<PAGE>   1

                                                                   EXHIBIT 10.22

                                  OFFICE LEASE

                                    LANDLORD:

                              LNR HARBOR BAY, LLC,
                     a California Limited Liability Company

                                     TENANT:

                        THE GOOD GUYS-CALIFORNIA, INC.,
                            a California Corporation


<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                    Page
                                                                                    ----
<S>     <C>                                                                         <C>
  1.    Premises.....................................................................1
  2.    Term.........................................................................1
  3.    Rent. .......................................................................2
  4.    Common Areas; Operating Expenses; Real Property Taxes and Assessments;
        Insurance Costs and Utilities Costs .........................................2
  5.    Security Deposit ............................................................8
  6.    Use. ........................................................................9
  7.    Payments and Notices .......................................................11
  8.    Brokers.....................................................................11
  9.    Surrender; Holding Over ....................................................12
 10.    Taxes on Tenant's Property .................................................12
 11.    Condition of Premises; Repairs . ...........................................12
 12.    Alterations.................................................................13
 13.    Liens.......................................................................15
 14.    Assignment and Subletting . ................................................15
 15.    Entry by Landlord ..........................................................18
 16.    Utilities and Services . ...................................................18
 17.    Indemnification and Exculpation ............................................19
 18.    Damage or Destruction ......................................................20
 19.    Eminent Domain . ...........................................................21
 20.    Tenant's Insurance . .......................................................22
 21.    Landlord's Insurance . .....................................................23
 22.    Waiver of Claims; Waiver of Subrogation ....................................24
 23.    Tenant's Default and Landlord's Remedies ...................................24
 24.    Landlord's Default .........................................................26
 25.    Subordination ..............................................................27
 26.    Estoppel Certificate .......................................................27
 27.    Intentionally Omitted.......................................................28
 28.    Modification and Cure Rights of Landlord's Mortgagees and Lessors ..........28
 29.    Quiet Enjoyment . ..........................................................28
 30.    Transfer of Landlord's Interest ............................................28
 31.    Limitation on Landlord's Liability .........................................28
 32.    Miscellaneous . ............................................................29
 33.    Lease Execution . ..........................................................30
 34.    Waiver of Jury Trial .......................................................31
</TABLE>

EXHIBITS

EXHIBIT "A"  Site Plan
EXHIBIT "B"  Floor Plan
EXHIBIT "C"  Work Letter Agreement
EXHIBIT "D"  Sample Form of Notice of Lease Term Dates
EXHIBIT "E"  Rules and Regulations
EXHIBIT "F"  Sample Form of Tenant Estoppel Certificate
EXHIBIT "G"  Janitorial Specifications

RIDERS

No. 1 Extension Option Rider
No. 2 Fair Market Rental Rate Rider
No. 3 Right of First Offer
No. 4 Tenant's Generator and AST



                                      (ii)
<PAGE>   3

                                      INDEX

<TABLE>
<CAPTION>
                                                                       Page(s)
                                                                       -------
<S>                                                                 <C>
Actual Statement ............................................................5
ADA..........................................................................9
Amortization Rate ...........................................................3
Building Common Areas .......................................................2
Building Holidays ...........................................................2
business day ...............................................................11
capital expenditure(s) ......................................................4
capital expenditures ........................................................6
Common Areas ................................................................3
Cost Pools ..................................................................3
days .......................................................................29
Environmental Law ..........................................................10
Environmental Permits ......................................................10
Estimate Statement ..........................................................5
Force Majeure Delays .......................................................30
Hazardous Materials ........................................................10
HVAC ...................................................................13, 18
Indemnified Claims .........................................................20
Insurance Costs .............................................................5
Landlord ............................................................1, 28, 29
Landlord Indemnified Parties ...........................................10, 20
Lease .......................................................................1
Operating Expenses .................................................3. Summary
PCBs .......................................................................10
Permitted Transfer .........................................................16
Pre-Approved Change ........................................................13
prime rate ..................................................................2
Project Common Areas ........................................................2
real property taxes .........................................................4
Real Property Taxes and Assessments ......................................4, 5
reference rate ..............................................................2
rent.........................................................................2
Service Provider............................................................19
Summary .....................................................................1
Tenant...................................................................1, 29
Tenant Changes .............................................................13
Tenant Indemnified Parties .................................................10
Tenant Parties .............................................................20
Tenant's Parties ...........................................................10
Tenant's Percentage .........................................................7
Term ........................................................................1
Transfer ...................................................................15
Transfer Notice ............................................................16
Transferee .................................................................16
Utilities Costs .............................................................5
worth at the time of award..................................................25
</TABLE>



                                     (iii)
<PAGE>   4

               SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS

This SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS ("SUMMARY") is hereby
incorporated into and made a part of the attached Office Lease which pertains to
the Building described in Section 1.4 below. All references in the Lease to the
"Lease" shall include this Summary. All references in the Lease to any term
defined in this Summary shall have the meaning set forth in this Summary for
such term. Any initially capitalized terms used in this Summary and any
initially capitalized terms in the Lease which are not otherwise defined in this
Summary shall have the meaning given to such terms in the Lease. If there is any
inconsistency between the Summary and the Lease, the provisions of the Lease
shall control.

1.1 LANDLORD'S ADDRESS:    LNR Harbor Bay, LLC
                           c/o Lennar Partners
                           18401 Von Karman Avenue, Suite 540
                           Irvine, CA 92612
                           Attn: David Team and Kevin Hanson
                           Telephone: (949) 442-6100
                           Facsimile: (949) 442-6175

1.2 TENANT'S ADDRESS:      Prior to Commencement Date:
                           7000 Marina Blvd.
                           Brisbane, CA 94005-1830
                           Attn: George Hechtman, Vice President Administration
                           Telephone: (650) 615-6154
                           Facsimile: (650) 615-6555

                           After Commencement Date:
                           At the Premises

                           With a copy to:
                           Miller, Starr & Regalia
                           1331 North California Blvd.
                           Suite 500
                           Walnut Creek, CA 94596
                           Attn: Phillip H. Stoermer, Esq.
                           Telephone: (925) 941-3271
                           Facsimile: (925) 933-4126

1.3 SITE; PROJECT: The Site consists of the parcel(s) of real property located
at 1600, 1650 and 1700 Harbor Bay Parkway, County of Alameda, State of
California, as shown on the site plan attached hereto as Exhibit "A" as such
area may be expanded or reduced from time to time. The Project includes the Site
and all buildings, improvements and facilities, now or subsequently located on
the Site from time to time, including, without limitation, the Building under
construction at 1600 Harbor Bay Parkway, as depicted on the site plan attached
hereto as Exhibit "A". The aggregate rentable square feet of the office
buildings (including the Building) to be constructed within the Project contain
approximately 180,754 rentable square feet.

1.4 BUILDING: A two (2) story office building located on the Site, containing
approximately 61,681 rentable square feet, the address of which is 1600 Harbor
Bay Parkway, Alameda, CA.

1.5 PREMISES: Those certain premises generally shown on the floor plan attached
hereto as Exhibit "B", located on the second floor of the Building, and
containing approximately 30,978 rentable square feet.

1.6 TERM: Ten (10) years.

1.7 ESTIMATED COMMENCEMENT DATE: February 28, 2001; Actual Commencement Date: To
be determined as provided in Exhibit "C" attached hereto.

1.8 MONTHLY BASIC RENT: Upon the commencement of the Term of this Lease, and on
the first day of each month thereafter during the Term of this Lease, Tenant
shall pay to Landlord, in advance and without offset, deduction or demand except
as otherwise set forth in this Lease as Monthly Basic Rent for the Premises the
following monthly payments:



                                      -1-
<PAGE>   5

<TABLE>
<CAPTION>
                   Year Of Term        Monthly Basic Rent
                   ------------        ------------------
                   <S>                 <C>
                        1                 $51,114.00
                        2                 $52,647.00
                        3                 $54,227.00
                        4                 $55,853.00
                        5                 $57,529.00
                        6                 $59,255.00
                        7                 $61,032.00
                        8                 $62,863.00
                        9                 $64,749.00
                       10                 $66,691.00
</TABLE>

1.9 TENANT'S PERCENTAGE OF THE BUILDING: 50,22%, which is the ratio that the
rentable square footage of the Premises bears to the rentable square footage of
the Building. Accordingly, as more particularly set forth in Section 4 hereof,
Tenant shall pay to Landlord: (a) 50.22% of the "Operating Expenses" (as defined
in Section 4.4)(b)50.22% of Real Property Taxes and Assessments (as defined in
Section 4.5); (c) 50.22% of Insurance Costs (as defined in Section 4.6);" and
(d) 50.22% of Utilities Costs (as defined in Section 4.7). Tenant's Percentage
is subject to adjustment in accordance with Section 1.3 of the Lease.

1.10 BUILDING PERCENTAGE OF THE PROJECT: 34.12%, which is the ratio that the
rentable square footage of the Building bears to the rentable square footage of
all buildings within the Project. Accordingly, as more particularly provided in
Section 4 hereof, Operating Expenses, Real Property Taxes and Assessments,
Insurance Costs and Utilities Costs include the Building Percentage of all such
items which are common to the entire Project.

1.11 SECURITY DEPOSIT: $505,000.00.

1.12 PERMITTED USE: General office and training center uses.

1.13 BROKERS: CB Richard Ellis representing Landlord. Triton Commercial
representing Tenant.

1.14 INTEREST RATE: The lesser of: (a) the rate announced from time to time by
Wells Fargo Bank or, if Wells Fargo Bank ceases to exist or ceases to publish
such rate, then the rate announced from time to time by the largest (as measured
by deposits) chartered bank operating in California, as its "prime rate" or
"reference rate", plus three percent (3%); or (b) the maximum rate permitted by
law.

1.15 TENANT IMPROVEMENTS: The tenant improvements installed or to be installed
in the Premises as described in the Work Letter Agreement attached hereto as
Exhibit "C".

1.16 PARKING: A total of one hundred five (105) parking spaces to be available
to Tenant at all times during the Term as it may be extended without charge to
Tenant, in accordance with the provisions of Section 6.2 of the Lease.

1.17 BUSINESS HOURS FOR THE BUILDING. 7:00 a.m. to 7:00 p.m., Mondays through
Fridays (except Building Holidays) and 7:00 a.m. to Noon on Saturdays (except
Building Holidays). "BUILDING HOLIDAYS" shall mean New Year's Day, Labor Day,
Presidents' Day, Thanksgiving Day, Memorial Day, Independence Day and Christmas
Day and such other national holidays as are adopted by Landlord as holidays for
the Building. Notwithstanding the foregoing, subject to factors beyond
Landlord's control and subject to the other provisions of this Lease, including,
without limitation, Sections 4.2, 18, 19 and 27, Tenant shall have access to the
Premises and entry access to the Building twenty-four (24) hours per day, seven
(7) days per week year round.


                   [ILLEGIBLE]                      [ILLEGIBLE]
               -------------------               -----------------
               Landlord's Initials               Tenant's Initials



                                      -2-
<PAGE>   6

                                  OFFICE LEASE

This LEASE, which includes the preceding Summary of Basic Lease Information and
Definitions ("SUMMARY") attached hereto and incorporated herein by this
reference ("LEASE"), is made as of the 3rd day of January, 2001 by and between
LNR HARBOR BAY, LLC, a California limited liability company ("LANDLORD"),and THE
GOOD GUYS-CALIFORNIA, INC., a California corporation ("TENANT").

1. PREMISES.

1.1 PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the Premises described in Section 1.5 of the Summary above, improved
or to be improved with the Tenant Improvements. Such lease is upon, and subject
to, the terms, covenants and conditions herein set forth and each party
covenants, as a material part of the consideration for this Lease, to keep and
perform their respective obligations under this Lease.

1.2 LANDLORD'S RESERVATION OF RIGHTS. Provided Tenant's use of and access to the
Premises is not interfered with in an unreasonable manner, and subject to the
terms of this Lease, Landlord reserves for itself the right from time to time to
install, use, maintain, repair, replace and relocate pipes, ducts, conduits,
wires and appurtenant meters and equipment above the ceiling surfaces, below the
floor surfaces and within the walls of the Building and the Premises.

1.3 MEASUREMENT OF PREMISES, BUILDING AND/OR THE PROJECT. Landlord and Tenant
hereby acknowledge and agree that the square footage of the Project, Building
and Premises is as set forth in Sections 1.3, 1.4 and 1.5 above, respectively,
and that such square footage was determined in accordance with the Method for
Measuring Floor Area in Office Buildings, ANSI Z65.1-1996, as promulgated by the
Building Owners and Managers Association based upon the construction plans for
the Building and Premises. Notwithstanding the foregoing, within thirty (30)
days after completion of construction of the Building and issuance of a
certificate of occupancy therefore, Landlord will, at Landlord's sole cost and
expense, cause its architect to prepare or cause to be prepared a certificate
verifying the rentable and usable square feet of the Premises and the Building.
Landlord will provide a copy of the architect's certificate to Tenant upon
receipt thereof from the architect. Except as otherwise set forth in this
Section 1.3 of this Lease, wherever in this Lease calculations appear which are
based on the rentable square footage determination, Landlord and Tenant will
adjust those calculations on the basis of the actual final determination of
rentable square footage as aforesaid. Such adjustments (if any) will be
applicable to (i) the calculation of sums due Landlord or Tenant based on the
rentable square footage of the Premises, such as, but not limited to, the
Allowance (Section 5(a) of Exhibit "C") and Rent if the Premises contain other
than the rentable square footage set forth in Section 1.5 of the Summary, and
(ii) the determination of Tenant's Percentage of Operating Expenses (Section
4.4), Real Property Taxes and Assessments (Section 4.5), Insurance Costs
(Section 4.6), and Utilities Costs (Section 4.7). Upon completion of each
subsequent building in the Project, a similar certification will be provided by
Landlord to Tenant as to the rentable and usable square footage in such
building. Should Tenant dispute the determination of the square footage of the
Premises or the Building as determined by Landlord's architect, Tenant shall
provide Landlord with Tenant's architect's or space planner's determination of
the square footage in question and Landlord and Tenant and the two
architects/space planners shall meet and confer within ten (10) days of request
by Tenant to attempt to resolve any square footage discrepancy. Should Landlord
and Tenant be unable to resolve such square footage discrepancy within twenty
(20) days after such meeting, Landlord's architect and Tenant's architect shall
together select a third party architect not affiliated or employed by either
party to determine the square footage measurement in dispute in accordance with
the terms of this Lease. If the third party architect is not appointed within
ten (10) days after the expiration of such twenty (20) day period, a third party
architect who shall act as arbiter of the square footage dispute shall be
appointed by the Superior Court of Alameda County, California.

2. TERM.

2.1 TERM; NOTICE OF LEASE DATES. "TERM" means (i) the Initial Term set forth in
Section 1.6 of the Summary and the Option Term if exercised pursuant to Rider
No. 1 to this Lease. The Term of this Lease shall be for the period designated
in Section 1.6 of the Summary commencing on the Commencement Date (as determined
pursuant to Exhibit "C"), and ending on the expiration of such period, unless
the Term is sooner terminated as provided in this Lease. Notwithstanding the
foregoing, if the Commencement Date falls on any day other than the first day of
a calendar month then the term of this Lease will be measured from the first day
of the month following the month in which the Commencement Date occurs. Within
ten (10) days following Landlord's delivery of possession of the Premises to
Tenant, Tenant shall execute a written confirmation of the Commencement Date and
expiration date of the Term in the form of the Notice of Lease Term Dates
attached hereto as Exhibit "D". Landlord shall deliver a written request to
Tenant for execution of the Notice of Lease Term Dates which shall be binding
upon Tenant should Tenant fail to execute and return the notice of Lease Term
Dates to Landlord within ten (10) days following Landlord's written request.

2.2 ESTIMATED COMMENCEMENT DATE. It is estimated by the parties that the Term of
this Lease will commence on the Estimated Commencement Date set forth in Section
1.7 of the Summary. Landlord agrees to use its best efforts to cause the
Commencement Date to occur by the Estimated Commencement Date, however, the
Estimated Commencement Date is merely an estimate of the

<PAGE>   7

Commencement Date and, consequently, Tenant agrees that, except as set forth in
this Lease, Landlord shall have no liability to Tenant for any loss or damage,
nor shall Tenant be entitled to terminate or cancel this Lease if the Term of
this Lease does not commence by the Estimated Commencement Date for any reason
whatsoever, including any delays in substantial completion of the Tenant
Improvements. Notwithstanding the foregoing, Landlord and Tenant agree as
follows: Tenant will be entitled to one (1) day of free rent after the
Commencement Date for every day beyond April 1, 2001 that the Commencement Date
is delayed by causes other than Tenant Delays or Force Majeure Delays.

2.3 EARLY OCCUPANCY. If Tenant occupies the Premises prior to the Commencement
Date, such early occupancy shall be subject to all of the terms and conditions
of this Lease, including, without limitation, the provisions of Sections 17, 20
and 22, except that provided Tenant does not commence the operation of business
from the Premises, Tenant will not be obligated to pay rent during the period of
such early occupancy. Tenant agrees to provide Landlord with prior notice of any
such intended early occupancy and to cooperate with Landlord during the period
of any such early occupancy so as not to interfere with Landlord in the
completion of any improvements to the Premises constructed pursuant to Exhibit
"C".

2.4 POST COMMENCEMENT DATE TENANT IMPROVEMENT COMPLETION. Tenant acknowledges
that as provided in Exhibit "C," certain designated portions of the Premises may
not be completed as of the Commencement Date and shall not be required to
establish "substantial completion" of the Premises, but Landlord agrees to use
commercially reasonable and diligent efforts following the Commencement Date to
pursue completion of such uncompleted portions and all punch-list items
identified by Tenant and Landlord as provided in Exhibit "C". If Landlord does
not diligently pursue completion of such items after notice to Landlord and a
period of thirty (30) days to cure (subject to Force Majeure Delays as defined
in Section 32.15 below), Tenant shall have the right to pursue completion of
such items within the Premises at Landlord's expense and Landlord shall
reimburse Tenant within thirty (30) days of demand for the reasonable, actual
and documented expenses incurred by Tenant in so completing such items.

3. RENT.

3.1 BASIC RENT. Tenant agrees to pay Landlord, as basic rent for the Premises,
the Monthly Basic Rent in the amounts designated in Section 1.8 of the Summary.
The Monthly Basic Rent shall be paid by Tenant in monthly installments in the
amounts designated in Section 1.8 of the Summary in advance on the first day of
each and every calendar month during the Term, without demand, notice, deduction
or offset, except as expressly provided in this Lease, except that the first
full month's Monthly Basic Rent shall be paid by Tenant on or before February
15, 2001. Monthly Basic Rent for any partial month shall be prorated in the
proportion that the number of days this Lease is in effect during such month
bears to the actual number of days in such month.

3.2 ADDITIONAL RENT. All amounts and charges payable by Tenant under this Lease
in addition to the Monthly Basic Rent described in Section 3.1 above (including,
without limitation, payments for insurance, repairs and parking, and Tenant's
Percentage of Operating Expenses, Real Property Taxes and Assessments, Insurance
Costs, and Utilities Costs, respectively) shall be considered additional rent
for the purposes of this Lease, and the word "rent" in this Lease shall include
such additional rent unless the context specifically or clearly implies that
only the Monthly Basic Rent is referenced. The Monthly Basic Rent and additional
rent shall be paid to Landlord as provided in Section 7, without any prior
demand therefor and without any deduction or offset whatever except as otherwise
set forth in this Lease, in lawful money of the United States of America.

4. COMMON AREAS; OPERATING EXPENSES; REAL PROPERTY TAXES AND ASSESSMENTS;
INSURANCE COSTS AND UTILITIES COSTS.

4.1 DEFINITIONS; TENANT'S RIGHTS. During the Term of this Lease, except as
otherwise set forth in this Lease, Landlord grants to Tenant a non-exclusive
easement and the right to use, in common with other tenants in the Project, and
subject to the Rules and Regulations referred to in Section 6.1 below, those
portions of the Project (the "PROJECT COMMON AREAS") not leased or designated
for lease to tenants that are provided for use in common by Landlord, Tenant and
any other tenants of the Project (or by the sublessees (agents, employees,
customers invitees, guests or licensees of any such party), whether or not those
areas are open to the general public. The Project Common Areas shall include,
without limitation, any fixtures, systems, decor, facilities and landscaping
contained, maintained or used in connection with those areas, and shall be
deemed to include any city sidewalks adjacent to the Project, any offsite common
areas which benefit the Project such as monument signage indemnifying the
Project but not a specific tenant unless Tenant's name appears thereon,
landscaping and lighting, any pedestrian walkway system, park or other
facilities located on the Site and open to the general public. The common areas
of the Building shall be referred to herein as the "BUILDING COMMON AREAS" and
shall include, without limitation, the following areas:

(a)     the common entrances, lobbies, restrooms on multi-tenant floors,
        elevators, stairways and accessways, loading docks, ramps, drives and
        platforms and any passageways and serviceways thereto to the extent not
        exclusively serving another tenant or contained within another tenant's
        premises, and the common pipes, conduits, wires and appurtenant
        equipment serving the Premises; and



                                      -2-
<PAGE>   8

(b)     the parking areas (subject to Section 6.2 below), loading and unloading
        areas, trash areas, roadways, sidewalks, walkways, parkways, driveways
        and landscaped areas appurtenant to the Building.

The Building Common Areas and the Project Common Areas shall be referred to
herein collectively as the "COMMON AREAS."

4.2 LANDLORD'S RESERVED RIGHTS. Landlord reserves the right from time to time to
use any of the Common Areas and to do any of the following, as long as such acts
do not unreasonably interfere with Tenant's use of or access to the Premises:

(a)     expand the Building and construct or alter other buildings or
        improvements on the Site;

(b)     make any changes, additions, improvements, repairs or replacements in or
        to the Project, the Site, the Common Areas and/or the Building
        (including the Premises if required to do so by any law or regulation)
        and the fixtures and equipment thereof, including, without limitation:
        (i) maintenance, replacement and relocation of pipes, ducts, conduits,
        wires and meters; and (ii) changes in the location, size, shape and
        number of driveways, entrances, stairways, elevators, loading and
        unloading areas, ingress, egress, direction of traffic, landscaped areas
        and walkways, easements and, subject to Section 6.2, parking spaces and
        parking areas;

(c)     close temporarily any of the Common Areas while engaged in making
        repairs, improvements or alterations to the Project, Site and/or
        Building; and

(d)     perform such other acts and make such other changes with respect to the
        Project, Site, Common Areas and Building, as Landlord may, in the
        exercise of good faith business judgment, deem to be appropriate.

Notwithstanding the foregoing, Landlord agrees that if Tenant's use of the
Premises or the Project Common Areas or the Building Common Areas is
unreasonably interfered with as a result of Landlord's activities in the Project
or the Premises, Tenant will be entitled to an equitable abatement of rent to
the extent of and for the period of such interference. Any dispute as to the
amount or duration of such abatement will be resolved pursuant to the procedure
set forth in Section 24 of this Lease.

4.3 COST POOLS. Landlord shall have the right, from time to time, to equitably
allocate some or all of the Operating Expenses, Real Property Taxes and
Assessments, Insurance Costs and Utilities Costs among different tenants and/or
different buildings of the Project (the "COST POOLS") based upon the unique
usage of benefits or services provided by Landlord to such buildings and/or
tenants as compared to the other tenants and/or buildings in the Project. Such
Cost Pools may include, without limitation, office space tenants and retail
space tenants in the Project and may be modified to take into account the
addition of any additional buildings within the Project. Accordingly, in the
event of such allocation into Cost Pools, Tenant's Percentage and the Building's
Share shall be appropriately adjusted to reflect such allocation. Any dispute
will be resolved pursuant to the procedure set forth in Section 24 of this
Lease.

4.4 DEFINITION OF OPERATING EXPENSES. As used in this Lease, the term "OPERATING
EXPENSES" shall mean only sums reasonably expended or incurred for the following
items: (i) expenses, costs and amounts incurred by Landlord in connection with
the ownership, management, maintenance, repair, replacement, and operation of
the Project to the extent consistent with prevailing prices incurred by
comparable landlords for comparable office building projects in Alameda County;
(ii) the cost of janitorial service to the Premises as set forth on Exhibit "G"
and to the balance of the Project, alarm and security service, window cleaning,
and trash removal, the cost of operating, maintaining, repairing, replacing,
renovating and managing the utility systems, mechanical systems, sanitary and
storm drainage systems, elevator systems and the cost of supplies, tools, and
equipment and maintenance and service contracts in connection therewith; (iii)
the cost of licenses (excluding Landlord's business license), certificates,
permits (excluding any building or construction permits) and inspections and the
reasonable cost of contesting the validity or applicability of any governmental
enactments which may increase Operating Expenses, and the costs incurred in
connection with the implementation and operation of a transportation system
management program or similar program that is required by applicable law enacted
after the Commencement Date; (iv) the cost of landscaping, relamping, supplies,
tools, equipment (including costs under equipment rental agreements) and
materials, and all fees, charges and other costs, including management fees (or
amounts in lieu thereof), consulting fees legal fees and accounting be, incurred
in connection with the management, operation, administration, maintenance and
repair of the Project; (v) the cost of parking area repair, restoration and
maintenance, including, but not limited to, resurfacing, repainting, restriping,
and cleaning; (vi) wages, salaries and other compensation and benefits of all
persons engaged in the operation, management, maintenance or security of the
Project, and employer's Social Security taxes, unemployment taxes or insurance,
and any other taxes which may be levied on such wages, salaries, compensation
and benefits, excluding such items related to executive personnel of Landlord;
(vii) payments under any easement, license, operating agreement, declaration,
restrictive covenant, or instrument pertaining to the sharing of costs by the
Project that has been disclosed to Tenant prior to the Effective Date; (viii)
amortization (including interest on the unamortized cost at a rate equal to the
floating commercial loan rate announced from time to time by Bank of America, a
national banking association, or its successor, as its prime rate, plus 2% per
annum (the "AMORTIZATION RATE")) of the cost of acquiring or the rental expense
of personal property used in the maintenance, operation and repair of the
Project; (ix) Harbor Bay Isle Association fees, Harbor Bay Business Park
Association dues,



                                      -3-
<PAGE>   9

Island City Landscaping and Lighting District fees and Harbor Bay Transportation
Subsidy fees (collectively, "ASSOCIATION FEES"); and (x) the cost of any capital
alterations, capital additions, or capital improvements (hereinafter the
"CAPITAL EXPENDITURE(S)") made to the Project or any portion thereof (A) which
relate to the operation, repair, maintenance and replacement of all systems,
equipment or facilities which serve the Project in the whole or in part
(including replacement of wall and floor coverings, ceiling tiles and fixtures
in lobbies, corridors, restrooms and other common or public areas or facilities,
maintenance and replacement of curbs, walkways and parking areas, and repairs to
roofs to the extent not covered by warranty), (B) which are intended as a
labor-saving device or to effect other economies in the operation or maintenance
of the Project, or any portion thereof to the extent of savings realized as a
result thereof, or (C) that are required under any governmental law or
regulation that is then being enforced against the Project by a federal, state
or local governmental agency as to such laws or regulations enacted after the
Commencement Date; provided, however, that each such permitted capital
expenditure shall be amortized (including interest on the unamortized cost at
the Amortization Rate in effect at the time such capital expenditure is placed
in service) over its useful life determined in accordance with IRS guidelines.
If Landlord is not furnishing any particular work or service (the cost of which,
if performed or provided by Landlord, would be included in Operating Expenses)
to a tenant who has undertaken to perform such work or service in lieu of the
performance thereof by Landlord, Operating Expenses shall be deemed to be
increased by an amount equal to the additional Operating Expenses which would
reasonably have been incurred during such period by Landlord if it had at its
own expense furnished such work or service to such tenant. In no event will
Tenant's cost of Operating Expenses increase as the result of Landlord's
election to allow another tenant to provide such work or service at its own
expense. Real Property Taxes and Assessments, Insurance Costs and Utilities
Costs, as defined in Section 4.5, Section 4.6 and Section 4.7, respectively,
shall be separately accounted for pursuant to Sections 4.8 and 4.9 below. In no
event will controllable Operating Expenses (i.e., Operating Expenses excluding
Insurance Costs, Utilities Costs, Association Fees and Real Property Taxes and
Assessments) charged to Tenant increase by more than five percent (5%) annually.
As used herein, "Operating Expenses" shall mean 100% of all Operating Expenses
items which are attributable to the Building only and the Building Percentage of
all Operating Expenses items which are attributable to the entire Project.

4.5 DEFINITION OF REAL PROPERTY TAXES AND ASSESSMENTS. All Real Property Taxes
and Assessments shall be adjusted to reflect an assumption that the Building is
fully assessed for real property tax purposes as a completed building(s) ready
for occupancy. As used in this Lease, the term "REAL PROPERTY TAXES AND
ASSESSMENTS" shall mean: any form of assessment, license fee, license tax,
business license fee, commercial rental tax, levy, charge, improvement bond,
tax, water and sewer rents and charges, utilities and communications taxes and
charges or similar or dissimilar imposition imposed by any authority having the
direct power to tax, including any city, county, state or federal government, or
any school, agricultural, lighting, drainage or other improvement or special
assessment district thereof, or any other governmental charge, general and
special, ordinary and extraordinary, foreseen and unforeseen, which may be
assessed against any legal or equitable interest of Landlord in the Premises and
the Building, and the Building Percentage of the same in the Project Common
Areas or Site, including the following by way of example:

(a)     any tax on Landlord's "right" to rent or "right" to other income from
        the Premises or as against Landlord's business of leasing the Premises,
        if imposed in lieu of ordinary ad valorem real property taxes;

(b)     any assessment, tax, fee, levy or charge in substitution, partially or
        totally, of any assessment, tax, fee, levy or charge previously included
        within the definition of real property tax including assessments, taxes,
        fees, levies and charges may be imposed by governmental agencies for
        such services as fire protection, street, sidewalk and road
        maintenance, refuse removal and for other governmental services formerly
        provided without charge to property owners or occupants. It is the
        intention of Tenant and Landlord that all such new and increased
        assessments, taxes, fees, levies and charges be included within the
        definition of "REAL PROPERTY TAXES" for the purposes of this Lease;

(c)     any assessment, tax, fee, levy or charge allocable to or measured by the
        area of the Premises or other premises in the Building or the rent
        payable by Tenant hereunder or other tenants of the Building, including,
        without limitation, any gross receipts tax or excise tax levied by
        state; city or federal government, or any political subdivision thereof,
        with respect to the receipt of such rent, or upon or with respect to the
        possession, leasing, operation, management, maintenance, alteration,
        repair, use or occupancy by any tenant of the Building, or any portion
        thereof but not on Landlord's other operations, if such taxes are
        imposed in lieu of ordinary ad valorem real property taxes;

(d)     any assessment, tax, fee, levy or charge by any governmental agency
        related to any transportation plan, fund or system (including assessment
        districts) instituted within the geographic area of which the Building
        is a part;

(e)     any tax assessment in lieu of (not in addition to) any ad valorem real
        property to the extent Tenant is relieved of the obligation therefore;
        and


(f)     assessments under local improvement district 92 -- 1 as shown on the tax
        bill for the Project.



                                      -4-
<PAGE>   10

Notwithstanding the foregoing provisions of this Section 4.5 above to the
contrary, "REAL PROPERTY TAXES AND ASSESSMENTS" shall not include Landlord's
federal or state income, franchise, inheritance or estate taxes, transfer taxes
or business license taxes. Landlord agrees to pay Real Property Taxes and
Assessments in the maximum number of installments allowed without a penalty.

4.6 DEFINITION OF INSURANCE COSTS. As used in this Lease, "INSURANCE COSTS"
shall mean the cost of insurance obtained by Landlord pursuant to Section 21 for
the Building, the Premises and the Tenant Improvements and the Building
Percentage of the costs of such insurance for the Project Common Areas
(including commercially reasonable deductible amounts or amounts which would
otherwise be attributable to a commercially reasonable deductible amount should
Landlord elect to self-insure against property damage or loss as permitted under
Section 21, provided Tenant's responsibility for any such deductible or
self-insured deductible amounts shall be subject to the limitations set forth in
Section 21 of this Lease). Notwithstanding the foregoing, any increase in the
premium forth a property insurance attributable to the replacement cost of the
Tenant Improvements in excess of Building standard shall not be included as
Insurance Costs, but shall be paid by Tenant concurrently with Tenants monthly
installment of its share of Insurance Costs.

4.7 DEFINITION OF UTILITIES COSTS. As used in this Lease, "UTILITIES COSTS"
shall mean all actual charges for utilities for the Building and the Building
Percentage of the same for the Project Common Areas, including but not limited
to water, sewer and electricity, and the costs of heating, ventilating and air
conditioning and other utilities (but excluding those charges for which tenants
are individually responsible) as well as related fees, assessments and
surcharges.

4.8 ESTIMATE STATEMENT. By the first day of April of each calendar year during
the Term of this Lease (after the Base Year noted in Section 1.10 of the
Summary), Landlord shall endeavor to deliver to Tenant a statement ("ESTIMATE
STATEMENT") estimating the Operating Expenses, Real Property Taxes and
Assessments, Insurance Costs, and Utilities Costs for the current calendar year
payable by Tenant. Landlord shall have the right no more than two (2) times in
any calendar year to deliver a revised Estimate Statement for such calendar year
if Landlord reasonably determines that the Operating Expenses, Real Property
Taxes and Assessments, Insurance Costs, and/or Utilities Costs are greater than
those set forth in the original Estimate Statement (or previously delivered
revised Estimate Statement) for such calendar year. The Operating Expenses, Real
Property Taxes and Assessments, Insurance Costs, and/or Utilities Costs shown on
the Estimate Statement (or revised Estimate Statement, as applicable) shall be
divided into twelve (12) equal monthly installments, and Tenant shall pay to
Landlord, concurrently with the regular monthly rent payment next due following
the receipt of the Estimate Statement (or revised Estimate Statement, as
applicable), an amount equal to one (1) monthly installment of such Operating
Expenses, Real Property Taxes and Assessments, Insurance Costs, and Utilities
Costs multiplied by the number of months from January in the calendar year in
which such statement is submitted to the month of such payment, both months
inclusive (less any amounts previously paid by Tenant with respect to any
previously delivered Estimate Statement or revised Estimate Statement for such
calendar year). Subsequent installments shall be paid concurrently with the
regular monthly rent payments for the balance of the calendar year and shall
continue until the next calendar year's Estimate Statement (or current calendar
year's revised Estimate Statement) is received. Within fifteen (15) days of
receipt of Tenant's written request therefore, Landlord will provide reasonable
supporting data and a breakdown of any element of the Estimated Statement
requested by Tenant as well as evidence of actual payment of Real Property Taxes
and Assessments after payment by Landlord.

