to pay said amounts to such lender. Tenant shall comply with such
written direction to pay without determining whether an event of default exists
under such lender's loan to Landlord.

34.  QUITCLAIM

     Upon any termination of this Lease, Tenant shall, at Landlord's request,
execute, have acknowledged and deliver to Landlord a quitclaim deed of Tenant's
interest in and to the Premises.

35.  MODIFICATIONS FOR LENDER

     If, in connection with obtaining financing for the Premises or any portion
thereof, Landlord's lender shall request reasonable modification(s) to this
Lease as a condition to such financing, Tenant shall not unreasonably withhold,
delay or defer its consent thereto, provided such modifications do not
materially adversely affect Tenant's rights hereunder or the use, occupancy or
quiet enjoyment of Tenant hereunder or increase Tenant's obligations or decrease
Tenant's rights hereunder.

36.  WARRANTIES OF TENANT

     Tenant hereby warrants and represents to Landlord, for the express benefit
of Landlord, that Tenant has undertaken an independent evaluation of the risks
inherent in the execution of this Lease and the operation of the Premises for
the use permitted hereby, and that, based upon said independent evaluation,
Tenant has elected to enter into this Lease and except as expressly set forth
herein hereby assumes all risks with respect thereto. Tenant hereby further
warrants and represents to Landlord, for the express benefit of Landlord, that
in entering into this Lease, Tenant has not relied upon any statement, fact,
promise or representation (whether express or implied, written or oral) not
specifically set forth herein in writing and that any statement, fact, promise
or representation (whether express or implied, written or oral) made at any
time to Tenant, which is not expressly incorporated herein in writing, is hereby
waived by Tenant.

37.  COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT

     Landlord and Tenant hereby agree and acknowledge that the Premises, the
Building and/or the Park may be subject to the requirements of the Americans
with Disabilities Act, a federal law codified at 42 U.S.C. 12101 et seq,
including, but not limited to Title III thereof, all regulations and guidelines
related thereto, together with any and all laws, rules, regulations, ordinances,
codes and statutes now or hereafter enacted by local or state agencies having
jurisdiction thereof, including all requirements of Title 24 of the State of
California, as the same may be in effect on the date of this Lease and may be
hereafter modified, amended or supplemented (collectively, the "ADA"). Any
Tenant Improvements to be constructed hereunder shall be in compliance with the
requirements of the ADA, and all costs incurred for purposes of compliance
therewith shall be a part of and included in the costs of the Tenant
Improvements. Tenant shall be solely responsible for conducting its own
independent investigation of this matter with respect to the condition of the
Building, Tenant's use of the Premises and for all improvements to be made to
the Premises after the actual Commencement Date other than the Tenant
Improvements; provided, however, with respect to the Tenant Improvements
Landlord shall be solely responsible for ensuring that the design of all Tenant
Improvements strictly comply with all requirements of the ADA. Subject to
reimbursement pursuant to Section 6 of the Lease, if any barrier removal work or
other work is required to the Building, the Common Areas or the Park under the
ADA, then such work shall be the responsibility of Landlord; provided, if such
work is required under the ADA as a result of Tenant's particular use of the
Premises or any work or alteration made to the Premises by or on behalf of
Tenant (other than any initial improvements), then such work shall be performed
by Landlord at the sole cost and expense of Tenant. Except as otherwise
expressly provided in this provision, Tenant shall be responsible at its sole
cost and expense for fully and faithfully complying with all applicable
requirements of the ADA, including without limitation, not discriminating
against any disabled persons in the operation of Tenant's business in or about
the Premises, and offering or otherwise providing auxiliary aids and services
as, and when, required by the ADA. Within ten (10) days after receipt, Landlord
and Tenant shall advise the other party in writing, and provide the other with
copies of (as applicable), any notices alleging violation of the ADA relating to
any portion of the Premises or the Building; any claims made or threatened in
writing regarding noncompliance with the ADA and relating to any portion of the
Premises or the Building; or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with the ADA and
relating to any portion of the Premises or the Building. Tenant shall and hereby
agrees to protect, defend (with counsel acceptable, to Landlord) and hold
Landlord and the other Indemnitees harmless and indemnify the Indemnitees from
and against all liabilities, damages, claims, losses, penalties, judgments,
charges and expenses (including reasonable attorneys' fees, costs of court and
expenses necessary in the prosecution or defense of any litigation including the
enforcement of this provision) arising from or in any way related to, directly
or indirectly, Tenant's or Tenant's Representatives violation or alleged
violation of the

                                       27
<PAGE>

ADA. Tenant agrees that the obligations of Tenant herein shall survive the
expiration or earlier termination of this Lease.

38.  BROKERAGE COMMISSION

     Landlord and Tenant each represents and warrants for the benefit of the
other that it has had no dealings with any real estate broker, agent or finder
in connection with the Premises and/or the negotiation of this Lease, except for
the Broker(s) (as set forth on Page 1), and that it knows of no other real
estate broker, agent or finder who is or might be entitled to a real estate
brokerage commission or finder's fee in connection with this Lease or otherwise
based upon contacts between the claimant and Tenant. Each party shall indemnify
and hold harmless the other from and against any and all liabilities or expenses
arising out of claims made for a fee or commission by any real estate broker,
agent or finder in connection with the Premises and this Lease other than
Broker(s), if any, resulting from the actions of the indemnifying party. Any
real estate brokerage commission or finder's fee payable to the Broker(s) in
connection with this Lease shall only be payable and applicable to the extent of
the initial Term of the Lease and to the extent of the Premises as same exist as
of the date on which Tenant executes this Lease. Unless expressly agreed to in
writing by Landlord and Broker(s), no real estate brokerage commission or
finder's fee shall be owed to, or otherwise payable to, the Broker(s) for any
renewals or other extensions of the initial Term of this Lease or for any
additional space leased by Tenant other than the Premises as same exists as of
the date on which Tenant executes this Lease. Tenant further represents and
warrants to Landlord that Tenant will not receive (i) any portion of any
brokerage commission or finder's fee payable to the Broker(s) in connection with
this Lease or (ii) any other form of compensation or incentive from the
Broker(s) with respect to this Lease.

39.  QUIET ENJOYMENT

     Landlord covenants with Tenant, upon the paying of Rent and observing and
keeping the covenants, agreements and conditions of this Lease on its part to be
kept, and during the periods that Tenant is not otherwise in default of any of
the terms or provisions of this Lease, and subject to the rights of any of
Landlord's lenders, (i) that Tenant shall and may peaceably and quietly hold,
occupy and enjoy the Premises and the Common Areas during the Term of this
Lease, and (ii) neither Landlord, nor any successor or assign of Landlord, shall
disturb Tenant's occupancy or enjoyment of the Premises and the Common Areas.

40.  LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS

     Notwithstanding anything to the contrary contained in this Lease, if Tenant
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Tenant pursuant to this Lease within the
applicable cure periods, and/or if the failure of Tenant relates to a matter
which in Landlord's judgment reasonably exercised is of an emergency nature and
such failure shall remain uncured for a period of time commensurate with such
emergency, then Landlord may, at Landlord's option without any obligation to do
so, and in its sole discretion as to the necessity therefor, perform any such
term, provision, covenant, or condition, or make any such payment and Landlord
by reason of so doing shall not be liable or responsible for any loss or damage
thereby sustained by Tenant or anyone holding under or through Tenant. If
Landlord so performs any of Tenant's obligations hereunder, the full amount of
the cost and expense entailed or the payment so made or the amount of the loss
so sustained shall immediately be owing by Tenant to Landlord, and Tenant shall
promptly pay to Landlord upon demand, as Additional Rent, the full amount
thereof with interest thereon from the date of payment at the greater of (i) ten
percent (10%) per annum, or (ii) the highest rate permitted by applicable law
and Enforcement Expenses.

41.  TENANT'S EARLY TERMINATION OPTION:

   41.1      Termination Date: Tenant shall have a one-time option (the
       "Termination Option") to terminate this Lease, effective as of the 37/th/
       month of the Lease Term (the "Termination Date"). The Termination Option
       is granted subject to the following terms and conditions:

      41.1.1  Notice: Tenant delivers to Landlord written notice of Tenant's
              election to exercise the Termination Option, which notice is given
              no later than nine (9) full calendar months prior to the
              Termination Date; and

      41.1.2  No Default: Tenant is not then in default under this Lease beyond
              any applicable cure periods either on the date that Tenant
              exercises the Termination Option, or unless waived in writing by
              Landlord, on the Termination Date; and

      41.1.3  Termination Fee: Tenant pays to Landlord on the 30th month of the
              Lease Term, a cash lease termination fee (the "Fee") equal to two
              hundred six thousand eight hundred ninety-five and 00/100 dollars
              ($206,895.00).

                                       28
<PAGE>

      41.2    Terms: If Tenant timely and properly exercises the Termination
Option, (i) all rent payable under this Lease shall be paid through and
apportioned as of the Termination Date (in addition to payment by Tenant of the
Fee); (ii) neither party shall have any rights, estates, liabilities, or
obligations under this Lease for the period accruing after the Termination Date,
except those which by the provisions of this Lease, expressly survive the
expiration or termination of the Term of this Lease; (iii) Tenant shall
surrender and vacate the Premises and deliver possession thereof to Landlord on
or before the Termination Date in the condition required under this Lease for
surrender of the Premises; and (iv) Landlord and Tenant shall enter into a
written agreement reflecting the termination of this Lease upon the terms
provided for herein, which agreement shall be executed within thirty (30) days
after Tenant exercises the Termination Option and delivers to Landlord the
written notice required above. It is the parties' intention that nothing
contained herein shall impair, diminish or otherwise prevent Landlord from
recovering from Tenant such additional sums as may be necessary for payment of
Tenant's Share of the Operating Expenses, Tax Expenses, Common Area Utility
Costs, Utility Expenses, Administrative Charges and any other sums due and
payable under this Lease allocated to any period prior to the Termination Date,
including, any sums required to repair any damage to the Premises and/or restore
the Premises to the condition required under the provisions of this Lease.

      41.3    Termination: The Termination Option shall automatically terminate
and become null and void upon the earlier to occur of (i) the breach or default
by Tenant of any of the terms of this Lease beyond any applicable cure periods
either on the date that tenant exercises the Termination Option, or unless
waived in writing by Landlord, on the Termination Date; (ii) Landlord or
Tenant's the termination of Tenant's right to possession of the Premises under
the provisions of this Lease; or (iii) the failure of Tenant to timely or
properly exercise the Termination option as contemplated herein. This
Termination Option is personal to Tenant and may not be assigned voluntarily,
separate from or as part of the Lease, except to a Related Entity.

      IN WITNESS WHEREOF, this Lease is executed by duly authorized signatories
of the parties as of the Lease Date referenced on Page 1 of this Lease.

TENANT:

NetFlix.Com,
a Delaware corporation

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

Its:    CFO & Secretary
       -----------------------

Date:   10/8/99
       -----------------------


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

Its:   Secretary
       -----------------------
Date:
       -----------------------

LANDLORD:

LINCOLN-RECP OLD OAKLAND OPCO, LLC,
a Delaware limited liability company

By:  LEGACY PARTNERS COMMERCIAL, INC.
     as manager and agent for Lincoln-RECP Old Oakland OPCO, LLC

   By:
        ---------------------
        Senior Vice President

     Date:
          -------------------

If Tenant is a CORPORATION, the authorized officers must sign on behalf of the
               -----------
corporation and indicate the capacity in which they are signing. The Lease must
be executed by the president or vice-president and the secretary or assistant
                                               ----
secretary, unless the bylaws or a resolution of the board of directors shall
           -------
otherwise provide, in which event, the bylaws or a certified copy of the
resolution, as the case may be, must be attached to this Lease.

                                       29
<PAGE>

                                   EXHIBIT A
                                    PREMISES


This exhibit, entitled "Premises", is and shall constitute EXHIBIT A to that
certain Lease Agreement dated August 11, 1999 (the "Lease"), by and between
LINCOLN-RECP OLD OAKLAND OPCO, LLC, a Delaware limited liability company
("Landlord") and NetFlix.com, a Delaware corporation ("Tenant") for the leasing
of certain premises located at 2219 Old Oakland Road, San Jose, California (the
"Premises").

The Premises consist of the rentable square footage of space specified in the
Basic Lease Information and has the address specified in the Basic Lease
Information. The Premises are a part of and are contained in the Building
specified in the Basic Lease Information. The non cross-hatched area depicts the
Premises within the [Building, Project]:

                                       30
<PAGE>

                          EXHIBIT B TO LEASE AGREEMENT
                              TENANT IMPROVEMENTS


This exhibit, entitled "Tenant Improvements", is and shall constitute EXHIBIT B
                                                                      ---------
to that certain Lease Agreement dated August 11, 1999 (the "Lease"), by and
between LINCOLN-RECP OLD OAKLAND OPCO, LLC, a Delaware limited liability company
("Landlord") and NetFlix.com, a Delaware corporation ("Tenant") for the leasing
of certain premises located at 2219 Old Oakland Road, San Jose, California (the
"Premises"). The terms, conditions and provisions of this EXHIBIT B are hereby
                                                          ---------
incorporated into and are made a part of the Lease. Any capitalized terms used
herein and not otherwise defined herein shall have the meaning ascribed to such
terms as set forth in the Lease:

1.  Tenant Improvements. Subject to the conditions set forth below, Landlord
    --------------------
agrees to construct and install at its sole cost and expense certain
improvements ("Tenant Improvements") in the Building of which the Premises are a
part in accordance with Section 2 below and pursuant to the terms of this

EXHIBIT B.
---------

2.   Definition. "Tenant Improvements" as used in this Lease shall include only
     ----------
those portions of the Building which are described below. "Tenant Improvements"
shall specifically not include any alterations, additions or improvements
installed or constructed by Tenant, and any of Tenant's trade fixtures,
equipment, furniture, furnishings, telephone equipment or other personal
property (collectively, "Personal Property"). The Tenant Improvements shall
include only those improvements as specified in this Section 2 below and made a
part hereof. Such work, as set forth below and as shown in the Initial Plans
shall be hereinafter referred to as the "Work". Landlord shall not be obligated
to pay for any improvements which are not expressly set forth herein below. The
Tenant Improvements shall consist of the following Work as described more fully
on Exhibit B-2 hereto:

     (a) Install full floor to roof joist demising wall and separately metered
PG&E.
     (b)  Remove wall partitions in former restroom area and install 12' of
          upper and 12' of lower cabinets, kitchenette sink and outlets for
          microwave and refrigerator.
     (c)  Install exterior lighting in shipping and receiving area which will be
          operational on a 24-hour, 7 days per week basis.

3.   Tenant Improvement Costs. The "Tenant Improvements" cost (Tenant
     -------------------------
Improvement Costs") shall mean and include any and all costs and expenses of the
Work, including, without limitation, all of the following:

     (a) All costs of preliminary space planning and final architectural and
engineering plans and specifications (including, without limitation, the scope
of work, all plans and specifications, the Initial Plans and the Final Drawings)
for the Tenant Improvements, and architectural fees, engineering costs and fees,
and other costs associated with completion of said plans;

     (b) All costs of obtaining building permits and other necessary
authorizations and approvals from the City of San Jose and other applicable
jurisdictions;

     (c) All costs of interior design and finish schedule plans and
specifications including as-built drawings;

     (d) All direct and indirect costs or procuring, constructing and installing
the Tenant Improvements in the Premises, including, but not limited to, the
construction fee for overhead and profit, the cost of all on-site supervisory
and administrative staff, office, equipment and temporary services rendered by
Landlord's consultants and the General Contractor in connection with
construction of the Tenant Improvements, and all labor (including overtime) and
materials constituting the Work;

     (e) All fees payable to the General Contractor, architect and Landlord's
engineering firm if they are required by Tenant to redesign any portion of the
Tenant Improvements following Tenant's approval of the Final Drawings; and

     (f) A construction management fee payable to Landlord in the amount of five
percent (5%) of all direct and indirect costs of procuring, constructing and
installing the Tenant Improvements in the Premises and the Building.

4.  Building Standard Work. Landlord shall provide that the Tenant Improvements
    -----------------------
be at least equal, in quality, to Landlord's building standard materials,
quantities and procedures then in use by Landlord ("Building Standards")
attached hereto as Exhibit B-I, and shall consist of improvements which are
generic in nature. Landlord shall obtain all government approvals of the Work to
the full extent necessary for the issuance of a building permit for the Tenant
Improvements. Such Tenant Improvements shall be constructed in a good and
workmanlike manner, free of defects and using new

                                       1
<PAGE>

materials and equipment of good quality. Tenant shall have the right to submit a
written "punch list" to Landlord, setting forth any defective item of
construction, and Landlord shall promptly cause such items to be corrected.
Tenant's acceptance of the Premises or submission of a "punch list" shall not be
deemed a waiver of Tenant's right to have defects in the Tenant Improvements or
the Premises repaired at no cost to Tenant. Tenant shall give notice to
Landlord, within the first year of the Lease Term, whenever any such defect
becomes reasonably apparent, and Landlord shall repair such defect as soon as
practicable.

5.  Landlord shall not be obligated to pay for any Tenant Improvements which are
not specifically set forth in Section 2 above or in Exhibit B-1.

6.  Lease Provisions; Conflict. The terms and provisions of the Lease, insofar
    --------------------------
as they are applicable, in whole or in part, to this EXHIBIT B, are hereby
                                                     ---------
incorporated herein by reference, and specifically including all of the
provisions of Section 31 of the Lease. In the event of any conflict between the
terms of the Lease and this EXHIBIT B, the terms of this EXHIBIT B shall
                            ---------                    ----------
prevail.

                                       2
<PAGE>

                                  EXHIBIT B-1
                               BUILDING STANDARDS

                           OUTLINE SPECIFICATION FOR
                     NEW OFFICE BUILD-OUT IN R&D BUILDINGS

OFFICE AREA
-----------

DEMISING PARTITION AND CORRIDOR WALLS:

Note:  One hr. rated walls where required based on occupancy group.

A.   6" 20-gage metal studs at 24" O.C. (or as required by code based on roof
height) framed full height from finish floor to surface above.