4.9 ACTUAL STATEMENT. By the first day of April of each succeeding calendar year
during the Term of this Lease, Landlord shall endeavor to deliver to Tenant a
statement ("Actual Statement") of the actual Operating Expenses, Real Property
Taxes and Assessments, Insurance Costs, and Utilities Costs for the immediately
preceding calendar year. If the Actual Statement reveals that Operating
Expenses, Real Property Taxes and Assessments, Insurance Costs, and/or Utilities
Costs were over-stated or understated in any Estimate Statement (or revised
Estimate Statement) previously delivered by Landlord pursuant to Section 4.8
above, then within thirty (30) days after delivery of the Actual Statement,
Tenant shall pay to Landlord the amount of any such under-payment, or, Landlord
shall credit Tenant against the next monthly rent falling due, the amount of
such over-payment, as the case may be. Such obligation will be a continuing one
which will survive the expiration or earlier termination of this Lease. Prior to
the expiration or sooner termination of the Lease Term and Landlord's acceptance
of Tenant's surrender of the Premises, Landlord will have the right to estimate
the actual Operating Expenses, Real Property Taxes and Assessments, Insurance
Costs, and Utilities Costs for the then current Lease Year and to collect from
Tenant prior to Tenant's surrender of the Premises, Tenant's Percentage of any
excess of such actual Operating Expenses, Real Property Taxes and Assessments,
Insurance Costs, and Utilities Costs over the estimated Operating Expenses, Real
Property Taxes and Assessments, Insurance Costs, and Utilities Costs paid by
Tenant in such Lease Year.

4.10 No Release. Any delay or failure by Landlord in delivering any Estimate or
Actual Statement pursuant to this Section 4 shall not constitute a waiver of its
right to receive Tenant's payment of Operating Expenses, Real Property Taxes and
Assessments, Insurance Costs, and Utilities Costs, nor shall it relieve Tenant
of its obligations to pay Operating Expenses, Real Property Taxes and
Assessments, Insurance Costs, and Utilities Costs pursuant to this Section 4,
except that Tenant shall not be obligated to make any payments based on such
Estimate or Actual Statement until thirty (30) days after receipt of such
statement and Tenant shall not be obligated to pay Tenant's Percentage of any
amount which is not invoiced to Tenant within two (2) years of the date such
amount is incurred by Landlord.



                                      -5-
<PAGE>   11

4.11 EXCLUSIONS FROM OPERATING EXPENSES, REAL PROPERTY TAXES AND ASSESSMENTS,
INSURANCE COSTS AND UTILITIES COSTS. Notwithstanding anything to the contrary
contained elsewhere in this Section 4, the following items shall be excluded
from Operating Expenses, Real Property Taxes and Assessments, Insurance Costs,
and Utilities Costs, as applicable:

(a)     Costs of decorating, redecorating, or special cleaning or other services
        provided to certain tenants and not provided on a regular basis to all
        tenants of the Building;

(b)     Any charge for depreciation of the Building or equipment and any
        interest or other financing charge;

(c)     Any charge for Landlord's income taxes, excess profit taxes, franchise
        taxes, business license taxes, or similar taxes on Landlord's business;

(d)     All costs relating to activities forth a marketing, solicitation,
        negotiation and execution of leases of space in the Building, including
        without limitation, preparation of plans, costs of tenant improvements
        and brokerage fees;

(e)     All costs for which Tenant or any other tenant in the Building is being
        charged other than pursuant to the operating expense clauses of leases
        for the Building;

(f)     The cost of correcting defects in the construction of the Building or in
        the building equipment, except that conditions (not occasioned by
        construction defects) resulting from ordinary wear and tear will not be
        deemed defects for the purpose of this category;

(g)     The cost of repairs made by Landlord because of the total or partial
        destruction of the Building or the condemnation of a portion of the
        Building except to the extent of a commercially reasonable deductible
        amount for property insurance for comparable projects in Alameda County;

(h)     The cost of any items for which Landlord is reimbursed by insurance or
        otherwise compensated by parties other than tenants of the Building
        pursuant to clauses similar to this paragraph;

(i)     Any operating expense representing an amount paid to a related
        corporation, entity, or person which is in excess of the amount which
        would be paid in the absence of such relationship;

(j)     The cost of any work or service performed for or facilities furnished to
        any tenant of the Building to a greater extent or in a manner more
        favorable to such tenant than that performed for or furnished to Tenant;

(k)     The cost of alterations of space in the Building leased to other
        tenants;

(l)     Ground rent or similar payments to a ground lessor;

(m)     Legal fees and related expenses incurred by Landlord (together with any
        damages awarded against Landlord) due to the negligence or willful
        misconduct of Landlord;

(n)     Costs arising from the presence of any Hazardous Materials within, upon
        or beneath the Project unless resulting solely from the acts or neglect
        of Tenant, its agents, employees or contractors;

(o)     Costs for sculpture, paintings or other objects of art in the Building
        which exceed those typically incurred in other similar first class
        office buildings in Alameda County, California and specifically
        excluding any cost related to the initial acquisition or installation
        thereof;

(p)     Salaries of management personnel to the extent that such persons provide
        services to properties other than the Building;

(q)     The cost of any capital alterations, capital expenditures, capital
        additions or capital improvements (collectively "CAPITAL EXPENDITURES")
        made to the Project or the Building during the Initial Term of this
        Lease except as expressly allowed in Section 4.4 above;

(r)     Any cost incurred by Landlord pursuant to Section 11.2 of this Lease for
        replacement of the Building shell or other structural portions of the
        Building (including replacement of the structural elements of the roof
        or replacement of the foundations) during the Initial Term of this
        Lease;

(s)     Any cost of replacement of the utility systems including the HVAC (as
        defined in Section 11.2 of the Lease) during the Initial Term of the
        Lease;

(t)     The cost of any management fees in excess of a sum equal to ten percent
        (10%) of Operating Expenses, excluding therefrom any sum related to a
        capital expenditure in excess of Twenty-Five Thousand Dollars
        ($25,000.00);

(u)     Any cost related to the initial construction or decoration of the
        Building or the Project, such as, but not limited to, the initial
        installation of landscaping, utilities, or striping of the Common Areas,
        or painting of the buildings in the Project;



                                      -6-
<PAGE>   12

(v)     The cost of new buildings, additional land or any expansion of the
        Project;

(w)     Repairs or replacements or hook-up or tap-in charges related to any
        utility systems which are dedicated to the use of a single tenant;

(x)     Repairs or replacements necessitated by the negligence or the wrongful
        action of Landlord or Landlord's agents, contractors or employees, or
        any other tenant (to the extent the cost of such repairs or replacements
        are collected from such tenant which Landlord agrees to seek with due
        diligence);

(y)     All interest or penalties incurred as a result of Landlord's failing to
        pay bills as the same become due;

(z)     Any repairs to the Building or the Common Area necessitated by any
        construction in the Project;

(aa)    Any bad debt losses, rent losses or reserves for bad debt or rent
        losses;

(bb)    Costs of selling, syndicating, financing, mortgaging or hypothecating
        any of Landlord's interest in the Project; or

(cc)    Any cost related to compliance with the Americans with Disabilities Act
        (42 U.S.C. Section 12101 et seq.) or any similar statute, ordinance or
        regulation in effect as of the Commencement Date;

(dd)    Costs of a second or subsequent replacement of any capital item which is
        replaced more than one time during its reasonable useful life (but this
        exclusion shall not exclude costs of a second or subsequent replacement
        of a capital item after the expiration of its reasonable useful life
        which is otherwise permitted under this Article 4); and

(ee)    Reserves in excess of commercially reasonable reserve amounts maintained
        by landlords of comparable projects in Alameda County, provided in any
        event, Landlord shall reimburse Tenant at the expiration of the Lease
        Term for any unamortized reserves paid by Tenant during the Lease Term
        which have not been applied to the costs of replacements for which such
        reserves have been collected by Landlord.

4.12 TENANT'S PERCENTAGE. "TENANT'S PERCENTAGE" shall mean the percentage set
forth in Section 1.9 of the Summary. Tenant's Percentage was calculated by
multiplying the number of rentable square feet of the Premises by 100 and
dividing the product by the total rentable square feet in the Building. Landlord
shall have the right from time to time, in its discretion, to include or exclude
existing or future buildings in the Project in the calculation of the total
rentable square feet of the Project, for purposes of determining the Building's
Share of Operating Expenses, Real Property Taxes and Assessments, Insurance
Costs and Utilities Costs and/or the provision of various services and amenities
thereto, including equitable allocation of the foregoing in Cost Pools (as
described in Section 4.3 above); in such event, Tenant's Percentage shall
include such allocation of the Building's Share of Operating Expenses, Real
Property Taxes and Assessments, Insurance Costs, and Utilities Costs in the
calculation of Tenant's Percentage. In addition, if either the rentable square
feet of the Premises and/or the Building and other buildings in the Project
changes, Tenant's Percentage and/or the Building's Share shall be appropriately
adjusted, and, as to the calendar year in which such change occurs, Tenant's
Percentage and/or the Building's Share for such year shall be determined on the
basis of the number of days during such calendar year that each such Tenant's
Percentage and/or the Building's Share was in effect.

4.13 TENANT'S AUDIT RIGHTS. If Tenant questions a component of an Actual
Statement, Landlord will provide Tenant with a copy of the actual invoices or
other documentation reasonably acceptable to Tenant substantiating the component
within thirty (30) days of Tenant's request therefor. Landlord will maintain
accurate, detailed records of all items included in the Actual Statements at
Landlord's office at the address for notices set forth in Section 1.1 of the
Summary for at least twenty-four (24) months after delivery of the Actual
Statement to Tenant. Tenant may at its cost and expense inspect or cause an
employee of Tenant or a certified public accountant hired on a non-contingent
basis to audit the records during normal business hours at the offices of
Landlord's property manager on up to one (1) occasion per annum provided Tenant
delivers prior written notice ("Audit Notice") of its intent to perform such
audit within twenty four (24) months following receipt of the Actual Statement
which Tenant intends to audit. In no event will Landlord or its property manager
be required to (i) photocopy any accounting records or other items or contracts,
(ii) create any ledgers or schedules not already in existence, (iii) incur any
costs or expenses relative to such inspection, or (iv) perform any other tasks
other than making available such accounting records as are described in this
paragraph. Tenant must pay its Percentage of Operating Expenses when due
pursuant to the terms of the Lease and may not withhold payment of Operating
Expenses or any other rent pending results of the audit or during a dispute
regarding Operating Expenses. The audit must be completed within sixty (60) days
of the date of Tenant's Audit Notice and the results of such audit shall be
delivered to Landlord within seventy five (75) days of the date of Tenant's
Audit Notice. If Tenant does not deliver its Audit Notice within such time
period, then the Actual Statement will be conclusively binding on Tenant. If
such audit or review correctly reveals that Landlord has overcharged Tenant and
Landlord agrees with the results of such audit, then within thirty (30) days
after the results of such audit are made available to Landlord, Landlord agrees
to reimburse Tenant the amount of such overcharge. If the audit reveals that
Tenant was undercharged, then within thirty (30) days after the results of the
audit are made available to Tenant, Tenant agrees to reimburse Landlord the



                                      -7-
<PAGE>   13
amount of such undercharge. If the audit shows that the Actual Statement
contains an overstatement exceeding five percent (5%) of any category of the
items set forth in Sections 4.4, 4.5, 4.6 or 4.7 for the covered period, then
the reasonable audit fees and expenses incurred by Tenant will be paid by
Landlord. To the extent Landlord must pay the cost of such audit, such cost
shall not exceed a reasonable hourly charge for a reasonable amount of hours
spent by such third-party in connection with the audit. Tenant agrees to keep
the results of the audit confidential and will cause its agents, employees and
contractors to keep such results confidential. If Landlord's accountant protests
the conclusions of the audit, Landlord may contest Tenant's determination by
giving Tenant written notice within thirty (30) days following Landlord's
receipt of the audit report. If Landlord's accountant and Tenant's accountant
cannot mutually agree as to sums due pursuant hereto within thirty (30) days
after Tenant's receipt of Landlord's notice of protest, the dispute will be
resolved pursuant to Section 24 of the Lease.

5. SECURITY DEPOSIT.

Tenant shall deposit with Landlord the Security Deposit in the form of one or
two irrevocable sight draft letter(s) of credit in form reasonably satisfactory
to Landlord drawn on a national bank designated in Section 1.11 of the Summary
as follows: A letter of credit in face amount equal to one-half (1/2) of the
total Security Deposit shall be provided to Landlord within five (5) days after
full execution of this Lease and such letter of credit shall be increased by, or
a second letter of credit shall be issued in favor of Landlord with a face
amount equal to, one-half (1/2) of the total Security Deposit on or before the
date upon which Landlord commences construction of the Tenant Improvements. The
letters of credit Security Deposit shall be held by Landlord as security for the
full and faithful performance by Tenant of all of the terms, covenants and
conditions of this Lease to be performed by Tenant during the Term, except as
otherwise provided herein. If Tenant defaults with respect to any of its
obligations under this Lease, Landlord may (but shall not be required to) use,
apply or retain all or any part of the Security Deposit for the payment of any
rent or any other sum in default, or for the payment of any other amount, loss
or damage which Landlord may spend, incur or suffer by reason of Tenant's
default. If any portion of the Security Deposit is so used or applied, Tenant
shall, within ten (10) days after demand therefor, deposit cash with Landlord in
an amount sufficient to restore the Security Deposit to its original amount.
Landlord shall not be required to keep the Security Deposit separate from its
general funds. If Tenant is not in default beyond the period of notice and
opportunity to cure provided in Section 23 of this Lease at the expiration of
the Term, the Security Deposit or any balance thereof shall be returned to
Tenant within two (2) weeks following such expiration, provided that Landlord
may retain the Security Deposit until such time as any amount due from Tenant in
accordance with Section 4 hereof has been determined and paid in full. If
Landlord sells its interest in the Building during the Term and if Landlord
deposits with the purchaser the Security Deposit (or balance thereof), then,
upon such sale, Landlord shall be discharged from any further liability with
respect to the Security Deposit. Provided Tenant is not in default beyond the
period of notice and opportunity to cure provided in this Lease, the face amount
of the letter(s) of credit shall be reduced as provided herein until the face
amount of the letter(s) of credit is reduced to One Hundred Fifty-Five Thousand
Dollars ($155,000.00) in the aggregate as follows: (a) the face amount of the
letter(s) of credit shall be reduced by Eighty-Seven Thousand Five Hundred
Dollars ($87,500.00) upon the first to occur of (i) an increase of Tenant's Base
Shareholders' Equity (exclusive of income from extraordinary sources and
expenses of extraordinary events) by Ten Million Dollars ($10,000,000.00) or
more (the "First Increased Shareholders' Equity") over any period of four (4)
consecutive fiscal quarters of the Lease Term (Tenant hereby representing and
warranting to Landlord that Tenant's "Base Shareholders' Equity" as of September
30, 2000 is $90,519,000) or (ii) Tenant achieving net income from operations
(exclusive of income from extraordinary sources and expenses of extraordinary
events) of Eight Million Two Hundred Thirty Thousand Dollars ($8,230,000.00)
over any period of four (4) consecutive fiscal quarters of the Lease Term; (b)
the face amount of the letter(s) of credit shall further reduce by Eighty-Seven
Thousand Five Hundred Dollars ($87,500.00) upon the earlier to occur of (i) such
time as Tenant's First Increased Shareholders' Equity (exclusive of income from
extraordinary sources and expenses of extraordinary events) shall increase by
Ten Million Dollars ($10,000,000.00) or more over any period of four (4)
consecutive fiscal quarters of the Lease Term following the most recent prior
reduction of the letter(s) of credit (the "Second Increased Shareholders'
Equity") or (ii) Tenant achieves net income from operations (exclusive of income
from extraordinary sources and expenses of extraordinary events) of Ten Million
Dollars ($10,000,000.00) or more over any period of four (4) consecutive fiscal
quarters of the Lease Term following the most recent prior reduction of the
letter(s) of credit; (c) the face amount of the letter(s) of credit shall
further reduce by Eighty-Seven Thousand Five Hundred Dollars ($87,500.00) upon
the earlier to occur of (i) such time as Tenant's Second Increased Shareholders'
Equity (exclusive of income from extraordinary sources and expenses of
extraordinary events) shall increase by Ten Million Dollars ($10,000,000.00) or
more over any period of four (4) consecutive fiscal quarters of the Lease Term
following the most recent prior reduction of the letter(s) of credit (the "Third
Increased Shareholders' Equity") or (ii) Tenant achieving net income from
operations (exclusive of income from extraordinary sources and expenses of
extraordinary events) increases by Ten Million Dollars ($10,000,000.00) or more
over any period of four (4) consecutive fiscal quarters of the Lease Term
following the most recent prior reduction of the letter(s) of credit; and (d)
the face amount of the letter(s) of credit shall further reduce by Eighty-Seven
Thousand Five Hundred Dollars ($87,500.00) upon the earlier to occur of (i) such
time as Tenant's Third Increased Shareholders' Equity (exclusive of income from
extraordinary sources and expenses of extraordinary events) shall increase by
Ten Million Dollars ($10,000,000.00) or more over any period of four (4)
consecutive fiscal quarters of the Lease Term following the most recent prior
reduction of the letter(s) of credit or (ii) Tenant achieving net income from
operations (exclusive of income from extraordinary sources and expenses of
extraordinary events) of Ten Million Dollars ($10,000,000.00) or more over any
period of four (4) consecutive fiscal quarters of the Lease Term following the
most recent prior reduction of the letter(s) of credit.



                                      -8-
<PAGE>   14

6. USE.

6.1 GENERAL. Tenant shall use the Premises solely for the Permitted Use
specified in Section 1.12 of the Summary, and shall not use or permit the
Premises to be used for any other use or purpose whatsoever. Tenant shall
observe and comply with the "Rules and Regulations" attached hereto as Exhibit
"E", and all reasonable non-discriminatory modifications thereof and additions
thereto from time to time put into effect and furnished to Tenant by Landlord.
Landlord shall endeavor to enforce the Rules and Regulations, but shall have no
liability to Tenant for the violation or non-performance by any other tenant or
occupant of the Project or the Building of any such Rules and Regulations.
Tenant shall, at its sole cost and expense, observe and comply with all recorded
covenants, conditions and restrictions now or hereafter affecting the Project,
and all laws, statutes, codes, rules and regulations now or hereafter in force
relating to or affecting the condition, use, occupancy, alteration or
improvement of the Premises, including, without limitation, the provisions of
Title III of the Americans with Disabilities Act of 1990 ("ADA") as to
provisions thereof in effect after the Commencement Date as it pertains to
Tenant's use, occupancy, improvement and alteration of the Premises. Tenant will
have no obligation to comply with applicable law related to the structural
portion of the Premises, unless resulting from alterations required by Tenant.
Tenant reserves the right to contest the applicability of any laws, statutes,
codes, rules and regulations relating to the condition of the Premises or use of
the Premises. Tenant's obligation with respect to such compliance will cease on
the expiration or earlier termination of this Lease and Tenant will not be
obligated to deliver the Premises to Landlord in compliance with applicable
laws, statutes, codes, rules and regulations, except as the Premises have been
modified by Tenant in accordance therewith. Tenant shall not use or allow the
Premises to be used (a) in violation of any recorded covenants, conditions and
restrictions affecting the Site or of any law or governmental rule or
regulation, or of any certificate of occupancy issued for the Premises or
Building, or (b) for any unlawful purpose. Tenant shall not do or permit to be
done anything which will obstruct or interfere with the rights of other tenants
or occupants of the Project or the Building, or injure or annoy them. Tenant
shall not cause, maintain or permit any nuisance in, on or about the Premises,
the Building, the Project or the Site, nor commit or suffer to be committed any
waste in, on or about the Premises.

6.2 PARKING.

(a)     Tenant's Parking Privileges. During the Term of this Lease, Tenant will
        be entitled to use without charge (other than Tenant's Percentage of
        Operating Expenses attributable to parking) the number of parking spaces
        specified in Section 1.16 of the Summary hereof for use by Tenant's
        employees, customers, invitees, licensees, contractors and agents in the
        common parking areas for the Building within the Project. Landlord shall
        at all times have the right to establish and modify the nature and
        extent of the parking areas forth a Building and Project (including
        whether such areas shall be surface, underground and/or other
        structures) as long as Tenant is provided without charge the number of
        parking spaces designated in Section 1.16 of the Summary and provided if
        Landlord shall ever elect to assign parking spaces to any tenants of the
        building, Tenant shall receive a ratable allocation of assigned parking
        spaces as well on such terms and conditions upon which such parking may
        be provided, provided in all events all of Tenant's parking spaces shall
        be provided to Tenant without charge other than the payment by Tenant of
        Tenant's Percentage of Operating Expenses attributable to parking.

(b)     Parking Rules. The use of the parking areas shall be subject to the
        Parking Rules and Regulations contained in Exhibit "E" attached hereto
        and any other reasonable, non-discriminatory rules and regulations
        adopted by Landlord from time to time. Tenant shall not use more parking
        privileges than its allotment. Tenant's parking privileges shall be used
        only for parking by vehicles no larger than normally sized passenger
        automobiles or pick-up trucks or Tenant's usual four (4) or six (6)
        wheel delivery vans and four (4) wheel vehicles. Tenant shall use all
        reasonable efforts and due diligence not permit or allow any vehicles
        that belong to or are controlled by Tenant or Tenant's employees,
        suppliers, shippers, customers or invitees to be loaded, unloaded, or
        parked in areas other than those reasonably designated by Landlord for
        such activities so long as a reasonable loading zone for the Building is
        designated by Landlord for Tenant's use. If Tenant permits or allows any
        of the prohibited activities described herein, then Landlord shall have
        the right, upon reasonable notice, in addition to such other rights and
        remedies that it may have at law or in equity, to remove or tow away
        the vehicle involved at the expense of the owner of the vehicle.

6.3 SIGNS AND AUCTIONS. Except for Tenant's name on the directory board in the
Building lobby and identity sign at the entry doors of the Premises (which sign
shall be consistent with the Building's signage program and otherwise subject to
Landlord's prior written approval), Tenant shall have no right to place any sign
upon the Premises, the Building, Site or Project or which can be seen from
outside the Premises. Tenant shall have no right to conduct any auction in, on
or about the Premises, the Building or Site. Provided such signage is approved
by the Harbor Bay Isle Association and all governmental agencies with
jurisdiction, Tenant will have the right, at Tenant's sole cost and expense, to
install during the Term one (1) non-exclusive sign on the exterior of the
Building located in approximately the location depicted on Exhibit "A-2"
attached hereto ("BUILDING SIGN"), subject to the terms of this Section 6.3.
Landlord agrees to support Tenant's application to the Harbor Bay Isle
Association for Tenant's Building Sign. The specifications, plans and elevations
for the Building Sign (including the graphics, materials, color, design,
lettering, height, lighting, size and quality) will be in accordance with the
Building's signage program, all applicable governmental laws, rules and
regulations and the Harbor Bay Isle Association's sign program, and will be
subject to Landlord's prior written approval. The Building Sign must be
installed



                                      -9-
<PAGE>   15
under the supervision of Landlord by a contractor approved by Landlord and must
be installed in a lien-free manner in accordance with the provisions of this
Lease. The Building Sign must be maintained, at the sole cost and expense of
Tenant, pursuant to a maintenance program approved and supervised by Landlord.
Upon the expiration or earlier termination of this Lease, Tenant, at Tenant's
sole cost and expense (subject to Landlord's supervision), will cause the
Building Sign to be removed and the Building to be restored to the condition
existing prior to the placement of such sign. If Tenant fails to remove such
sign and restore the Building as provided above within thirty (30) days
following Landlord's demand therefor, then Landlord may perform such work and
all costs and expenses incurred by Landlord in so performing such work will be
reimbursed by Tenant to Landlord within ten (10) days following Landlord's
delivery to Tenant of an invoice therefor, plus interest at the Interest Rate.
The Building Sign rights hereinabove provided are personal to the original
Tenant executing this Lease and may not be assigned or transferred to, or
utilized by, any other person or entity. Tenant hereby acknowledges that the
restrictive covenants, promulgated by the Harbor Bay Isle Association, currently
affecting the Premises prohibit the Building Sign permitted by this Section 6.3;
however, Tenant may, with Landlord's cooperation (but without any cost to
Landlord), apply to the Harbor Bay Isle Association for approval of the Building
Sign described herein. Notwithstanding anything to the contrary contained
herein, Landlord's consent to Tenant's installation of the Building Sign and
Landlord's agreement to cooperate with Tenant's application to the Harbor Bay
Isle Association for the approval of such Building Sign, as provided herein, in
no manner constitute a warranty by Landlord that Tenant will obtain approval of
the Building Sign from the Harbor Bay Isle Association.

6.4 HAZARDOUS MATERIALS. Tenant will (i) obtain and maintain in full force and
effect all Environmental Permits that may be required from time to time under
any Environmental Laws applicable to Tenant or the Premises and (ii) be and
remain in compliance in all material respects with all terms and conditions of
all such Environmental Permits and with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in all Environmental Laws applicable to Tenant or the
Premises. As used in this Lease, the term "ENVIRONMENTAL LAW" means any past,
present or future federal, state, local or foreign statutory or common law, or
any regulation, ordinance, code, plan, order, permit, grant, franchise,
concession, restriction or agreement issued, entered, promulgated or approved
thereunder, relating to (a) the environment, human health or safety, including,
without limitation, emissions, discharges, releases or threatened releases of
Hazardous Materials (as defined below) into the environment (including, without
limitation, air, surface water, groundwater or land), or (b) the manufacture,
generation, refining, processing, distribution, use, sale, treatment, receipt,
storage, disposal, transport, arranging for transport, or handling of Hazardous
Materials. "ENVIRONMENTAL PERMITS" means, collectively, any and all permits,
consents, licenses, approvals and registrations of any nature at any time
required pursuant to, or in order to comply with, any Environmental Law. Except
for ordinary and general office supplies, such as copier toner, liquid paper,
glue, ink and common household cleaning materials (some or all of which may
constitute "Hazardous Materials" as defined in this Lease), Tenant agrees not to
cause or permit any Hazardous Materials to be brought upon, stored, used,
handled, generated, released or disposed of on, in, under or about the Premises,
the Building, the Common Areas or any other portion of the Project by Tenant,
its agents, employees, subtenants, assignees, licensees, or contractors
(collectively, "TENANT'S PARTIES"), without the prior written consent of
Landlord, which consent Landlord may withhold in its sole and absolute
discretion. Upon the expiration or earlier termination of this Lease, Tenant
agrees to promptly remove from the Premises, the Building and the Project, at
its sole cost and expense, any and all Hazardous Materials, including any
equipment or systems containing Hazardous Materials which are installed, brought
upon, stored, used, generated or released upon, in, under or about the Premises,
the Building and/or the Project or any portion thereof by Tenant or any of
Tenant's Parties. To the fullest extent permitted by law, Tenant agrees to
promptly indemnify, protect, defend and hold harmless Landlord and Landlord's
partners, officers, directors, employees, agents, successors and assigns
(collectively, "LANDLORD INDEMNIFIED PARTIES") from and against any and all
claims, damages, judgments, suits, causes of action, losses, liabilities,
penalties, fines, expenses and costs (including, without limitation, clean-up,
removal, remediation and restoration costs, sums paid in settlement of claims,
attorneys' fees, consultant fees and expert fees and court costs) which arise or
result from the presence of Hazardous Materials on, in, under or about the
Premises, the Building or any other portion of the Project and which are caused
(or within the Premises only, permitted) by Tenant or any of Tenant's Parties.
Tenant agrees to promptly notify Landlord of any release of Hazardous Materials
in the Premises, the Building or any other portion of the. Project which Tenant
becomes aware of during the Term of this Lease, whether caused by Tenant or any
other persons or entities. In the event of any release of Hazardous Materials
caused or permitted by Tenant or any of Tenant's Parties, Landlord shall have
the right, but not the obligation, to cause Tenant to immediately take all steps
Landlord deems necessary or appropriate to remediate such release and prevent
any similar future release to the satisfaction of Landlord and Landlord's
mortgagee(s). At all times during the Term of this Lease, upon not less than
twenty-four (24) hours prior written notice to Tenant, Landlord will have the
right, but not the obligation, to enter upon the Premises to inspect,
investigate, sample and/or monitor the Premises to determine if Tenant is in
compliance with the terms of this Lease regarding Hazardous Materials. As used
in this Lease, the term "HAZARDOUS MATERIALS" shall mean and include any
hazardous or toxic materials, substances or wastes as now or hereafter
designated under any law, statute, ordinance, rule, regulation, order or ruling
of any agency of the State, the United States Government or any local
governmental authority, including, without limitation, asbestos, petroleum,
petroleum hydrocarbons and petroleum based products, urea formaldehyde foam
insulation, polychlorinated biphenyls ("PCBS"), and freon and other
chlorofluorocarbons. The provisions of this Section 6.4 will survive the
expiration or earlier termination of this Lease.



                                      -10-
<PAGE>   16
To the fullest extent permitted by law, Landlord agrees to promptly indemnify,
protect, defend and hold harmless Tenant and Tenant's officers, directors,
employees, contractors, agents, successor and assigns (collectively "TENANT
INDEMNIFIED PARTIES") from and against any and all claims, damages, judgments,
suits, causes of action, losses, liabilities, penalties, fines, expenses and
costs (including without limitation, clean up, removal, remediation and
restoration costs, sums paid in settlement of claims, attorneys' fees,
consultants fees and expert fees and court costs) which arise as the result from
the presence of Hazardous Materials on, in, under or about the Premises, the
Building or any other portion of the Project which predates Tenant's occupancy
of the Premises or which are caused by Landlord, its agents or employees.
Landlord agrees to promptly notify Tenant of any release of Hazardous Materials
on any portion of the Project that Landlord becomes aware of during the Term of
this Lease. To the extent the presence of Hazardous Materials on the Project
which is not caused by Tenant or any Tenant Parties, causes a material
interference with the conduct of Tenant's business in the Premises or poses a
material health risk to any of the Tenant's Indemnified Parties, Tenant will be
entitled to an abatement of rent until the Hazardous Materials are abated. If
such interference continues for a period in excess of six (6) months from
Landlord's notice thereof or Tenant's discovery thereof, Tenant will be entitled
to cancel and terminate this Lease upon written notice to Landlord, in addition
to any other remedy available at law or in equity.

6.5 OCCUPANCY LEVEL. Without in any way increasing Landlord's obligations to
provide parking in the amount to be provided to Tenant as provided in this
Lease, Tenant covenants and agrees that the number of persons occupying the
Premises shall not exceed one hundred ninety-five (195) persons. If Landlord at
any time reasonably determines that more than one hundred ninety-five (195)
persons occupy the Premises on a day-to day basis, Landlord shall notify Tenant
and Tenant shall have thirty (30) days after receipt of Landlord's notice to
either (a) reduce the occupancy level to one hundred ninety-five (195) persons
or less or (b) notify Landlord of Tenant's desire to lease additional space in
the Building or elsewhere in the Project. If Landlord does not receive notice of
Tenant's desire to lease additional space in the Building or the Project within
thirty (30) days after the date of receipt of Landlord's notice of the violation
of the maximum occupancy provision, and if the Premises occupancy level remains
in excess of the maximum allocation as of the thirtieth (30th) day following the
date of receipt of Landlord's notice, Tenant shall automatically be deemed in
default of this Lease and Landlord shall be entitled to exercise any and all
remedies set forth in this Lease or at law or in equity by reason of such
default. If Tenant selects option (b), subject to the availability of space in
the Building or the Project, the parties shall in good faith, negotiate a
proposal to expand the Premises. If no space will be available in the Building
or elsewhere in the Project within ninety (90) days after Landlord's receipt of
Tenant's request to lease additional space, or if Landlord and Tenant have not
reached an agreement with respect to any available expansion space within thirty
(30) days after Landlord's receipt of Tenant's request to lease additional
space, Tenant shall have an additional twenty (20) days to reduce the occupancy
level of the Premises to the required maximum. Should Tenant fail to reduce the
occupancy level within said additional twenty (20) day period, Tenant shall
automatically be deemed in default of this Lease and Landlord shall be entitled
to exercise any and all remedies set forth in this Lease or at law or in equity
by reason of such default.

7. PAYMENTS AND NOTICES.

All rent and other sums payable by Tenant to Landlord hereunder shall be paid to
Landlord at the first address designated in Section 1.1 of the Summary, or to
such other persons and/or at such other places as Landlord may hereafter
designate in writing. Any notice required or permitted to be given hereunder
must be in writing and may be given by personal delivery (including delivery by
nationally recognized overnight courier or express mailing service), facsimile
transmission sent by a machine capable of confirming transmission receipt, with
a hard copy of such notice delivered no later than one (1) business day after
facsimile transmission by another method specified in this Section 7, or by
registered or certified mail, postage prepaid, return receipt requested,
addressed to Tenant at the address(es) designated in Section 1.2 of the Summary,
or to Landlord at the address(es) designated in Section 1.1 of the Summary.
Either party may, by written notice to the other, specify a different address
for notice purposes. Notice given in the foregoing manner shall be deemed given
(i) upon confirmed transmission if sent by facsimile transmission, provided such
transmission is prior to 3:00 p.m. on a business day (if such transmission is
after 3:00 p.m. on a business day or is on a non-business day, such notice will
be deemed given on the following business day), (ii) when actually received or.
refused by the party to whom sent if delivered by a carrier or personally served
or (iii) if mailed, on the day of actual delivery or refusal as shown by the
certified mail return receipt. For purposes of this Section 7, a "BUSINESS DAY"
is Monday through Friday, excluding holidays observed by the United States
Postal Service.

8. BROKERS.

The parties recognize that the broker(s) who negotiated this Lease are stated in
Section 1.13 of the Summary, and agree that Landlord shall be solely responsible
for the payment of brokerage commissions to said broker(s) pursuant to the terms
of a separate commission agreement, and that Tenant shall have no responsibility
therefor unless written provision to the contrary has been made. Each party
represents and warrants to the other, that, to its knowledge, no other broker,
agent or finder (a) negotiated or was instrumental in negotiating or
consummating this Lease on its behalf, and (b) is or might be entitled to a
commission or compensation in connection with this Lease. Any broker, agent or
finder of Tenant whom Tenant has failed to disclose herein shall be paid by
Tenant. Tenant shall indemnify, defend (by counsel reasonably approved in
writing by Landlord) and hold Landlord harmless from and against any and all
claims, judgments, suits, causes of action, damages, losses, liabilities and
expenses (including attorneys'



                                      -11-
<PAGE>   17

fees and court costs) resulting from any breach by Tenant of the foregoing
representation, including, without limitation, any claims that may be asserted
against Landlord by any broker, agent or finder undisclosed by Tenant herein.
Landlord shall indemnify, defend (by counsel reasonably approved in writing by
Tenant) and hold Tenant harmless from and against any and all claims, judgments,
suits, causes of action, damages, losses, liabilities and expenses (including
attorneys' fees and court costs) resulting from any breach by Landlord of the
foregoing representation, including, without limitation, any claims that may be
asserted against Tenant by any broker, agent or finder undisclosed by Landlord
herein. The foregoing indemnities shall survive the expiration or earlier
termination of this Lease.