B.  One (1) layer 5/8" drywall Type "X" both sides of wall, fire taped only.

INTERIOR PARTITIONS:

A.  3-5/8" 25-gage metal studs at 24" O.C. to bottom of T-Bar ceiling grid
approximately 9' 0" high.

B.  One (1) layer 5/8" drywall both sides of wall, smooth ready for paint.

C.  3-5/8" metal studs including all lateral bracing as required by code.

PERIMETER DRYWALL (AT OFFICE AREAS):

A.  3-5/8" metal studs @ 24" O.C. to 12' 0" above finished floor. (or as
required by Title-24 for full height envelope then use demising wall spec.)

B.  One (1) layer 5/8" Type "X" drywall taped smooth and ready for paint.

COLUMN FURRING:

A.  Furring channel all sides of 2-1/2" metal studs per details.

B.  One (1) layer 5/8" drywall taped smooth and ready for paint.

C.  Columns within walls shall be furred-out.

ACOUSTICAL CEILINGS:

Note  Gyp. Bd. ceiling at all restrooms Typ.

A.  2' x 4' standard white T-Bar grid system as manufactured by Chicago Metallic
of equal.

B.  2' x 4' x 5/8" white, no-directional acoustical tile to be regular second
look as manufactured by Armstrong or equal.

PAINTING:

A.  Sheetrock walls within office to receive two (2) coats of interior latex
paint as manufactured by Kelly Moore or equal. Some portions of second coat to
be single accent color.

B.  Semi-gloss paint all restrooms and lunch rooms.

WINDOW COVERING:

A.  1" aluminum mini-blinds as manufactured by Levelor, Bali or equal, color to
be selected by Legacy Partners Commercial, Inc. (brushed aluminum or white).

B.  Blinds to be sized to fit window module.

                                       1
<PAGE>

VCT:
----

A.  VCT to be l/8" x 12" x 12" as manufactured by Armstrong - Excelon Series or
equal.

B.  Slabs shall be water proofed per manufacturer recommendations, at sheet
vinyl or VCT areas.

LIGHT FIXTURES:

A.  2" x 4" T-bar lay in 3-tube energy efficient fixture with cool white
fluorescent tubes with parabolic lens as manufactured by Lithonia or equal.
(Approximately 50 F.C,)

LIGHT SWITCHES:

A.  Switching as required by Title 24.

B.  Switch assembly to be Levinton or equal, color - White

ELECTRICAL OUTLET:

A.  110V duplex outlet in demising or interior partitions only, as manufactured
by Leviton or equal, color to be White.

B.  Maximum eight (8) outlets per circuit, spacing to meet code or minimum 2 per
office, conference room, reception and 2 dedicated over cabinet at lunch room
junction boxes above ceiling for large open area with furniture partitions.

C.  Transformers to be a minimum of 20% or over required capacity.

D.  Contractors to inspect electric room and to include all necessary metering
cost.

E.  No aluminum wiring is acceptable.

TELEPHONE/DATA OUTLET:

A.   One (1) single outlet box in wall with pullwire from outlet box to area
above T-bar ceiling per office.

B.   Cover plate for phone outlets by telephone/data vendors.

FIRE SPRINKLERS:

As required by fire codes.

TOPSET BASE:

A.   4" rubber base as manufactured by Burke or equal, standard colors only.

B.   4" rubber base at VCT areas.

TOILET AREAS:

Wet walls to receive Durabond or Wonder Board and ceramic tile up to 48". Floors
to receive ceramic tile with self coved base as required by code.

CARPET:

Note any of the following carpets are acceptable

Designweave: Alumni 28 oz., Windswept Classic 30 oz. or Stratton Design Series
III 30 oz, Structure II 28 oz.

WOOD DOORS:

Shall be 3' 0" x 9' 0" x 1-3/4" (unless otherwise specified) solid core,
prefinished harmony (rotary N. birch).

                                       2
<PAGE>

DOOR FRAMES:

Shall be ACI or equal, 3-3/4" or 4-7/8" throat, brushed, standard aluminum,
snap-on trim.

HARDWARE:

1-1/2 pr. butts F179 Stanley, Latchset D10S Rhodes Schlage, Lockset D53PD Rhodes
Schlage, Dome Type floor stop Gylnn Johnson FB 13, Closer 4110LCN (where
required) brushed chrome.

INSULATION:

By Title 24 insulation.

PLUMBING:

A.   Shall comply with all local codes and handicapped code requirements.
Fixtures shall be either "American Standard", "Kohler" or "Norris". All toilet
accessories and grab bars shall be "Bobrick" or equal and approved by owner.

B.  Plumbing bid shall include 5 gallon minimum hot water heater, or insta hot
with mixer valve including all connections.

TOILET PARTITIONS:

Shall be as manufactured by Fiat, global or equal if approved by owner. Color to
be white or gray.

HVAC:

HVAC units per specifications.

Five (5) year warranty provided on all HVAC compressor units. All penetrations
including curbs and sleepers to be hot moped to Legacy Partners Commercial, Inc.
standard.

WAREHOUSE AREAS:

Floor - seal concrete with water base clear acrylic sealer.
Fire extinguishers - 2A 10 BC surface mount by code x by S.F.

400 W metal halide lighting at warehouse minimum 5-7 foot candles.

Note. All high pile storage requirements are excluded for standard building.
T.I.

                                       3
<PAGE>

                                  EXHIBIT B-2
                              TENANT IMPROVEMENTS

The floor plan below shows the Work to be provided by Landlord pursuant to
Section 2 of this Exhibit B of the Lease.
<PAGE>

                          EXHIBIT C TO LEASE AGREEMENT
                              RULES & REGULATIONS


This exhibit, entitled "Rules & Regulations", is and shall constitute EXHIBIT C
                                                                      ---------
to that certain Lease Agreement dated August 11, 1999 (the "Lease"), by and
between LINCOLN-RECP OLD OAKLAND OPCO, LLC, a Delaware limited liability company
("Landlord") and NetFlix.com, a Delaware corporation ("Tenant") for the leasing
of certain premises located at 2219 Old Oakland Road, San Jose, California (the
"Premises"). The terms, conditions and provisions of this EXHIBIT C are hereby
                                                          ---------
incorporated into and are made a part of the Lease. Any capitalized terms used
herein and not otherwise defined herein shall have the meaning ascribed to such
terms as set forth in the Lease:

1.  No advertisement, picture or sign of any sort shall be displayed on or
outside the Premises or the Building without the prior written consent of
Landlord. Landlord shall have the right to remove any such unapproved item
without notice and at Tenant's expense.

2.  Tenant shall not regularly park motor vehicles in designated parking areas
after the conclusion of normal daily business activity.

3.  Tenant shall not use any method of heating or air conditioning other than
that supplied by Landlord without the prior written consent of Landlord.

4.  All window coverings installed by Tenant and visible from the outside of the
Building require the prior written approval of Landlord.

5.  Tenant shall not use, keep or permit to be used or kept any foul or noxious
gas or substance or any flammable or combustible materials on or around the
Premises, the Building or the Park.

6.  Tenant shall not alter any lock or install any new locks or bolts on any
door at the Premises without the prior consent of Landlord.

7.  Tenant agrees not to make any duplicate keys without the prior consent of
Landlord.

8.  Tenant shall park motor vehicles in those general parking areas as
designated by Landlord except for loading and unloading. During those periods of
loading and unloading, Tenant shall not unreasonably interfere with traffic flow
within the Park and loading and unloading areas of other Tenants.

9.  Tenant shall not disturb, solicit or canvas any occupant of the Building or
Park and shall cooperate to prevent same.

10.  No person shall go on the roof without Landlord's permission.

11.  Business machines and mechanical equipment belonging to Tenant which cause
noise or vibration that may be transmitted to the structure of the Building, to
such a degree as to be objectionable to Landlord or other Tenants, shall be
placed and maintained by Tenant, at Tenant's expense, on vibration eliminators
or other devices sufficient to eliminate noise or vibration.

12.  All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and shall not be
left in parking or receiving areas overnight.

13.  Tractor trailers which must be unhooked or parked with dolly wheels beyond
the concrete loading areas must use steel plates or wood blocks under the dolly
wheels to prevent damage to the asphalt paving surfaces. No parking or storing
of such trailers will be permitted in the auto parking areas of the Park or on
streets adjacent thereto.

14.  Forklifts which operate on asphalt paving areas shall not have solid rubber
tires and shall only use tires that do not damage the asphalt.

15.  Tenant is responsible for the storage and removal of all trash and refuse.
All such trash and refuse shall be contained in suitable receptacles stored
behind screened enclosures at locations approved by Landlord.

                                       1
<PAGE>

16.  Tenant shall not store or permit the storage or placement of goods, or
merchandise or pallets or equipment of any sort in or around the Premises, the
Building, the Park or any of the Common Areas of the foregoing. No displays or
sales of merchandise shall be allowed in the parking lots or other Common Areas.

17.  Tenant shall not permit any animals, including, but not limited to, any
household pets, to be brought or kept in or about the Premises, the building,
the Park or any of the Common Areas of the foregoing.

18.  Tenant shall not permit any motor vehicles to be washed on any portion of
the Premises or in the Common Areas of the Park, nor shall Tenant permit
mechanical work or maintenance of motor vehicles to be performed on any portion
of the Premises or in the Common Areas of the Park.

                                       2
<PAGE>

                                   EXHIBIT E
                   HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE

Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as Tenant. After a lease agreement is signed by you and the Landlord
(the "Lease Agreement"), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:

Landlord:
         -------------------------------------------------------------------

         -------------------------------------------------------------------
          c/o Legacy Partners Commercial, Inc.
          101 Lincoln Centre Drive, Fourth Floor
          Foster City, California 94404
          Attn:
               -------------------------------------------------------------
          Phone: (650) 571-2200

Name of (Prospective) Tenant:
                             -----------------------------------------------
Mailing Address:
                ------------------------------------------------------------
Contact Person, Title and Telephone Number(s):
                                              ------------------------------
Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):
                    --------------------------------------------------------

----------------------------------------------------------------------------
Address of (Prospective) Premises:
                                  ------------------------------------------
Length of (Prospective) Initial Term:
                                     ---------------------------------------

----------------------------------------------------------------------------
1.  General Information:

     Describe the initial proposed operations to take place in, on, or about the
Premises, including, without limitation, principal products processed,
manufactured or assembled services and activities to be provided or otherwise
conducted. Existing Tenants should describe any proposed changes to on-going
operations.

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

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

2.   Use, Storage and Disposal of Hazardous Materials

     2.1  Will any Hazardous Materials be used, generated, stored or disposed of
in, on or about the Premises? Existing Tenants should describe any Hazardous
Materials which continue to be used, generated, stored or disposed of in, on or
about the Premises.

           Wastes                 Yes [  ]   No [  ]
           Chemical Products      Yes [  ]   No [  ]
           Other                  Yes [  ]   No [  ]

     If Yes is marked, please explain:
                                      --------------------------------------

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

     -----------------------------------------------------------------------
<PAGE>

     2.2 If Yes is markedinSection 2.1, attach a list of any Hazardous Materials
to be used, generated, stored or disposed of in, on or about the Premises,
including the applicable hazard class and an estimate of the quantities o[ such
Hazardous Materials at any given time; estimated annual throughput; the proposed
location(s) and method of storage (excluding nominal amounts of ordinary
household cleaners and janitorial Supplies which are not regulated by any
Environmental Laws); and the proposed location(s) and method of disposal for
each Hazardous Material, including, the estimated frequency, and the proposed
contractors or subcontractors. Existing Tenants should attach a list setting
forth the information requested above and such list should include actual data
from on-going operations and the identification of any variations in such in
information from the prior year's certificate.

3.  Storage Tanks and Sumps

     3.1 Is any above or below ground storage of gasoline, diesel, petroleum, or
other Hazardous Materials in tanks or sumps proposed in, on or about the
Premises? Existing Tenants should describe any such actual or proposed
activities.

           Yes [  ]  No [  ]

     If Yes, please explain:
                            ------------------------------------------------

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

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



4.  Waste Management

     4.1  Has your company been issued an EPA Hazardous Waste Generator I.D.
Number? Existing Tenants should describe any additional identification numbers
issued since the previous certificate.

           Yes [  ]  No [  ]

        4.2  Has your company filed a biennial or quarterly reports as a
hazardous waste generator? Existing Tenants should describe any new reports
filed.

           Yes [  ]  No [  ]

           If yes, attach a copy of the most recent report filed.

5.  Wastewater Treatment and Discharge

        5.1  Will your company discharge wastewater or other wastes to:

<TABLE>
<S>                                   <C>
                   storm drain?             sewer?
             -----                    -----
                   surface water?           no wastewater or other wastes discharged.
             -----                    -----
</TABLE>

          Existing Tenants should indicate any actual discharges. If so,
describe the nature of any proposed or actual discharge(s).

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

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

        5.2  Will any such wastewater or waste be treated before discharge?

           Yes[  ]   No[  ]

          If yes, describe the type of treatment proposed to be conducted.
Existing Tenants should describe the actual treatment conducted.

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

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

6.  Air Discharges

        6.1  Do you plan for any air filtration systems or stacks to be used in
your company's operations in, on or about the Premises that will discharge into
the air; and will such air emissions be monitored? Existing Tenants should
indicate whether or not there are any such air filtration systems or stacks in
use in, on or about the Premises which discharge into the air and whether such
air emissions are being monitored.

                                       2
<PAGE>

          Yes [  ]   No [  ]

          If yes, please describe:
                                   ---------------------------------------------

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

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

     6.2  Do you propose to operate any of the following types of equipment, or
any other equipment requiring an air emissions permit? Existing Tenants should
specify any such equipment being operated in, on or about the Premises.

<TABLE>
<S>                                       <C>
               Spray booth(s)                   Incinerator(s)
          -----                            -----
               Dip tank(s)                      Other (Please describe)
          -----                            -----
               Drying oven(s)                   No Equipment Requiring Air Permits
          -----                            -----
</TABLE>

          If yes, please describe:
                                  ------------------------------------------

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

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

7.  Hazardous Materials Disclosures

     7.1  Has your company prepared or will it be required to prepare a
Hazardous Materials management plan ("Management Plan") pursuant to Fire
Department or other governmental or regulatory agencies' requirements? Existing
Tenants should indicate whether or not a Management Plan is required and has
been prepared.

          Yes [  ]  No [  ]

          If yes, attach a copy of the Management Plan. Existing Tenants should
attach a copy of any required updates to the Management Plan.

     7.2  Are any of the Hazardous Materials, and in particular chemicals,
proposed to be used in your operations in, on or about the Premises regulated
under Proposition 65? Existing Tenants should indicate whether or not there are
any new Hazardous Materials being so used which are regulated under Proposition
65.

          Yes [  ]  No [  ]

          If yes, please explain:
                                 -------------------------------------------

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

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

8.  Enforcement Actions and Complaints

     8.1  With respect to Hazardous Materials or Environmental Laws, has your
company ever been subject to any agency enforcement actions, administrative
orders, or consent decrees or has your company received requests for
information, notice or demand letters, or any other inquiries regarding its
operations? Existing Tenants should indicate whether or not any such actions,
orders or decrees have been, or are in the process of being, undertaken or if
any such requests have been received.

          Yes [  ]  No [  ]

          If yes, describe the actions, orders or decrees and any continuing
compliance obligations imposed as a result of these actions, orders or decrees
and also describe any requests, notices or demands, and attach a copy of all
such documents. Existing Tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not already delivered to
Landlord pursuant to the provisions of Section 29 of the signed Lease Agreement.


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

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

     8.2  Have there ever been, or are there now pending, any lawsuits against
your company regarding any environmental or health and safety concerns?

          Yes [  ]  No [  ]

                                       3
<PAGE>

          If yes, describe any such lawsuits and attach copies of the
complaint(s), cross-complaint(s), pleadings and all other documents related
thereto as requested by Landlord. Existing Tenants should describe and attach a
copy of any new complaint(s), cross-complaint(s), pleadings and other related
documents not already delivered to Landlord pursuant to the provisions of
Section 29 of the signed Lease Agreement.

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

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

     8.3  Have there been any problems or complaints from adjacent Tenants,
owners or other neighbors at your company's current facility with regard to
environmental or health and safety concerns? Existing Tenants should indicate
whether or not there have been any such problems or complaints from adjacent
Tenants, owners or other neighbors at, about or near the Premises.

          Yes [  ]  No [  ]

          If yes, please describe. Existing Tenants should describe any such
problems or complaints not already disclosed to Landlord under the provisions of
the signed Lease Agreement.

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

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

9.  Permits and Licenses

     9.1  Attach copies of all Hazardous Materials permits and licenses
including a Transporter Permit number issued to your company with respect to its
proposed operations in, on or about the Premises, including, without limitation,
any wastewater discharge permits, air emissions permits, and use permits or
approvals. Existing Tenants should attach copies of any new permits and licenses
as well as any renewals of permits or licenses previously issued.

The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.

I (print name)         , acting with full authority to bind the (proposed)
Tenant and on behalf of the (proposed) Tenant, certify, represent and warrant
that the information contained in this certificate is true and correct.

(Prospective) Tenant:

By:
       ----------------------------------------
Title:
       -------------------------------------
Date:
       --------------------------------------

                                       4
<PAGE>

                                   EXHIBIT F
                       FIRST AMENDMENT TO LEASE AGREEMENT
                          CHANGE OF COMMENCEMENT DATE

This First Amendment to Lease Agreement (the "Amendment") is made and entered
into to be effective as of __________,  by  and between _______________________
("Landlord"), and ____________________________ ("Tenant"), with reference to the
following facts:

                                    RECITALS

A.   Landlord and Tenant have entered into that certain Lease Agreement dated
_____________ (the "Lease"), for the leasing of certain premises containing
approximately _________________ rentable square feet of space located at
_________, California (the "Premises") as such Premises are more fully described
in the Lease.

B.  Landlord and Tenant wish to amend the Commencement Date of the Lease.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:

     1.   Recitals: Landlord and Tenant agree that the above recitals are true
          --------
          and correct.

     2.   The Commencement Date of the Lease shall be ______________.

     3.   The last day of the Term of the Lease (the "Expiration Date") shall be
          _______________.

     4.   The dates on which the Base Rent will be adjusted are:
<TABLE>
<S>                                              <C>
          for the period ________ to __________  the monthly Base Rent shall be $ ______________;
          for the period ________ to __________  the monthly Base Rent shall be $ ______________; and
          for the period ________ to __________  the monthly Base Rent shall be $ ______________.
</TABLE>

     5.  Effect of Amendment: Except as modified herein, the terms and
         -------------------
conditions of the Lease shall remain unmodified and continue in full force and
effect. In the event of any conflict between the terms and conditions of the
Lease and this Amendment, the terms and conditions of this Amendment shall
prevail.