9. SURRENDER; HOLDING OVER.

9.1 SURRENDER OF PREMISES. Upon the expiration or sooner termination of this
Lease, Tenant shall surrender all keys for the Premises to Landlord, and
exclusive possession of the Premises to Landlord broom clean and in first-class
condition and repair, reasonable wear and tear excepted (and casualty damage
excepted if this Lease is terminated as a result thereof pursuant to Section
18), with all of Tenant's personal property (and those items, if any, of Tenant
Improvements and Tenant Changes identified by Landlord pursuant to Section 12.2
below) removed therefrom and all damage caused by such removal repaired; as
required pursuant to Sections 12.2 and 12.3 below. If, for any reason, Tenant
fails to surrender the Premises on the expiration or earlier termination of this
Lease (including upon the expiration of any subsequent month-to-month tenancy
consented to by Landlord pursuant to Section 9.2 below), with such removal and
repair obligations completed, then, in addition to the provisions of Section 9.3
below and Landlord's rights and remedies under Section 12.4 and the other
provisions of this Lease, Tenant shall indemnify, protect, defend (by counsel
approved in writing by Landlord) and hold Landlord harmless from and against any
and all claims, judgments, suits, causes of action, damages, losses, liabilities
and expenses (including attorneys' fees and court costs) resulting from such
failure to surrender, including, without limitation, any claim made by any
succeeding tenant based thereon. The foregoing indemnity shall survive the
expiration or earlier termination of this Lease.

9.2 HOLD OVER. If, with Landlord's express written consent, Tenant remains in
possession of the Premises after the expiration or earlier termination of the
Lease Term, Tenant shall become a tenant from month-to-month upon the terms and
conditions set forth in this Lease (including Tenant's obligation to pay all
Operating Expenses, Real Property Taxes and Assessments, Insurance Costs, and
Utilities Costs and any other additional rent under this Lease), but at a
Monthly Basic Rent equal to one hundred fifty percent (150%) of the Monthly
Basic Rent applicable to the Premises immediately prior to the date of such
expiration or earlier termination. Tenant shall pay an entire month's Monthly
Basic Rent calculated in accordance with this Section 9.2 for any portion of a
month it holds over and remains in possession of the Premises pursuant to this
Section 9.2 unless Tenant shall provide Landlord with at least thirty (30) days
prior written notice of the precise date upon which Tenant will vacate the
Premises in which event the holdover rent shall be prorated for the actual
number of days Tenant holds over at the Premises. This Section 9.2 shall not be
construed to create any expressed or implied right to holdover beyond the
expiration of the Lease Term or any extension thereof.

9.3 NO EFFECT ON LANDLORD'S RIGHTS. The foregoing provisions of this Section 9
are in addition to, and do not affect, Landlord's right of re-entry or any other
rights of Landlord hereunder or otherwise provided by law or equity.

10. TAXES ON TENANT'S PROPERTY.

Tenant shall be liable for, and shall pay before delinquency, all taxes and
assessments (real and personal) levied against (a) any personal property or
trade fixtures placed by Tenant in or about the Premises (including any increase
in the assessed value of the Premises based upon the value of any such personal
property or trade fixtures); and (b) any Tenant Improvements or alterations in
the Premises (whether installed and/or paid for by Landlord or Tenant) to the
extent such items are assessed at a valuation higher than the valuation at which
tenant improvements conforming to the Building's standard tenant improvements
are assessed. Tenant will not be obligated to pay any portion of taxes and
assessments described in the preceding sentence related to other premises within
the Project; Landlord will upon receipt of a written request therefore and, as a
condition to Tenant's obligation to pay any portion of such taxes and
assessments that are not separately assessed, provide reasonable supporting data
to assure Tenant that the amount claimed to be due does not include such items
for premises other than the Premises. If any such taxes or assessments are
levied against Landlord or Landlord's property, Landlord may, after written
notice to Tenant (and under proper protest if requested by Tenant) pay such
taxes and assessments, and Tenant shall reimburse Landlord therefor within
thirty (30) days after receipt of demand by Landlord accompanied by reasonable
supporting data showing Landlord's method of determination of the amount claimed
to be due to Landlord; any dispute regarding the foregoing will be resolved
pursuant to Section 24 of this Lease.

11. CONDITION OF PREMISES: REPAIRS.

11.1 CONDITION OF PREMISES. Tenant acknowledges that, except as otherwise
expressly set forth in this Lease, neither Landlord nor any agent of Landlord
has made any representation or warranty with respect to the Premises, the
Building, the Site or the Project or their condition, or with respect to the
suitability thereof for the conduct of Tenant's business. The taking of
possession of the Premises by Tenant shall conclusively establish that the
Project, the Site, the Premises, the Tenant Improvements therein, the Building
and the Common Areas were at such time complete and in good, sanitary and



                                      -12-
<PAGE>   18

satisfactory condition and repair with all work required to be performed by
Landlord, if any, pursuant to Exhibit "C" completed and without any obligation
on Landlord's part to make any alterations, upgrades or improvements thereto,
except as provided in Exhibit "C" and except to the extent required by
applicable laws, statutes, codes, rules and regulations with respect to the
portion of the Premises to be maintained by Landlord pursuant to Section 11.2
hereof.

11.2 LANDLORD'S REPAIR OBLIGATIONS. Subject to Section 18.1 and 18.2 of this
Lease, Landlord shall repair, maintain and replace, as necessary (a) as part of
Operating Expenses, the Building shell and other structural portions of the
Building (including the structural elements of the roof and foundations),
provided repair and replacement of structural elements of roof, foundation and
structural load bearing walls shall be performed at Landlord's sole cost and
expense, (b) as part of Operating Expenses, the basic heating, ventilating, air
conditioning ("HVAC"), sprinkler and electrical systems within the Building
core and standard conduits, connections and distribution systems thereof within
the Premises (but not any above standard improvements installed in the Premises
such as, for example, but not by way of limitation, custom lighting, special or
supplementary HVAC or plumbing systems or distribution extensions, special or
supplemental electrical panels or distribution systems, or kitchen or restroom
facilities and appliances to the extent such facilities and appliances are
intended for the exclusive use of Tenant), and (c) as part of Operating
Expenses, the Common Areas; provided, however, to the extent such maintenance,
repairs or replacements are required as a result of any act, neglect, fault or
omission of Tenant or any of Tenant's agents, employees, contractors or
licensees, Tenant shall be responsible for such maintenance, repairs and
replacements. Landlord shall not be liable to Tenant for failure to perform any
such maintenance, repairs or replacements, unless Landlord shall fail to perform
or commence to perform such maintenance, repairs or replacements and such
failure shall continue for more than five (5) business days after Landlord's
receipt of Tenant's written notice therefore. Landlord will be deemed to have
commenced such maintenance, repair or replacement when Landlord or its agent has
inspected the condition and commenced the work or contacted any outside service
required in connection therewith provided Landlord proceeds diligently to
complete or cause to be completed such work as soon as reasonably possible under
the circumstances. In the event of an emergency which creates an immediate
threat of injury to persons or damage to property, after reasonable efforts to
contact Landlord, Tenant may make such repairs or maintenance as may reasonably
be required at Landlord's expense and Landlord will reimburse Tenant its
reasonable out of pocket costs within thirty (30) days of receipt of a bill
therefor and evidence supporting Tenant's expenditures. Tenant shall be liable
for any damage Tenant causes in performing any such repairs on Landlord's
behalf. Any dispute will be resolved pursuant to the procedure set forth in
Section 24 of this Lease. Except as set forth herein, Tenant waives the right to
make repairs at Landlord's expense under any law, statute or ordinance now or
hereafter in effect (including the provisions of California Civil Code Section
1942 and any successive sections or statutes of a similar nature).

11.3 TENANT'S REPAIR OBLIGATIONS. Except for Landlord's obligations specifically
set forth in Sections 11.1,11.2,16.1,18.1 and 19.2 hereof, Tenant shall at all
times and at Tenant's sole cost and expense, keep, maintain, clean, repair,
preserve and replace, as necessary, the Premises and all parts thereof
including, without limitation, all Tenant Improvements, Tenant Changes, utility
meters, all special or supplemental HVAC systems, electrical systems, pipes and
conduits, located within the Premises, all fixtures, furniture and equipment,
including, without limitation, all computer, telephone and data cabling and
equipment, Tenant's signs, locks, closing devices, security devices, windows,
window sashes, casements and frames, floors and floor coverings, shelving,
kitchen and/or restroom facilities and appliances located within the Premises to
the extent such facilities and appliances are intended for the exclusive use of
Tenant, if any, custom lighting, and any alterations, additions and other
property located within the Premises in first-class condition and repair,
reasonable wear and tear excepted. Tenant shall replace, at its expense, any and
all plate and other glass in and about the Premises which is damaged or broken
from any cause whatsoever except due to the negligence or willful misconduct of
Landlord, its agents or employees. Such maintenance and repairs shall be
performed with due diligence, lien-free and in a first-class and workmanlike
manner, by licensed contractor(s) which are selected by Tenant and approved by
Landlord, which approval Landlord shall not unreasonably withhold or delay.
Except as otherwise expressly provided in this Lease, Landlord shall have no
obligation to alter, remodel, improve, repair, renovate, redecorate or paint all
or any part of the Premises.

12. ALTERATIONS.

12.1 TENANT CHANGES; CONDITIONS. After installation of the initial Tenant
Improvements for the Premises pursuant to Exhibit "C", Tenant may, at its sole
cost and expense, make alterations, additions, improvements and decorations to
the Premises (collectively, "TENANT CHANGES") subject to and upon the following
terms and conditions:

(a)     Notwithstanding any provision in this Section 12 to the contrary, Tenant
        is absolutely prohibited from making any alterations, additions,
        improvements or decorations which: (i) affect any area outside the
        Premises; (ii) affect the Building's structure, equipment, services or
        systems, or the proper functioning thereof, or Landlord's access
        thereto; (iii) affect the outside appearance, character or use of the
        Project, the Building or the Common Areas; (iv) weaken or impair the
        structural strength of the Building; (v) in the reasonable opinion of
        Landlord, lessen the value of the Project or Building; or (vi) will
        violate or require a change in any occupancy certificate applicable to
        the Premises.



                                      -13-
<PAGE>   19

(b)     Before proceeding with any Tenant Change which is not otherwise
        prohibited in Section 12.1(a) above, Tenant must first obtain
        Landlord's written approval thereof (including approval of all plans,
        specifications and working drawings for such Tenant Change), which
        approval shall not be unreasonably withheld or delayed. Notwithstanding
        the foregoing, Landlord's prior approval shall not be required for any
        Tenant Change which satisfies the following conditions (hereinafter a
        "PRE-APPROVED CHANGE"): (i) the costs of such Tenant Change does not
        exceed Thirty Thousand Dollars ($30,000.00) individually; (ii) the costs
        of such Tenant Change when aggregated with the costs of all other Tenant
        Changes made by Tenant during any year the Term of this Lease do not
        exceed One Hundred Thousand Dollars ($100,000.00); (iii) Tenant delivers
        to Landlord final plans, specifications and working drawings for such
        Tenant Change at least ten (10) days prior to commencement of the work
        thereof; (iv) Tenant and such Tenant Change otherwise satisfy all other
        conditions set forth in this Section 12.1; and (v) such Tenant Change
        does not affect the structure or the mechanical or electrical systems
        serving the Premises. Landlord's consent to such Tenant Changes shall be
        deemed granted unless within five (5) business days after receipt of
        Tenant's written request therefore accompanied by any required plans and
        specifications, Landlord notifies Tenant that such consent is denied
        stating the specific reason therefore and any modifications required for
        such consent. Notwithstanding the foregoing restrictions of this Section
        12.1(b), Landlord's consent to recarpeting or painting the interior of
        the Premises will be not be required; provided Tenant shall notify
        Landlord of any such installations in advance and shall coordinate such
        work with Landlord to avoid any interference to other tenants.

(c)     After Landlord has approved the Tenant Changes and the plans,
        specifications and working drawings therefor (or is deemed to have
        approved the Pre-Approved Changes as set forth in Section 12.1(b)
        above), Tenant shall: (i) enter into an agreement for the performance of
        such Tenant Changes with such contractors and subcontractors selected by
        Tenant and approved by Landlord, which approval Landlord shall not
        unreasonably withhold or delay (provided if Landlord shall not provide
        its approval or reasonable grounds for disapproval within five (5)
        business days, Landlord's approval shall be deemed given); (ii) before
        proceeding with any Tenant Change (including any Pre-Approved Change),
        provide Landlord with ten (10) days' prior written notice thereof; and
        (iii) pay to Landlord, within ten (10) days after written demand, the
        costs of any increased insurance premiums incurred by Landlord to
        include such Tenant Changes in the fire and extended coverage insurance
        obtained by Landlord pursuant to Section 21 below. However, Landlord
        shall be required to include the Tenant Changes under such insurance
        only to the extent such insurance is actually obtained by Landlord and
        such Tenant Changes are insurable under such insurance; if such Tenant
        Changes are not or cannot be included in Landlord's insurance, Tenant
        shall insure the Tenant Changes under its casualty insurance pursuant to
        Section 20.1(a) below. In addition, before proceeding with any Tenant
        Change, Tenant's contractors shall obtain, on behalf of Tenant and at
        Tenant's sole cost and expense all necessary governmental permits and
        approvals for the commencement and completion of such Tenant Change.
        Landlord's approval of any contractor(s) and subcontractor(s) of Tenant
        shall not release Tenant or any such contractor(s) and/or
        subcontractors) from any liability for any conduct or acts of such
        contractor(s) and/or subcontractor(s).

(d)     Tenant shall pay to Landlord, as additional rent, the reasonable costs
        not to exceed a total of One Thousand Five Hundred Dollars ($1,500.00)
        of Landlord's engineers and other consultants (but not Landlord's
        on-site management personnel) for review of all plans, specifications
        and working drawings for the Tenant Changes that require Landlord's
        consent, within thirty (30) business days after Tenant's receipt of
        invoices either from Landlord or such consultants. In addition to such
        costs, Tenant shall pay to Landlord, within ten (10) business days after
        completion of any Tenant Change, the actual, reasonable costs incurred
        by Landlord for services rendered by Landlord's management personnel
        (not to exceed $85.00 per hour) and engineers to coordinate and/or
        supervise any of the Tenant Changes to the extent such services are
        provided in excess of or after the normal on-site hours of such
        engineers and management personnel.

(e)     All Tenant Changes shall be performed: (i) in accordance with the
        approved plans, specifications and working drawings if Landlord's
        consent thereto is required; (ii) lien-free and in a first-class
        workmanlike manner; (iii) in compliance with all laws, rules,
        regulations of all governmental agencies and authorities including,
        without limitation, the provisions of the ADA then in effect (provided
        that Landlord has delivered the Premises in full compliance with all ADA
        requirements in effect as of the Commencement Date); (iv) in such a
        manner so as not to unreasonably interfere with the occupancy of any
        other tenant in the Project or Building, nor impose any additional
        expense upon nor delay Landlord in the maintenance and operation of the
        Project or Building; and (v) at such times, in such manner and subject
        to such reasonable rules and regulations as Landlord may from time to
        time reasonably designate provided that Tenant shall be entitled to make
        such Tenant Changes during normal business hours so long as the conduct
        thereof does not materially interfere with other tenants of the Project.

(f)     Throughout the performance of the Tenant Changes, Tenant shall obtain,
        or cause its contractors to obtain, workers compensation insurance and
        general liability insurance in compliance with the provisions of Section
        20 of this Lease.

12.2 REMOVAL OF TENANT CHANGES AND TENANT IMPROVEMENTS. All Tenant Improvements
and Tenant Changes in the Premises shall become the property of Landlord upon
the expiration or earlier termination of this Lease and shall remain upon and be
surrendered with the Premises upon the



                                      -14-
<PAGE>   20

expiration or earlier termination of this Lease; provided, however, Landlord
may, by written notice delivered to Tenant at the time Landlord's consent
thereto is granted or, at any time prior to the date which is thirty (30) days
before the expiration of the Lease Term (or immediately upon any sooner
termination of this Lease) as to those Tenant Changes for which Landlord's
consent is not required, identify those items of the Tenant Changes which
Landlord shall require Tenant to remove at the end of the Term of this Lease. If
Landlord requires Tenant to remove any such items as described above, Tenant
shall, at its sole cost, remove the identified items on or before the expiration
or sooner termination of this Lease and repair any damage to the Premises caused
by such removal (or shall pay to Landlord all of Landlord's costs of such
removal and repair if Tenant refuses to remove such items). In no event will
Tenant be required to remove carpets or other floor coverings or to repaint the
Premises. Tenant hereby represents and warrants that Tenant will invest
approximately Seven Hundred Fifty Thousand Dollars ($750,000.00) in the Tenant
Improvements in accordance with the terms of the Work Letter Agreement attached
to this Lease as Exhibit "C". If Tenant fails to expend Seven Hundred Fifty
Thousand Dollars ($750,000.00) on the Tenant Improvements for the Premises,
Landlord shall have the right to require that Tenant increase its Security
Deposit letter(s) of credit by the difference between Seven Hundred Fifty
Thousand Dollars ($750,000.00) and the amount actually expended by Tenant on the
Tenant Improvements, and such increased amount shall not be subject to reduction
as provided in Section 5. Landlord shall advise Tenant prior to the commencement
of construction of the Tenant Improvements, if Tenant shall be obligated to
remove any of the Tenant Improvements upon the expiration or earlier termination
of the Lease; provided, however, in any event, Tenant shall not be required to
remove electrical wiring, wiring trays, terminators, outlets, junction boxes and
the like.

12.3 REMOVAL OF PERSONAL PROPERTY. All articles of personal property owned by
Tenant or installed by Tenant at its expense in the Premises (including business
and trade fixtures, furniture and moveable partitions and all specialized data
processing equipment and telecommunications equipment including
telecommunications and computer cabling [but excluding conduit and risers for
such cabling which Tenant shall not be obligated to remove]) shall be, and
remain, the property of Tenant, and shall be removed by Tenant from the
Premises, at Tenant's sole cost and expense, on or before the expiration or
sooner termination of this Lease. Tenant shall promptly repair any damage caused
by such removal.

12.4 TENANT'S FAILURE TO REMOVE. If Tenant fails to remove by the expiration or
sooner termination of this Lease all of its personal property, or any items of
Tenant Changes identified by Landlord for removal pursuant to Section 12.2
above, or if Tenant fails to comply with its obligations under Section 12.3,
Landlord may, at its option, remove and store such items in accordance with
applicable law and/or upon ten (10) days' prior notice to Tenant, sell all or
any such items at private or public sale for such price as Landlord may obtain
as permitted under applicable law. Landlord shall apply the proceeds of any such
sale to any amounts due to Landlord under this Lease from Tenant (including
Landlord's attorneys' fees and other costs incurred in the removal, storage
and/or sale of such items), with any remainder to be paid to Tenant.

13. LIENS.

Tenant shall not permit any mechanic's, materialmen's or other liens to be filed
against all or any part of the Project, the Site, the Building or the Premises,
nor against Tenant's leasehold interest in the Premises, by reason of or in
connection with any repairs, alterations, improvements or other work contracted
for or undertaken by Tenant or any other act or omission of Tenant or Tenant's
agents, employees, contractors, licensees or invitees. Tenant shall, at
Landlord's request, provide Landlord with enforceable, unconditional and final
lien releases (and other evidence reasonably requested by Landlord to
demonstrate protection from liens) from all persons furnishing labor and/or
materials with respect to the Premises. Landlord shall have the right at all
reasonable times to post on the Premises and record any notices of
non-responsibility which it deems necessary for protection from such liens. If
any such liens are filed, Tenant shall, at its sole cost, immediately cause such
lien to be released of record or bonded to Landlord's reasonable satisfaction so
that it no longer affects title to the Project, the Site, the Building or the
Premises. If Tenant fails to cause such lien to be so released or bonded within
twenty (20) days after filing thereof, Landlord may, without waiving its rights
and remedies based on such breach, and without releasing Tenant from any of its
obligations, cause such lien to be released by any means it shall deem proper,
including payment in satisfaction of the claim giving rise to such lien. Tenant
shall pay to Landlord within thirty (30) days after receipt of invoice from
Landlord, any sum paid by Landlord to remove such liens, together with interest
at the Interest Rate from the date of such payment by Landlord. NOTICE IS HEREBY
GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS
FURNISHED OR TO BE FURNISHED TO TENANT, OR TO ANYONE HOLDING THE PREMISES
THROUGH OR UNDER TENANT, AND THAT NO MECHANICS' OR OTHER LIENS FOR ANY SUCH
LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD
IN THE PREMISES.

14. ASSIGNMENT AND SUBLETTING.

14.1 RESTRICTION ON TRANSFER. Except as otherwise expressly provided in this
Section 14, Tenant shall not, without the prior written consent of Landlord,
which consent Landlord will not unreasonably withhold, assign this Lease or any
interest herein or sublet the Premises or any part thereof, or permit the use or
occupancy of the Premises by any party other than Tenant (any such assignment,
encumbrance, sublease, license or the like shall sometimes be referred to as a
"TRANSFER"). In no event may Tenant encumber this Lease. Any Transfer without
Landlord's consent (except for a Permitted Transfer pursuant to Section 14.2
below) shall constitute a default by Tenant under this Lease, and in addition to
all of


                                      -15-
<PAGE>   21

Landlord's other remedies at law, in equity or under this Lease, such Transfer
shall be voidable at Landlord's election. In addition, this Lease shall not, nor
shall any interest of Tenant herein, be assignable by operation of law without
the written consent of Landlord.

14.2 PERMITTED CONTROLLED TRANSFERS. Notwithstanding the provisions of Sections
14.1 above to the contrary, Tenant may assign this Lease or sublet the Premises
or any portion thereof (herein, a "PERMITTED TRANSFER"), without Landlord's
consent and without extending any sublease or termination option to Landlord, to
any corporation which controls, is controlled by or is under common control with
Tenant, or to any corporation resulting from a merger or consolidation with
Tenant, or to any person or entity which acquires all the assets of Tenant's
business as a going concern, provided that: (a) at least thirty (30) days prior
to such assignment or sublease, Tenant delivers to Landlord the financial
statements and other financial and background information of the assignee or
sublessee described in Section 14.3 below; (b) if an assignment, the assignee
assumes, in full, the obligations of Tenant under this Lease (or if a sublease,
the sublessee of a portion of the Premises or Term assumes, in full, the
obligations of Tenant with respect to such portion); (c) the financial net worth
of the assignee or sublessee equals or exceeds Ninety Million Dollars
($90,000,000.00), as increased on an annual basis by the annual increase in the
consumer price index - All Items; (d) Tenant remains fully liable under this
Lease except in the case of a merger in which Tenant is not the surviving entity
in which event the net worth of the surviving entity shall not be less than
Ninety Million Dollars ($90,000,000.00), as increased on an annual basis by the
annual increase in the consumer price index - All Items; (e) the use of the
Premises under Article 6 remains unchanged; or (f) any license of the use of a
portion of the Premises by third party customers, service providers and other
parties conducting business with Tenant under a written contract with Tenant
(other than a lease, sublease or license for use of space within the Premises),
where the portion of the Premises licensed for use by such third parties does
not exceed a total of thirty percent (30%) of the rentable square footage of the
Premises and Tenant does not derive any rental profit from such licensee
occupancies.

14.3 LANDLORD'S OPTIONS. If at any time or from time to time during the Term
Tenant desires to effect a Transfer other than a Permitted Transfer, Tenant
shall deliver to Landlord written notice ("TRANSFER NOTICE") setting forth the
terms and provisions of the proposed Transfer and the identity of the proposed
assignee, sublessee or other transferee (sometimes referred to hereinafter as a
"TRANSFEREE"). Tenant shall also deliver to Landlord with the Transfer Notice, a
current financial statement and financial statements for the preceding two (2)
years of the Transferee which have been certified or audited by a reputable
independent accounting firm acceptable to Landlord, and such other information
concerning the business background and financial condition of the proposed
Transferee as Landlord may reasonably request. Except with respect to a
Permitted Transfer, Landlord shall have the option, exercisable by written
notice delivered to Tenant within twenty (20) days after Landlord's receipt of
the Transfer Notice, such financial statements and other information, either to:

(a)    approve or disapprove such Transfer, which approval shall not be
       unreasonably withheld or delayed, provided that if Landlord has not
       declined its consent in writing or stated its election pursuant to (b)
       below within twenty (20) days from receipt of Tenant's request for
       consent accompanied by all supporting data required by this Lease stating
       with specificity the reason therefore, Tenant shall deliver to Landlord a
       second request for consent, if Landlord has not delivered its consent in
       writing or stated its election pursuant to (b) below within ten (10) days
       from receipt of Tenant's second request, then Landlord's consent will be
       deemed granted; or

(b)    sublet from Tenant that portion of the Premises which Tenant has
       requested to sublease at the rental and on the other terms set forth in
       this Lease prorated for the portion of the Premises to be sublet and for
       the term set forth in Tenant's Notice, or, in the case of an assignment
       or encumbrance, terminate this Lease with respect to the entire Premises
       and recapture the Premises, which termination shall be effective ninety
       (90) days after Tenant's receipt of Landlord's notice, unless Tenant
       elects not to proceed with such sublease by written notice to Landlord
       within thirty (30) days of Landlord's notice to Tenant of its election.

If Landlord exercises its option to sublease any such space from Tenant
following Tenant's request for Landlord's approval of the proposed sublease of
such space, (i) Landlord shall be responsible for the construction of any
partitions which Landlord reasonably deems necessary to separate such space from
the remainder of the Premises, (ii) Landlord shall pay to Tenant the documented
unamortized costs of the Tenant Improvements installed in the Premises at
Tenant's cost and any documented unamortized brokerage fees paid by Tenant in
connection with its leasing of the Premises, and (iii) Landlord and any
sub-subtenant or assignee of Landlord with respect to such subleased space shall
have the right to use in common with Tenant all lavatories, corridors and
lobbies which are within the Premises and which are reasonably required for the
use of such space on the same basis and to the same extent (if any) as any
sublessee proposed by Tenant.

14.4 ADDITIONAL CONDITIONS; EXCESS RENT. If for a Transfer other than a
Permitted Transfer Landlord does not exercise its sublease or termination option
and instead approves of the proposed Transfer pursuant to Section 14.3(a) above,
Tenant may enter into the proposed Transfer with such proposed Transferee
subject to the following further conditions:

(a)    the Transfer shall be on substantially the same terms set forth in the
       Transfer Notice delivered to Landlord (if the terms have materially
       changed, Tenant must submit a revised Transfer Notice to


                                      -16-
<PAGE>   22

       Landlord and Landlord shall have another thirty (30) days after receipt
       thereof to make the election in Sections 14.3(a) or 14.3(b) above);

(b)    no Transfer shall be valid and no Transferee shall take possession of the
       Premises until an executed counterpart of the assignment, sublease or
       other instrument affecting the Transfer has been delivered to Landlord
       pursuant to which the Transferee shall expressly assume all of Tenant's
       obligations under this Lease (or with respect to a sublease of a portion
       of the Premises or for a portion of the Term, all of Tenant's obligations
       applicable to such portion);

(c)    no Transferee shall have a further right to assign, encumber or sublet,
       except on the terms herein contained; and

(d)    fifty percent (50%) of any rent or other economic consideration received
       by Tenant as a result of such Transfer which exceeds, in the aggregate,
       (i) the total rent which Tenant is obligated to pay Landlord under this
       Lease (prorated to reflect obligations allocable to any portion of the
       Premises subleased), plus (ii) any reasonable brokerage commissions,
       attorneys' fees and reasonable tenant improvement costs actually paid by
       Tenant in connection with such Transfer, shall be paid to Landlord within
       ten (10) days after receipt thereof as additional rental under this
       Lease, without affecting or reducing any other obligations of Tenant
       hereunder.

14.5 REASONABLE DISAPPROVAL. Landlord and Tenant hereby acknowledge that
Landlord's disapproval of any proposed Transfer (other than a Permitted
Transfer) pursuant to Section 14.3(a) shall be deemed reasonably withheld if
based upon any reasonable factor, including, without limitation, any or all of
the following factors: (a) the proposed Transfer would result in more than two
subleases of portions of the Premises being in effect at any one time during the
Term; (b) the proposed Transferee is an existing tenant of the Project or is
negotiating with Landlord (or has submitted to Landlord or received from
Landlord a written proposal to lease in the last six (6) months) for space in
the Project; (c) the proposed Transferee is a governmental entity; (d) the
portion of the Premises to be sublet or assigned is irregular in shape with
inadequate means of ingress and egress; (e) the use of the Premises by the
Transferee is not permitted by the use provisions in Section 6 hereof; (f) the
Transfer would likely result in significant increase in the use of the parking
areas or Common Areas by the Transferee's employees or visitors, and/or
significantly increase the demand upon services to be provided by Landlord to
the Premises; (g) the Transferee is not in Landlord's reasonable opinion of
reputable or good character; or (h) the Transferee does not have the financial
capability to fulfill the obligations imposed by this Lease. Notwithstanding any
contrary provision of this Lease, if Tenant or any proposed Transferee claims
that Landlord has unreasonably withheld or delayed its consent to a proposed
Transfer or otherwise has breached its obligations under this Section 14,
Tenant's and such Transferee's only remedy shall be to seek a declaratory
judgment and/or injunctive relief, and Tenant, on behalf of itself and, to the
extent permitted by law, such proposed Transferee waives all other remedies
against Landlord, including, without limitation, the right to seek monetary
damages or to terminate this Lease except to the extent of any claim that such
consent is withheld maliciously or in bad faith.

14.6 NO RELEASE. No Transfer shall release Tenant of Tenant's obligations under
this Lease or alter the primary liability of Tenant to pay the rent and to
perform all other obligations to be performed by Tenant hereunder. Landlord may
require that any Transferee remit directly to Landlord on a monthly basis, all
monies due Tenant by said Transferee, and each sublease shall provide that if
Landlord gives said sublessee written notice that Tenant is in default under
this Lease, said sublessee will thereafter make all payments due under the
sublease directly to or as directed by Landlord, which payments will be credited
against any payments due under this Lease. Tenant hereby irrevocably and
unconditionally assigns to Landlord all rents and other sums payable under any
sublease of the Premises; provided, however, that Landlord hereby grants Tenant
a license to collect all such rents and other sums so long as Tenant is not in
default under this Lease beyond the period of notice and opportunity to cure
provided herein. Tenant shall, within ten (10) days after the execution and
delivery of any assignment or sublease, deliver a duplicate original copy there
of to Landlord. However, the acceptance of rent by Landlord from any other
person shall not be deemed to be a waiver by Landlord of any provision hereof.
Consent by Landlord to one Transfer shall not be deemed consent to any
subsequent Transfer. In the event of default by any Transferee of Tenant or any
successor of Tenant in the performance of any of the terms hereof, Landlord may
proceed directly against Tenant without the necessity of exhausting remedies
against such Transferee or successor. Landlord may consent to subsequent
assignments of the Lease or sublettings or amendments or modifications to the
Lease with assignees of Tenant, without notifying Tenant, or any 'successor of
Tenant, and without obtaining its or their consent thereto and any such actions
shall not relieve Tenant or any sublessee or assignee of liability under this
Lease.

14.7 ADMINISTRATIVE AND ATTORNEYS' FEES. If Tenant effects a Transfer or
requests the consent of Landlord to any Transfer, then Tenant shall, within
thirty (30) days after receipt of a bill accompanied by a copy of any legal bill
related thereto, pay Landlord any reasonable attorneys' fees and costs not to
exceed a total of One Thousand Dollars ($1,000.00) incurred by Landlord in
connection with such Transfer or request for consent. Acceptance of and/or
reimbursement of Landlord's attorneys' fees shall in no event obligate Landlord
to consent to any proposed Transfer.

14.8 MATERIAL INDUCEMENT. Tenant understands, acknowledges and agrees that (a)
Landlord's option to sublease from Tenant any space which Tenant proposes to
sublease or terminate this Lease upon any proposed assignment or encumbrance of
this Lease by Tenant, other than a Permitted Transfer as provided in Section
14.3(b) above, rather than approve the proposed sublease, assignment or


                                      -17-
<PAGE>   23

encumbrance, and (b) Landlord's right to receive fifty percent (50%) of any
excess consideration paid by a Transferee in connection with an approved
Transfer as provided in Section 14.4(d) above, are a material inducement for
Landlord's agreement to lease the Premises to Tenant upon the terms and
conditions herein set forth.

14.9 JUDICIAL REFERENCE. In the event of any dispute between the parties
pertaining to any matters under this Article 14, the parties agree to submit
such dispute to judicial reference pursuant to Section 24.

15. ENTRY BY LANDLORD.

Landlord and its employees and agents shall at all reasonable times have the
right to enter the Premises to inspect the same, to supply janitorial service
and any other service required to be provided by Landlord to Tenant under this
Lease, to exhibit the Premises to prospective lenders or purchasers (or during
the last year of the Term, to prospective tenants), to post notices of
non-responsibility, and/or to alter, improve or repair the Premises or any other
portion of the Building or Project. The foregoing entries by Landlord will not
entitle Tenant to an abatement of rent or constitute breach of Landlord's
covenant of quiet enjoyment, except to the extent that improvements or repairs
to the Premises or the Project are performed by Landlord in a negligent manner
(other than those resulting from the acts or neglect of Tenant) and result in a
material interference with the conduct of Tenant's business. In exercising such
entry rights, Landlord shall endeavor to minimize, as reasonably practicable,
the interference with Tenant's business, and shall provide Tenant with
reasonable advance written notice of such entry (except in emergency situations
and for scheduled services). Any dispute between the parties concerning
Landlord's conduct under this Section 15 will be resolved pursuant to Section 24
of this Lease. For each of the foregoing purposes, Landlord shall at all times
have and retain a key with which to unlock all of the doors in, upon and about
the Premises, excluding Tenant's vaults and safes, and Landlord shall have the
means which Landlord may deem proper to open said doors in an emergency in order
to obtain entry to the Premises. Except with respect to scheduled janitorial
services, Landlord will not be entitled to access to the Premises without the
accompaniment of an officer of Tenant or person designated by an officer of
Tenant.

16. UTILITIES AND SERVICES.

16.1 STANDARD UTILITIES AND SERVICES. Landlord shall furnish or cause to be
furnished to the Premises the following minimum utilities and services (Landlord
reserves the right to adopt nondiscriminatory reasonable modifications and
additions to the following provisions from time to time):

(a)    Landlord shall make the elevator of the Building available for Tenant's
       non-exclusive use, twenty four (24) hours per day.

(b)    Landlord shall furnish during the Business Hours for the Building
       specified in Section 1.17 of the Summary, heating, ventilation and air
       conditioning ("HVAC") for the Premises as required for the comfortable
       and normal occupancy of the Premises. The cost of maintenance and service
       calls to adjust and regulate the HVAC system shall be charged to Tenant
       if the need for maintenance work results from either Tenant's adjustment
       of room thermostats or Tenant's failure to comply with its obligations
       under this Section 16, including keeping window coverings closed as
       needed. Such work shall be charged at hourly rates equal to then-current
       journeyman's wages for HVAC mechanics. HVAC will be separately metered to
       the Premises.

(c)    Landlord shall furnish to the Premises twenty-four (24) hours per day,
       reasonable quantities of electric current as required by the Final Plans
       which will be submetered to the Premises. Landlord shall also furnish
       water to the Premises twenty-four (24) hours per day for drinking and
       lavatory purposes, in such quantities as required in Landlord's judgment
       for the comfortable and normal use of the Premises. If Tenant requires or
       consumes water in excess of what is considered reasonable or normal by
       Landlord, Landlord may require Tenant to pay to Landlord, as additional
       rent, the cost as fairly determined by Landlord incurred for such excess
       usage.

(d)    Landlord shall furnish janitorial services to the Premises five (5) days
       per week pursuant to janitorial and cleaning specifications attached as
       Exhibit "G" to this Lease. No person(s) other than those persons approved
       by Landlord shall be permitted to enter the Premises for such purposes.
       Janitor service will not be furnished to rooms occupied after 7:30 p.m.
       or to rooms which are locked unless a key is furnished to the Landlord
       for use by the janitorial contractor. Window cleaning shall be done only
       by Landlord, at such time and frequency as determined by Landlord at
       Landlord's sole discretion but not less often than twice per annum.
       Tenant shall pay to Landlord the cost of removal of any of Tenant's
       refuse and rubbish to the extent that the same exceeds the refuse and
       rubbish usually attendant upon the use of the Premises as offices. If
       janitorial services provided to the Premises by Landlord pursuant to and
       as part of Operating Expenses are inadequate in Tenant's reasonable
       opinion, Tenant will notify Landlord in writing. Landlord will utilize
       reasonable efforts and due diligence to satisfy or cause to be satisfied
       Tenant's reasonable objections to such service. Tenant may require a
       change in janitorial service to the Premises if such service remains
       unsatisfactory after providing to Landlord written notice of the details
       with respect to which such service is unsatisfactory and the expiration
       of a thirty (30) day period in which to correct such deficiencies,
       provided that if Landlord and Tenant cannot agree upon a replacement
       janitorial service within a reasonable time, Tenant shall contract for
       its own janitorial service to the Premises only (subject to Landlord's
       right to reasonably approve the


                                      -18-
<PAGE>   24

       scope of janitorial services to the Premises if the scope of such
       services is other than as set forth on Exhibit "G"), and Tenant shall pay
       all costs of such service directly, without any limitation on such
       charges.

(e)    Landlord may provide security service or protection in the Building, in
       any manner deemed reasonable by Landlord at Landlord's sole discretion,
       from the Commencement Date throughout the Term.

(f)    Landlord will install electricity and HVAC meters in the Premises to
       measure Tenant's consumption of such utilities, including any after-hours
       and extraordinary usage described above at Tenant's sole cost and expense
       or as a charge against the Allowance pursuant to Final Plans.

The costs of Building services shall be included in Operating Expenses and all
charges with respect to utilities shall be included in Utilities Costs as
defined in Section 4.7 above. Landlord may, but is not obligated to, provide
additional services requested by Tenant; provided, however, that if Landlord
does provide such extra services as requested by Tenant, Tenant agrees to pay a
five percent (5%) administration fee for the provisions of such services. Tenant
will pay the cost of utilities separately metered to the Premises in lieu of any
charge therefore as Utility Costs, except to the extent such utilities are
provided to the Common Areas.

Landlord shall have the right at any time and from time-to-time during the Lease
Term to contract for service from any company or companies providing electricity
service other than Alameda Power ("SERVICE PROVIDER"). Tenant shall cooperate
with Landlord and the Service Provider at all times and, as reasonably
necessary, shall allow Landlord and Service Provider reasonable access to the
Building's electric lines, feeders, risers, wiring, and any other machinery
within the Premises. Landlord shall in no way be liable or responsible for any
loss, damage, or expense that Tenant may sustain or incur by reason of any
change, failure, interference, disruption, or defect in the supply or character
of the electric energy furnished to the Premises, or if the quantity or
character of the electric energy supplied by the Service Provider is no longer
available or suitable for Tenant's requirements, no such change, failure,
defect, unavailability, or unsuitability shall constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any abatement
or diminution of rent, or relieve Tenant from any of its obligations under the
Lease.

16.2 TENANT'S OBLIGATIONS. Tenant shall cooperate fully at all times with
Landlord, and abide by all reasonable non-discriminating regulations and
requirements which Landlord may prescribe for the proper functioning and
protection of the Building's services and systems. Tenant shall not use any
apparatus or device in, upon or about the Premises pursuant to the Final Plans
which may in any way increase the amount of services or utilities usually
furnished or supplied to the Premises or other premises in the Building. In
addition, Tenant shall not connect any conduit, pipe, apparatus of other device
to the Building's water, waste or other supply lines or systems for any purpose.
Neither Tenant nor its employees, agents, contractors, licensees or invitees
shall at any time enter, adjust, tamper with, touch or otherwise in any manner
affect the mechanical installations or facilities of the Building.

16.3 FAILURE TO PROVIDE UTILITIES. Landlord's failure to furnish any of the
utilities and services described in Section 16.1 above when such failure is
caused by all or any of the following shall not result in any liability of
Landlord: (a) accident, breakage or repairs; (b) strikes, lockouts or other
labor disturbances or labor disputes of any such character; (c) governmental
regulation, moratorium or other governmental action; (d) inability, despite the
exercise of reasonable diligence, to obtain electricity, water or fuel; or (e)
any other cause beyond Landlord's reasonable control. In addition, in the event
of the failure of any said utilities or services, no eviction of Tenant shall
result, Tenant shall not be relieved from the performance of any covenant or
agreement in this Lease and Tenant shall not be entitled to any abatement or
reduction of rent unless such failure or interruption results from an elective
change in Service Providers initiated by Landlord or the negligence of Landlord,
its agents, employees or contractors, where such interruption in services
continues for more than twenty four (24) hours (except as expressly provided in
Sections 18.3 and 19.2 if such failure is a result of a damage or taking
described therein and except that if Tenant shall be unable under applicable
laws to maintain and operate its back up Generator system as provided in Section
36 below, the time frame for which interruption of utility service shall result
in rent abatement as provided herein shall be reduced to eight [8] hours), in
which event Tenant will be entitled to as its sole remedy an abatement of rent
to the extent of and for the duration of the interruption in utilities and
services from the commencement of interruption until utilities or services are
restored. In the event of any stoppage or interruption of services or utilities,
Landlord shall diligently attempt to resume such services or utilities as
promptly as practicable. Tenant hereby waives the provisions of California Civil
Code Section 1932(1) or any other applicable existing or future law, ordinance
or governmental regulation permitting the termination of this Lease due to an
interruption, failure or inability to provide any services.

17. INDEMNIFICATION AND EXCULPATION.

17.1 TENANT'S ASSUMPTION OF RISK AND WAIVER. Subject to the terms of Section 22
and except to the extent such matter is not covered by the insurance required to
be maintained by Tenant under this Lease and such matter is attributable to the
negligence or willful misconduct of Landlord, Landlord shall not be liable to
Tenant, Tenant's employees, agents or invitees for: (i) any damage to property
of Tenant, or of others, located in, on or about the Premises, nor for (ii) the
loss of or damage to any property of Tenant or of others by theft or otherwise,
(iii) any injury or damage to persons or property resulting from fire,


                                      -19-
<PAGE>   25

explosion, falling plaster, steam, gas, electricity, water, rain or leaks from
any part of the Premises or from the pipes, appliance of plumbing works or from
the roof, street or subsurface or from any other places or by dampness or by any
other cause of whatsoever nature, or (iv) any such damage caused by other
tenants or persons in the Premises, occupants of adjacent property of the
Project, or the public, or caused by operations in construction of any private,
public or quasi-public work. Landlord shall in no event be liable to Tenant for
any consequential damages or for loss of revenue or income and Tenant waives any
and all claims for any such damages. Notwithstanding anything to the contrary
contained in this Section 17.1, all property of Tenant, its agents, employees
and invitees kept or stored on the Premises, whether leased or owned by any such
parties, shall be so kept or stored at the sole risk of Tenant and Tenant shall
hold Landlord harmless from any claims arising out of damage to the same,
including subrogation claims by Tenant's insurance carriers, unless such damage
shall be caused by the negligence or willful misconduct of Landlord. Landlord or
its agents shall not be liable for interference with the light or other
intangible rights.

17.2 TENANT'S INDEMNIFICATION OF LANDLORD. Tenant shall be liable for, and shall
indemnify, defend, protect and hold Landlord and Landlord's members, partners,
officers, directors, shareholders, employees, agents, successors and assigns
(collectively, "LANDLORD INDEMNIFIED PARTIES") harmless from and against, any
and all claims, damages, judgments, suits, causes of action, losses, liabilities
and expenses, including attorneys' fees and court costs (collectively,
"INDEMNIFIED CLAIMS"), arising or resulting from (a) any occurrence at the
Premises following the date Landlord delivers all or any portion of the Premises
to Tenant, unless caused by the negligence or willful misconduct of Landlord or
its agents, employees or contractors, (b) any act or omission of Tenant or any
of Tenant's agents, employees, contractors, subtenants, assignees, licensees or
with respect to acts or omissions within the Premises only, Tenant's invitees
(collectively, "TENANT PARTIES"); (c) the use of the Premises and Common Areas
and conduct of Tenant's business by Tenant or any Tenant Parties, or any other
activity, work or thing done, permitted or suffered by Tenant or any Tenant
Parties, in or about the Premises, the Building or elsewhere in the Project;
and/or (d) any default by Tenant of any obligations on Tenant's part to be
performed under the terms of this Lease or the terms of any contract or
agreement to which Tenant is a party or by which it is bound, affecting this
Lease or the Premises. Tenant shall in no event be liable to Landlord for any
consequential damages or for loss of revenue or income and Landlord waives any
and all claims for any such damages. The foregoing indemnification shall
include, but not be limited to, any injury to, or death of, any person, or any
loss of, or damage to, any property on the Premises, or on adjoining sidewalks,
streets or ways, or connected with the use, condition or occupancy thereof,
whether or not Landlord or its mortgagee has or should have knowledge or notice
of the defect or conditions causing or contributing to such injury, death, loss
or damage. In case any action or proceeding is brought against Landlord or any
Landlord Indemnified Parties by reason of any such Indemnified Claims, Tenant,
upon notice from Landlord, shall defend the same at Tenant's expense by counsel
reasonably acceptable to Landlord.

17.3 LANDLORD'S INDEMNIFICATION OF TENANT. Notwithstanding anything to the
contrary contained in Section 17.1 or 17.2, Tenant shall not be required to
protect, defend, save harmless or indemnify Landlord from any liability for
injury, loss, accident or damage to any person resulting from (i) Landlord's
negligent acts or omissions or willful misconduct or that of its agents,
contractors, servants, employees or licensees, in connection with Landlord's
activities on or about the Premises or elsewhere in the Project or (ii) any
occurrence within the Project, but outside of the Premises, unless caused by the
negligence or willful misconduct of Tenant or any Tenant Parties, and subject to
the terms of Section 22, Landlord hereby indemnifies and agrees to protect,
defend and hold Tenant harmless from and against Indemnified Claims arising out
of Landlord's negligent acts or omissions or willful misconduct or those of its
agents, contractors, servants, employees or licensees or any other occurrence
anywhere within the Project outside of the Premises unless caused by the
negligence or willful misconduct of Tenant or any Tenant Parties, provided
Landlord shall in no event be liable to Tenant for any consequential damages or
for loss of revenue or income and Tenant waives any and all claims for any such
damages. Landlord's and Tenant's indemnification obligations hereunder may or
may not be coverable by insurance, but the failure of either Landlord or Tenant
to carry insurance covering the indemnification obligation shall not limit their
indemnity obligations hereunder.

17.4 SURVIVAL; NO RELEASE OF INSURERS. The indemnification obligations under
Section 17.2 and 17.3 shall survive the expiration or earlier termination of
this Lease. Landlord's and Tenant's covenants, agreements and indemnification in
Sections 17.1, 17.2 and 17.3 above are not intended to and shall not relieve any
insurance carrier of its obligations under policies required to be carried by
Landlord and Tenant pursuant to the provisions of this Lease.

18. DAMAGE OR DESTRUCTION.

18.1 LANDLORD'S RIGHTS AND OBLIGATIONS. In the event the Premises or any part of
the Building is damaged by fire or other casualty to an extent not exceeding
fifty percent (50%) of the full replacement cost thereof, and Landlord's
contractor estimates in a writing delivered to the parties that the damage
thereto is such that the Building and/or Premises may be repaired, reconstructed
or restored to substantially its condition immediately prior to such damage
within two hundred seventy (270) days, then Landlord shall commence and proceed
diligently with the work of repair, reconstruction and restoration and this
Lease shall continue in full force and effect. If, however, the Premises or any
other part of the Building is damaged to an extent exceeding fifty percent (50%)
of the full replacement cost thereof, or Landlord's architect reasonably
determines that such work of repair, reconstruction and restoration will require
longer than two hundred seventy (270) days to complete, then Landlord may elect
to either:


                                      -20-
<PAGE>   26

(a)    repair, reconstruct and restore the portion of the Building and Premises
       damaged by such casualty (including the Tenant Improvements and, to the
       extent of insurance proceeds received from Tenant, Tenant Changes), in
       which case this Lease shall continue in full force and effect; or

(b)    terminate this Lease effective as of the date which is thirty (30) days
       after Tenant's receipt of Landlord's election to so terminate.

Under any of the conditions of this Section 18.1, Landlord shall give written
notice to Tenant of its intention to repair or terminate within thirty (30) days
after the casualty.

If the Premises are destroyed and Landlord's contractor determines that the
Premises cannot be restored within 270 days from the date of the casualty,
Tenant will have the right to cancel this Lease by written notice to Landlord
within sixty (60) days after the occurrence of the casualty. If Landlord's
contractor determines that the Premises can be restored within 270 days and
Landlord elects to rebuild the Premises or the Building and such reconstruction
is not completed within two hundred seventy (270) days from the date of the
casualty (subject to extension for Force Majeure Delays not to exceed 30 days
and Tenant Delays) Tenant may terminate this Lease on thirty (30) days written
notice to Landlord.

18.2 TENANT'S COSTS AND INSURANCE PROCEEDS. In the event of any damage or
destruction of all or any part of the Premises, Tenant shall immediately: (a)
notify Landlord thereof; and (b) make available to Landlord by depositing into
an escrow account for disbursement to Landlord during the course of
reconstruction, all insurance proceeds received by Tenant with respect to the
Tenant Improvements (including any Tenant Improvements installed at Tenant's
expense as described in the Work Letter) and Tenant Changes in the Premises
(excluding proceeds for Tenant's furniture and other personal property). If, for
any reason (including Tenant's failure to obtain insurance for the full
replacement cost of any Tenant Improvements paid for by Tenant or Tenant Changes
which Tenant is required to insure pursuant to Sections 12.1(c) and/or 20.1(a)
hereof), Tenant fails to receive insurance proceeds covering the full
replacement cost of such Tenant Improvements paid for by Tenant or Tenant
Changes which are damaged, Tenant shall be deemed to have self-insured the
replacement cost of such Tenant Improvements paid for by Tenant or Tenant
Changes, and upon any damage or destruction thereto, Tenant shall make available
to Landlord the full replacement cost of such items, less any insurance proceeds
actually received by Landlord from Landlord's or Tenant's insurance with respect
to such items. If the Lease is terminated pursuant hereto, Tenant will be
entitled to retain from Tenant's insurance proceeds all sums in excess of the
remaining unamortized balance of the Allowance amortized over the Term of the
Lease and the replacement cost of the Tenant Improvements paid for by Tenant and
any Tenant Changes amortized over the Lease Term. All such insurance proceeds
paid to Landlord shall be utilized to restore the Premises, the Tenant
Improvements, and the Tenant Changes. Any remaining sum will be paid to Tenant.

18.3 ABATEMENT OF RENT. In the event that as a result of any such damage,
repair, reconstruction and/or restoration of the Premises, the Building or any
of the parking to be provided to Tenant hereunder, Tenant is prevented from
using, and does not use, the Premises or any portion thereof or any of its
allocable share of parking within the Project (and Landlord is unable to provide
reasonably proximate replacement parking to satisfy Tenant's parking
requirements under this Lease) pursuant to the requirements of Landlord or the
City and/or County in which the Premises are located, then the rent shall be
abated or reduced, as the case may be, during the period that Tenant continues
to be so prevented from using and does not use the Premises or portion thereof
or such parking, in the proportion that the Rentable Square Feet of the portion
of the Premises that Tenant is prevented from using, and does not use, bears to
the total Rentable Square Feet of the Premises, as respects any damage to the
Building or the Premises and in the proportion that the number of Tenant's
allocable share of parking spaces which Tenant is prevented from using, and does
not use, bears to the total number of Tenant's allocable share of parking
spaces. Except for abatement of rent as provided hereinabove, Tenant shall not
be entitled to any compensation or damages for loss of, or interference with,
Tenant's business or use or access of all or any part of the Premises resulting
from any such damage, repair, reconstruction or restoration.

18.4 DAMAGE NEAR END OF TERM. In addition to its termination rights in Sections
18.1 and 18.4 above, Landlord shall have the right to terminate this Lease if
any damage to the Building or Premises occurs during the last twelve (12) months
of the Term of this Lease and Landlord's contractor estimates in a writing
delivered to the parties that the repair, reconstruction or restoration of such
damage cannot be completed within the earlier of (a) the scheduled expiration
date of the Lease Term, or (b) sixty (60) days after the date of such casualty,
unless Tenant exercises its option to extend the Term of this Lease pursuant to
Rider No. 1 to this Lease.

18.5 WAIVER OF TERMINATION RIGHT. This Lease sets forth the terms and conditions
upon which this Lease may terminate in the event of any damage or destruction.
Accordingly, the parties hereby waive the provisions of California Civil Code
Section 1932, Subsection 2, and Section 1933, Subsection 4 (and any successor
statutes thereof permitting the parties to terminate this Lease as a result of
any damage or destruction).

19. EMINENT DOMAIN.

19.1 SUBSTANTIAL TAKING. Subject to the provisions of Section 19.4 below in case
the whole of the Premises, or such part thereof as shall substantially interfere
with Tenant's use and occupancy of the Premises as reasonably determined by
Tenant, shall be taken for any public or quasi-public purpose by


                                      -21-
<PAGE>   27

any lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or sold to prevent such taking, Landlord,
subject to space availability, shall have the right at Landlord's sole cost and
expense to relocate Tenant to comparable space within the Project acceptable to
Tenant in its sole discretion, and if no such space is then available, Landlord
shall notify Tenant and either party shall have the right to terminate this
Lease effective as of the date possession is required to be surrendered to said
authority.

19.2 PARTIAL TAKING; ABATEMENT OF RENT. In the event of a taking of a portion of
the Premises which does not substantially interfere with the conduct of Tenant's
business, then, except as otherwise provided in the immediately following
sentence, neither party shall have the right to terminate this Lease and
Landlord shall thereafter proceed to make a functional unit of the remaining
portion of the Premises, and rent shall be abated with respect to the part of
the Premises which Tenant shall be so deprived on account of such taking.
Notwithstanding the immediately preceding sentence to the contrary, if any part
of the Building or the Site shall be taken (whether or not such taking
substantially interferes with Tenant's use of the Premises), Landlord may
terminate this Lease upon thirty (30) days' prior written notice to Tenant as
long as Landlord also terminates leases of all other tenants in the Building.

19.3 CONDEMNATION AWARD. Subject to the provisions of Section 19.4 below, in
connection with any taking of the Premises or Building, Landlord shall be
entitled to receive the entire amount of any award which may be made or given in
such taking or condemnation without deduction or apportionment for any estate or
interest of Tenant, provided Landlord and Tenant shall share equally any such
award for any so-called bonus or excess value of this Lease, in which event
Tenant shall assert a claim against the taking authority for such bonus or
excess value of this Lease. In addition, if any portion of the Premises is
taken, Tenant shall have the right to recover from the condemning authority (but
not from Landlord) any compensation as may be separately awarded or recoverable
by Tenant for the taking of Tenant's furniture, fixtures, equipment and other
personal property within the Premises, for the unamortized value of any
alterations and Tenant Changes paid for by Tenant (but not for any of the
initial Tenant Improvements paid for by Tenant, the award for which Landlord
shall be entitled to retain), for Tenant's relocation expenses, and for any loss
of goodwill or other damage to Tenant's business by reason of such taking.

19.4 TEMPORARY TAKING. In the event of a taking of the Premises or any part
thereof for temporary use, (a) this Lease shall be and remain unaffected thereby
and, at Landlord's election, (a) rent shall not abate, or (b) Tenant shall
receive for itself such portion or portions of any award made for such use with
respect to the period of the taking which is within the Term, provided that if
such taking shall remain in force at the expiration or earlier termination of
this Lease, Tenant shall perform its obligations under Section 9 with respect to
surrender of the Premises and shall pay to Landlord the portion of any award
which is attributable to any period of time beyond the Term expiration date. For
purpose of this Section 19.4, a temporary taking shall be defined as a taking
for a period of two hundred seventy (270) days or less.

19.5 WAIVER OF TERMINATION RIGHT. This Lease sets forth the terms and conditions
upon which this Lease may terminate in the event of a taking. Accordingly, the
parties waive the provisions of the California Code of Civil Procedure Section
1265.130 and any successor or similar statutes permitting the parties to
terminate this Lease as a result of a taking.

20. TENANT'S INSURANCE.

20.1 TYPES OF INSURANCE, On or before the earlier of the Commencement Date or
the date Tenant commences or causes to be commenced any work of any type in or
on the Premises pursuant to this Lease, and continuing during the entire Term,
Tenant shall obtain and keep in full force and effect, the following insurance:

(a)    Special Form (formerly known as All Risk) insurance, including fire and
       extended coverage, sprinkler leakage (including earthquake sprinkler
       leakage), vandalism, malicious mischief plus earthquake and flood
       coverage upon property of every description and kind owned by Tenant and
       located in the Premises or Building, or for which Tenant is legally
       liable or installed by or on behalf of Tenant including, without
       limitation, furniture, equipment and any other personal property, and any
       Tenant Changes (but excluding the initial Tenant Improvements previously
       existing or installed in the Premises), in an amount not less than the
       full replacement cost thereof.

(b)    Commercial general liability insurance coverage on an occurrence basis,
       including personal injury, bodily injury (including wrongful death),
       broad form property damage, operations hazard, owner's protective
       coverage, contractual liability, host liquor liability (if Tenant serves
       alcohol on the Premises), products and completed operations liability,
       with an initial combined single limit of liability of not less than Three
       Million Dollars ($3,000,000.00). The limits of liability of such
       commercial general liability insurance shall be adjusted every five (5)
       years during the Term of this Lease to an amount reasonably required by
       Landlord, but not to exceed limits of liability required for comparable
       office building projects in Alameda County, California. The limits
       required for Tenant's commercial general liability insurance may be met
       under an umbrella policy.

(c)    Worker's compensation and employer's liability insurance, in statutory
       amounts and limits, covering all persons employed in connection with any
       work done on or about the Premises for


                                      -22-
<PAGE>   28

       which claims for death or bodily injury could be asserted against
       Landlord, Tenant or the Premises.

(d)    Commercial automobile liability insurance.

(e)    Any other form or forms of insurance as Tenant or Landlord or the
       mortgagees of Landlord may reasonably require from time to time, in form,
       amounts and for insurance risks against which a prudent tenant of
       comparable office parks in the City of Alameda, California would protect
       itself, but only to the extent such risks and amounts are available in
       the insurance market at commercially reasonable costs.

20.2 REQUIREMENTS. Each policy required to be obtained by Tenant hereunder
shall: (a) be issued by insurers which are authorized to do business in the
state in California and rated not less than financial class VIII, and not less
than policyholder rating A in the most recent version of Best's Key Rating Guide
(provided that, in any event, the same insurance company shall provide the
coverages described in Sections 20.1 (a) and 20.1 (d) above); (b) name Tenant as
named insured thereunder and shall name by endorsement Landlord and, at
Landlord's request, Landlord's mortgagee, property manager, joint venture
partner(s) and/or investor(s) as additional insureds thereunder as to Tenant's
commercial general liability insurance only, all as their respective interests
may appear; (c) not have a deductible amount exceeding Twenty-Five Thousand
Dollars ($25,000.00), which deductible amount shall be deemed self-insured with
full waiver of subrogation; (d) specifically provide that the insurance afforded
by such policy for the benefit of Landlord and any other additional insureds
shall be primary, and any insurance carried by Landlord or any other additional
insureds shall be excess and non-contributing; (e) contain an endorsement that
the insurer waives its right to subrogation as described in Section 22 below;
(f) require the insurer to notify Landlord (and any other additional insureds)
in writing not less than thirty (30) days prior to any material change,
reduction in coverage, cancellation or other termination thereof; (g) contain a
cross liability or severability of interest endorsement; and (h) be in amounts
sufficient at all times to satisfy any coinsurance requirements thereof. Each
property insurance policy shall also provide that any loss otherwise payable
thereunder shall be payable notwithstanding (i) any act or omission of Landlord
or Tenant which might, absent such provision, result in a forfeiture of all or a
part of such insurance payment, (ii) any foreclosure or other action or
proceeding taken by any mortgagee pursuant to any provision of the mortgage upon
the happening of a default thereunder, or (iii) any change in title or ownership
of the Premises provided notice of any such change in title or ownership of the
Premises has been provided to Tenant. Tenant agrees to deliver to Landlord, as
soon as practicable after the placing of the required insurance, but in no event
later than the date Tenant is required to obtain such insurance as set forth in
Section 20.1 above, certificates from the insurance company evidencing the
existence of such insurance and Tenant's compliance with the foregoing
provisions of this Section 20. Tenant shall cause replacement policies or
certificates to be delivered to Landlord not less than ten (10) days prior to
the expiration of any such policy or policies. If any such initial or
replacement policies or certificates are not furnished within the time(s)
specified herein, Tenant shall be deemed to be in material default under this
Lease, Landlord upon five (5) days notice to Tenant shall have the right, but
not the obligation, to procure such policies and certificates at Tenant's
expense.

20.3 EFFECT ON INSURANCE. Tenant shall not do or permit to be done anything
which will (a) violate or invalidate any insurance policy maintained by Landlord
or Tenant hereunder, or (b) increase the costs of any insurance policy
maintained by Landlord pursuant to Section 21 or otherwise with respect to the
Building or the Project. If Tenant's occupancy or conduct of its business in or
on the Premises results in any increase in premiums for any insurance carried by
Landlord with respect to the Building or the Project, Tenant shall pay such
increase as additional rent within ten (10) days after being billed therefor by
Landlord, provided such bill is preceded by a notice to Tenant that gives Tenant
a reasonable opportunity to cease such activity and further provided that such
bill must state with specificity the amount charged related to such specific
activity. If any insurance coverage carried by Landlord pursuant to Section 21
or otherwise with respect to the Building or the Project shall be canceled or
reduced (or cancellation or reduction thereof shall be threatened) by reason of
the use or occupancy of the Premises by Tenant or by anyone permitted by Tenant
to be upon the Premises, and if Tenant fails to remedy such condition within ten
(10) days after receipt of notice thereof, Tenant shall be deemed to be in
default under this Lease, without the benefit of any additional notice or cure
period specified in Section 23.1 below, and Landlord shall have all remedies
provided in this Lease, at law or in equity, including, without limitation, the
right (but not the obligation) to enter upon the Premises and attempt to remedy
such condition at Tenant's cost.

20.4 SELF-INSURANCE. At Tenant's option, provided Tenant maintains a minimum net
worth of One Hundred Twenty Five Million Dollars ($125,000,000.00) or more,
Tenant may elect to self-insure all or any part of such required insurance
coverage.

21. LANDLORD'S INSURANCE.

During the Term, Landlord shall insure the Project Common Areas, the Building,
the Premises and the Tenant Improvements initially installed in the Premises
pursuant to Exhibit "C" (excluding, however, Tenant's furniture, equipment and
other personal property and any Tenant Changes) against damage by fire and
standard extended coverage perils and with vandalism and malicious mischief
endorsements, rental loss coverage for a period not to exceed twelve (12)
months, at Landlord's option, earthquake damage coverage. In no event will
Tenant be obligated to pay more than Twenty Five Thousand Dollars ($25,000.00)
per annum on account of any earthquake and flood insurance. Tenant will not be
obligated


                                      -23-
<PAGE>   29

to pay more than Tenant's Percentage of the Building Percentage of any
deductible on Landlord's property insurance policies described herein (Tenant's
Percentage of the Building Percentage of Landlord's property insurance
deductible amount for the Project as of the date hereof being $165,000.00),
provided such maximum liability of Tenant shall reduce effective as of the
commencement of the seventh (7th) Lease Year and as of the commencement of each
Lease Year thereafter by Twenty Percent (20%), such that commencing as of the
commencement of the tenth (10th) Lease Year of the Term, Tenant's maximum
liability under this sentence shall be Twenty Percent (20%) of Tenant's
Percentage of the Building Percentage of Landlord's then property insurance
deductible amount; provided, further, however, that if Tenant exercises its
Option to Extend contained in Rider No. 1 to this Lease, Tenant's maximum
liability shall be reinstated to 100% of Tenant's Percentage of the Building
Percentage of Landlord's property insurance deductible and shall thereafter be
reduced effective as of the commencement of the second Lease Year of the Option
Term and as of the commencement of each Lease Year thereafter by Twenty Percent
(20%), such that commencing as of the commencement of the final Lease Year of
the Option Term, Tenant's maximum liability under this sentence shall be Twenty
Percent (20%) of Tenant's Percentage of the Building Percentage of Landlord's
then property insurance deductible amount. Such insurance shall be in the amount
of one hundred percent (100%) of the replacement value with deductibles not
exceeding fifteen percent (15%) thereof.

Landlord shall also carry commercial general liability insurance, in such
reasonable amounts and with such reasonable deductibles as would be carried by a
prudent owner of a similar building in the state of California, with deductibles
not in excess of commercially reasonable deductibles for comparable office
building projects in Alameda County.

Each policy required to be obtained by Landlord hereunder shall be issued by
insurers which are authorized to do business in the state in California and
rated not less than financial class VIII, and not less than policyholder rating
A in the most recent version of Best's Key Rating Guide. Landlord's commercial
general liability policy shall name Landlord as named insured thereunder and
shall name Tenant by endorsement as an additional insured. At Landlord's option,
all such insurance may be carried under any blanket or umbrella policies which
Landlord has in force for other buildings and projects. In addition, at
Landlord's option, provided Landlord maintains a minimum net worth of One
Hundred Twenty Five Million Dollars ($125,000,000.00) or more, Landlord may
elect to self-insure all or any part of such required insurance coverage.
Landlord may, but shall not be obligated to, carry any other form or forms of
insurance as Landlord or the mortgagees or ground lessors of Landlord may
reasonably determine is advisable.

22. WAIVER OF CLAIMS; WAIVER OF SUBROGATION.

22.1 MUTUAL WAIVER OF PARTIES. Landlord and Tenant hereby waive their rights
against each other with respect to any claims or damages or losses which are
caused by or result from (a) any peril insured against under any property
insurance policy carried by Landlord or Tenant (as the case may be) pursuant to
the provisions of this Lease and enforceable at the time of such damage or loss,
or (b) any peril which would have been covered under any property insurance
required to be obtained and maintained by Landlord or Tenant (as the case may
be) under Sections 20 and 21 of this Lease (as applicable) had such property
insurance been obtained and maintained as required therein. The foregoing
waivers shall be in addition to, and not a limitation of, any other waivers or
releases contained in this Lease.

22.2 WAIVER OF INSURERS. Each party shall cause each property insurance policy
required to be obtained by it pursuant to Sections 20 and 21 to provide that the
insurer waives all rights of recovery by way of subrogation against either
Landlord or Tenant, as the case may be, in connection with any claims, losses
and damages covered by such policy. If either party fails to maintain any such
insurance required hereunder, such insurance shall be deemed to be self-insured
with a deemed full waiver of subrogation as set forth in the immediately
preceding sentence.

23. TENANT'S DEFAULT AND LANDLORD'S REMEDIES.

23.1 TENANT'S DEFAULT. The occurrence of any one or more of the following events
shall constitute a default under this Lease by Tenant:

(a)    the abandonment of the Premises by Tenant as defined in California Civil
       code section 1951.3;

(b)    the failure by Tenant to make any payment of rent or additional rent or
       any other payment required to be made by Tenant hereunder, when such
       failure continues for three (3) days after written notice thereof from
       Landlord that such payment was not received when due;

(c)    the failure by Tenant to observe or perform any of the express or implied
       covenants or provisions of this Lease to be observed or performed by
       Tenant, other than as specified in Sections 23.1(a) or (b) above, where
       such failure shall continue for a period of thirty (30) days after
       written notice thereof from Landlord to Tenant; provided, however, that,
       if the nature of Tenant's default is such that more than thirty (30) days
       are reasonably required for its cure, then Tenant shall not be deemed to
       be in default if Tenant shall commence such cure within said thirty (30)
       day period and thereafter diligently prosecute such cure to completion;

(d)    If Tenant is otherwise in default beyond the period of notice and
       opportunity to cure provided in this Lease, (i) the making by Tenant of
       any general assignment for the benefit of creditors, (ii) the


                                      -24-
<PAGE>   30

       filing by or against Tenant of a petition to have Tenant adjudged a
       bankrupt or a petition for reorganization or arrangement under any law
       relating to bankruptcy (unless, in the case of a petition filed against
       the Tenant, the same is dismissed within sixty (60) days), (iii) the
       appointment of a trustee or receiver to take possession of substantially
       all of Tenant's assets located at the Premises or of Tenant's interest in
       this Lease or of substantially all of the guarantor's assets, where
       possession is not restored to Tenant within sixty (60) days, or (iv) the
       attachment, execution or other judicial seizure of substantially all of
       Tenant's assets located at the Premises or of Tenant's interest in this
       Lease where such seizure is not discharged within sixty (60) days.

(e)    any material representation or warranty made by Tenant in this Lease or
       any other document delivered in connection with the execution and
       delivery of this Lease or pursuant to this Lease proves to be incorrect
       in any material respect; and

(f)    Tenant shall be liquidated or dissolved or shall begin proceedings
       towards its liquidation or dissolution.

Any notice sent by Landlord to Tenant pursuant to this Section 23 shall be in
lieu of, and not in addition to, any notice required under California Code of
Civil Procedure, Section 1161.

23.2 LANDLORD'S REMEDIES; TERMINATION. In the event of any such default by
Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity, Landlord shall have the immediate option to
terminate this Lease and all rights of Tenant hereunder. In the event that
Landlord shall elect to so terminate this Lease, then Landlord may recover from
Tenant:

(a)    the worth at the time of award of any unpaid rent which had been earned
       at the time of such termination; plus

(b)    the worth at the time of the award of the amount by which the unpaid rent
       which would have been earned after termination until the time of award
       exceeds the amount of such rental loss that Tenant proves could have been
       reasonably avoided; plus

(c)    the worth at the time of award of the amount by which the unpaid rent for
       the balance of the term after the time of award exceeds the amount of
       such rental loss that Tenant proves could be reasonably avoided; plus

(d)    any other amount necessary to compensate Landlord for all the detriment
       proximately caused by Tenant's failure to perform its obligations under
       this Lease or which, in the ordinary course of things, would be likely to
       result therefrom including, but not limited to: unamortized Tenant
       Improvement costs; reasonable attorneys' fees; prorated brokers'
       commissions; the costs to return the Premises to the condition in which
       it was delivered by Landlord; and the reasonable costs of removal
       (including the repair of any damage caused by such removal) and storage
       (or disposal) of Tenant's personal property, equipment, fixtures, Tenant
       Changes, Tenant Improvements and any other items which Tenant is required
       under this Lease to remove but does not remove.

As used in Sections 23.2(a) and 23.2(b) above, the "WORTH AT THE TIME OF AWARD"
is computed by allowing interest at the Interest Rate set forth in Section 1.14
of the Summary. As used in Section 23.2(c) above, the "WORTH AT THE TIME OF
AWARD" is computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).