     6.  Definitions: Unless otherwise defined in this Amendment, all terms not
         -----------
defined in this. Amendment shall have the meaning set forth in the Lease.

     7.  Authority: Subject to the provisions of the Lease, this Amendment shall
         ---------
be binding upon and inure to the benefit of the parties hereto, their respective
heirs, legal representatives, successors and assigns. Each party hereto and the
persons signing below warrant that the person signing below on such party's
behalf is authorized to do so and to bind such party to the terms of this
Amendment.

     8.  The terms and provisions of the Lease are hereby incorporated in this
Amendment.

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

[PROPERTY MANAGER: Please provide Tenant information and Word Processing will
complete the signature block]
<PAGE>

                                   EXHIBIT G
          TENANT's INITIAL HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE

Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as Tenant. After a lease agreement is signed by you and the Landlord
(the "Lease Agreement"), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:

Landlord:
          ------------------------------------------------------------------

          ------------------------------------------------------------------
          c/o Legacy Partners Commercial, Inc.
          101 Lincoln Centre Drive, Fourth Floor
          Foster City, California 94404
          Attn:
               -------------------------------------------------------------
          Phone: (650) 571-2200

Name of (Prospective) Tenant:
                             -----------------------------------------------
Mailing Address:
                ------------------------------------------------------------

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

Contact Person, Title and Telephone Number(s):
                                              ------------------------------
Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):

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

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

Address of (Prospective) Premises:
                                  ------------------------------------------
Length of (Prospective) Initial Term:
                                     ---------------------------------------

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

1.  General Information:

     Describe the initial proposed operations to take place in, on, or about the
Premises, including, without limitation, principal products processed,
manufactured or assembled services and activities to be provided or otherwise
conducted. Existing Tenants should describe any proposed changes to on-going
operations.

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

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

2.  Use, Storage and Disposal of Hazardous Materials

     2.1 Will any Hazardous Materials bc used, generated, stored or disposed of
in, on or about the Premises? Existing Tenants should describe any Hazardous
Materials which continue to be used, generated, stored or disposed of in, on or
about the Premises.

           Wastes                 Yes [  ]   No [  ]
           Chemical Products      Yes [  ]   No [  ]
           Other                  Yes [  ]   No [  ]

     If Yes is marked, please explain:
                                      --------------------------------------

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

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

                                      1
<PAGE>

     2.2  If Yes is marked in Section 2.1. attach a list of any Hazardous
Materials to be used, generated, stored or disposed of in, on or about the
Premises, including the applicable hazard class and an estimate of the
quantities of such Hazardous Materials at any given time; estimated annual
throughput; the proposed location(s) and method of storage (excluding nominal
amounts of ordinary household cleaners and janitorial supplies which are not
regulated by any Environmental Laws); and the proposed location(s) and method of
disposal for each Hazardous Material, including, the estimated frequency, and
the proposed contractors or subcontractors. Existing Tenants should attach a
list setting forth the information requested above and such list should include
actual data from on-going operations and the identification of any variations in
such information from the prior year's certificate.

3.  Storage Tanks and Sumps

     3.1  Is any above or below ground storage of gasoline, diesel, petroleum,
or other Hazardous Materials in tanks or sumps proposed in, on or about the
Premises? Existing Tenants should describe any such actual or proposed
activities.

           Yes [  ]  No [  ]

          If yes, please explain:
                                 -------------------------------------------

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

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

4.  Waste Management

     4.1  Has your company been issued an EPA Hazardous Waste Generator I.D.
Number? Existing Tenants should describe any additional identification numbers
issued since the previous certificate.

           Yes [  ]  No [  ]

     4.2  Has your company filed a biennial or quarterly reports as a
hazardous waste generator? Existing Tenants should describe any new reports
filed.

           Yes [  ]  No [  ]

           If yes, attach a copy of the most recent report filed.

5.  Wastewater Treatment and Discharge

     5.1  Will your company discharge wastewater or other wastes to:
<TABLE>
<S>                               <C>
                  storm drain?         sewer?
             ----                 ----
                  surface water?        no wastewater or other wastes discharged.
             ----                 ----
</TABLE>

          Existing Tenants should indicate any actual discharges. If so,
describe the nature of any proposed or actual discharge(s).

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

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

     5.2  Will any such wastewater or waste be treated before discharge?

           Yes [  ]   No [  ]

          If yes, describe the type of treatment proposed to be conducted.
Existing Tenants should describe the actual treatment conducted.

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

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

6.  Air Discharges

     6.1  Do you plan for any air filtration systems or stacks to be used in
your company's operations in, on or about the Premises that will discharge into
the air; and will such air emissions be monitored? Existing Tenants should
indicate whether or not there are any such air filtration systems or stacks in
use in, on or about the Premises which discharge into the air and whether such
air emissions are being monitored.

                                       2
<PAGE>

          Yes[  ]   No[  ]

          If yes, please describe:
                                  ------------------------------------------

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

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

     6.2  Do you propose to operate any of the following types of equipment, or
any other equipment requiring an air emissions permit? Existing Tenants should
specify any such equipment being operated in, on or about the Premises.

               Spray booth(s)          Incinerator(s)
          ----                    ----
               Dip tank(s)             Other (Please describe)
          ----                    ----
               Drying oven(s)          No Equipment Requiring Air Permits
          ----                    ----

          If yes, please describe:
                                  ------------------------------------------

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

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

7.   Hazardous Materials Disclosures

     7.1  Has your company prepared or will it be required to prepare a
Hazardous Materials management plan ("Management Plan") pursuant to Fire
Department or other governmental or regulatory agencies' requirements? Existing
Tenants should indicate whether or not a Management Plan is required and has
been prepared.

          Yes [  ]  No [  ]

          If yes, attach a copy of the Management Plan. Existing Tenants should
attach a copy of any required updates to the Management Plan.

     7.2  Are any of the Hazardous Materials, and in particular chemicals,
proposed to be used in your operations in, on or about the Premises regulated
under Proposition 65? Existing Tenants should indicate whether or not there are
any new Hazardous Materials being so used which are regulated under Proposition
65.

          Yes [  ]  No [  ]

          If yes, please explain:
                                 -------------------------------------------

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

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

8.   Enforcement Actions and Complaints

     8.1  With respect to Hazardous Materials or Environmental Laws, has your
company ever been subject to any agency enforcement actions, administrative
orders, or consent decrees or has your company received requests for
information, notice or demand letters, or any other inquiries regarding its
operations? Existing Tenants should indicate whether or not any such actions,
orders or decrees have been, or are in the process of being, undertaken or if
any such requests have been received.

          Yes [  ]  No [  ]

          If yes, describe the actions, orders or decrees and any continuing
compliance obligations imposed as a result of these actions, orders or decrees
and also describe any requests, notices or demands, and attach a copy of all
such documents. Existing Tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not already delivered to
Landlord pursuant to the provisions of Section 29 of the signed Lease Agreement.

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

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

     8.2  Have there ever been, or are there now pending, any lawsuits against
your company regarding any environmental or health and safety concerns?

          Yes [  ]  No [  ]

                                       3
<PAGE>

          If yes, describe any such lawsuits and attach copies of the
complaint(s), cross-complaint(s), pleadings and all other documents related
thereto as requested by Landlord. Existing Tenants should describe and attach a
copy of any new complaint(s), cross-complaint(s), pleadings and other related
documents not already delivered to Landlord pursuant to the provisions of
Section 29 of the signed Lease Agreement.

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

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

     8.3  Have there been any problems or complaints from adjacent Tenants,
owners or other neighbors at your company's current facility with regard to
environmental or health and safety concerns? Existing Tenants should indicate
whether or not there have been any such problems or complaints from adjacent
Tenants, owners or other neighbors at, about or near the Premises.

          Yes [  ]  No [  ]

          If yes, please describe. Existing Tenants should describe any such
problems or complaints not already disclosed to Landlord under the provisions of
the signed Lease Agreement.

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

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

9.  Permits and Licenses

     9.1  Attach copies of all Hazardous Materials permits and licenses
including a Transporter Permit number issued to your company with respect to its
proposed operations in, on or about the Premises, including, without limitation,
any wastewater discharge permits, air emissions permits, and use permits or
approvals. Existing Tenants should attach copies of any new permits and licenses
as well as any renewals of permits or licenses previously issued.

The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.

I (print name)_________, acting with full authority to bind the (proposed)
Tenant and on behalf of the (proposed) Tenant, certify, represent and warrant
that the information contained in this certificate is true and correct.

(Prospective) Tenant:

By:
   ----------------------------------------------
Title:
      -------------------------------------------
Date:
     --------------------------------------------

                                       4
<PAGE>

                                   EXHIBIT I

                         SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT
                            ------------------------

          This Subordination, Non-Disturbance and Attornment Agreement (this
"Agreement") is as of the ___ day of ______, 19___, between Credit Suisse First
Boston Mortgage Capital LLC ("Lender") and _______("Tenant").