23.3 LANDLORD'S REMEDIES; RE-ENTRY RIGHTS. In the event of any such default by
Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity, Landlord shall also have the right, with or without
terminating this Lease, to re-enter the Premises pursuant to an order of court
of competent jurisdiction and remove all persons and property from the Premises;
such property may be removed, stored and/or disposed of pursuant to Section 12.4
of this Lease or any other procedures permitted by applicable law. No re-entry
or taking possession of the Premises by Landlord pursuant to this Section 23.3,
and no acceptance of surrender of the Premises or other action on Landlord's
part, shall be construed as an election to terminate this Lease unless a written
notice of such intention be given to Tenant or unless the termination thereof be
decreed by a court of competent jurisdiction.

23.4 LANDLORD'S REMEDIES; CONTINUATION OF LEASE. In the event of any such
default by Tenant, in addition to any other remedies available to Landlord under
this Lease, at law or in equity, Landlord shall have the right to continue this
Lease in full force and effect, whether or not Tenant shall have abandoned the
Premises. The foregoing remedy shall also be available to Landlord pursuant to
California Civil Code Section 1951.4 and any successor statute thereof in the
event Tenant has abandoned the Premises. In the event Landlord elects to
continue this Lease in full force and effect pursuant to this Section 23.4, then
Landlord shall be entitled to enforce all of its rights and remedies under this
Lease, including the right to recover rent as it becomes due. Landlord's
election not to terminate this Lease pursuant to this Section 23.4 or pursuant
to any other provision of this Lease, at law or in equity, shall not preclude
Landlord from subsequently electing to terminate this Lease or pursuing any of
its other remedies.

23.5 LANDLORD'S RIGHT TO PERFORM. Except as specifically provided otherwise in
this Lease, all covenants and agreements by Tenant under this Lease shall be
performed by Tenant at Tenant's sole


                                      -25-
<PAGE>   31

cost and expense and without any abatement or offset of rent. If Tenant shall
fail to pay any sum of money (other than Monthly Basic Rent) or perform any
other act on its part to be paid or performed hereunder and such failure shall
continue for ten (10) days with respect to monetary obligations (or thirty (30)
days with respect to non-monetary obligations) after Tenant's receipt of written
notice thereof from Landlord, Landlord may, without waiving or releasing Tenant
from any of Tenant's obligations, make such payment or perform such other act on
behalf of Tenant. All sums so paid by Landlord and all necessary incidental
costs incurred by Landlord in performing such other acts shall be payable by
Tenant to Landlord within thirty (30) days after demand therefor as additional
rent.

23.6 INTEREST. If any monthly installment of Rent or Project Operating Expenses,
or any other amount payable by Tenant hereunder is not received by the date when
due, it shall bear interest at the Interest Rate set forth in Section 1.14 of
the Summary from the date due until paid. All interest, and any late charges
imposed pursuant to Section 23.7 below, shall be considered additional rent due
from Tenant to Landlord under the terms of this Lease.

23.7 LATE CHARGES. Tenant acknowledges that, in addition to interest costs, the
late payments by Tenant to Landlord of any Monthly Basic Rent or other sums due
under this Lease will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of such costs being extremely difficult and impractical
to fix. Such other costs include, without limitation, processing, administrative
and accounting charges and late charges that may be imposed on Landlord by the
terms of any mortgage, deed of trust or related loan documents encumbering the
Premises, the Building or the Project. Accordingly, if any monthly installment
of Monthly Basic Rent or Project Operating Expenses or any other amount payable
by Tenant hereunder is not received by Landlord by the due date, Tenant shall
pay to Landlord an additional sum of six percent (6%) of the overdue amount as a
late charge, but in no event more than the maximum late charge allowed by law.
The parties agree that such late charge represents a fair and reasonable
estimate of the costs that Landlord will incur by reason of any late payment as
hereinabove referred to by Tenant, and the payment of late charges and interest
are distinct and separate in that the payment of interest is to compensate
Landlord for the use of Landlord's money by Tenant, while the payment of late
charges is to compensate Landlord for Landlord's processing, administrative and
other costs incurred by Landlord as a result of Tenant's delinquent payments.
Acceptance of a late charge or interest shall not constitute a waiver of
Tenant's default with respect to the overdue amount or prevent Landlord from
exercising any of the other rights and remedies available to Landlord under this
Lease or at law or in equity now or hereafter in effect. Notwithstanding the
foregoing, Landlord agrees not to charge Tenant a late charge for the first two
late payments in any calendar year if such late payments are paid within ten
(10) days of notice of non-payment from Landlord.

23.8 RIGHTS AND REMEDIES CUMULATIVE. All rights, options and remedies of
Landlord contained in this Section 23 and elsewhere in this Lease (including
Section 28 below) shall be construed and held to be cumulative, and no one of
them shall be exclusive of the other, and Landlord shall have the right to
pursue any one or all of such remedies or any other remedy or relief which may
be provided by law or in equity, whether or not stated in this Lease. Nothing in
this Section 23 shall be deemed to limit or otherwise affect Tenant's
indemnification of Landlord pursuant to any provision of this Lease.

23.9 INTENTIONALLY OMITTED.

23.10 COSTS UPON DEFAULT AND LITIGATION. Tenant shall pay to Landlord and its
mortgagees as additional rent all the expenses incurred by Landlord or its
mortgagees in connection with any default by Tenant hereunder or the exercise of
any remedy by reason of any default by Tenant hereunder, including reasonable
attorneys' fees and expenses if Landlord is the prevailing party in any action
related thereto.

24. LANDLORD'S DEFAULT.

24.1 TENANT'S REMEDIES. If Landlord fails to perform or observe any of the
covenants, provisions, or conditions contained in this Lease on its part to be
performed or observed within twenty (20) days after written notice of default or
if more than twenty (20) days are required because of the nature of the default,
if Landlord fails to commence the cure of such default within the twenty (20)
day period and proceed diligently to cure such default after written notice,
then Landlord will be responsible to Tenant for any and all damages sustained by
Tenant as a result of Landlord's breach. Notwithstanding anything contained in
this Section 24.1 to the contrary, upon any such uncured default by Landlord,
Tenant may exercise any of its rights provided at law or in equity; provided,
however: (a) Tenant shall have no right to offset or abate rent in the event of
any default by Landlord under this Lease, except to the extent offset rights are
specifically provided to Tenant in this Lease; (b) Tenant's rights and remedies
hereunder shall be limited to the extent (i) Tenant has expressly waived in this
Lease any of such rights or remedies and/or (ii) this Lease otherwise expressly
limits Tenant's rights or remedies, including the limitation on Landlord's
liability contained in Section 31 hereof; and (c) in no event shall Landlord or
Tenant be liable for consequential damages.

24.2 JUDICIAL REFERENCE. If this Lease expressly provides that a particular
dispute or issue is to be resolved pursuant to Section 24 of this Lease,
Landlord or Tenant will have the right within the twenty (20) day period
following notice to the other party of the election to invoke this provision to
institute a reference proceeding in accordance with the provisions set forth
below to resolve such dispute. Any amount in dispute shall be paid by the party
contesting such payment obligation pending resolution of such dispute. If it is
determined pursuant to such reference proceeding that either party is entitled
to recover any


                                      -26-
<PAGE>   32

monies from the other, payment of all such sums owing shall be made within
thirty (30) days after such determination, together with interest thereon
pursuant to Section 23.6.

Any dispute between Landlord and Tenant which is to be resolved by a reference
proceeding pursuant to the provisions of this Lease must be resolved by a
proceeding in accordance with the provisions of California Code of Civil
Procedure Section 638, et seq., for a determination to be made which will be
binding upon the parties as if tried before a court or jury. The parties agree
specifically as to the following:

(a)    Within five (5) business days after service of a demand by a party
       hereto, the parties will agree upon a single referee who shall then try
       all issues, whether of fact or law, and then report a finding and
       judgment thereon. If the parties are unable to agree upon a referee,
       either party may seek to have one appointed, pursuant to California Code
       of Civil Procedure, Section 640, et seq., by the presiding judge of the
       County.

(b)    The compensation of the referee will be such charge as is customarily
       charged by the referee for like services. The cost of such proceedings
       will initially be born equally by the parties. However, the prevailing
       party in such proceedings will be entitled, in addition to all other
       costs, to recover its contribution for the cost of the reference as an
       item of damages and/or recoverable costs.

(c)    If a reporter is requested by either party, then a reporter will be
       present at all proceedings, and the fees of such reporter will be born by
       the party requesting such reporter. Such fees will be an item of
       recoverable costs. Only a party shall be authorized to request a
       reporter.

(d)    The referee will apply all California Rules of Evidence and Procedure
       (provided that discovery shall be limited as set forth in California Code
       of Civil Procedure Section 94 unless a party is able to persuade the
       referee that the matter requires further discovery under Code of Civil
       Procedure Section 95) and will apply the substantive law of the State in
       deciding the issues to be heard. Notice of any motions before the referee
       will be given, and all matters will be set at the convenience of the
       referee.

(e)    The referee's decision under California Code of Civil Procedure Section
       644 will stand as the judgment of the court, subject to appellate review
       as provided by the Laws of the State.

(f)    The parties agree that they will in good faith endeavor to cause any such
       dispute to be decided within three (3) months. The date of hearing for
       any proceeding will be determined by agreement of the parties and the
       referee, or if the parties cannot agree, then by the referee.

(g)    The referee will have the power to award damages and all other relief.

25. 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
mortgagee of a mortgage or a beneficiary of a deed of trust now or hereafter
encumbering all or any portion of the Building or Site, or any lessor of any
ground or master lease now or hereafter affecting all or any portion of the
Building or Site, this Lease shall be subject and subordinate at all times to
such ground or master leases (and such extensions and modifications thereof),
and to the lien of such mortgages and deeds of trust (as well as to any advances
made thereunder and to all renewals, replacements, modifications and extensions
thereof). Notwithstanding the foregoing, Landlord and any mortgagee and/or
ground lessor of Landlord, as applicable, shall have the right to subordinate or
cause to be subordinated any or all ground or master leases or the lien of any
or all mortgages or deeds of trust to this Lease. In the event that any ground
or master 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, at the
election of Landlord's successor in interest, Tenant shall attorn to and become
the tenant of such successor provided such successor agrees in writing to assume
and be bound by all of Landlord's obligations under this Lease. Subject to the
preceding sentence, Tenant hereby waives its rights under any current or future
law which gives or purports to give Tenant any right to terminate or otherwise
adversely affect this Lease and the obligations of Tenant hereunder in the event
of any such foreclosure proceeding or sale. Tenant covenants and agrees to
execute and deliver to Landlord within twenty (20) days after receipt of written
demand by Landlord and in the form reasonably required by Landlord and
reasonably acceptable to Tenant, any additional documents evidencing the
priority or subordination of this Lease with respect to any such ground or
master lease or the lien of any such mortgage or deed of trust or Tenant's
agreement to attorn, provided Landlord agrees in writing to pay in each instance
a sum on account of Tenant's attorneys' fees not to exceed One Thousand Dollars
($1,000.00). Should Tenant fail to sign and return any such documents within
said ten day period, Tenant shall be in default hereunder. Tenant will not be
required to execute any subordination agreement that does not contain a
non-disturbance provision acceptable to Tenant or that requires the waiver or
alteration of Tenant's rights and entitlements or an increase in Tenant's
obligations under this Lease.

26. ESTOPPEL CERTIFICATES.

26.1 DELIVERY OF ESTOPPELS. Within twenty (20) business days following receipt
of Landlord's written request, Tenant shall execute and deliver to Landlord an
estoppel certificate, in a form substantially


                                      -27-
<PAGE>   33

similar to the form of Exhibit "F" attached hereto, certifying: (a) the
Commencement Date of this Lease; (b) that this Lease is unmodified and in full
force and effect (or, if modified, that this Lease is in full force and effect
as modified, and stating the date and nature of such modifications); (c) the
date to which the rent and other sums payable under this Lease have been paid;
(d) that there are not, to Tenant's knowledge, any defaults under this Lease by
either Landlord or Tenant, except as specified in such certificate; and (e) such
other matters as are reasonably requested by Landlord. Landlord will execute a
similar estoppel on Tenant's behalf within twenty (20) business days of receipt
of Tenant's written request therefore. Any such estoppel certificate delivered
pursuant to this Section 26.1 may be relied upon by any mortgagee, beneficiary,
purchaser or prospective purchaser of any portion of the Site, as well as their
assignees or by anyone to whom Landlord's estoppel is directed.

26.2 FAILURE TO DELIVER. Either party's failure to deliver a requested estoppel
certificate within the time provided in Section 26.1 above shall constitute a
default and shall be conclusive upon the non-responding party that: (a) this
Lease is in full force and effect without modification, except as may be
represented by the requesting party; (b) there are no uncured defaults in
Landlord's or Tenant's performance (other than the non-responding party's
failure to deliver the estoppel certificate); and (c) not more than one (1)
month's rental has been paid in advance.

27. INTENTIONALLY OMITTED.

28. MODIFICATION AND CURE RIGHTS OF LANDLORD'S MORTGAGEES AND LESSORS.

28.1 INTENTIONALLY OMITTED.

28.2 CURE RIGHTS. In the event of any default on the part of Landlord, Tenant
will give simultaneous notice by registered or certified mail to any beneficiary
of a deed of trust or mortgagee covering the Premises or ground lessor of
Landlord whose address shall have been furnished to Tenant and such beneficiary
or trustee will have an additional cure period of twenty (20) business days
after the expiration of any cure period provided for Landlord default under
Section 24 within which to cure any such Landlord's default.

29. QUIET ENJOYMENT.

Landlord covenants and agrees with Tenant that, upon Tenant performing all of
the covenants and provisions on Tenant's part to be observed and performed under
this Lease (including payment of rent hereunder), Tenant shall have the right to
use and occupy the Premises in accordance with and subject to the terms and
conditions of this Lease as against all persons claiming by, through or under
Landlord.

30. TRANSFER OF LANDLORD'S INTEREST.

The term "LANDLORD" as used in this Lease, so far as covenants or obligations on
the part of the Landlord are concerned, shall be limited to mean and include
only the owner or owners, at the time in question, of the fee title to, or a
lessee's interest in a ground lease of, the Site. In the event of any transfer
or conveyance of any such title or interest (other than a transfer for security
purposes only), the transferor shall be automatically relieved of all covenants
and obligations on the part of Landlord contained in this Lease accruing after
the date of such transfer or conveyance, provided (i) the Allowance in Section 5
of Exhibit "C" has been paid, (ii) any Security Deposit has been transferred,
and (iii) all of Landlord's obligations under this Lease have been expressly
assumed in writing. Subject to the foregoing, Landlord and Landlord's
transferees and assignees shall have the absolute right to transfer all or any
portion of their respective title and interest in the Site, the Building, the
Premises and/or this Lease without the consent of Tenant, and such transfer or
subsequent transfer shall not be deemed a violation on Landlord's part of any of
the terms and conditions of this Lease.

31. LIMITATION ON LANDLORD'S LIABILITY.

Notwithstanding anything contained in this Lease to the contrary, the
obligations of Landlord under this Lease (including any actual or alleged breach
or default by Landlord) do not constitute personal obligations of the individual
partners, directors, officers, members or shareholders of Landlord or Landlord's
members or partners, and Tenant shall not seek recourse against the individual
partners, directors, officers, members or shareholders of Landlord or against
Landlord's members or partners or any other persons or entities having any
interest in Landlord, or any of their personal assets for satisfaction of any
liability with respect to this Lease. In addition, in consideration of the
benefits accruing hereunder to Tenant and notwithstanding anything contained in
this Lease to the contrary, Tenant hereby covenants and agrees for itself and
all of its successors and assigns that the liability of Landlord for its
obligations under this Lease (including any liability as a result of any actual
or alleged failure, breach or default hereunder by Landlord (excluding therefrom
any damage resulting from Landlord's failure to carry insurance pursuant to
Section 21 hereof)), shall be limited solely to, and Tenant's and its
successors' and assigns' sole and exclusive remedy shall be against, Landlord's
interest in the Project, and no other assets of Landlord. Nothing contained
herein will be deemed to constitute a waiver of Tenant's rights to seek recovery
for losses covered or required to be covered by Landlord's insurance pursuant to
Section 21 of this Lease.


                                      -28-
<PAGE>   34

32. MISCELLANEOUS.

32.1 GOVERNING LAW. This Lease shall be governed by, and construed pursuant to,
the laws of the state in which the Building is located.

32.2 SUCCESSORS AND ASSIGNS. Subject to the provisions of Section 30 above, and
except as otherwise provided in this Lease, all of the covenants, conditions and
provisions of this Lease shall be binding upon, and shall inure to the benefit
of, the parties hereto and their respective heirs, personal representatives and
permitted successors and assigns; provided, however, no rights shall inure to
the benefit of any Transferee of Tenant unless the Transfer to such Transferee
is made in compliance with the provisions of Section 14 of this Lease.

32.3 NO MERGER. The voluntary or other surrender of this Lease by Tenant or a
mutual termination thereof shall not work as a merger and shall, at the option
of Landlord, either (a) terminate all or any existing subleases, or (b) operate
as an assignment to Landlord of Tenant's interest under any or all such
subleases.

32.4 PROFESSIONAL FEES. If either Landlord or Tenant should bring suit against
the other with respect to this Lease, including for unlawful detainer or any
other relief against the other hereunder, then all costs and expenses incurred
by the prevailing party therein (including, without limitation, its actual
appraisers', accountants', attorneys' and other professional fees and court
costs), shall be paid by the other party. If either party or their respective
mortgagees or lenders are made a party to any litigation commenced against the
other or any litigation pertaining to this Lease, by reason of an negligent or
intentional act or omission of the other party or its mortgagee or lender, such
other party will indemnify, defend (with counsel reasonably acceptable to the
named party) and hold harmless the party named and its mortgagee or lender and
will pay all costs incurred or paid by the named party and its mortgagee or
lender in connection with such litigation.

32.5 WAIVER. The waiver by either party of any breach by the other party of any
term, covenant or condition herein contained shall not be deemed to be a waiver
of any subsequent breach of the same or any other term, covenant and condition
herein contained, nor shall any custom or practice which may become established
between the parties in the administration of the terms hereof be deemed a waiver
of, or in any way affect, the right of any party to insist upon the performance
by the other in strict accordance with said terms. No waiver of any default of
either party hereunder shall be implied from any acceptance by Landlord or
delivery by Tenant (as the case may be) of any rent or other payments due
hereunder or any omission by the non-defaulting party to take any action on
account of such default if such default persists or is repeated, and no express
waiver shall affect defaults other than as specified in said waiver. The
subsequent acceptance of rent hereunder by Landlord shall not be deemed to be a
waiver of any preceding breach by Tenant of any term, covenant or condition of
this Lease other than the failure of Tenant to pay the particular rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent.

32.6 TERMS AND HEADINGS. The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular. Words used in any gender include
other genders. The Section headings of this Lease are not a part of this Lease
and shall have no effect upon the construction or interpretation of any part
hereof. Any deletion of language from this Lease prior to its execution by
Landlord and Tenant shall not be construed to raise any presumption, canon of
construction or implication, including, without limitation, any implication that
the parties intended thereby to state the converse of the deleted language.

32.7 TIME. Time is of the essence with respect to performance of every provision
of this Lease in which time or performance is a factor. All references in this
Lease to "DAYS" shall mean calendar days unless specifically modified herein to
be "business" days.

32.8 PRIOR AGREEMENTS; AMENDMENTS. This Lease (and the Exhibits and Riders
attached hereto) contain all of the covenants, provisions, agreements,
conditions and understandings between Landlord and Tenant concerning the
Premises and any other matter covered or mentioned in this Lease, and no prior
agreement or understanding, oral or written, express or implied, pertaining to
the Premises or any such other matter shall be effective for any purpose. No
provision of this Lease may be amended or added to except by an agreement in
writing signed by the parties hereto or their respective successors in interest.
The parties acknowledge that all prior agreements, representations and
negotiations are deemed superseded by the execution of this Lease to the extent
they are not expressly incorporated herein.

32.9 SEPARABILITY. The invalidity or unenforceability of any provision of this
Lease (except for Tenant's obligation to pay Monthly Basic Rent and Operating
Expenses, Real Property Taxes and Assessments, Insurance Costs, and Utilities
Costs) shall in no way affect, impair or invalidate any other provision hereof,
and such other provisions shall remain valid and in full force and effect to the
fullest extent permitted by law.

32.10 RECORDING. Neither Landlord nor Tenant shall record this Lease. In
addition, neither party shall record a short form memorandum of this Lease
without the prior written consent (and signature on the memorandum) of the
other, and provided that prior to recordation Tenant executes and delivers to
Landlord, in recordable form, a properly acknowledged quitclaim deed or other
instrument extinguishing all of the Tenant's rights and interest in and to the
Site, Building and Premises, and designating Landlord


                                      -29-
<PAGE>   35

as the transferee, which deed or other instrument shall be held by Landlord and
may be recorded by Landlord once the Lease terminates or expires (but not prior
thereto). If such short form memorandum is recorded in accordance with the
foregoing, the party requesting the recording shall pay for all costs of or
related to such recording, including, but not limited to, recording charges and
documentary transfer taxes.

32.11 EXHIBITS AND RIDERS. All Exhibits and Riders attached to this Lease are
hereby incorporated in this Lease as though set forth at length herein.

32.12 ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord of a
lesser amount than the rent payment herein stipulated shall be deemed to be
other than on account of the rent, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as rent be deemed an
accord and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance of such rent or pursue any
other remedy provided in this Lease. Tenant agrees that each of the foregoing
covenants and agreements shall be applicable to any covenant or agreement either
expressly contained in this Lease or imposed by any statute or at common law.

32.13 FINANCIAL STATEMENTS. Upon thirty (30) days prior written request from
Landlord (which Landlord may make at any time during the Term but no more often
that two (2) times in any calendar year), Tenant shall deliver to Landlord (a) a
current financial statement of Tenant, and (b) financial statements of Tenant
for the two (2) years prior to the current financial statement year. Such
statements shall be prepared in accordance with generally acceptable accounting
principles and certified as true in all material respects by Tenant (if Tenant
is an individual) or by an authorized officer, member/manager or general partner
of Tenant (if Tenant is a corporation, limited liability company or partnership,
respectively). Financial statements published by Tenant in the ordinary course
of its business will be deemed to satisfy this requirement.

32.14 NO PARTNERSHIP. Landlord does not, in any way or for any purpose, become a
partner of Tenant in the conduct of its business, or otherwise, or joint
venturer or a member of a joint enterprise with Tenant by reason of this Lease.

32.15 FORCE MAJEURE. In the event that either party hereto shall be delayed or
hindered in or prevented from the performance of any act required hereunder by
reason of strikes, lock-outs, labor troubles, inability to procure materials,
failure of power, governmental moratorium or other governmental action or
inaction (including failure, refusal or delay in issuing permits, approvals
and/or authorizations), injunction or court order, riots, insurrection, war,
fire, inclement weather which causes the cessation of work, earthquake, flood or
other natural disaster or other reason of a like nature not the fault of the
party delaying in performing work or doing acts required under the terms of this
Lease (but excluding delays due to financial inability) (herein collectively,
"FORCE MAJEURE DELAYS"), then performance of such act shall be excused for the
period of the delay and the period for the performance of any such act shall be
extended for a period equivalent to the period of such delay. The provisions of
this Section 32.15 shall not apply to nor operate to excuse either party from
the payment of sums due under this Lease in accordance with its terms.
Notwithstanding the foregoing provisions of this Section 32.15, no Force Majeure
Delay claim by either party shall be valid unless written notice of the event
giving rise to the claimed Force Majeure Delay is provided to the other party
within five (5) business days following the occurrence of such event of Force
Majeure.

32.16 COUNTERPARTS. This Lease may be executed in one or more counterparts, each
of which shall constitute an original and all of which shall be one and the same
agreement.

32.17 NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and agrees that the
terms of this Lease are confidential and constitute proprietary information of
Landlord. Disclosure of the terms could adversely affect the ability of Landlord
to negotiate other leases and impair Landlord's relationship with other tenants.
Accordingly, Tenant agrees that it, and its partners, officers, directors,
employees, agents and attorneys, shall not intentionally and voluntarily
disclose the terms and conditions of this Lease to any newspaper or other
publication or any other tenant or apparent prospective tenant of the Building
or other portion of the Project, either directly or indirectly, without the
prior written consent of Landlord, provided, however, that Tenant may disclose
the terms to prospective brokers, subtenants or assignees under this Lease or as
required by applicable law or order of court.

32.18 NON-DISCRIMINATION. Tenant acknowledges and agrees that there shall be no
discrimination against, or segregation of, any person, group of persons, or
entity on the basis of race, color, creed, religion, age, sex, marital status,
national origin, or ancestry in the leasing, subleasing, transferring,
assignment, occupancy, tenure, use, or enjoyment of the Premises, or any portion
thereof.

33. LEASE EXECUTION.

33.1 TENANT'S AUTHORITY. If Tenant executes this Lease as a partnership,
corporation or limited liability company, then Tenant and the persons and/or
entities executing this Lease on behalf of Tenant represent and warrant that:
(a) Tenant is a duly organized and existing partnership, corporation or limited
liability company, as the case may be, and is qualified to do business in the
state in which the Building is located; and (b) such persons and/or entities
executing this Lease are duly authorized to execute and deliver this Lease on
Tenant's behalf in accordance with the Tenant's partnership agreement (if Tenant
is a partnership), or a duly adopted resolution of Tenant's board of directors
and the Tenant's by-laws (if Tenant is a corporation) or with Tenant's operating
agreement (if Tenant is a limited liability


                                      -30-
<PAGE>   36

company). Concurrently with Tenant's execution and delivery of this Lease to
Landlord and/or at any time during the Term within twenty (20) days of
Landlord's request, Tenant shall provide to Landlord a copy of any documents
reasonably requested by Landlord evidencing such qualification, organization,
existence and authorization.

33.2 JOINT AND SEVERAL LIABILITY. If more than one person or entity executes
this Lease as Tenant: (a) each of them is and shall be jointly and severally
liable for the covenants, conditions, provisions and agreements of this Lease to
be kept, observed and performed by Tenant; and (b) the act or signature of, or
notice from or to, any one or more of them with respect to this Lease shall be
binding upon each and all of the persons and entities executing this Lease as
Tenant with the same force and effect as if each and all of them had so acted or
signed, or given or received such notice.

33.3 INTENTIONALLY OMITTED.

33.4 NO OPTION. The submission of this Lease for examination, or execution by
Tenant does not constitute a reservation of or option for the Premises and this
Lease shall not become effective as a Lease until it has been executed by
Landlord and delivered to Tenant.

34. DUTY TO ACT REASONABLE. Except for determinations expressly described in
this Lease as being at the sole discretion of the applicable party, neither
Landlord nor Tenant shall unreasonably withhold, condition or delay any consent,
approval or other determination provided for hereunder, and determinations
subject to sole discretion shall not be unreasonably conditioned or delayed. In
addition to the foregoing, whenever this Lease grants Landlord or Tenant the
right to take action, exercise discretion, establish rules and regulations, make
allocations or other determinations, or otherwise exercise rights or fulfill
obligations, Landlord and Tenant shall act reasonably and in good faith and take
no action which might result in the frustration of the reasonable expectations
of a sophisticated landlord and sophisticated tenant concerning the benefits to
be enjoyed under this Lease.

35. WAIVER OF JURY TRIAL.

       EACH PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
SEEKING SPECIFIC PERFORMANCE OF ANY PROVISION OF THIS LEASE, FOR DAMAGES FOR ANY
BREACH UNDER THIS LEASE, OR OTHERWISE FOR ENFORCEMENT OF ANY RIGHT OR REMEDY
HEREUNDER.

36. SPECIAL TENANT EQUIPMENT

       The following terms and conditions shall apply to Tenant's use,
occupancy, alteration and improvement of the Premises, the Building and the
Project with particular improvements for Tenant's use.

36.1 LANDLORD'S APPROVAL RIGHTS. For all purposes of this Section 36, in any
case where Landlord's approval is required, Landlord shall not unreasonably
withhold, condition or delay its approval. In any event, without limiting the
foregoing, Landlord shall have the right to withhold its consent if Tenant fails
to obtain a building permit for any Tenant work where a permit is required for
such work, or if such work will otherwise not in any way comply with applicable
laws, or if the proposed improvements are not consistent with the balance of the
improvements in the Project in terms of architectural style, materials, scale,
quality and method of construction or such proposed improvements will materially
and adversely impact the roof, the roof warranty, the structure or foundation of
the Building or any building systems or equipment or any other tenant of the
Project or access to or use of the balance of the Building or the Common Areas
of the Project by such other tenants or their employees, agents, contractors,
customers and other invitees. In all events where Tenant makes improvements
which are visible from outside of the Building (including from any areas
adjacent to the Building or from other buildings now or hereafter constructed
within the Project), Tenant shall cause such improvements to be screened from
view in a manner reasonably acceptable to Landlord and comparable and compatible
with the improvements and/or landscaping contiguous to such improvements (such
as by way of example only with appropriate metal and/or fabric screening,
concrete masonry unit block wall fencing or landscaping screening to match
adjacent landscaping). All such screening and visible improvements shall be of
first class quality and shall be consistent in quality and design with similar
improvements and screening in comparable quality office projects in Alameda
County, California.

36.2 ROOFTOP COMMUNICATIONS EQUIPMENT. Subject to all applicable governmental
laws and regulations and to the provisions of this Lease, Tenant shall have the
non-exclusive right to install, maintain and operate, at Tenant's sole cost and
expense, up to a maximum of four (4) antennae or other telecommunications
equipment, including base site cabinets and appurtenant conduits (i.e., subject
to available capacities) and cabinets ("ANTENNAE EQUIPMENT") at a location on
the roof of the Building approved by Landlord. Use of the roof top space shall
be for Tenant's internal purposes only and shall be in common with Landlord and
other occupants of the Building. In no event shall Tenant's Antennae Equipment
interfere with the equipment of Landlord or other tenants or occupants of the
Building or Building roof and Landlord shall not interfere with nor allow any
other tenant or occupant of the Building or Building roof to interfere with
Tenant's Antennae Equipment. Tenant reserves the right to run cabling, conduit
or wiring across the roof of the portion of the Building which is above Tenant's
Premises to appropriate conduit riser that will terminate within the Premises as
set forth in plans and specifications, which shall be subject to Landlord's
approval including, without limitation, as to scope of work, timing for
construction, plans and installation and restoration of improvements.


                                      -31-
<PAGE>   37

36.3 EMERGENCY POWER GENERATOR. Subject to the terms and conditions set forth in
Rider No. 4 which the parties shall complete and incorporate into, or attach as
an exhibit to, an amendment to this Lease, and subject to all other terms and
conditions in this Lease and to Tenant obtaining all necessary governmental
permits and approvals, and so long as Tenant shall not interfere with any
Building systems, Tenant shall have the right to install, operate and maintain,
at Tenant's sole cost and expense, a back-up generator ("TENANT'S GENERATOR")
and an above-ground storage tank (the "AST") for diesel fuel to run Tenant's
Generator on the Site near the Building or on the roof of the Building. At such
time as Tenant shall determine the specifications for Tenant's Generator and
AST, Landlord and Tenant shall enter into an amendment to this Lease attaching
or incorporating the terms and conditions of Rider No. 4 to this Lease
(incorporating Tenant's specifications for the Generator and AST) which Rider
No. 4 the parties agree shall govern Landlord's and Tenant's respective rights,
duties and obligations with respect to Tenant's Generator and AST

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

TENANT:                                 LANDLORD:

THE GOOD GUYS-CALIFORNIA, INC.,         LNR HARBOR BAY, LLC,
a California corporation                a California limited liability company


*By:  /s/ GEORGE HECHTMAN               *By:  /s/ DAVID O. TEAM         1/3/01
    --------------------------------        ----------------------------------
    Print Name: George Hechtman             Print Name: DAVID O. TEAM
                --------------------                    ----------------------
    Print Title: V.P. Administration        Print Title: VICE PRESIDENT
                 -------------------                     ---------------------


*By:  /s/ ROBERT STOFFREGEN             *By:
    --------------------------------        ----------------------------------
    Print Name: Robert Stoffregen           Print Name:
                --------------------                    ----------------------
    Print Title:  CEO                       Print Title:
                 -------------------                     ---------------------

*NOTE:

IF TENANT IS A CALIFORNIA CORPORATION, then one of the following alternative
requirements must be satisfied:

(A) This Lease must be signed by two (2) officers of such corporation: one being
the chairman of the board, the president or a vice president, and the other
being the secretary, an assistant secretary, the chief financial officer or an
assistant treasurer. If one (1) individual is signing in two (2) of the
foregoing capacities, that individual must sign twice; once as one officer and
again as the other officer.

(B) If there is only one (1) individual signing in two (2) capacities, or if the
two (2) signatories do not satisfy the requirements of (A) above, then Tenant
shall deliver to Landlord a certified copy of a corporate resolution in a form
reasonably acceptable to Landlord authorizing the signatory(ies) to execute this
Lease.

IF TENANT IS A CORPORATION INCORPORATED IN A STATE OTHER THAN CALIFORNIA, then
Tenant shall deliver to Landlord a certified copy of a corporate resolution in a
form reasonably acceptable to Landlord authorizing the signatory(ies) to execute
this Lease.


                                      -32-
<PAGE>   38

                                  EXHIBIT "A"

                                   SITE PLAN



                       [BAY VIEW PLAZA SITE PLAN DIAGRAM]





                                  EXHIBIT "A"
                                      -1-

<PAGE>   39

                                  EXHIBIT "B"

                                   FLOOR PLAN


                      [BAY VIEW PLAZA BUILDING A DIAGRAM]




                                  EXHIBIT "B"
                                      -1-




<PAGE>   40

                                   EXHIBIT "C"

                              WORK LETTER AGREEMENT
                                   [ALLOWANCE]

1. LANDLORD'S WORK/TENANT IMPROVEMENTS. The work to be performed by Landlord
with respect to the completion of the Building and the Project Common Areas is
described in Schedule "1" to this Exhibit "C" and may be referred to herein as
"Landlord's Work". As used in the Lease and this Work Letter Agreement, the term
"TENANT IMPROVEMENTS" or "TENANT IMPROVEMENT WORK" means those items of general
tenant improvement construction described in the materials denoted on the Index
of Drawings attached as Schedule "2" to this Exhibit "C".

2. WORK SCHEDULE. Attached hereto as Schedule "3" is a schedule ("WORK
SCHEDULE") which sets forth the timetable for the planning and completion of the
installation of the Tenant Improvements and the Commencement Date of the Lease.
All plans and drawings required by this Work Letter Agreement and all work
performed pursuant thereto are to be prepared and performed in accordance with
the Work Schedule. Landlord may, from time to time during construction of the
Tenant Improvements, modify the Work Schedule as Landlord reasonably deems
appropriate.

3. CONSTRUCTION REPRESENTATIVES. Landlord hereby appoints the following
person(s) as Landlord's representative ("LANDLORD'S REPRESENTATIVE") to act for
Landlord in all matters covered by this Work Letter Agreement: Tom Ireland.

Tenant hereby appoints the following person(s) as Tenant's representative
("TENANT'S REPRESENTATIVE") to act for Tenant in all matters covered by this
Work Letter Agreement: George Hechtman.