                                    RECITALS
                                    --------

          A.  Tenant is the tenant under a certain lease (the "Lease"), dated as
of _______________________________, 19__, with__________________________________
("Landlord"), of premises described in the Lease (the "Premises") as more
particularly described in Exhibit A hereto.
                          ---------

          B.  This Agreement is being entered into in connection with a certain
loan (the "Loan") which Lender has made to Landlord, and secured in part by a
Deed of Trust, assignment of leases and rents and security agreement on the
Premises (the "Deed of Trust ") dated as of ___________________________________
_________________________________,199__  and an assignment of leases and
rents dated as of___________________________________________________,199__
(the "Assignment"; the Deed of Trust, the Assignment and the other documents
executed and delivered in connection with the Loan are hereinafter collectively
referred to as the "Loan Documents").

                                   AGREEMENT
                                   ---------

          For mutual consideration, including The mutual covenants and
agreements set forth below, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

          1.  Tenant agrees that the Lease and all terms and conditions
contained therein and all rights, options, liens and charges created thereby is
and shall be subject and subordinate in all respects to the Loan Documents and
to all present or future advances under the obligations secured thereby and all
renewals, amendments, modifications, consolidations, replacements and extensions
of secured obligations and the Loan Documents, to the full extent of all amounts
secured by the Loan Documents from time to time.

          2.  Lender agrees that, if Lender exercises any of its rights under
the Loan Documents such that it becomes the owner of the Premises, including but
not limited to an entry by Lender pursuant to the Deed of Trust, a foreclosure
of the Deed of Trust, a power of sale under the Deed of Trust or otherwise: (a)
the Lease shall continue in full force and effect as a direct lease between
Lender and Tenant, and subject to all the terms, covenants and conditions of the
Lease, and (b) Lender shall not disturb Tenant's right of quiet possession of
the Premises under the terms of the Lease so long as Tenant is not in default
beyond any applicable grace period of any term, covenant or condition of the
Lease.

          3.  Tenant agrees that, in the event of a exercise of the power of
sale or foreclosure of The Deed of Trust by Lender or the acceptance of a deed
in lieu of foreclosure by Lender or any other succession of Lender to ownership
of the Premises, Tenant will attorn to and recognize Lender as its landlord
under the Lease for the remainder of the term off the Lease (including all
extension periods which have been or are hereafter exercised) upon the same
terms and conditions as are set forth in the Lease, and Tenant hereby agrees to
pay and perform all off the obligations of Tenant pursuant to the Lease.

          4.  Tenant agrees that, in the event Lender succeeds to the interest
of Landlord under the Lease, Lender shall not be:

          (a) liable in any way for any act, omission, neglect or default of any
prior Landlord (including, without limitation, the then defaulting Landlord), or

          (b) subject to any claim, defense, counterclaim or offsets which
Tenant may have against any prior Landlord (including, without limitation, the
then defaulting Landlord), or

          (c) bound by any payment of rent or additional rent which Tenant might
have paid for more than one month in advance of the due date under the Lease to
any prior Landlord (including, without limitation, the then defaulting
Landlord), or

          (d) bound by any obligation to make any payment to Tenant which was
required to be made prior to the time Lender succeeded to any prior Landlord's
interest, or

          (e) accountable for any monies deposited with any prior Landlord
(including security deposits), except to the extent such monies are actually
received by Lender, or

          (f) bound by any amendment or modification of the Lease made without
the written consent of Lender.

                                       1
<PAGE>

          Nothing contained herein shall prevent Lender from naming Tenant in
any foreclosure or other action or proceeding initiated in order for Lender to
avail itself of and complete any such foreclosure or other remedy.

          5.  Tenant hereby agrees to give to Lender copies of all notices of
Landlord default(s) under the Lease in the same manner as, and whenever, Tenant
shall give any such notice of default to Landlord and no such notice of default
shall be deemed given to Landlord unless and until a copy of such notice shall
have been so delivered to Lender. Lender shall have the right but no obligation
to remedy any landlord default under the Lease, or to cause any default of
Landlord under the Lease to be remedied, and for such purpose Tenant hereby
grants Lender, in addition the period given to Landlord for remedying defaults,
an additional 30 days to remedy, or cause to be remedied, any such default.
Tenant shall accept performance by Lender of any term, covenant, condition or
agreement to be performed by Landlord under the Lease with the same force and
effect as though performed by Landlord. No Landlord default under the Lease
shall exist or shall be deemed to exist (i) as long as Lender, in good faith,
shall have commenced to cure such default within the above reference time period
and shall be prosecuting the same to completion with reasonable diligence,
subject to force majeure, or (ii) if possession of the Premises is required in
order to cure such default, or if such default is not susceptible of being cured
by Lender, as long as Lender, in good faith, shall have notified Tenant that
Lender intends to institute proceedings under the Loan Documents, and,
thereafter, as long as such proceedings shall have been instituted and shall be
prosecuted with reasonable diligence. In the event of the termination of the
Lease by reason of any default thereunder by Landlord, upon Lender's written
request, given within thirty (30) days after any such termination, Tenant,
within fifteen (15) days after receipt of such request, shall execute and
deliver to lender or its designee or nominee a new lease of the Premises for the
remainder of the term of the Lease upon all of the terms, covenants and
conditions of the Lease. Neither Lender nor its designee or nominee shall become
liable under the Lease unless and until Lender or its designee or nominee
becomes, and then only with respect to periods in which Lender or its designee
or nominee remains, the owner of the Premises. In no event shall Lender have any
personal liability as successor to Landlord and Tenant shall look only to the
estate and property of Lender in the Premises for the satisfaction of Tenant's
remedies for the collection of a judgment (or other judicial process) requiring
the payment of money in the event of any default by Lender as Landlord under the
Lease, and no other property or assets of Lender shall be subject to law,
execution or other enforcement procedure for the satisfaction of Tenant's
remedies under or with respect to the Lease. Lender shall have the right,
without Tenant's consent, to foreclose the Deed of Trust or to accept a deed in
lieu of foreclosure of the Deed of Trust or to exercise any other remedies under
the Loan Documents.

          6.  Tenant has no knowledge of any prior assignment or pledge of the
rents accruing under the Lease by Landlord. Tenant hereby acknowledges the
making of the Assignment from Landlord to Lender in connection with the Loan.
Tenant acknowledges that the interest of the Landlord under the Lease is to be
assigned to Lender solely as security for the purposes specified in said
assignments, and Lender shall have no duty, liability or obligation whatsoever
under the Lease or any extension or renewal thereof, either by virtue of said
assignments or by any subsequent receipt or collection of rents thereunder,
unless Lender shall specifically undertake such liability in writing.

          7.  If Tenant is a corporation, each individual executing this
Agreement on behalf of said corporation represents and warrants that s/he is
duly authorized to execute and deliver this Agreement on behalf of said
corporation, in accordance with a duly adopted resolution of the Board of
Directors of said corporation or in accordance with the by-laws of said
corporation, and that this Agreement is binding upon said corporation in
accordance with its terms. If Landlord is a partnership, each individual
executing this Agreement on behalf of said partnership represents and warrants
the s/he is duly authorized to execute and deliver this Agreement on behalf of
said partnership in accordance with the partnership agreement for said
partnership.

          8.  Any notice, election, communication, request or other document or
demand required or permitted under this Agreement shall be in writing and shall
be deemed delivered on the earlier to occur of (a) receipt or (b) the date of
delivery, refusal or nondelivery indicated on the return receipt, if deposited
in a United States Postal Service Depository, postage prepaid, sent certified or
registered mail, return receipt requested, or if sent via recognized commercial
courier service providing for a receipt, addressed to Tenant or Lender, as the
case may be at the following addresses:

     If to Tenant:
     NetFlix.com
     -------------------------------------------
     750 University Ave.
     -------------------------------------------
     Los Gatos, CA 95032         Attn: CFO
     -------------------------------------------


     with a copy to:

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

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

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

                                       2
<PAGE>

          If to Lender:    Credit Suisse First Boston Mortgage Capital LLC
                           11 Madison Avenue,
                           New York, New York 10010
                           Attention:
                                     ---------------------

          with a copy to:  Cadwalader, Wickersham & Taft
                           100 Maiden Lane
                           New York, New York 10038
                           Attention: William P. McInerney, Esq.

          9.  The term "Lender" as used herein includes any successor or assign
of the named Lender herein, including without limitation, any co-lender at the
time of making the Loan, any purchaser at a foreclosure sale and any
transferee pursuant to a deed in lieu of foreclosure, and their successors and
assigns, and the term "Tenant" as used herein includes any successor and assign
of the named Tenant herein.

          10.  If any provision of this Agreement is held to be invalid or
unenforceable by a court of competent jurisdiction, such provision shall be
deemed modified to the extent necessary to be enforceable, or if such
modification is not practicable such provision shall be deemed deleted from this
Agreement, and the other provisions of this Agreement shall remain in full force
and effect.

          11.  Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing executed by the party against which enforcement of the
termination, amendment, supplement, waiver or modification is sought.

          12.  This Agreement shall be construed in accordance with the laws of
the State of _____________.

          Witness the execution hereof as of the date first above written.

                                    [LENDER]

                                    By:
                                       -----------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                    [TENANT]

                                    By:   NetFlix.com
                                       -----------------------------------------
                                      Name:   /s/ [Illegible]^^
                                            ------------------------------------
                                      Title:   CFO
                                            ------------------------------------

          The undersigned Landlord hereby consents to the foregoing Agreement
and confirms the facts stated in the foregoing Agreement.

                                    [LANDLORD]

                                    By:
                                       ----------------------------------------
                                      Name:
                                           ------------------------------------
                                      Title:
                                            -----------------------------------

                                       3
<PAGE>

                      Second Amendment to Lease Agreement

This Second Amendment to Lease Agreement (the "Amendment") is made and entered
into as of January 4, 2000, by and between LINCOLN-RECP OLD OAKLAND OPCO, LLC,
a Delaware limited liability company ("Landlord"), and NETFLIX.COM, a Delaware
corporation ("Tenant"), with reference to the following facts.

                                    Recitals

A.  Landlord and Tenant have entered into that certain Lease Agreement dated as
of August 11, 1999 (the "Lease"), for the leasing of certain premises consisting
of approximately 31,830 rentable square feet located at 2219 Old Oakland Road,
San Jose, California (the "Original Premises") as such Original Premises are
more fully described in the Lease.

B.  Landlord and Tenant now wish to amend the Lease to provide for, among other
things, the addition of certain contiguous space to the Original Premises, all
upon and subject to each of the terms, conditions, and provisions set forth
herein.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant agree as follows:

     1.   Recitals: Landlord and Tenant agree that the above recitals are true
          --------
and correct and are hereby incorporated herein as though set forth in full.

     2.   Premises:
          --------

          2.1  Commencing on February 1, 2000 (the "AP Commencement Date") there
shall be added to the Original Premises those certain premises consisting of
approximately 26,020 rentable square feet located at 2217 Old Oakland Road, San
Jose, California (the "Additional Premises"), which Additional Premises are
depicted on the building plan attached hereto and made a part hereof as Exhibit
A.

          2.2  For purposes of the Lease, from and after the AP Commencement
Date, the "Premises" as defined in Section 1 of the Lease shall mean and refer
to the aggregate of the Original Premises and the Additional Premises consisting
of a combined total of approximately 57,850 rentable square feet located at 2219
Old Oakland Road. Accordingly, from and after the AP Commencement Date, all
references in this Amendment and in the Lease to the term "Premises" shall mean
and refer to the Original Premises and the Additional Premises. Landlord and
Tenant hereby agree that for purposes of the Lease, from and after the AP
Commencement Date, the rentable square footage area of the Premises shall be
conclusively deemed to be 57,850 rentable square feet. In addition to the
foregoing, it is the parties express intention that the balance of the Term of
the Lease for the Original Premises and the Additional Premises be coterminous
with the Expiration Date of the Initial Term as specified in the Lease and that
any option or renewal term described in the Lease shall be applicable to both
the Premises and the Additional Premises.

          2.3  Notwithstanding anything to the contrary contained herein or in
the Lease, Landlord shall neither be  subject to any liability, nor shall the
validity of the Lease be affected if Landlord is not able to deliver to Tenant
possession of the Additional Premises by the AP Commencement Date. Provided,
however, Tenant's obligation to pay Rent on the Additional Premises shall
commence on the date possession is tendered.

          3.  Base Rent: The Basic Lease Information and Section 3 of the Lease
              ---------
are hereby modified to provide that  during the Term of the Lease the monthly
Base Rent payable by Tenant to Landlord, in accordance with the provisions of
Section 3 of the Lease shall be as follows:

<TABLE>
<CAPTION>
Period                               Original Premises   Additional Premises   Aggregate Amount of
                                     Monthly Base Rent    Monthly Base Rent     Monthly Base Rent
--------------------------------------------------------------------------------------------------
<S>                                  <C>                 <C>                   <C>
02/01/00 - 12/06/00                         $36,605.00            $29,923.00            $66,528.00
--------------------------------------------------------------------------------------------------
12/07/00 - 12/06/01                         $38,196.00            $31,224.00            $69,420.00
--------------------------------------------------------------------------------------------------
12/07/01 - 12/06/02                         $39,788.00            $32,525.00            $72,313.00
--------------------------------------------------------------------------------------------------
12/07/02 - 12/06/03                         $41,379.00            $33,826.00            $75,205.00
--------------------------------------------------------------------------------------------------
12/07/03 - 12/06/04                         $42,971.00            $35,127.00            $78,098.00
--------------------------------------------------------------------------------------------------
</TABLE>

     4.  Condition of the Additional Premises: Subject to the provisions of
         ------------------------------------
Section 2 above, on the AP Commencement Date Landlord shall deliver to Tenant
possession of the Additional Premises in its then existing condition and state
of repair, "AS IS", without any obligation of Landlord to remodel, improve or
alter the Additional Premises, to perform any other construction or work of
improvement upon the Additional Premises, or to provide Tenant with any
construction or refurbishing allowance. Tenant acknowledges that no
representations or warranties of any kind, express or implied, respecting the
condition of the Additional Premises, Building, or Park or have been made by
Landlord or any agent of Landlord to Tenant, except as expressly set forth
herein. Tenant further acknowledges that neither Landlord nor any of Landlord's
agents, representatives or employees have made any representations as to the
suitability or fitness of the Additional Premises for the conduct of Tenant's
business, including without limitation, any storage incidental thereto, or for
any other purpose. Any exception to the foregoing provisions must be made by
express written agreement signed by both parties.

     5.  Security Deposit: Tenant's existing Security Deposit of Two Hundred
         ----------------
Nineteen Thousand Six Hundred Thirty and 00/100 Dollars ($219,630.00) shall be
reduced to Zero Dollars ($0.00) and such Security Deposit amount shall be
returned to Tenant upon Landlord's receipt of the Letter of Credit (which must
be in form and content acceptable to Landlord as set froth in Section 14)
pursuant to Section 14 of this Amendment. In addition, the final two (2)
sentences of Section 4 of the Lease are hereby deleted and of no further force
or effect.

     6. Tenant's Share of Operating Expenses: As of the AP Commencement Date,
        ------------------------------------
the Lease shall be modified to provide that Tenant's Share of Operating Expenses
(as defined in the Basic Lease Information and Section 6

                                       1
<PAGE>

of the Lease) shall be increased to 100% of the Building, 41% of the Park.

     7.  Tenant's Share of Tax Expenses: As of the AP Commencement Date, the
         ------------------------------
Lease shall be modified to provide that Tenant's Share of Tax Expenses (as
defined in the Basic Lease Information and Section 6.2 of the Lease) shall be
increased to 41%.

     8.  Tenant's Share of Utility Expenses: As of the AP Commencement Date, the
         ----------------------------------
Lease shall be modified to provide that Tenant's Share of Utility Expenses (as
defined in the Basic Lease Information and Section 7 of the Lease) shall be
increased to 100% of the Building, 41% of the Park.

     9.  Tenant's Share of Common Area Utility Costs: As of the AP Commencement
         -------------------------------------------
Date, the Lease shall be modified to provide that Tenant's Share of common Area
Utility Costs (as defined in the Basic Lease Information and Section 7 of the
Lease) shall be increased to 100% of the Building, 41% of the Park.

     10.  Unreserved Parking Spaces: As of the AP Commencement Date, the Lease
          -------------------------
shall be modified to provide that  Tenant's Unreserved Parking Spaces (as
defined in the Basic Lease Information) shall be increased to two hundred
thirty-three (233).

     11.  Insurance: Tenant shall deliver to Landlord, upon execution of this
          ---------
Amendment, a certificate of insurance evidencing that the Additional Premises
are included within and covered by Tenant's insurance policies required to be
carried by Tenant pursuant to the Lease.

     12.  Brokers: Tenant warrants that it has had no dealings with any real
          -------
estate broker or agent in connection with the negotiation of this Amendment
other than Cornish & Carey. If Tenant has dealt with any other person, real
estate broker or agent with respect to this Amendment other than Cornish &
Carey, Tenant shall be solely responsible for the payment of any fee due to said
person or firm, and Tenant shall indemnify, defend and hold Landlord free and
harmless against any claims, judgments, damages, costs, expenses, and
liabilities with respect thereto, including attorneys' fees and costs.

     13.  Park and Building: The Park, as defined in the Basic Lease
          -----------------
Information, shall herein be modified to reflect the current aggregate building
area of 140,254 rentable square feet, and the Building, as defined in the Basic
Lease information shall herein be modified to 57,850 rentable square feet.