All communications with respect to the matters covered by this Work Letter
Agreement are to made to Landlord's Representative or Tenant's Representative,
as the case may be, in writing in compliance with the notice provisions of the
Lease. Either party may change its representative under this Work Letter
Agreement at any time by written notice to the other party in compliance with
the notice provisions of the Lease.

4. TENANT IMPROVEMENT PLANS.

(a)     PLANS. Attached hereto as Schedule "2" is the Index of Drawings which
        specifies all of the construction drawings which make up the plans for
        the Tenant Improvements for the Premises (the "Plans"). Landlord hereby
        approves the Plans.

(b)     SUBMITTAL OF PLANS. Tenant's architect will submit the Plans to the
        appropriate governmental agencies for plan checking and the issuance of
        a building permit. Tenant's architect, with Tenant's and Landlord's
        cooperation, will make any changes to the Plans which are requested by
        the applicable governmental authorities to obtain the building permit.
        After submittal of the Plans for permits, no further material changes
        may be made without the prior approval of Landlord, and then only after
        agreement by Tenant to pay any costs resulting from the design and/or
        construction of such changes in excess of the Allowance. Tenant hereby
        acknowledges that any such changes will be subject to the terms of
        Section 9 below. Landlord's approval of the Plans has created no
        liability or responsibility on the part of Landlord for the completeness
        of such plans or their design sufficiency or compliance with laws.

(c)     CHANGES TO SHELL OF BUILDING. If the Plans or any amendment thereof or
        supplement thereto shall require changes in the Building shell, the
        increased cost of the Building shell work caused by such changes will be
        paid for by Tenant or charged against the "Allowance" described in
        Section 5 below.

(d)     WORK COST ESTIMATE AND STATEMENT. Attached hereto as Schedule "5" to
        this Exhibit "C" is a written estimate of the cost (the "WORK COST") to
        complete the Tenant Improvement Work (the "WORK COST ESTIMATE"). Tenant
        will utilize Landlord's contractor L.E. Wentz (the "CONTRACTOR"),
        subject to prior written approval of contractor fees and general
        condition costs. The Contractor will require a minimum of two (2) bids
        from subcontractors for electrical, HVAC and carpentry work in the
        Premises. Landlord and Tenant hereby approve the Work Cost Estimate
        which shall also be referred to herein as the "WORK COST STATEMENT".
        Landlord and Tenant agree that the Work Cost Statement is expected to
        and shall exceed the Allowance described in Section 5 below by a minimum
        of $750,000.00 which is to be paid by Tenant. Tenant agrees to pay such
        excess, as additional rent, pro rata as and when Landlord makes payments
        to the Contractor upon invoice by the Contractor (i.e., Tenant will pay
        concurrently with each payment by Landlord to the Contractor an amount
        equal to the total payment to be paid to be Contractor at such time
        multiplied by a fraction, the numerator of which is the total Work Cost
        amount minus the Allowance, and the denominator of which is the total
        Work Cost). Throughout the course of construction, any differences
        between the estimated Work Cost in the Work Cost Statement and the
        actual Work Cost will be determined by Landlord and appropriate
        adjustments and payments by Landlord or Tenant, as the case may be, will
        be made within fifteen (15) days thereafter. Tenant agrees to pay, as
        additional rent, any and all commercially reasonable overtime costs



                                      -1-
<PAGE>   41

        incurred by Landlord in connection with the construction of the Tenant
        Improvements at Tenant's request or with Tenant's prior written
        approval, within fifteen (15) days of Tenant's receipt of Landlord's
        request for such payment.

5.      PAYMENT FOR THE TENANT IMPROVEMENTS.

(a)     ALLOWANCE. Landlord hereby grants to Tenant a tenant improvement
        allowance of $30.00 per rentable square foot of the Premises (the
        "ALLOWANCE"). The Allowance is to be used only for:

(i)     Payment of the cost of preparing the Plans, including mechanical,
        electrical, plumbing and structural drawings and of all other aspects
        necessary to complete the Plans;

(ii)    The payment of plan check, permit and license fees relating to
        construction of the Tenant Improvements;

(iii)   Construction of the Tenant Improvements, including, without limitation,
        the following:

(1)     Installation within the Premises of all partitioning, doors, floor
        coverings, ceilings, wall coverings and painting, millwork and similar
        items;

(2)     All electrical wiring, lighting fixtures, outlets and switches, and
        other electrical work necessary for the Premises (but excluding computer
        and telecommunications cabling);

(3)     The furnishing and installation of all duct work, terminal boxes,
        diffusers and accessories necessary for the heating, ventilation and air
        conditioning systems within the Premises, including the cost of meter
        and key control for after-hour air conditioning;

(4)     Any additional tenant improvements to the Premises required for Tenant's
        use of the Premises including, but not limited to, odor control, special
        heating, ventilation and air conditioning, noise or vibration control or
        other special systems or improvements, but excluding furniture, fixtures
        and equipment and personal property;

(5)     All fire and life safety control systems such as fire walls, sprinklers,
        halon, fire alarms, including piping, wiring and accessories, necessary
        for the Premises;

(6)     All plumbing, fixtures, pipes and accessories necessary for the
        Premises;

(7)     Testing and inspection costs; and

(8)     Fees for the contractor and tenant improvement coordinator including,
        but not limited to, fees and costs attributable to general conditions
        associated with the construction of the Tenant Improvements.

(9)     Subject to Tenant's prior written approval, not to be unreasonably
        withheld or delayed, all other costs to be expended by Landlord in the
        construction of the Tenant Improvements, including those costs incurred
        by Landlord for construction of elements of the Tenant Improvements in
        the Premises, which construction was performed by Landlord prior to the
        execution of this Lease by Landlord and Tenant and which construction is
        for the benefit of tenants and is customarily performed by Landlord
        prior the execution of leases for space in the Building for reasons of
        economics (examples of such construction would include, but not be
        limited to, the extension of mechanical [including heating, ventilating
        and air conditioning systems] and electrical distribution systems
        outside of the core of the Building, wall construction, column
        enclosures and painting outside of the core of the Building, ceiling
        hanger wires and window treatment).

(b)     EXCESS COSTS. The cost of each item referenced in Section 5(a) above
        shall be charged against the Allowance. Tenant agrees that part of the
        consideration for Landlord agreeing to enter into this Lease upon the
        terms set forth herein, Tenant is to pay for a minimum of $750,000.00 of
        the costs of the Tenant Improvements. Tenant agrees to pay to Landlord
        such excess pro rata as and when Landlord makes payments to the
        Contractor upon invoice by the Contractor (i.e., Tenant will pay
        concurrently with each payment by Landlord to the Contractor an amount
        equal to the total payment to be paid to the Contractor at such time
        multiplied by a fraction, the numerator of which is the total Work Cost
        amount minus the Allowance, and the denominator of which is the total
        Work Cost). In no event will the Allowance be used to pay for Tenant's
        furniture, artifacts, equipment, or any other item of personal property
        which is not affixed to the Premises. If the Work Cost does not exceed
        the Allowance by $750,000.00 or more, Tenant agrees that Landlord shall
        have the right at its election to either require Tenant to increase the
        Security Deposit under Section 5 of the Lease, by the amount of such
        shortfall or to reduce the Allowance by the amount of such shortfall.

(c)     Changes. If, after the Plans have been prepared and the Work Cost
        Statement has been established, Tenant requires any changes or
        substitutions to the Plans, any additional costs related thereto will be
        added to the total Work Cost and shall be paid by Tenant to Landlord
        pro rata as and when Landlord makes payments to the Contractor upon
        invoice by the Contractor. Any changes to the Plans will be approved by
        Landlord and Tenant in the manner set forth in



                                   EXHIBIT "C"
                                       -2-
<PAGE>   42

        Section 4 above and will, if necessary, require the Work Cost Statement
        to be revised and agreed upon between Landlord and Tenant in the manner
        set forth in Section 4(d) above. Landlord will have the right to decline
        Tenant's request for a change to the Plans if such changes are
        inconsistent with the provisions of Section 4 above, or if the change
        would unreasonably delay construction of the Tenant Improvements and the
        Commencement Date of the Lease.

(d)     GOVERNMENTAL COST INCREASES. If increases in the cost of the Tenant
        Improvements as set forth in the Work Cost Statement are due to
        requirements of any governmental agency, such increases will be added to
        the total Work Cost and shall be paid by Tenant to Landlord pro rata as
        and when Landlord makes payments to the Contractor upon invoice by the
        Contractor.

(e)     UNUSED ALLOWANCE AMOUNTS. Any unused portion of the Allowance upon
        completion of the Tenant Improvements will not be refunded to Tenant or
        be available to Tenant as a credit against any obligations of Tenant
        under the Lease unless Tenant has paid for excess costs as described in
        Sections 5(b), 5(c) or 5(d), in which case the unused Allowance may be
        applied toward such excess cost amounts and paid to Tenant.

6.      CONSTRUCTION OF TENANT IMPROVEMENTS. Until Tenant approves the Work Cost
        Statement, Landlord will be under no obligation to cause the
        construction of any of the Tenant Improvements. Following Tenant's
        approval of the Work Cost Statement described in Section 4(d) above and
        upon Tenant's payment of the total amount by which such Work Cost
        Statement exceeds the Allowance, if any, Landlord's contractor will
        commence and diligently proceed with the construction of the Tenant
        Improvements, subject to Tenant Delays (as described in Section 9 below)
        and Force Majeure Delays (as described in Section 10 below).

7.      FREIGHT/CONSTRUCTION ELEVATOR. Landlord will, consistent with its
        obligation to other tenants in the Building, if appropriate and
        necessary, make the freight/construction elevator reasonably available
        to Tenant in connection with initial decorating, furnishing and moving
        into the Premises.

8.      COMMENCEMENT DATE AND SUBSTANTIAL COMPLETION.

(a)     COMMENCEMENT DATE. The Term of the Lease will commence on the date (the
        "COMMENCEMENT DATE") which is the earlier of: (i) the date Tenant moves
        into the Premises to commence operation of its business in all or any
        portion of the Premises; or (ii) the date the Tenant Improvements have
        been "substantially completed" (as defined below); provided, however,
        that if substantial completion of the Tenant Improvements is delayed as
        a result of any Tenant Delays described in Section 9 below, then the
        Commencement Date as would otherwise have been established pursuant to
        this Section 8(a)(ii) will be accelerated by the number of days of such
        Tenant Delays.

(b)     SUBSTANTIAL COMPLETION; PUNCH-LIST. For purposes of Section 8(a)(ii)
        above, the Tenant Improvements will be deemed to be "SUBSTANTIALLY
        COMPLETED" when Landlord: (a) is able to provide Tenant with reasonable
        access to the Premises; (b) has substantially performed all of the
        Tenant Improvement Work required to be performed by Landlord under this
        Work Letter Agreement, other than the items described on Schedule "4"
        attached hereto (Possible Scope Of Work Which May Not Be Completed by
        2/28/01) and minor "punch-list" type items and adjustments which do not
        materially interfere with Tenant's access to or use of the Premises; and
        (c) a certificate of occupancy, temporary certificate of occupancy or
        final sign off for the Premises. Tenant acknowledges substantial
        completion will not require completion of those items listed on Schedule
        "4" attached hereto, which Tenant acknowledges Landlord may complete
        after Tenant takes occupancy of the Premises. If Landlord does not
        diligently pursue completion of such items after notice to Landlord and
        a reasonable opportunity to cure, Tenant shall have the right to pursue
        completion of such items within the Premises at Landlord's expense and
        Landlord shall reimburse Tenant within thirty (30) days of demand for
        the reasonable, actual and documented expenses incurred by Tenant in so
        completing such items. Within ten (10) days after delivery of the
        Premises to Tenant and again, within ten (10) days after Landlord
        completes the Schedule "4" items, Tenant and Landlord will conduct a
        walk-through inspection of the Premises and prepare a written punch-list
        specifying those punch-list items which require completion, which items
        Landlord will thereafter diligently complete.

(c)     Delivery of Possession. Landlord agrees to deliver possession of the
        Premises to Tenant when the Tenant Improvements (other than the Schedule
        "4" items and punch-list items) have been substantially completed in
        accordance with Section (b) above. The parties estimate that Landlord
        will deliver possession of the Premises to Tenant and the Term of this
        Lease will commence on or before the Estimated Commencement Date set
        forth in Section 1.7 of the Summary. Landlord agrees to use its
        commercially reasonable efforts to cause the Premises to be
        substantially completed on or before the Estimated Commencement Date.
        Tenant agrees that if Landlord is unable to deliver possession of the
        Premises to Tenant on or prior to the Estimated Commencement Date
        specified in Section 1.7 of the Summary, the Lease will not be void or
        voidable, nor will Landlord be liable to Tenant for any loss or damage
        resulting therefrom except as follows: Tenant will be entitled to occupy
        the Premises without the payment of rent for one (1) day for every day
        of delay beyond April 1, 2001 that does not result from Tenant Delays or
        Force Majeure Delays.



                                   EXHIBIT "C"
                                       -3-
<PAGE>   43

9. TENANT DELAYS. For purposes of this Work Letter Agreement, "TENANT DELAYS"
means any delay in the completion of the Tenant Improvements resulting from any
or all of the following: (a) Tenant's failure for any reason to provide Landlord
with permitted construction drawings for the Tenant Improvements by January 1,
2001 or the date the contractor is ready to commence construction of the Tenant
Improvements, whichever is later (provided the result of any Tenant Delay under
this subparagraph (a) shall be to extend one day for each day of Tenant Delay,
the April 1, 2001 outside date in Section 2.2 of the Lease); (b) Tenant's
failure to timely perform any of its obligations pursuant to this Work Letter
Agreement, including any failure to complete, on or before the due date
therefor, any action item which is Tenant's responsibility pursuant to the Work
Schedule delivered by Landlord to Tenant pursuant to this Work Letter Agreement;
(c) Tenant's changes to the Final Plans after Landlord's approval thereof; (d)
Tenant's request for materials, finishes, or installations which are not readily
available or which are incompatible with the Standards; (e) any delay of Tenant
in making payment to Landlord for Tenant's share of the Work Cost; or (f) any
other act or failure to act by Tenant, Tenant's employees, agents, architects,
independent contractors, consultants and/or any other person performing or
required to perform services on behalf of Tenant.

10. FORCE MAJEURE DELAYS. For purposes of this Work Letter, "FORCE MAJEURE
DELAYS" means any actual delay in the construction of the Tenant Improvements,
which is beyond the reasonable control of Landlord or Tenant, as the case may
be, as described in Section 32.15 of the Lease.

TENANT:                                 LANDLORD:

THE GOOD GUYS-CALIFORNIA, INC.,         LNR HARBOR BAY, LLC,
a California corporation                a California limited liability company


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


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


                                  EXHIBIT "C"
                                      -4-
<PAGE>   44

                          SCHEDULE "1" TO EXHIBIT "C"

                                LANDLORD'S WORK

Exhibit A-1
                                  [WENTZ LOGO]
                                                                  Bay View Plaza
                                                                       Job #0708

                                 ATTACHMENT "C"
                             CONTRACT DOCUMENT LOG

<TABLE>
<CAPTION>
Drawing             Latest
Number              Revision Title                                      Area      Phase     Latest Date         Designer
--------------------------------------------------------------------------------------------------------------------------
<S>                 <C>                                                <C>       <C>        <C>                 <C>
Architecture

A1.1                002  Site Plan                                      OFFICE    IFC       5/22/00             FEE
A1.2                002  Site Details                                   OFFICE    IFC       5/22/00             FEE
A2.0                002  Window, Doors & Partition Schedule             OFFICE    IFC       5/22/00             FEE
A2.1                002  First Floor Plans; Bldg. A & B                 OFFICE    IFC       5/22/00             FEE
A2.2                002  Second Floor Plans; Bldg. A & B                OFFICE    IFC       5/22/00             FEE
A2.3                002  Roof Plans; Bldg. A & B                        OFFICE    IFC       5/22/00             FEE
A3.1                002  Building Elevations                            OFFICE    IFC       5/22/00             FEE
A3.2                002  Building Sections: A & B                       OFFICE    IFC       5/22/00             FEE
A4.1                003  Enlarged Plans/Entry Lobby & Stairs 1,2,3      OFFICE    IFC                           FEE
A4.2                003  Enlarged Section & Elev.                       OFFICE    IFC                           FEE
A4.3                002  Core & Ceiling Plan, Elevations                OFFICE    IFC       5/22/00             FEE
A5.0                001  Foundation Details                             OFFICE    PERMIT    4/12/00             FEE
A6.1                002  Wall Sections                                  OFFICE    IFC       5/22/00             FEE
A6.2                002  Wall Sections                                  OFFICE    IFC       5/22/00             FEE
A6.3                002  Horizontal Wall Sections                       OFFICE    IFC       5/22/00             FEE
A8.1                002  Door & Window Details                          OFFICE    IFC       5/22/00             FEE
A8.2                002  Panel, Roof & Misc. Details                    OFFICE    IFC       5/22/00             FEE
A8.3                002  Details                                        OFFICE    IFC       5/22/00             FEE
A9.1                     Interior Details                                                   5/22/00             FEE
C1                  003  Notes                                          OFFICE    IFC       5/22/00             RJA
C2                  003  Details/Sections                               OFFICE    IFC       5/22/00             RJA
C3                  003  Horizontal Control Plan                        OFFICE    IFC       5/22/00             RJA
C4                  003  Grading Plan                                   OFFICE    IFC       5/22/00             RJA
C5                  003  Utility Plan                                   OFFICE    IFC       5/22/00             RJA
C6                  003  Striping Plan                                  OFFICE    IFC       5/22/00             RJA
C7                  003  Erosion & Sediment Control Plan                OFFICE    IFC       5/22/00             RJA

Electrical

E0.1                001  Electrical Symbols                             OFFICE    IFC       5/30/00             HAYWARD
E0.2                001  Building A- One-Line                           OFFICE    IFC       5/30/00             HAYWARD
E0.3                001  Building B- One-Line                           OFFICE    IFC       5/30/00             HAYWARD
E1.1                001  Site Plan                                      OFFICE    IFC       5/30/00             HAYWARD
E2.1                001  First Floor Elect                              OFFICE    IFC       5/30/00             HAYWARD
E2.2                001  2nd Floor Elect Bldg A & B                     OFFICE    IFC       5/30/00             HAYWARD
E2.3                001  Roof Plans; Bldg A & B                         OFFICE    IFC       5/30/00             HAYWARD

General Information

A0.1                004  Title Sheet                                    OFFICE    IFC       6/6/00              FEE
</TABLE>

                                  Page 1 of 3

                                SCHEDULE "1" TO
                                  EXHIBIT "C"

                                      -1-
<PAGE>   45

Exhibit A-1
                                  [WENTZ LOGO]
                                                                  Bay View Plaza
                                                                       Job #0708

                                 ATTACHMENT "C"
                             CONTRACT DOCUMENT LOG

<TABLE>
<CAPTION>
Drawing    Latest
Number     Revision   Title                                              Area        Phase     Latest Date     Designer
------------------------------------------------------------------------------------------------------------------------
<S>        <C>      <C>                                                  <C>          <C>       <C>             <C>
General Information

A0.2       004      Specifications                                       OFFICE        IFC      6/6/00           FEE
A0.3       003      Specifications                                       OFFICE        IFC      5/22/00          FEE
A0.4       002      Title 24 Calculations                                OFFICE        IFC      5/22/00          FEE
A0.5       002      Title 24 Calculations                                OFFICE        IFC      5/22/00          FEE

HVAC

AC0.01     001      Title 24, Mandatory Measures, Drawing Schedule       OFFICE        IFC      5/30/00          ACCO
AC0.02     001      Equipment Schedule                                   OFFICE        IFC      5/30/00          ACCO
AC1.01     001      First Floor Plan Building A                          OFFICE        IFC      5/30/00          ACCO
AC1.02     001      Second Floor Plan Building A                         OFFICE        IFC      5/30/00          ACCO
AC1.03     001      Roof Plan Building A                                 OFFICE        IFC      5/30/00          ACCO
AC1.03B    001      Roof Coordination Plan Building A                    OFFICE        IFC      5/30/00          ACCO
AC1.04     001      First Floor Plan Building B                          OFFICE        IFC      5/30/00          ACCO
AC1.05     001      Second Floor Plan Building B                         OFFICE        IFC      5/30/00          ACCO
AC1.06     001      Roof Plan Building B                                 OFFICE        IFC      5/30/00          ACCO
AC1.06B    001      Roof Coordination Plan Building B                    OFFICE        IFC      5/30/00          ACCO
AC5.01     001      Duct Details                                         OFFICE        IFC      5/30/00          ACCO
AC6.01     001      Piping Details                                       OFFICE        IFC      5/30/00          ACCO
AC7.01     001      Wiring Details                                       OFFICE        IFC      5/30/00          ACCO

Interiors

A9.1       001      Interior Details                                     OFFICE        IFC      5/22/00          FEE

Landscape

L-1        002      Landscape Layout & Mounding Plan                     OFFICE        IFC      5/22/00          WILASSOC
L-2        002      Irrigation Plan                                      OFFICE        IFC      5/22/00          WILASSOC
L-3        002      Planting Plan                                        OFFICE        IFC      5/22/00          WILASSOC
L-4        002      Notes                                                OFFICE        IFC      5/22/00          WILASSOC
L-5        002      Details                                              OFFICE        IFC      5/22/00          WILASSOC
L-6        002      Details                                              OFFICE        IFC      5/22/00          WILASSOC

Plumbing

P0.0       001      Plumbing Indes, Schdls, Legends, Calcs & Details     OFFICE        IFC      5/26/00          KINETIC
P1.1       001      Domestic Water Piping Plan, 1st Floor Bldg A & B     OFFICE        IFC      5/26/00          KINETIC
P1.2       001      Domestic Water Piping Plan, 2nd Floor Bldg A & B     OFFICE        IFC      5/26/00          KINETIC
P2.0       001      Sanitary Sewer Underslab Bldg A & B                  OFFICE        IFC      5/26/00          KINETIC
P2.1       001      San Sewer & Vent Pip Plan: 1st Fl Bldg A & B         OFFICE        IFC      5/26/00          KINETIC
P2.2       001      San Sewer & Vent Pip Plan: 2nd Fl Bldg A & B         OFFICE        IFC      5/26/00          KINETIC
</TABLE>

                                SCHEDULE "1" TO
                                  EXHIBIT "C"
                                      -2-

<PAGE>   46
Exhibit A-1
                                  [WENTZ LOGO]
                                                                  Bay View Plaza
                                                                       Job #0708

                                 ATTACHMENT "C"
                             CONTRACT DOCUMENT LOG

<TABLE>
<CAPTION>
Drawing             Latest
Number              Revision Title                                      Area      Phase     Latest Date         Designer
--------------------------------------------------------------------------------------------------------------------------
<S>                 <C>                                                <C>       <C>        <C>                 <C>
Plumbing

P3.0                001  Roof Piping Plan Building A & B                OFFICE    IFC       5/26/00             KINETIC

Structural

S0.1                002  General Notes Schedules                        OFFICE    IFC       5/22/00             SEI
S1.0                002  Building A/Foundation Plan                     OFFICE    IFC       5/22/00             SEI
S1.1                002  Building B/Foundation Plan                     OFFICE    IFC       5/22/00             SEI
S2.0                002  Building A/Second Floor Framing Plan           OFFICE    IFC       5/22/00             SEI
S2.1                002  Building B/Second Floor Framing Plan           OFFICE    IFC       5/22/00             SEI
S3.0                002  Building A/Roof Framing Plan                   OFFICE    IFC       5/22/00             SEI
S3.1                002  Building B/Roof Framing Plan                   OFFICE    IFC       5/22/00             SEI
S4.0                002  Building A/Panel Elevations                    OFFICE    IFC       5/22/00             SEI
S4.1                002  Building A/Panel Elevations                    OFFICE    IFC       5/22/00             SEI
S4.2                002  Building B/Panel Elevations                    OFFICE    IFC       5/22/00             SEI
S4.3                002  Building B/Panel Elevations                    OFFICE    IFC       5/22/00             SEI
S5.0                001  Foundation Details                             OFFICE    IFC       5/22/00             SEI
S5.1                002  Foundation Details                             OFFICE    IFC       5/22/00             SEI
S6.0                002  2nd Floor Framing Details                      OFFICE    IFC       5/22/00             SEI
S6.1                002  2nd Floor Framing Details                      OFFICE    IFC       5/22/00             SEI
S6.2                001  2nd Floor Framing Details                      OFFICE    IFC       5/22/00             SEI
S7.0                002  Roof Framing Details                           OFFICE    IFC       5/22/00             SEI
S7.1                002  Roof Framing Details                           OFFICE    IFC       5/22/00             SEI
S8.0                002  Panel Joints                                   OFFICE    IFC       5/22/00             SEI
S8.1                002  Panel Sections and Details                     OFFICE    IFC       5/22/00             SEI
S9.0                002  Building A/Stair Plan & Details                OFFICE    IFC       5/22/00             SEI
S9.1                002  Building B/Stair Plan & Details                OFFICE    IFC       5/22/00             SEI
S9.2                002  Trasin Enclosure Plans & Details               OFFICE    IFC       5/22/00             SEI
</TABLE>

                                SCHEDULE "1" TO
                                  EXHIBIT "C"
                                      -3-

<PAGE>   47
                          SCHEDULE "2" TO EXHIBIT "C"

                               INDEX OF DRAWINGS

GENERAL
-------
A0.1            TITLE SHEET
A0.2            SPEC. SHEET
A0.3            SPEC. SHEET
A0.4            TITLE 24 CALCULATIONS
A0.5            TITLE 24 CALCULATIONS

CIVIL
-----
C1              NOTES
C2              DETAILS/SECTIONS
C3              HORIZONTAL CONTROL PLAN
C4              GRADING PLAN
C5              UTILITY PLAN
C6              STRIPING PLAN
C7              EROSION AND SEDIMENT CONTROL PLAN

LANDSCAPE
---------
L-1             LANDSCAPE LAYOUT & MOUNDING PLAN
L-2             IRRIGATION PLAN
L-3             PLANTING PLAN
L-4             NOTES
L-5             DETAILS
L-6             DETAILS

ARCHITECTURAL
-------------
A1.1            SITE PLAN
A1.2            SITE DETAILS
A2.0            WINDOW, DOOR & PARTITION SCHEDULES
A2.1            FIRST FLOOR PLANS - BUILDINGS A & B
A2.2            SECOND FLOOR PLANS - BUILDINGS A & B
A2.3            ROOF PLANS - BUILDINGS A & B
A3.1            BUILDING ELEVATIONS - BUILDINGS A & B
A3.2            BUILDING SECTIONS - BUILDINGS A & B
A4.1            ENLARGED PLANS - LOBBY & STAIRS
A4.2            ENLARGED ELEVATIONS & SECTIONS
A4.3            ENLARGED CORE PLANS & ELEVATIONS
A6.1            WALL SECTIONS
A6.2            WALL SECTIONS
A6.3            HORIZONTAL WALL SECTIONS
A8.1            DOOR & WINDOW DETAILS
A8.2            PANEL, ROOF & MISCELLANEOUS DETAILS
A8.3            DETAILS
A9.1            INTERIOR DETAILS

STRUCTURAL
----------
S0.1            GENERAL NOTES, SCHEDULES
S1.0            BUILDING A FOUNDATION PLAN
S1.1            BUILDING B FOUNDATION PLAN
S2.0            BUILDING A SECOND FLOOR FRAMING PLAN
S2.1            BUILDING B SECOND FLOOR FRAMING PLAN
S3.0            BUILDING A ROOF FRAMING PLAN
S3.1            BUILDING B ROOF FRAMING PLAN
S4.0            BUILDING A PANEL ELEVATIONS
S4.1            BUILDING A PANEL ELEVATIONS
S4.2            BUILDING B PANEL ELEVATIONS
S4.3            BUILDING B PANEL ELEVATIONS
S5.0            FOUNDATION DETAILS
S5.1            FOUNDATION DETAILS
S6.0            SECOND FLOOR FRAMING DETAILS
S6.1            SECOND FLOOR FRAMING DETAILS
S6.2            SECOND FLOOR FRAMING DETAILS
S7.0            ROOF FRAMING DETAILS
S7.1            ROOF FRAMING DETAILS
S8.0            PANEL JOINTS
S8.1            PANEL SECTIONS AND DETAILS
S9.0            BUILDING A STAIR PLANS AND DETAILS
S9.1            BUILDING B STAIR PLANS AND DETAILS
S9.2            TRASH ENCLOSURE PLANS AND DETAILS


                                SCHEDULE "2" TO
                                  EXHIBIT "C"
                                      -1-




<PAGE>   48



                          SCHEDULE "2" TO EXHIBIT "C"

                             INDEX -- TENANT PLANS

A0.0    PLOT PLAN AND KEY PLAN

A0.1    GENERAL NOTES

A0.2    DOOR AND HARDWARE SCHEDULES

A1.02   CONSTRUCTION PLAN

A2.02   REFLECTED CEILING PLAN

A3.02   ELECTRICAL AND TELECOMMUNICATION PLAN

A4.02   FINISH PLAN

A5.1    ELEVATIONS AND SECTIONS

A5.2    ELEVATIONS

A6.1    DETAILS

M0.0    COVER SHEET, INDEX, LEGENDS, NOTES & MECHANICAL SCHEDULES

M1.0    MECHANICAL HVAC PLAN -- 2ND FLOOR

M2.0    MECHANICAL ROOF PLAN

M3.0    MECHANICAL DETAILS

MT.24   MECHANICAL TITLE 24

P0.0    PLUMBING INDEX, LEGENDS, SCHEDULES, NOTES & DETAILS

P1.0    SANITARY & VENT ABOVE SLAB -- 1ST FLOOR

P1.1    DOMESTIC WATER PIPING -- 1ST FLOOR

P1.2    SANITARY & VENT, DOMESTIC WATER -- 2ND FLOOR

E.0     CA TITLE 24, LIGHT FIXTURE SCHEDULE

E.1     LEGEND, PANEL SCHEDULES

E.2     LIGHTING PLAN

E.3     POWER AND SIGNAL PLAN



<PAGE>   49
                          SCHEDULE "3" TO EXHIBIT "C"

                                 WORK SCHEDULE

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
 ACT                                    ORIG       REM         EARLY        EARLY                         START
 ID       DESCRIPTION                   DUR        DUR         START       FINISH          JAN            FEB         MAR     APR
------------------------------------------------------------------------------------------------------------------------------------
<S>  <C>                               <C>       <C>         <C>         <C>           <C>

1000  Mobilize and Layout                5          5        08JAN01       12JAN01     Mobilize and Layout
1010  R/I Overhead Mechanical           16         16        09JAN01       30JAN01     R/I Overhead Mechanical
1020  R/I Overhead Electrical           11         11        10JAN01       24JAN01     R/I Overhead Electrical
1030  Frame Full Height Watts & Fur
        Ext Walls                       11         11        10JAN01       24JAN01     Frame Full Height Walls & Fur Ext Walls
1040  R/I Overhead Sprinklers           18         18        10JAN01       02FEB01     R/I Overhead Sprinklers
1050  R/I VAV Boxes and Piping          18         18        10JAN01       02FEB01     R/I VAV Boxes and Piping
1060  R/I Electrical in Walls            8          8        15JAN01       24JAN01     R/I Electrical in Walls
1070  Gyp Full Height Walls One Side
        & Furring                        7          7        16JAN01       24JAN01     Gyp Full Height Walls One Side & Furring
1080  Tape to Level 5 Finish Full
        Height Walls                    11         11        22JAN01       05FEB01     Tape to Level 5 Finish Full Height Walls
1090  Gyp Full Height Walls Second
        Side                             7          7        25JAN01       02FEB01     Gyp Full Height Walls Second Side
1100  Tape to Level 5 Finish Second
        Side                            10         10        31JAN01       13FEB01     Tape to Level 5 Finish Second Side
1110  Install [Illegible] Grid          10         10        31JAN01       13FEB01     Install [Illegible] Grid
1120  Paint Full Height Walls & Open
       Office Area                       7          7        05FEB01       13FEB01     Paint Full Height Walls & Open Office
                                                                                       Area
1130  Carpet Base & VCT Open Office
        Area                             5          5        08FEB01       14FEB01     Carpet Base & VCT Open Office Area
1140  Frame Under Grid Walls             3          3        14FEB01       16FEB01     Frame Under Grid Walls
1150  R/I Under Grid Walls               3          3        19FEB01       21FEB01     R/I Under Grid Walls
1160  Gyp Under Grid Walls               3          3        19FEB01       21FEB01     Gyp Under Grid Walls
1170  Tape Under Grid Walls              8          8        19FEB01       28FEB01     Tape Under Grid Walls
1180  Install Furniture                 10         10        15FEB01       28FEB01     Install Furniture
1190  ***Substantial Completion***       1          1        28FEB01       28FEB01     ***Substantial Completion***
1200  Doors Frames and Hardware          8          8        19FEB01       28FEB01     Doors Frames and Hardware
1210  Milwork                            5          5        26FEB01       02MAR01     Milwork
1220  Paint Under Grid Walls             5          5        26FEB01       02MAR01     Paint Under Grid Walls
1230  Drop Ceiling Tile                  5          5        01MAR01       07MAR01     Drop Ceiling Tile
1240  Carpet VCT and Base Inside Rooms   5          5        05MAR01       09MAR01     Carpet VCT and Base
                                                                                       Inside Rooms
1250  Clean Up                           3          3        07MAR01       09MAR01     Clean Up
1260  Punch List                         3          3        07MAR01       09MAR01     Punch List
1270  **"SERVER ROOM"**                 35         35        08JAN01       23FEB01     **"SERVER ROOM"**
1280  Layout Walls                       3          3        08JAN01       10JAN01     Layout Walls
1290  Layout MEPS                        4          4        08JAN01       11JAN01     Layout MEPS
1300  Frame Walls                        3          3        11JAN01       15JAN01     Frame Walls
1310  R/I MEPS Overhead and Walls        5          5        11JAN01       17JAN01     R/I MEPS Overhead and walls
1320  Gyp Interior                       2          2        18JAN01       19JAN01     Gyp Interior
1330  Tape Interior                      6          6        22JAN01       29JAN01     Tape Interior
1340  Install Grid                       3          3        30JAN01       01FEB01     Install Grid
1350  Install Lighting                   5          5        02FEB01       08FEB01     Install Lighting
1360  Paint                              5          5        02FEB01       08FEB01     Paint
1370  Install Computer Floor             5          5        09FEB01       15FEB01     Install Computer Floor
1380  Drop Ceiling Tile                  1          1        16FEB01       18FEB01     Drop Ceiling Tile
1390  Set Equipment                      5          5        19FEB01       23FEB01     Set Equipment

Start date     08JAN01                                                 Early bar
Finish date    09MAR01                    Wentz Group                  Progress bar
Data date      08JAN01                   Good Guys T.I.                Critical bar
Run date       28DEC00                                                 Summary bar
Page Number    14                                                      Start milestone point
[ILLEGIBLE]                                                            Finish milestone point
</TABLE>


<PAGE>   50
                          SCHEDULE "4" TO EXHIBIT "C"

          POSSIBLE SCOPE OF WORK WHICH MAY NOT BE COMPLETED BY 2/28/01



Good Guys Corporate Office Relocation                                   12/28/00
Prepared by: Reed Design Group


Possible scope of work not completed by 2/28/01
-----------------------------------------------
These items are shown on the schedule from L.E. Wentz Company dated 12/28/00.
This scope of work is referenced to the Good Guys tenant improvement
construction documents prepared by Richard Pollock and Assoc. dated 12/14/00.
These items will be completed by 3/12/01.

Act ID 1210 -- Millwork
     Cabinet, countertops, and custom millwork for the following rooms:
          -  Copy / Coffee, rooms #207, 243, 247
          -  Shipping / Receiving, #217
          -  Lounge, #214
          -  Lobby, #201
          -  Training Room, #205

Act ID 1220, 1230, 1240 -- Paint under grid walls, drop ceiling tile, floor
finishes inside rooms

     The offices and conference rooms along the central core may not be
     finished and ready for occupancy, including the following rooms:
          -  Offices, #203, 219, 234, 237, 241
          -  Conference and Huddle Rooms, #206, 216, 218, 224, 226, 227, 228,
             236, 239, 242, 244, 249
          -  Storage Rooms, #202, 211, 223, 230, 245, 250
          -  Video Production Room, #246

Act ID 1250, 1260 -- Cleanup and Punchlist
     These items will completed as the above work is finished.


Phase Two
---------
The following items will be considered as part of a second phase of
construction, after the initial scope of work shown in the construction
documents is complete. All work will be subject to City of Alameda approvals.
Additional items might be added or deleted from this list.

          -  Install a "FM 200" fire suppression system in the Computer Room
             #209.
          -  Install a roof mounted emergency generator for the Computer Room,
             electrical and mechanical systems.
          -  Installation of the pivoting doors between the Training Room #205
             and Waiting Room #204




                                SCHEDULE "4" TO
                                  EXHIBIT "C"
                                      -1-
<PAGE>   51
                          SCHEDULE "5" TO EXHIBIT "C"

                                BUDGET ESTIMATE

                          BAY VIEW PLAZA @ HARBOR BAY
                          GOOD GUYS TENANT IMPROVEMENT
                                  ALAMEDA, CA
                               BUDGET ESTIMATE #1
                                    SUMMARY

<TABLE>
<CAPTION>
CSI #               ITEM                     TOTAL
--------------------------------------------------------
<S>       <C>                               <C>
1710      CLEANUP                               6,?20
2030      DEMOLITION                        EXCLUDED
5500      MISCELLANEOUS METAL               EXCLUDED
6105      ROUGH CARPENTRY                      12,000
6200      FINISH CARPENTRY/MILLWORK            83,540
7100      WATERPROOFING                     EXCLUDED
7210      INSULATION                        EXCLUDED
7250      FIREPROOFING                      EXCLUDED
7530      ROOFING                               8,000
7620      SHEET METAL                       EXCLUDED
7800      ROOF ACCESSORIES                  EXCLUDED
7920      JOINT SEALANTS/CAULKING               4,500
8110      DOORS/FRAMES/HARDWARE                4?,085
2500      SITE CONCRETE                     EXCLUDED
8800      GLASS/GLAZING                        47,500
9210      LATH/PLASTER/DRIVIT               EXCLUDED
9260      DRYWALL METAL STUDS                 132,333
9310      CERAMIC TILE                      EXCLUDED
9510      ACOUSTICAL CEILINGS                  5?,08?
9660      RESILIENT TILE/CARPET               181,2?8
9900      PAINTING                             20,165
10000     MISC. SPECIALTIES                    42,339
10430     MISC. SIGNAGE                     EXCLUDED
10815     FOLDING PARTITIONS                INCLUDED
10820     TOILET PARTITIONS/ACCESSORIES     EXCLUDED
12600     WINDOW TREATMENT/BLINDS               7,?47
15400     PLUMBING                             16,210
15500     FIRE PROTECTION                      65,582
15800     HVAC                                358,850
16000     ELECTRICAL                          317,750
                                            ---------
               TOTAL DIRECT COSTS           1,405,229

          CONTINGENCY                       EXCLUDED
          GENERAL CONDITIONS                   90,821
          INSURANCE (0.75%)                    11,220
          BUILDERS RISK INSURANCE           EXCLUDED
          ESCALATION                        EXCLUDED
          BOND                              EXCLUDED
          FEE (6.0%)                           90,438
                                            ---------
                         GRAND TOTAL        1,597,706
                                            =========
</TABLE>

                                SCHEDULE "5" TO
                                  EXHIBIT "C"
                                      -1-
<PAGE>   52
                          BAY VIEW PLAZA @ HARBOR BAY
                          GOOD GUYS TENANT IMPROVEMENT
                                  ALAMEDA, CA
                                 QUALIFICATIONS

GENERAL QUALIFICATIONS

     1    Budget estimate based on preliminary drawings as identified in
          documents.
     2    Staging area will be provided to General Contractor for trailers,
          storage, etc.
     3    Budget estimate includes Design/Build Electrical, Mechanical, Plumbing
          and Fire Protection.
     4    Owner to provide architect, structural engineering, and space planner.
     5    Drywall taping to be at level 4 finish.
     6    Base building roofing company to complete work for repairs to insure
          roof warranty.
     7    A GMP will be provided once "For Construction" documents are
          available.
     8    Cost of power to run equipment during construction and for equipment
          start-up is not included in budget.
     9    Start up and commissioning of mechanical, electrical systems which
          are part of a new construction are included in the budget estimate.
     9    Tenant improvement construction to start January 2, 2001 and complete
          April 1, 2000.

DOCUMENTS

     1    Richard Pollack & Associates Drawings A1.02, A2.02, A3.02 dated:
          November 21, 2000
     2    Good Guys preliminary pricing notes dated: November 21, 2000

EXCLUSIONS

     1    All items noted as excluded in the attached budget.
     2    All items listed as alternates.
     3    Permit and Plan checking fees and other city fees and taxes.
     4    Testing and inspection by third parties or municipalities.
     5    Builders Risk Insurance, including any deductibles.
     6    Interior/exterior furnishings, systems furniture and office
          furnishings not detailed on drawings.
     7    Hazardous material abatement, handling, & disposal of any sort.
     8    Architectural & engineering services other than design/build services
          as stated.
     9    Premium time.
     10   Cost of shutdown for utility tie-ins, ie: sprinkler, electrical,
          underground, etc.
     11   Utility connection fees for services to facility.
     12   Life/access control/fire supervisory systems not detailed on plans.
     13   Structural engineering.
     14   Sound attenuation and noise abatement during construction.
     15   Painting of ceiling, exposed duct, and exposed piping.
     16   Liquidated Damages.
     17   Delays due to inclemental weather or unforseen site conditions
          uncovered during construction.
     18   Cost of blueprinting or reproduction services.
     19   Items not detailed on preliminary drawings and pricing notes.

                                SCHEDULE "5" TO
                                  EXHIBIT "C"
                                      -2-

<PAGE>   53
                          BAY VIEW PLAZA @ HARBOR BAY
                          GOOD GUYS TENANT IMPROVEMENT
                                  ALAMEDA, CA
                                 QUALIFICATIONS

ALLOWANCES

     The following allowances are included in the budget estimate as requested:

1    6200 - Millwork; Desk Allowance, $20,000, Board Room Allowance, $20,000.
2    7510 - Roofing: Roof Penetration Repairs, $6000
3    7900 - Caulking & Sealants: Sound & Fire Penetration Caulking $4600
4    9510 - Acoustical Ceilings: Metal Ceiling Panel System, $20,000
5    9660 - Tile & Carpet: Floor Preparation, $12,500
6    9900 - Painting: Paint Wood Siding, $4,050

                                SCHEDULE "5" TO
                                  EXHIBIT "C"
                                      -3-

<PAGE>   54
                          BAY VIEW PLAZA @ HARBOR BAY
                          GOOD GUYS TENANT IMPROVEMENT
                                  ALAMEDA, CA
                                 BE #1 BREAKOUT

<TABLE>
<CAPTION>
CSI #     DESCRIPTION                             QTY       UNIT         UC          SUBTOTAL         TOTAL
<S>       <C>                                   <C>        <C>         <C>           <C>            <C>
1710      CONSTRUCTION FINAL CLEAN
               PERIODIC CLEANING                31,000       SF             0.10       3,100
               FINAL CLEANING                   31,000       SF             0.12       3,720
                                                                                                        6,820
2030      DEMOLITION
                                                                                                     EXCLUDED
5500      MISCELLANEOUS STEEL
                                                                                                     EXCLUDED
6100      ROUGH CARPENTRY
               MISC. BLKG ON ROOF                   15      ALLOW         800.00      12,000
                                                                                                       12,000
6200      CASEWORK
               CABINET BUDGET                        1       EA        43,540.00      43,540
               DESK ALLOWANCE                        1      ALLOW      20,000.00      20,000
               BOARD ROOM ALLOWANCE                  1      ALLOW      20,000.00      20,000
7100      WATERPROOFING                                                                                83,540

               WATERPROOFING FLOOR COVERING
                                                                                                     EXCLUDED
7210      INSULATION
                                                                                                     EXCLUDED
7510      ROOFING
               REPAIR PENETRATIONS                  12      ALLOW         650.00       8,000
                                                                                                        6,000
7900      CAULKING/SEALANTS
               FULL HEIGHT/SOUND CAULKING            1      ALLOW       2,500.00       2,500
               FIRE CAULK PENETRATIONS               4      ALLOW         500.00       2,000
                                                                                                        4,500
8100      HOLLOW METAL DOORS, HARDWARE & FRAMES
               DOORS FRAMES & HARDWARE              34       EA         1,180.00      40,120
               SUPPLY CARD READER                    1       EA         7,945.00       7,945
                                                                                                       48,065
2500      CONCRETE
                                                                                                     EXCLUDED
8800      GLASS/GLAZING
               INTERIOR FRAMES, GLASS O              1       EA        47,500.00      47,500
               HERCULITE DOORS
                                                                                                       47,500
9260      DRYWALL/METAL STUDS
               DRYWALL BUDGET ESTIMATE               1       EA       132,338.00     132,338
               INTERIOR WALLS
                                                                                                      132,338
9310      ACOUSTICAL CEILINGS
               ACOUSTICAL CEILING SYSTEM             1       EA        35,085.00      35,085
               METAL CEILING PANEL SYSTEM            1      ALLOW      20,000.00      20,000
                                                                                                       55,085
</TABLE>
                                SCHEDULE "5" TO
                                  EXHIBIT "C"
                                      -4-
<PAGE>   55
                          BAY VIEW PLAZA @ HARBOR BAY
                          GOOD GUYS TENANT IMPROVEMENT

                                  ALAMEDA, CA

                                 BE #1 BREAKOUT
<TABLE>
==========================================================================================================
CSI#      DESCRIPTION                        QTY      UNIT           UC         SUBTOTAL          TOTAL
==========================================================================================================
<S>       <C>                                <C>      <C>        <C>            <C>              <C>
 9660     RESILIENT TILE & CARPET
            GLUE DOWN CARPET                   1       EA        168,738.00       168,738
            TREATMENT & PREP                   1     ALLOW        12,500.00        12,500
                                                                                                   181,238

 9900     PAINTING

            STEEL COLUMNS                      1       EA          1,365.00         1,365
            HOLLOW METAL FRAMES               34       EA          1,750.00         1,750
            WOOD PAINT - FLAT                  1       EA         13,000.00        13,000
            WOOD SIDING                        1     ALLOW         4,050.00         4,050
                                                                                                    20,165

10000     MISC. SPECIALTIES


            FIRE EXTINGUISHERS                6        EA            232.00         1,392
            PROJECTION SCREENS                3        EA          3,884.00        11,852            5,400
            COMPUTER ROOM FLOOR           1,260        SF             23.26        28,285               NI
                                                                                                    42,339

10616     FOLDING PARTITIONS
            HERCULITE PANELS INCLUDED IN
            GLASS AND GLAZING                                                                     INCLUDED

12500     WINDOW TREATMENT
            FURNISH & INSTALL MINI BLINDS     1        EA          7,247.00         7,247
                                                                                                     7,247

15400     PLUMBING
            SINKS, GARBAGE DISPOSAL           1        EA         18,210.00        18,210
            & DISHWASHERS
                                                                                                    16,210

15500     FIRE PROTECTION
            PENDANT HEADS                   102        EA            356.00        36,312
            PREACTION SYSTEM                  1        EA         29,270.00        29,270
                                                                                                    65,582

16500     HVAC
            COMPUTER ROOM W/RH, ALARMS        1        EA        128,350.00       126,350
            AND SYSTEMS BACK-UP

            TI IMPROVEMENT, 37 ZONES          1        EA        232,500.00       232,500
            W/HW REHEAT PERIMITER
                                                                                                   368,850

18000     ELECTRICAL
            ELECTRICAL SCOPE BID              1        EA        317,750.00       317,750          317,750

==========================================================================================================
          BUILDING TOTAL DIRECT COSTS                                           1,405,229        1,405,229
==========================================================================================================
</TABLE>

                                SCHEDULE "5" TO
                                  EXHIBIT "C"
                                      -5-



<PAGE>   56
                          BAY VIEW PLAZA @ HARBOR BAY
                          GOOD GUYS TENANT IMPROVEMENT
                                  ALAMEDA, CA
                          GENERAL CONDITIONS BREAKDOWN

<TABLE>
<S>                                               <C>       <C>       <C>       <C>            <C>            <C>
          PERSONNEL                               %
PROJECT EXECUTIVE                                 0.10       3.00     MO        19,???.?0          5,820
PROJECT MANAGER                                   0.50       3.00     MO        12,??0.00         19,485
PROJECT ACCOUNTANT                                0.10       3.00     MO         5,198.00          1,559
PROJECT ADMINISTRATOR                             0.5?       3.00     MO         5,19?.00          7,794
PROJECT SUPERINTENDENT                            1.00       ?.??     MO        1?,?00.00         ?0,70?
VEHICLE EXPENSE                                                                                 IN RATES
                              SUBTOTAL                                                                        81,421

          JOBSITE OFFICE
MOBILIZE -- DEMOBILIZE                                       0.00     LS         1,500.00        W/SHELL
JOB TRAILERS - CONTRACTOR/CONFERENCE                         0.00     MO           800.00        W/SHELL
COPIER RENTAL                                                0.00     MO           200.00        W/SHELL
FAX RENTAL                                                   0.00     MO           200.00        W/SHELL
TELEPHONE INSTALLATION                                                LS                         W/SHELL
TELEPHONE SYSTEM - LEASE                                     0.00     MO           ?00.00        W/SHELL
TELEPHONE BILLS - MONTHLY                                    0.00     MO           ?00.00        W/SHELL
JOB OFFICE - WIRING/NETWORK INSTALLATION                                                        EXCLUDED
JOB OFFICE - WIRING/NETWORK MONTHLY SERVICE                                                     EXCLUDED
JOB OFFICE - HARDWARE                                                                           EXCLUDED
DRINKING WATER/COFFEE SERVICE                                0.00     MO           125.00        W/SHELL
UTILITY BILLS - PG&E                                         3.00     MO           200.00            600
OFFICE SUPPLIES & EQUIPMENT                                  3.00     MO           250.00            750
SUBMITTAL BLUEPRINTING                                       1.00     LS         1,2?0.00          1,??0
POSTAGE & COURIER SERVICE                                   65.00    DAYS           15.00        W/SHELL
FIRST AID SUPPLIES                                           3.00     MO            60.00        W/SHELL
                              SUBTOTAL                                                                         2,?00

          JOBSITE EXPENSES
PERMITS AND FEES                                                      LS                        BY OWNER
CITY BUSINESS LICENSE                                        0.00     LS         1,500.00        W/SHELL
USE TAX                                                               LS                        EXCLUDED
GROSS RECEIPTS TAX                                                    LS                        EXCLUDED
PROJECT SIGNAGE                                              0.00     LS           750.00       EXCLUDED
SMALL TOOLS & SUPPLIES                                       0.00     MO           ?00.00            600
SECURITY GUARD                                                        MO                         W/SHELL
TEMPORARY SECURITY FENCE                                              LS                         W/SHELL
TEMPORARY TOILETS W/SERVICE 1x/WK                            3.00     MO           300.00            900
TEMPORARY POWER & PHONE DISTRIBUTION                                  MO                         W/SHELL
TEMPORARY WATER DISTRIBUTION                                          MO                         W/SHELL
UTILITY BILLS - STARTUP COSTS                                         MO                        BY OWNER
PERIODIC CLEAN-UP                                                     SF                           TRADE
FINAL CLEAN UP                                                        SF                           TRADE
FIRE EXTINGUISHERS                                           4.00     EA            76.00            ?00
                              SUBTOTAL                                                                         1,800

          PRECONSTRUCTION
ESTIMATING                                                   1.00     LS         5,000.00          5,000
VALUE ENGINEERING                                                     HRS                       INCLUDED
PURCHASING                                                            HRS                       INCLUDED
CONSTRUCTABILITY REVIEW                                               HRS                       INCLUDED
                              SUBTOTAL                                                                         5,000

          TOTAL GENERAL CONDITIONS                           3.00     MO        30,274            90,?21
</TABLE>

                                SCHEDULE "5" TO
                                  EXHIBIT "C"
                                      -6-
<PAGE>   57

                                   EXHIBIT "D"

                    SAMPLE FORM OF NOTICE OF LEASE TERM DATES

To:                                     Date:
   ---------------------------------         ----------------------------------

Re:   Office Lease dated ___________, ________ between _______________________
________, a ______________________, Landlord, and _________________________, a
_____________________, Tenant, concerning Suite ________ ("PREMISES") located at
______________________________________________________________.

Gentlemen:

In accordance with the above-referenced Lease, we wish to advise and/or confirm
as follows:

1. That the Premises have been accepted by Tenant as being substantially
complete in accordance with the Lease, and that there is no deficiency in
construction, except those items remaining to be completed pursuant to the
punch-list referenced in the Work Letter Agreement attached to the Lease as
Exhibit C.

2. That Tenant has accepted and is in possession of the Premises, and
acknowledges that under the provisions of the Lease, the Term of the Lease is
for ___________________ (___) years, with ______________ (___) options to renew
for ________________ (___) years each, and commenced upon the Commencement Date
of ___________________, _______ and is currently scheduled to expire on
________________, _______, subject to earlier termination as provided in the
Lease.

3. That in accordance with the Lease, rental payment has commenced (or shall
commence) on ______________________, _______.

4. If the Commencement Date of the Lease is other than the first day of the
month, the first billing will contain a pro rata adjustment. Each billing
thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.

5.Rent is due and payable in advance on the first day of each and every month
during the Term of the Lease. Your rent checks should be made payable to
_______________________ at _________________________.

6. The exact number of rentable square feet within the Premises is ____________
square feet. The exact number of usable square feet within the Premises is
______________ square feet, subject to adjustment as provided in the Lease.

7. Tenant's Percentage, as adjusted based upon the exact number of rentable
square feet within the Premises, is _______%, subject to adjustment as provided
in the Lease.

AGREED AND ACCEPTED

TENANT:                                 LANDLORD:


--------------------------------,       --------------------------------------,
a                                       a
 --------------------------------        --------------------------------------


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


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

                         SAMPLE ONLY [NOT FOR EXECUTION]


                                  EXHIBIT "D"
                                      -1-
<PAGE>   58

                                   EXHIBIT "E"

                              RULES AND REGULATIONS

1. No sign, advertisement, name or notice shall be installed or displayed on any
part of the outside or inside of the Building without the prior written consent
of Landlord. Landlord shall have the right to remove, at Tenant's expense and
without notice, any sign installed or displayed in violation of this rule. All
approved signs or lettering on doors and walls shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved by Landlord,
using materials and in a style and format approved by Landlord.

2. Tenant shall not place anything or allow anything to be placed near the glass
of any window, door, partition or wall which may appear unsightly from outside
the Premises, No awnings or other projection shall be attached to the outside
walls of the Building without the prior written consent of Landlord. No
curtains, blinds, shades or screens shall be attached to or hung in, or used in
connection with, any window or door of the Premises, other than Building
standard materials, without the prior written consent of Landlord.

3. Tenant shall not obstruct any sidewalks, halls, passages, exits, entrances,
elevators, escalators or stairways of the Building. The halls, passages, exits,
entrances, elevators, escalators and stairways are not for the general public,
and Landlord shall in all cases retain the right to control and prevent access
thereto of all persons whose presence in the judgment of Landlord would be
prejudicial to the safety, character, reputation and interests of the Building
and its tenants; provided, that nothing herein contained shall be construed to
prevent such access to persons with whom any tenant normally deals in the
ordinary course of its business, unless such persons are engaged in illegal
activities. Tenant and no employee, invitee, agent, licensee or contractor of
Tenant shall go upon or be entitled to use any portion of the roof of the
Building, provided that Tenant will be entitled to install antennas or other
receiving devices on the roof of the Building so long as such devices are not
visible from the Common Areas or adjacent streets. Tenant will utilize
Landlord's roofing contractor for such installation.

4. The directory of the Building will be provided exclusively for the display of
the name and location of tenants only, and Landlord reserves the right to
exclude any other names therefrom. Tenant shall be entitled to one line on the
Building lobby directory to identify Tenant.

5. Except as otherwise provided in this Lease, all cleaning and janitorial
services for the Building and the Premises shall be provided exclusively through
Landlord or Landlord's janitorial contractors in accordance with the provisions
of Section 16.1(d) of the Lease. No person or persons other than those approved
by Landlord shall be employed by Tenant or permitted to enter the Building for
the purpose of cleaning the same. Tenant shall not cause any unnecessary labor
by carelessness or indifference to the good order and cleanliness of the
Premises. Landlord shall not in any way be responsible to Tenant for loss of
property on the Premises, however occurring, or for any damage to Tenant's
property by the janitors or any other employee or any other person.

6. Landlord will furnish Tenant, free of charge, with the number of keys to each
door lock in the Premises reasonably required by Tenant. Landlord may impose a
reasonable charge for any additional keys. Tenant may not make or have made
additional keys, and Tenant shall not alter any lock or install a new additional
lock or bolt on any door or window of its Premises. Tenant, upon termination of
its tenancy, shall deliver to Landlord the keys of all doors which have been
furnished to, or otherwise procured by Tenant.

7. Electric wires, telephones, telegraphs, burglar alarms or other similar
apparatus shall not be installed in the Premises except as set forth in Tenant's
Plans or otherwise reasonably approved by Landlord. Any installation of
telephones, telegraphs, electric wires or other electric apparatus made without
permission shall be removed by Tenant at Tenant's own expense. No machines other
than standard office machines, such as typewriters and calculators, photo
copiers, personal computers and word processors, and vending machines permitted
by the Lease, shall be used in the Premises without the approval of Landlord,
except in the computer room shown on Tenant's Plans.

8. Except in connection with Tenant's initial occupancy of the Building, no
furniture, freight, or equipment of any kind shall be brought into the Building
without prior notice to Landlord and all moving of the same into or out of the
Building shall be done at such time and in such manner as Landlord shall
reasonably designate. No furniture, equipment or merchandise shall be received
in the Building or carried up or down in the elevator, except between such hours
as shall be designated by Landlord which must include Tenant's normal business
hours. No deliveries shall be made which impede or materially interfere with
other tenants or the operation of the Building.

9. Tenant shall not place a load upon any floor of the Premises which exceeds
the load per square foot which such floor was designed to carry which is 100
psf and which is allowed by law. Landlord shall have the right to prescribe the
weight, size and position of all equipment, materials, furniture or other
property brought into the Building. Heavy objects, if such objects are
considered necessary by Tenant, as determined by Landlord, shall stand on such
platforms as determined by Landlord to be necessary to properly distribute the
weight. Business machines and mechanical equipment which cause noise or
vibration that may be transmitted to the structure of the Building or to any
space therein to such a degree


                                  EXHIBIT "E"
                                      -1-
<PAGE>   59

as to be objectionable to Landlord or to any tenants in the Building, shall be
placed and maintained by Tenant, at Tenant's expense, on vibration eliminators
or other devices sufficient to eliminate noise or vibration. Landlord will not
be responsible for loss of, or damage to, any such equipment or other property
from any cause, and all damage done to the Building by maintaining or moving
such equipment or other property shall be repaired at the expense of Tenant
after Tenant's receipt of notice and an opportunity to cure provided in the
Lease.

10. Tenant shall not use or keep in the Premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited quantities
necessary for the operation or maintenance of office equipment. Tenant shall not
use or permit to be used in the Premises any foul or noxious gas or substance,
or permit or allow the Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Project by reason of noise,
odors or vibrations, nor shall Tenant bring into or keep in or about the
Premises any birds or animals.

11. Tenant shall not use any method of heating or air-conditioning other than
that supplied by Landlord.

12. Tenant shall not waste electricity, water or air-conditioning and agrees to
cooperate fully with Landlord to assure the most effective operation of the
Building's heating and air-conditioning and to comply with any governmental
energy-saving rules, laws or regulations of which Tenant has actual notice, and
shall not adjust controls other than room thermostats installed for Tenant's
use. Tenant shall keep corridor doors closed.

13. Landlord reserves the right from time to time, in Landlord's sole and
absolute discretion, exercisable without prior notice and without liability to
Tenant, to: (a) name or change the name of the Building, Site or Project; (b)
change the address of the Building or Project, and/or (c) install, replace or
change any signs in, on or about the Common Areas, the Building or Site (except
for Tenant's signs, if any, which are expressly permitted by the Lease).

14. Landlord reserves the right to exclude from the Building between the hours
of 6:00 p.m. and 7:00 a.m., or such other hours as may be established from time
to time by Landlord, and on legal holidays, any person unless that person is
known to the person or employee in charge of the Building or has a pass or is
properly identified. Landlord shall not be liable for damages for any error with
regard to the admission to or exclusion from the Building of any person. Tenant
shall be responsible for all persons for whom it requests passes and shall be
liable to Landlord for all acts of such persons. Landlord reserves the right to
prevent access to the Building in case of invasion, mob, riot, public excitement
or other commotion by closing the doors or by other appropriate action.

15. Tenant shall close and lock all doors of its Premises and entirely shut off
all water faucets or other water apparatus, and, except with regard to Tenant's
computers and other equipment which reasonably require electricity on a 24-hour
basis, all electricity, gas or air outlets before Tenant and its employees leave
the Premises. Tenant shall be responsible for any damage or injuries sustained
by other tenants or occupants of the Building or by Landlord for noncompliance
with this rule.

16. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed, and no
foreign substances of any kind whatsoever shall be thrown therein.

17. Tenant shall not sell, or permit the sale at retail, of newspapers,
magazines, periodicals, theater tickets, or any other goods or merchandise to
the general public in or on the Premises. Tenant shall not make any room-to-room
solicitation of business from other tenants in the Project. Tenant shall not use
the Premises for any business or activity other than that specifically provided
for in the Lease.

18. Except as otherwise permitted by this Lease, Tenant shall not install any
radio or television antenna, loudspeaker or other device on the roof or exterior
walls of the Building. Tenant shall not interfere with radio or television
broadcasting or reception from or in the Building or elsewhere.

19. Except as expressly permitted in the Lease, Tenant shall not mark, drive
nails, screw or drill into the partitions, window mullions, woodwork or plaster,
or in any way deface the Premises or any part thereof, except to install normal
wall hangings and furniture systems employed by Tenant in the conduct of its
business. Tenant shall repair any damage resulting from noncompliance under this
rule and all damage resulting from the installation and removal of such
furniture systems.

20. Tenant shall not install, maintain or operate upon the Premises any vending
machines without the prior written consent of Landlord, except those used
exclusively for its employees and invitees.

21. Canvassing, soliciting and distribution of handbills or any other written
material, and peddling in and around the Project or the Building are expressly
prohibited, and each tenant shall cooperate to prevent same.

22. Landlord reserves the right to exclude or expel from the Project and/or the
Building any person who, in Landlord's judgment, is intoxicated or under the
influence of liquor or drugs or who is in violation of any of the Rules and
Regulations of the Project or Building.


                                  EXHIBIT "E"
                                      -2-
<PAGE>   60

23. Tenant shall store all its trash and garbage within its Premises or in
facilities in the Common Areas provided for such purposes. Tenant shall not
place in any trash box or receptacle any material which cannot be disposed of in
the ordinary and customary manner of trash and garbage disposal. All garbage and
refuse disposal shall be made in accordance with directions reasonably issued
from time to time by Landlord.

24. The Premises shall not be used for the storage of merchandise held for sale
to the general public, or for lodging or for manufacturing of any kind. No
cooking shall be done or permitted by Tenant on the Premises, except that use by
Tenant of Underwriters' Laboratory-approved equipment for brewing coffee, tea,
hot chocolate and similar beverages shall be permitted and the use of a
microwave shall be permitted, provided that such equipment and use is in
accordance with all applicable federal, state, county and city laws, codes,
ordinances, rules and regulations.

25. Tenant shall not use in any space, or in the public halls of the Building,
any hand trucks except those equipped with rubber tires and side guards, or such
other material-handling equipment as Landlord may approve. Tenant shall not
bring any other vehicles of any kind into the Building.

26. Tenant shall not use the name of the Project or Building in connection with,
or in promoting or advertising, the business of Tenant, except for Tenant's
address.

27. Tenant agrees that it shall comply with all fire and security regulations
that may be issued from time to time by Landlord, and Tenant also shall provide
Landlord with the name of a designated responsible employee to represent Tenant
in all matters pertaining to such fire or security regulations. Tenant shall
cooperate fully with Landlord in all matters concerning fire and other emergency
procedures.

28. Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage. Such responsibility shall include keeping doors
locked and other means of entry to the Premises closed.

29. Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of Tenant or any
other such tenant, nor prevent Landlord from thereafter enforcing any such Rules
and Regulations against any and all of the tenants in the Building.

30. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of premises in the Project or Building.
In the event of a conflict between any Rule and Regulation and the terms of the
Lease, the terms of the Lease shall prevail.

31. Landlord reserves the right to make such other and reasonable Rules and
Regulations as, in its judgment, may from time to time be needed for safety,
security, care and cleanliness of the Project and/or Building and for the
preservation of good order therein. Tenant agrees to abide by all such Rules and
Regulations hereinabove stated and any additional rules and regulations which
are adopted, provided that no such additional rules and regulations will be
deemed to alter or modify or otherwise effect Tenant's rights or increase its
obligations set forth in the Lease.

32. Tenant shall be responsible for the observance of all of the foregoing rules
by Tenant's employees, agents, clients, customers, invitees or guests.

33. Tenant shall not lay linoleum, tile, carpet or other similar floor covering
so that the same shall be affixed to the floor of the Premises in any manner
except by a paste, or other material which may easily be removed with water, the
use of cement or other similar adhesive materials being expressly prohibited.
The method of affixing any such linoleum, tile, carpet or other similar floor
covering shall be subject to the reasonable approval of Landlord. The expense of
repairing any damage resulting from a violation of this rule shall be borne by
Tenant.

34. Tenant shall not without Landlord's consent, which may be given or withheld
in Landlord's sole and absolute discretion, receive, store, discharge, or
transport firearms, ammunition, or weapons or explosives of any kind or nature
at, on or from the Premises, the Building or the Project.

                          PARKING RULES AND REGULATIONS

In addition to the parking provisions contained in the Lease to which this
Exhibit "E" is attached, the following rules and regulations shall apply with
respect to the use of the Building's parking facilities.

1. Every parker is required to park and lock his/her own vehicle. All
responsibility for damage to or loss of vehicles is assumed by the parker and
Landlord shall not be responsible for any such damage or loss by water, fire,
defective brakes, the act or omissions of others, theft, or for any other cause.

2. Tenant shall not park or permit its employees to park in any parking areas
designated by Landlord as areas for parking by visitors to the Project. Tenant
shall not leave vehicles in the parking areas overnight nor park any vehicles in
the parking areas other than automobiles, motorcycles, motor driven or non-motor
driven bicycles or four wheeled trucks.


                                  EXHIBIT "E"
                                      -3-
<PAGE>   61

3. Parking stickers or any other device or form of identification supplied by
Landlord as a condition of use of the parking facilities shall remain the
property of Landlord. Such parking identification device must be displayed as
requested and may not be mutilated in any manner. The serial number of the
parking identification device may not be obliterated. Devices are not
transferable and any device in the possession of an unauthorized holder will be
void.

4. Other than over night and reasonable extended parking for employees in
connection with business activities at the Project or business travel, no
overnight or extended term storage of vehicles shall be permitted.

5. Vehicles must be parked entirely within painted stall lines of a single
parking stall.

6. All directional signs and arrows must be observed.

7. The speed limit within all parking areas shall be five (5) miles per hour.

8. Parking is prohibited: (a) in areas not striped for parking; (b) in aisles;
(c) where "no parking" signs are posted; (d) on ramps; (e) in cross-hatched
areas; and (f) in reserved spaces and in such other areas as may be designated
by Landlord.

9. Loss or theft of parking identification devices must be reported to the
Management Office immediately, and a lost or stolen report must be filed by the
Tenant or user of such parking identification device at the time. Landlord has
the right to exclude any vehicle from the parking facilities that does not have
an identification device except for customers and clients of Tenant and other
tenants of the Project.

10. Any parking identification devices reported lost or stolen found on any
unauthorized car will be confiscated and the illegal holder will be subject to
prosecution.

11. Washing, waxing, cleaning or servicing of any vehicle in any area not
specifically reserved for such purpose is prohibited.

12. Tenant's continued right to park in the parking facilities is conditioned
upon Tenant abiding by these rules and regulations and those contained in this
Lease. Further, if the Lease terminates for any reason whatsoever, Tenant's
right to park in the parking facilities shall terminate concurrently therewith.

13. Landlord reserves the right to adopt reasonable and non-discriminatory rules
and regulations for the parking facilities as it deems necessary for the
operation of the parking facilities (excluding parking charges). Landlord may
refuse to permit any person who violates these rules to park in the parking
facilities, and any violation of the rules shall subject the vehicle to removal,
at such vehicle owner's expense.


                                  EXHIBIT "E"
                                      -4-
<PAGE>   62

                                   EXHIBIT "F"

                   SAMPLE FORM OF TENANT ESTOPPEL CERTIFICATE

The undersigned _____________________________, a _______________________________
("TENANT") hereby certifies to __________________________ a ____________________
("LANDLORD"), and _______________________________, as follows:

1. Attached hereto is a true, correct and complete copy of that certain Office
Lease dated ________________, _______ between Landlord and Tenant (the "LEASE"),
which demises Premises which are located at _____________________________. The
Lease is now in full force and effect and has not been amended, modified or
supplemented, except as set forth in Section 6 below.

2. The term of the Lease commenced on _____________________, ________.

3. The term of the Lease is currently scheduled to expire on _______________,
_______.

4. Tenant has no option to renew or extend the Term of the Lease except: _______
____________________________________________________________________________.

5. Tenant has no preferential right to purchase the Premises or any portion of
the Building or Site upon which the Premises are located, and Tenant has no
rights or options to expand into other space in the Building except:
__________________________________________________________.

6. The Lease has: (Initial One)

       (___) not been amended, modified, supplemented, extended, renewed or
       assigned.

       (___) been amended, modified, supplemented, extended, renewed or assigned
       by the following described agreements, copies of which are attached
       hereto: ________________________________________________________________
       ________________________________________________________________________.