     14.  Collateral for Performance of Lease Obligations: Simultaneously with
          -----------------------------------------------
Tenant's execution and delivery of this Amendment to Landlord and as a condition
precedent to the effectiveness of this Amendment, Tenant shall deliver to
Landlord, as collateral for the full and faithful performance by Tenant of all
of its obligations under this Lease and for all losses and damages Landlord may
suffer as a result of any default by Tenant under this Lease, an irrevocable and
unconditional negotiable letter of credit, in the form and containing the terms
required herein, payable in the City of Foster City, California running in favor
of Landlord issued by a solvent bank under the supervision of the Superintendent
of Banks of the State of California, or a National Banking Association, in the
amount of Four Hundred Two Thousand and 00/100 Dollars ($402,000.00) (the
"Letter of Credit"). The Letter of Credit shall be (a) at sight and irrevocable,
(b) maintained in effect, whether through replacement, renewal or extension, for
the entire Lease Term (the "Letter of Credit Expiration Date") and Tenant shall
deliver a new Letter of Credit or certificate of renewal or extension to
Landlord at least thirty (30) days prior to the expiration of the Letter of
Credit, without any action whatsoever on the part of Landlord, (c) subject to
the Uniform Customs and Practices for Documentary Credits (1993-Rev)
International Chamber of Commerce Publication #500, (d) acceptable to Landlord
in its sole discretion, and (e) fully assignable by Landlord by amendment
thereto in accordance with customary letter of credit practice and permit
partial draws. In addition to the foregoing, the form and terms of the Letter of
Credit (and the bank issuing the same) shall be acceptable to Landlord, in
Landlord's sole discretion, and shall provide, among other things, in effect
that: (1) Landlord, or its then managing agent, shall have the right to draw
down an amount up to the face amount of the Letter of Credit upon the
presentation to the issuing bank of Landlord's (or Landlord's then managing
agent's) statement that such (A) amount is due to Landlord under the terms and
conditions of this Lease, it being understood that if Landlord or its managing
agent be a corporation, partnership or other entity, then such statement shall
be signed by an officer (if a corporation), a general partner (if a
partnership), or any authorized party (if another entity), and (B) an event of
default has occurred under this Lease and all applicable notice and cure periods
have elapsed; (2) the Letter of Credit will be honored by the issuing bank
without inquiry as to the accuracy thereof and regardless of whether the Tenant
disputes the content of such statement; and (3) in the event of a transfer of
Landlord's interest in the Building, Landlord shall transfer the Letter of
Credit, in whole or in part (or cause a substitute letter of credit to be
delivered, as applicable), to the transferee and thereupon the Landlord shall,
without any further agreement between the parties, be released by Tenant from
all liability therefor, and it is agreed that the provisions hereof shall apply
to every transfer or assignment of the whole or any portion of said Letter of
Credit to a new Landlord. If, as a result of any such application of all or any
part of the Letter of Credit, the amount of the Letter of Credit shall be less
than Four Hundred Two Thousand and 00/100 Dollars ($402,000.00), Tenant shall
within five (5) days thereafter provide Landlord with additional letter(s) of
credit in an amount equal to the deficiency (or a replacement letter of credit
in the total amount of Four Hundred Two Thousand and 00/100 Dollars
($402,000.00) and each such additional (or replacement) letter of credit shall
comply with all of the provisions of this Section 14, and if Tenant fails to do
so, the same shall constitute an incurable default by Tenant. Tenant further
covenants and warrants that it will neither assign nor encumber the Letter of
Credit or any part thereof and that neither Landlord nor its successors or
assigns will be bound by any such assignment, encumbrance, attempted assignment
or attempted encumbrance. Without limiting the generality of the foregoing, if
the Letter of Credit expires earlier than the Letter of Credit Expiration Date,
Landlord will accept a renewal thereof or substitute letter of credit (such
renewal or substitute letter of credit to be in effect not later than thirty
(30) days prior to the expiration thereof), which shall be irrevocable and
automatically renewable as above provided through the Letter of Credit
Expiration Date upon the same terms as the expiring letter of credit or such
other terms as may be acceptable to Landlord in its reasonable discretion.
However, if the Letter of Credit is not timely renewed or a substitute letter of
credit is not timely received, or if Tenant fails to maintain the Letter of
Credit in the amount and terms set forth in this Section 14, Landlord shall have
the right to present such Letter of Credit to the bank in accordance with the
terms of this Section 14, and the entire sum evidenced thereby shall be paid to
and held by Landlord as collateral for performance of all of Tenant's
obligations under this Lease and for all losses and damages Landlord may suffer
as a result of any default by Tenant under this Lease. If there shall occur a
default under this Lease as set forth in Section 20 of this Lease, Landlord may,
but without obligation to do so, draw upon the Letter of Credit, in part or in
whole, to cure any default of Tenant and/or to compensate Landlord for any and
all damages of any kind or nature sustained or which may be sustained by
Landlord resulting from Tenant's default. Tenant agrees not to interfere in any
way with payment to Landlord of the proceeds of the Letter of Credit, either
prior to or following a "draw" by Landlord of any portion of the Letter of
Credit, regardless of whether any dispute exists between Tenant and Landlord as
to Landlord's right to draw from the Letter of Credit. No condition or term of
this Lease shall be

                                       2
<PAGE>

deemed to render the Letter of Credit conditional to justify the issuer of the
Letter of Credit in failing to honor a drawing upon such Letter of Credit in a
timely manner. Landlord and Tenant acknowledge and agree that in no event or
circumstance shall the Letter of Credit or any renewal thereof or substitute
therefor be (i) deemed to be or treated as a "security deposit" within the
meaning of California Civil Code Section 1950.7 (as supplemented, amended,
replaced and substituted from time to time), (ii) subject to the terms of such
Section 1950.7 (as supplemented, amended, replaced and substituted from time to
time), or (iii) intended to serve as a "security deposit" within the meaning of
such Section 1950.7 (as supplemented, amended, replaced and substituted from
time to time). The parties hereto (x) recite that the Letter of Credit is not
intended to serve as a security deposit and such Section 1950.7 (as
supplemented, amended, replaced and substituted from time to time) and any and
all other laws, rules and regulations applicable to security deposits in the
commercial context ("Security Deposit Laws") shall have no applicability or
relevancy to the Letter of Credit and (y) waive any and all rights, duties and
obligations either party may now or, in the future, will have relating to or
arising from the Security Deposit Laws.

Notwithstanding the foregoing, on the third anniversary of the Commencement Date
of the Lease, or following Tenant's public offering of its stock and subsequent
achievement of a net worth of at least Forty Million Dollars ($40,000,000.00)
and such net worth is then sustained for three consecutive financial quarters
and substantiated by financial reports provided by Tenant to Landlord, which
ever event occurs sooner, and, so long as Tenant has not been in material
default of the Lease beyond any applicable cure period, then Tenant shall have
the right to provide a cash Security Deposit to Landlord in the amount of
Seventy Eight Thousand Seven Hundred Thirty-Three and 00/100 Dollars
($78,733.00) (the "New Deposit"). In the event that Tenant has met the financial
and other requirements set forth above and Tenant is no longer required to
maintain the Letter of Credit, so long as Tenant delivers the New Deposit to
Landlord, as set forth herein, Landlord and Tenant shall execute an Amendment to
the Lease signifying such removal of the Letter of Credit requirement and Tenant
shall deposit the New Deposit with Landlord and Landlord shall return the Letter
of Credit to Tenant. Thereafter, for the purposes of this Lease, the New Deposit
shall be (i) deemed to be the "Security Deposit" under the terms of the Lease
and (ii) subject to all of the provisions of the Lease relating to the "Security
Deposit".

     15.  Tenant's Early Termination Option: The parties hereby acknowledge and
          ---------------------------------
agree that effective as of the  date of this Amendment the Termination Option
pursuant to Section 41 of the Lease shall be deleted in its entirety and shall
be of no further force and effect and Tenant shall have no further right to
terminate the Lease.

     16.  Effect of Amendment: Except as modified herein, the terms and
          -------------------
conditions of the Lease shall remain  unmodified and continue in full force and
effect. In the event of any conflict between the terms and conditions of the
Lease and this Amendment, the terms and conditions of this Amendment shall
prevail.

     17.  Definitions: Unless otherwise defined in this Amendment, all terms not
          -----------
defined in this Amendment shall  have the meanings assigned to such terms in the
Lease.

     18.  Authority: Subject to the assignment and subletting provisions of the
          ---------
Lease, this Amendment shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, legal representatives, successors and
assigns. Each party hereto and the persons signing below warrant that the person
signing below on such party's behalf is authorized to do so and to bind such
party to the terms of this Amendment.

     19.  Incorporation: The terms and provisions of the Lease are hereby
          -------------
incorporated in this Amendment.

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

Tenant:

NETFLIX.COM,
a Delaware corporation

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

Its:  CFO
      ---

Date:  1/5/00
       ------

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

Its:  CFO
      ---

Date:  1/5/00
       ------

Landlord:

LINCOLN-RECP OLD OAKLAND OPCO, LLC,
a Delaware limited liability company

By:  LEGACY PARTNERS COMMERCIAL, INC.
     as manager and agent for Lincoln-RECP Old Oakland OPCO, LLC

     By:  /s/
        -----------------------------
          Senior Vice President

     Date:
          -----------------------------


If Tenant is a CORPORATION, the authorized officers must sign on behalf of the
               -----------
corporation and indicate the capacity in which they are signing. The Lease must
be executed by the president or vice-president and the secretary or assistant
                                               ---
secretary, unless the bylaws or a resolution of the board of directors shall
           ------
otherwise provide, in which event, the bylaws or a certified copy of the
resolution, as the case may be, must be attached to this Lease.

                                       3
<PAGE>

                                   Exhibit A
                   Original Premises and Additional Premises

     The non cross-hatched area below represents the "Additional Premises".

                                  [Site Plan]

                                       4