7. Tenant has accepted and is now in possession of the Premises and has not
sublet, assigned or encumbered the Lease, the Premises or any portion thereof
except as follows:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

8. The current Monthly Basic Rent is $______________; and current monthly
parking charges are $________________.

9. Tenant's Percentage is __________%, and Tenant's Percentage of Operating
Expenses, Real Property Taxes and Assessments, Insurance Costs, and Utilities
Costs currently payable by Tenant is $_________________ per month, which amount
is Landlord's current estimate of Tenant's Percentage of Operating Expenses,
Real Property Taxes and Assessments, Insurance Costs, and Utilities Costs:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

10. The amount of security deposit (if any) is $_________________. No other
security deposits have been made.

11. All rental payments payable by Tenant have been paid in full as of the date
hereof. No rent under the Lease has been paid for more than thirty (30) days in
advance of its due date.

12. To Tenant's knowledge, all work required to be performed by Landlord under
the Lease has been completed and has been accepted by Tenant, and all tenant
improvement allowances have been paid in full.

13. To Tenant's knowledge, as of the date hereof, there are no defaults on the
part of Landlord or Tenant under the Lease.

14. To Tenant's knowledge, Tenant has no defense as to its obligations under the
Lease and currently claims no set-off or counterclaim against Landlord; Tenant
has such defenses as are provided by applicable law or the Lease and this
agreement does not constitute a waiver of any unknown claims.

15. Tenant has no right to any concession (rental or otherwise) or similar
compensation in connection with renting the space it occupies, except as
expressly provided in the Lease.


                                  EXHIBIT "F"
<PAGE>   63
16. All insurance required of Tenant under the Lease has been provided by Tenant
and all premiums have been paid.

17. There has not been filed by or against Tenant a petition in bankruptcy,
voluntary or otherwise, any assignment of creditors, any petition seeking
reorganization or arrangement under the bankruptcy laws of the United States or
any state thereof, or any other action brought pursuant to such bankruptcy laws
with respect to Tenant.

18. Tenant pays rent due Landlord under the Lease to Landlord and does not have
any knowledge of any other person who has any right to such rents by collateral
assignment or otherwise.

The foregoing certification is made with the knowledge that is about to [fund a
loan to Landlord or purchase the Building from Landlord], and that is relying
upon the representations herein made in [funding such loan or purchasing the
Building].

Dated:_____________________, _______.

                                        TENANT:


                                        --------------------------------------,
                                        a
                                         --------------------------------------


                                        By:
                                           ------------------------------------
                                           Print Name:
                                                      -------------------------
                                           Its:
                                               --------------------------------


                                  EXHIBIT "F"
<PAGE>   64
                           JANITORIAL SPECIFICATIONS

A. Janitorial Service Specifications for Tenant Suites and Common Areas on
   Tenant-Occupied Floors

     1.   Nightly Services

          a.   Secure all lights as soon as possible each night.

          b.   Vacuum carpeted traffic lanes.

          c.   Dust mop all resilient and composition floors with treated dust
               mops. Damp mop to remove spills and water stains as required.

          d.   Dust desks and office furniture with treated dust cloths.

          e.   Papers and folders on desks are not to be moved.

          f.   Empty all ash trays and urns. Clean and sanitize as required.

          g.   Empty all waste paper baskets and other trash containers.

          h.   Remove all trash from floors to the designated trash areas.

          i.   Remove fingerprints, dirt smudges, graffiti, etc., from all
               doors, frames, glass partitions, windows, light switches, walls,
               elevator door jambs and elevator interiors.

          j.   Return chairs and waste baskets to proper positions.

          k.   Clean, sanitize and polish drinking fountains.

          l.   Police all service stair wells.

          m.   Police all interior public corridor planters.

          n.   Dust and remove debris from all metal door thresholds.

          o.   Wipe clean smudged brightwork.

          p.   Spotclean resilient and composition floors as required.


                         ABLE BUILDING MAINTENANCE CO.


                                   EXHIBIT G
                                      -1-
<PAGE>   65
                       JANITORIAL SPECIFICATIONS page two

A. Janitorial Service Specifications for Tenant Suites and Common Areas on
   Tenant-Occupied Floors (continued)

     1.   Nightly Services (continued)

          r.   Service all walk-off mats as required.

          s.   Close all drapes.

          t.   Check for burned out lights and report them to supervisor.
               Janitorial Supervisor to leave list of burned out lights at the
               lobby console on a nightly basis.

     2.   Weekly Services

          a.   Dust all low reach areas including, but not limited to, chair
               rungs, structural and furniture ledges, baseboards, window
               sills, door louvers, wood panelling molding, etc.

          b.   Dust inside of all door jambs, dust interior window blinds.

          c.   Clean and polish all metal door thresholds.

          d.   Wipe clean and polish all brightwork.

          e.   Sweep all service stair wells.

          f.   Dust all vinyl base.

          g.   Edge all carpeted areas.

          h.   Clean and spray buff all building standard resilient and/or
               composite flooring.

     3.   Monthly Services

          a.   Dust all high reach areas including, but not limited to, tops of
               door frames, structural and furniture ledges, air-conditioning
               diffusers



                         ABLE BUILDING MAINTENANCE CO.


                                   EXHIBIT G
                                      -2-

<PAGE>   66
                      JANITORIAL SPECIFICATIONS page three

A. Janitorial Service Specifications for Tenant Suites and Common Areas on
   Tenant-Occupied Floors (continued)

               and return grilles, tops of partitions, picture frames,
               parabolic light fixtures, etc.

          b.   Clean and refinish all resilient floors with a slip-retardant
               finish.

     4.   Bi-Monthly Services

          a.   Spot clean all corridor walls, trim, etc.

B.   Restroom Service Specifications

     1.   Nightly Services

          a.   Restock all restrooms with supplies from the Owner's stock,
               including paper towels, toilet tissue, seat covers and hand soap,
               sanitary napkins and tampons as required. Restock all restrooms
               with trashliners, and sanisacks from Contractor's stock.

          b.   Wash and polish all mirrors, dispensers, faucets, flushometers
               and brightwork with non-scratch disinfectant cleaner. Wipe dry
               all sinks.

          c.   Wash and sanitize all toilets, toilet seats, urinals and sinks
               with non-scratch disinfectant cleaner.

          d.   Remove stains, descale toilets, urinals and sinks, as required.

          e.   Mop all restroom floors with disinfectant germicidal solution.

          f.   Empty and sanitize all waste and sanitary napkin and tampon
               receptacles.

          g.   Remove all restroom trash.


                         ABLE BUILDING MAINTENANCE CO.


                                   EXHIBIT G
                                      -3-
<PAGE>   67
                      JANITORIAL SPECIFICATIONS page four

B.   Restroom Service Specifications (continued)

     1.   Nightly Services (continued)

          h.   Spotclean finger prints, marks and graffiti from walls,
               partitions, glass, aluminum and stainless and light switches as
               required.

          i.   Empty and damp wipe all ashtrays.

          j.   Check for light fixtures burned out lights or not working
               properly and report them to supervisor. Janitorial Supervisor to
               leave list at Building Office on a nightly basis.

          k.   Report to Janitorial Supervisor all bathroom fixtures not
               working properly.

     2.   Weekly Services

          a.   Dust all high reach areas including, but not limited to, tops of
               door frames, structural and furniture ledges, air-conditioning
               diffusers and return grilles, tops of partitions, picture
               frames, parabolic light fixtures, etc.

     3.   Monthly Services

          a.   Wipe down all tile walls and metal partitions. Partitions shall
               be left clean and unstreaked after this work.

          b.   Clean all ventilation grilles.

          c.   Dust all doors and door jambs.

          d.   Thoroughly machine scrub all ceramic tile floors.

     4.   Quarterly Services

          a.   Reseal all ceramic tile floor using approved sealers.



                         ABLE BUILDING MAINTENANCE CO.



                                   EXHIBIT G
                                      -4-

<PAGE>   68
                      JANITORIAL SPECIFICATIONS page five

C. Main Floor, Elevator Lobbies and Public Corridor Specifications

     1.   Nightly Services

          a.   Spot clean all glass including low partitions and the corridor
               side of all windows and glass doors to tenant premises.

          b.   Spot clean all metal brightwork including swinging door hardware,
               kick plates, base, partition tops, hand rails, waste paper
               receptacles, planters, elevator call button plates, hose cabinets
               and visible hardware on the corridor side of tenant entry doors.

          c.   Thoroughly clean all door saddles of dirt and debris.

          d.   Wash and buff lobby floor.

          e.   Spot clean and dust directory board glass and ledges.

          f.   Empty, clean and sanitize as required all waste paper baskets
               and refuse receptacles.

          g.   Vacuum all carpets as necessary, spot clean as necessary.

          h.   Spot clean all elevator doors and frames.

          i.   Wash and polish all drinking fountains.

          j.   Sweep and/or dust mop all tile floors.

     2.   Weekly Services

          a.   Buff all corridor halls where tile is installed.

          b.   Spot clean walls and doors in corridors.

          c.   Dust all high precast ledges within interior lobby.


                         ABLE BUILDING MAINTENANCE CO.


                                   EXHIBIT G
                                      -5-
<PAGE>   69
                       JANITORIAL SPECIFICATIONS page six

     3.   Monthly Services

          a.   Strip and seal marble lobby floor.

     4.   Quarterly Services

          a.   Thoroughly scrub and refinish all resilient floors with a
               slip-retardant finish.

D. Passenger Elevator Cleaning Specifications

     1.   Nightly Services

          a.   Spot clean cab walls and interior doors.

          b.   Spot clean outside surfaces of all elevator doors and frames.

          c.   Vacuum all cab floors thoroughly. Edge thoroughly.

          d.   Vacuum all elevator thresholds.

     2.   Weekly Services

          a.   Thoroughly clean entire surfaces of all doors and frames and
               outside surfaces of all doors and frames.

          b.   Steel wool all thresholds.

E. Exterior Structure and Grounds Services Specifications

     1.   Nightly Services

          a.   Police entire perimeter of building, including landscaped areas,
               storm drain grilles to the property lines on all sides, and
               loading dock area.


                         ABLE BUILDING MAINTENANCE CO.


                                   EXHIBIT G
                                      -6-
<PAGE>   70
                      JANITORIAL SPECIFICATIONS page seven

E. Exterior Structure and Grounds Services Specifications

     1.   Nightly Services (continued)

          b.   Spot sweep all accumulations of dirt, papers and leaves in all
               corner areas where winds tend to cause collections of debris.
               Spot clean-up once upon arrival (5:00 p.m.) and then again during
               the janitorial shift.

          c.   Spot clean all exterior glass at building entrances.

          d.   Lift nap on all entry walk-off mats as necessary with a heavy
               bristle brush and vacuum.

          e.   Sweep sidewalk and steps, including gum removed.

          f.   Hose down sidewalks.



                         ABLE BUILDING MAINTENANCE CO.


                                   EXHIBIT G
                                      -7-
<PAGE>   71

                             EXTENSION OPTION RIDER

                           RIDER N0. 1 TO OFFICE LEASE

This Rider No. 1 is made and entered into by and between LNR HARBOR BAY, LLC, a
California Limited Liability Company ("LANDLORD"), and THE GOOD GUYS-CALIFORNIA
INC., a California corporation ("TENANT"), as of the day and year of the Lease
between Landlord and Tenant to which this Rider is attached. Landlord and Tenant
hereby agree that, notwithstanding anything contained in the Lease to the
contrary, the provisions set forth below shall be deemed to be part of the Lease
and shall supersede any inconsistent provisions of the Lease. All references in
the Lease and in this Rider to the "Lease" shall be construed to mean the Lease
(and all exhibits and Riders attached thereto), as amended and supplemented by
this Rider. All capitalized terms not defined in this Rider shall have the same
meaning as set forth in the Lease.

1. Landlord hereby grants to Tenant one (1) option (the "EXTENSION OPTION") to
extend the Term of the Lease for one (1) additional period of five (5) years
(the "OPTION TERM"), on the same terms, covenants and conditions as provided for
in the Lease during the initial ten (10) year Term, except for the Monthly Basic
Rent, which shall initially be equal the greater of (a) the Monthly Basic Rent
payable by Tenant during the last month of the then current Term immediately
preceding the Option Term or (b) ninety-five percent (95%) of the Fair Market
Rent for the Premises for the initial year of the Option Term (thereafter, such
rent shall be subject to annual adjustments during the remainder of the Option
Term, if such adjustments are part of the Fair Market Rent determination) as
defined and determined in accordance with the provisions of Section 3 below.

2. The Extension Option must be exercised, if at all, by written notice
("EXTENSION NOTICE") delivered by Tenant to Landlord no sooner than that date
which is three hundred sixty-five (365) days and no later than that date which
is one hundred eighty (180) days prior to the expiration of the then current
term of the Lease. The Extension Option shall, at Landlord's sole option, not be
deemed to be properly exercised if, at the time the Extension Option is
exercised or on the scheduled commencement date for the Option Term, Tenant is
in default beyond the period of notice and opportunity to cure provided in the
Lease on either the date of delivery of the Extension Notice or the date the
Option Term would commence. Provided Tenant has properly and timely exercised
the Extension Option, the then current term of the Lease shall be extended by
the Option Term, and all terms, covenants and conditions of the Lease shall
remain unmodified and in full force and effect, except that the Monthly Basic
Rent shall be as set forth above.

3. If Landlord determines that the Monthly Basic Rent for the Option Term shall
be the Monthly Basic Rent payable by Tenant during the last month of the then
current Term pursuant to Section 1(a) above, such determination shall be
conclusive, Tenant shall have no right to object thereto, and the following
provisions regarding the determination of the fair market rental rate shall not
apply. If, however, Landlord determines that the Monthly Basic Rent for the
applicable Option Term shall be the fair market rental rate pursuant to Section
1(b) above, then such fair market rate shall be determined in accordance with
the Fair Market Rental Rate Rider attached to the Lease as Rider No. 2.

4. Notwithstanding the fair market rental rate determined pursuant to Section 3
above, in no event shall the initial Monthly Basic Rent payable during the
Option Term be less than the Monthly Basic Rent payable during the last month of
the immediately preceding Term.

5. Notwithstanding the fair market rental rate determined pursuant to Section 3
above, Tenant shall have the right to cancel its election to extend the Term
upon written notice to Landlord if Tenant disapproves the determination of the
Fair Market Rent pursuant to Rider No. 2 provided (i) at such time at least six
(6) months remains on Term or the Term is extended such that six (6) months
shall remain from the date of Tenant's notice of cancellation until the date
Tenant will cease payment of rent under this Lease, (ii) Tenant shall pay rent
throughout such six (6) month period at the then Monthly Basic Rent rate for any
portion of the original Term remaining and at the Fair Market rental rate
determined as provided in Rider No. 2 for any extended period of time needed to
provide such six (6) month occupancy period, (iii) Tenant pays all costs of the
appraisal process (i.e., both parties' costs).


                                  RIDER NO. 1
                                      -1-
<PAGE>   72

                          FAIR MARKET RENTAL RATE RIDER

                           RIDER NO. 2 TO OFFICE LEASE

This Rider No. 2 is made and entered into by and between LNR HARBOR BAY, LLC, a
California limited liability company ("LANDLORD"), and THE GOOD GUYS -
CALIFORNIA, INC., a California corporation ("TENANT"), as of the day and year of
the Lease between Landlord and Tenant to which this Rider is attached. Landlord
and Tenant hereby agree that, notwithstanding anything contained in the Lease to
the contrary, the provisions set forth below shall be deemed to be part of the
Lease and shall supersede any inconsistent provisions of the Lease. All
references in the Lease and in this Rider to the "Lease" shall be construed to
mean the Lease (and all exhibits and Riders attached thereto), as amended and
supplemented by this Rider. All capitalized terms not defined in this Rider
shall have the same meaning as set forth in the Lease.

1. The term "fair market rental rate" as used in the Lease and any Rider
attached thereto shall mean the annual amount per square foot, projected during
and throughout the Option Term (i.e., including annual adjustments to rent if
such annual adjustments are market at such time), that a willing, non-equity
renewal tenant (excluding sublease and assignment transactions) would pay, and a
willing, institutional landlord of a comparable quality office building located
in the Alameda, California area would accept, in an arm's length transaction
(what Landlord is accepting in then current transactions for the Building may be
included in the data used for purposes of projecting rent for the Option Term),
for space of comparable size, quality and floor height as the Premises, taking
into account the age, quality and layout of the existing improvements in the
Premises, and taking into account items that professional real estate brokers or
professional real estate appraisers customarily consider, including, but not
limited to, rental rates, space availability, tenant size, tenant improvement
allowances, parking charges and any other lease considerations, if any, then
being charged or granted by Landlord or the lessors of such similar office
buildings. The fair market rental rate will be an effective rate, not
specifically including, but accounting for, the appropriate economic
considerations described above.

2. In the event where a determination of fair market rental rate is required
under the Lease, Landlord shall provide written notice of Landlord's
determination of the fair market rental rate not later than sixty (60) days
after the last day upon which Tenant may timely exercise the right giving rise
to the necessity for such fair market rental rate determination. Tenant shall
have ten (10) days ("Tenant's Review Period") after receipt of Landlord's notice
of the fair market rental rate within which to accept such fair market rental
rate or to reasonably object thereto in writing. Failure of Tenant to so object
to the fair market rental rate submitted by Landlord in writing within Tenant's
Review Period shall conclusively be deemed Tenant's approval and acceptance
thereof. If within Tenant's Review Period Tenant reasonably objects to or is
deemed to have disapproved the fair market rental rate submitted by Landlord,
Landlord and Tenant will meet together with their respective legal counsel to
present and discuss their individual determinations of the fair market rental
rate for the Premises under the parameters set forth in Paragraph 1 above and
shall diligently and in good faith attempt to negotiate a rental rate on the
basis of such individual determinations. Such meeting shall occur no later than
ten (10) days after the expiration of Tenant's Review Period. The parties shall
each provide the other with such supporting information and documentation as
they deem appropriate. At such meeting if Landlord and Tenant are unable to
agree upon the fair market rental rate, they shall each submit to the other
their respective best and final offer as to the fair market rental rate. If
Landlord and Tenant fail to reach agreement on such fair market rental rate
within five (5) business days following such a meeting (the "Outside Agreement
Date"), Tenant's Extension Option will be deemed null and void unless Tenant
demands appraisal, in which event each party's determination shall be submitted
to appraisal in accordance with the provisions of Section 3 below.

3. (a) Landlord and Tenant shall each appoint one (1) independent appraiser who
shall by profession be an M.A.I. certified real estate appraiser who shall have
been active over the five (5) year period ending on the date of such appointment
in the leasing of commercial (including office) properties in the Alameda area.
The determination of the appraisers shall be limited solely to the issue of
whether Landlord's or Tenant's last proposed (as of the Outside Agreement Date)
best and final fair market rental rate for the Premises is the closest to the
actual fair market rental rate for the Premises as determined by the appraisers,
taking into account the requirements specified in Section 1 above. Each such
appraiser shall be appointed within fifteen (15) days after the Outside
Agreement Date.

(b) The two (2) appraisers so appointed shall within fifteen (15) days of the
date of the appointment of the last appointed appraiser agree upon and appoint a
third appraiser who shall be qualified under the same criteria set forth
hereinabove for qualification of the initial two (2) appraisers.

(c) The three (3) appraisers shall within thirty (30) days of the appointment of
the third appraiser reach a decision as to whether the parties shall use
Landlord's or Tenant's submitted best and final fair market rental rate, and
shall notify Landlord and Tenant thereof. During such thirty (30) day period,
Landlord and Tenant may submit to the appraisers such information and
documentation to support their respective positions as they shall deem
reasonably relevant and Landlord and Tenant may each appear before the
appraisers jointly to question and respond to questions from the appraisers.

(d) The decision of the majority of the three (3) appraisers shall be binding
upon Landlord and Tenant and neither party shall have the right to reject the
decision or to undo the exercise of the Option. If either Landlord or Tenant
fails to appoint an appraiser within the time period specified in Section 3(a)


                                  RIDER NO. 2
                                      -1-
<PAGE>   73

hereinabove, the appraiser appointed by one of them shall within thirty (30)
days following the date on which the party failing to appoint an appraiser could
have last appointed such appraiser reach a decision based upon the same
procedures as set forth above (i.e., by selecting either Landlord's or Tenant's
submitted best and final fair market rental rate), and shall notify Landlord and
Tenant thereof, and such appraiser's decision shall be binding upon Landlord and
Tenant and neither party shall have the right to reject the decision or to undo
the exercise of the Option.

(e) If the two (2) appraisers fail to agree upon and appoint a third appraiser,
either party, upon ten (10) days written notice to the other party, can apply to
the Presiding Judge of the Superior Court of Alameda County to appoint a third
appraiser meeting the qualifications set forth herein. The third appraiser,
however selected, shall be a person who has not previously acted in any capacity
for either party.

(f) The cost of each party's appraiser shall be the responsibility of the party
selecting such appraiser, and the cost of the third appraiser (or arbitration,
if necessary) shall be shared equally by Landlord and Tenant.

(g) If the process described hereinabove has not resulted in a selection of
either Landlord's or Tenant's submitted best and final fair market rental rate
by the commencement of the applicable lease term, then the fair market rental
rate estimated by Landlord will be used until the appraiser(s) reach a decision,
with an appropriate rental credit and other adjustments for any overpayments of
Monthly Basic Rent or other amounts if the appraisers select Tenant's submitted
best and final estimate of the fair market rental rate. The parties shall enter
into an amendment to this Lease confirming the terms of the decision.

(h) As provided in Rider 2, once the fair market rental rate for the Premises
has been established, the rental rate for the Premises shall be set at ninety
five percent (95%) of such fair market rental rate (including annual
adjustments, if applicable, at 95% of the adjusted rates per annum).


                                  RIDER NO. 2
                                      -2-
<PAGE>   74

                              FIRST RIGHT TO LEASE

                           RIDER NO. 3 TO OFFICE LEASE

This Rider No. 3 is made and entered into by and between LNR HARBOR BAY, LLC, a
California limited liability company ("LANDLORD"), and THE GOOD GUYS-CALIFORNIA,
INC., a California corporation ("TENANT"), as of the day and year of the Lease
between Landlord and Tenant to which this Rider is attached. Landlord and Tenant
hereby agree that, notwithstanding anything contained in the Lease to the
contrary, the provisions set forth below shall be deemed to be part of the Lease
and shall supersede any inconsistent provisions of the Lease. All references in
the Lease and in this Rider to the "Lease" shall be construed to mean the Lease
(and all exhibits and Riders attached thereto), as amended and supplemented by
this Rider. All capitalized terms not defined in this Rider shall have the same
meaning as set forth in the Lease.

1. Tenant shall have a continuing right of first offer to lease ("Tenant's Right
of First Offer") any space in the Building which becomes available for lease to
third parties after the expiration of any existing lease for such space during
the Lease Term, including the expiration of all renewal or extension options,
and after the existing tenant or occupant vacates such space ("First Offer
Space"). Before making any such First Offer Space available to any third
parties, Landlord will give Tenant written notice ("Landlord's Availability
Notice") of the availability of any First Offer Space and the date the existing
tenant or occupant, if any, is expected to vacate such space, together with the
rental rate for the First Offer Space which shall be equal to ninety-five
percent (95%) of the then prevailing "fair market rental rate" for the First
Offer Space as defined in Rider 2 to this Lease. Tenant's Right of First Offer
shall, at Landlord's sole option upon written notice to Tenant, not be deemed to
be properly exercised if, at the time the Right of First Offer is exercised,
Tenant is in default beyond the period of notice and opportunity to cure
provided in the Lease.

2. Within three (3) business days after receipt of Landlord's Availability
Notice, Tenant must give Landlord written notice pursuant to which Tenant shall
elect to either: (1) lease such First Offer Space for 95% of such fair market
rental rate and upon the same non-economic terms as are set forth in the Lease
with respect to the Premises; (2) refuse to lease such First Offer Space,
specifying that such refusal is not based upon the fair market rental rate, but
upon Tenant's lack of need for such First Offer Space, in which event Landlord
may at any time thereafter lease such First Offer Space to any party upon any
terms Landlord deems appropriate; or (3) refuse to lease the First Offer Space,
specifying that such refusal is based upon the fair market rental rate, in which
event Tenant will also specify the rental rate upon which Tenant is willing to
lease such First Offer Space. Tenant's failure to timely choose either clause
(1), clause (2) or clause (3) above will be deemed to be Tenant's choice of
clause (2) above. If Tenant gives Landlord notice pursuant to clause (3) above,
Landlord may elect, within five (5) days following receipt of such notice from
Tenant, either to: (i) lease such First Offer Space to Tenant upon such revised
fair market rental rate proposed by Tenant, and the same other non-economic
terms as set forth in the Lease; or (ii) lease the First Offer Space at any time
thereafter to any third party upon terms which are not substantially more
favorable to said party than the 95% of the fair market rental rate originally
proposed by Tenant. Landlord's failure to timely choose either clause (i) or
clause (ii) above will be deemed to be Landlord's choice of clause (ii) above.
If Tenant chooses (or is deemed to have chosen) clause (2) above, or if Landlord
chooses (or is deemed to have chosen) clause (ii) above, Tenant's Right to Lease
any First Offer Space will be null and void until Landlord once again delivers
to Tenant a Landlord's Availability Notice as requested herein, in which event,
the procedures and sequences set forth above will be followed. If Tenant
exercises its Right of First Offer as provided herein, the parties will promptly
thereafter execute an amendment to the Lease to include the First Offer Space in
the Premises and to document the lease terms thereof.

3. If Tenant chooses (or is deemed to have chosen) clause (2) above more than
three (3) times during the Term, as extended, Tenant's Right of First Offer
shall terminate.


                                  RIDER NO. 3
                                      -1-
<PAGE>   75

                           RIDER NO. 4 TO OFFICE LEASE

Landlord and Tenant agree to incorporate into or attach as an exhibit to an
amendment to the Lease, the terms and conditions of this Rider No. 4 at such
time as Tenant shall determine the specifications for Tenant's Generator and AST
as defined herein.

1. Emergency Power Generator. Subject to the terms and conditions set forth in
this Lease and to Tenant obtaining all necessary governmental permits and
approvals, and so long as Tenant shall not interfere with any Building systems,
Tenant shall have the right to install, operate and maintain, at Tenant's sole
cost and expense, a maximum ____ kilowatt back-up generator ("TENANT'S
GENERATOR") on the Site near the Building or on the roof of the Building at
Landlord's discretion. Tenant shall not be obligated to pay any rental or other
charges with respect to the area designated for Tenant's Generator. Landlord
shall have the right to review and approve Tenant's plans and specifications for
the proposed equipment, including, without limitation, the size, method of
installation and visibility of such equipment. Notwithstanding the foregoing, in
no event may the installation of Tenant's Generator involve the installation of
an underground storage tank. The above-ground storage tank associated with
Tenant's Generator (the "AST") shall not exceed ____ gallons in capacity, shall
be double walled in thickness, shall contain diesel fuel only (to power Tenant's
Generator only), and shall employ at a minimum a double containment system
whereby if the first containment system fails, a second containment system shall
be present to prevent releases of Hazardous Materials, all in accordance with
applicable laws and environmental regulations. For these purposes, a sealed,
uncracked concrete slab containment area without drains shall be sufficient (but
shall not be the exclusive method) to constitute the second containment system,
provided it is large enough to completely contain a release of the maximum
volume of Hazardous Materials which could be present in the first containment
system. Landlord, in its sole and absolute discretion, shall determine the
location of Tenant's Generator and the AST. Tenant acknowledges that any loss of
parking attributable to the location of Tenant's Generator and/or AST will be at
Tenant's sole risk and come out of Tenant's share of parking. All handling, use,
storage and disposal of Hazardous Materials relating to the AST or Tenant's
Generator shall be accomplished by Tenant at its sole cost and expense in
accordance with and subject to the terms of the Lease regarding Hazardous
Materials.

       In conjunction with the installation of Tenant's Generator, subject to
Landlord's prior approval of Tenant's plans and specifications, Tenant shall
have the right to install an emergency generator connection on the outside of
the Building for the purpose of connecting Tenant's Generator to the Premises
and an appurtenant electrical grounding system. Furthermore, Tenant shall have
the right to install ______(___) ______(__) inch conduits from Tenant's
Generator to the Premises, provided, however, that such conduits are installed
below grade to Landlord's reasonable satisfaction in accordance with the design
and architectural standards for the Building.

       Prior to or within sixty (60) days following the expiration, or earlier
termination of the Term of this Lease, Tenant agrees upon Landlord's request to
(i) promptly remove from the Project, at its sole cost and expense, the AST
(including, at Landlord's request, the basement slab), if any, and Tenant's
Generator and all Hazardous Materials which are brought upon, stored, used,
generated or released upon, in, under or about the Premises, the Project or any
portion thereof by Tenant or any Tenant Parties in connection with Tenant's
Generator or AST, and (ii) return the Premises and the balance of the Project to
substantially the condition existing prior to Tenant's installation of Tenant's
Generator and AST. Tenant shall be solely responsible for complying with any and
all Environmental Laws relating to the AST, Tenant's Generator and all Hazardous
Materials associated with either of the same, including, without limitation, all
permitting and tank installations, monitoring and removal/closure obligations.
For purposes of all Environmental Laws, Tenant shall be the owner and operator
of the AST. Tenant shall be responsible for ensuring compliance by all Tenant
Parties with all Environmental Laws relating to the AST and Tenant's Generator.
Any acknowledgment, consent or approval by Landlord of Tenant's use or handling
of Hazardous Materials shall not constitute an assumption of risk respecting the
same nor a warranty or certification by Landlord that Tenant's proposed use and
handling of Hazardous Materials is safe or reasonable or in compliance with
Environmental Laws.

       From time to time during the Term and for up to one hundred eighty (180)
days thereafter, Landlord may, and upon Landlord's request, Tenant shall, retain
a registered environmental consultant ("CONSULTANT") acceptable to Landlord to
conduct an environmental investigation of the Project ("ENVIRONMENTAL
ASSESSMENT") (i) for Hazardous Materials contamination in, about or beneath the
Project relative to the AST or Tenant's Generator, and (ii) to assess the
activities of Tenant and all Tenant Parties with respect to Tenant's Generator
and the AST for compliance with all Environmental Laws and to recommend the use
of procedures intended to reasonably reduce the risk of a release of Hazardous
Materials. If the Environmental Assessment discloses any material breach of
Environmental Laws by Tenant or any Tenant Parties, then the cost thereof shall
be the sole responsibility of Tenant, payable as additional rent under this
Lease. Otherwise, the costs of the Environmental Assessment shall be the
responsibility of Landlord. If Landlord so requires, Tenant shall comply, at its
sole cost and expense, with all reasonable recommendations contained in the
Environmental Assessment, including any reasonable recommendations with respect
to precautions which should be taken with respect to Tenant's or Tenant Parties'
activities at the Project relative to the AST or Tenant's Generator or any
recommendations for additional testing and studies to detect the presence of
Hazardous Materials relative to the AST or Tenant's Generator. Tenant covenants
to reasonably cooperate with the Consultant and to allow entry


                                  RIDER NO. 4
                                      -1-
<PAGE>   76

and reasonable access to the AST and Tenant's Generator for the purpose of the
Consultant's investigations.

       If any cleanup or monitoring procedure is required by any applicable
governmental authorities in or about the Project as a consequence of any
Hazardous Materials contamination by Tenant or any of Tenant's Parties arising
out of Tenant's Generator or AST use, and the procedure for cleanup is not
completed (to the satisfaction of all applicable governmental authorities) prior
to the expiration or earlier termination of the Term of this Lease (referred to
herein as "TENANT'S FAILURE TO CLEAN-UP"), then, without limiting any of
Landlord's other rights and remedies contained in this Lease (including, without
limitation, any indemnity and restoration obligations of Tenant contained in
this Lease), Tenant will additionally be liable for any revenue of Landlord lost
to the extent Landlord is precluded from re-leasing the Premises or any other
portion of the Project as a result of such contamination.

       Subject to Tenant obtaining all necessary governmental permits and
approvals, Tenant shall have the right, at Tenant's sole cost and expense, to
test Tenant's Generator once per month during the Term at a time after normal
business hours mutually agreed upon by Landlord and Tenant.

       Tenant shall indemnify and hold Landlord harmless from any and all
liability, losses, damages, actions or causes of action, judgments, costs and
expenses arising in any way from Tenant's installation, operation, maintenance
and removal of Tenant's Generator and the AST, or any breach of Tenant's
obligations under this Lease with respect to Tenant's Generator and the AST. The
representations, warranties and agreements of the Tenant set forth in this Rider
No. 4 shall survive the expiration of the Lease Term or the earlier termination
of the Lease for any reason.

2. Compliance With Laws. Nothing contained in this Exhibit shall in any way
limit or negate Tenant's obligation to comply with all applicable laws and to
obtain all necessary governmental approvals in accordance with the terms of the
Lease.

3. Initial Installation and Testing. Upon written notice to Landlord, Tenant
shall have the right, at Tenant's sole cost and expense, at any time following
the execution of this Lease by Tenant in a form mutually acceptable to Landlord
and Tenant, to enter upon the Building and Site and to carry out any tests,
inspections, pre-installation and installation activities on the Premises and
Site as necessary for the construction and installation of the Equipment,
including without limitation, engineering and environmental surveys (excluding
any Phase II environmental surveys or any other environmental surveys which may
violate Landlord's environmental insurance policy, physical inspections, soil
test borings, and underground trenching). Immediately following the completion
of such tests, inspections or pre-installation activities, Tenant shall, at
Tenant's sole cost and expense, repair any damage to the Building and Site
caused by such inspections or pre-installation activities, including repaving
and re-landscaping any affected areas of the Project and Site. Any such entry
onto the Premises and Site prior to the Commencement Date of the Lease shall be
on all of the terms and provisions of the Lease, including without limitation,
Tenant's indemnification and insurance obligations thereunder, except for
Tenant's obligation to pay rent.

4. Equipment Ownership; Surrender. All improvements, alterations, augmentations,
installations and modifications shall become part of the Premises or Project, as
the case may be, upon installation and shall remain with the Premises or
Project, as the case may be, and belong to Landlord upon the expiration or
sooner termination of the Lease, unless Landlord shall notify Tenant of
Landlord's election that Tenant remove any or all of such items, in which event
Tenant shall remove such items at Tenant's sole cost and expense and shall
restore the Premises and other portions of the Project modified by Tenant to the
condition existing prior to Tenant's modifications. If Tenant fails to remove
any such items Tenant is required to remove as provided herein, Landlord shall
have the right to remove all such items at Tenant's expense and Tenant hereby
indemnifies Landlord from and against any and all such costs.

5. Condition at Surrender. Subject to the provisions of this Rider No. 4 above,
on or before Lease termination and Tenant's surrender of the Premises to
Landlord, Tenant shall remove all of its Equipment, personal property and any of
the special tenant improvement installations, including, without limitation,
those items for which Landlord, at the time of its approval of the plans for the
improvements, notifies Tenant in writing that such improvements are to be
removed at Lease termination. Tenant shall repair any damage caused by the
removal of any and all equipment, personal property or tenant improvements from
the Premises, the Building and the Site, and shall restore the Premises, the
Building and the Site to the condition existing as of the later of (i) the date
the Lease was fully executed, or (ii) the date of installation of such items by
Tenant.


                                  RIDER NO. 4
                                      -2-