<PAGE>

                                                                   EXHIBIT 10.51

                                  OFFICE LEASE

                                    BETWEEN

                           BRADBURY ASSOCIATES, L.P.,
                        a California limited Partnership

                                   LANDLORD,

                                      and

                       CATELLUS DEVELOPMENT CORPORATION,
                             a Delaware corporation

                                     TENANT
<PAGE>

                               TABLE OF CONTENTS
                               -----------------
<TABLE>
<CAPTION>
                                                                                        Page
                                                                                        ----
<S>                                                                                     <C>
ARTICLE 1: PREMISES...................................................................   1
     1.1   Lease of Premises..........................................................   1
     1.2   Basic Terms................................................................   1
     1.3   Tenant's Acceptance of Premises............................................   4
     1.4   Rights Reserved to Landlord................................................   4
     1.5   BONA Method of Measurement.................................................   4
     1.6   Access to Building and Parking.............................................   5
     1.7   Additional Space...........................................................   5

ARTICLE 2: LEASE TERM.................................................................   5
     2.1   Commencement Date..........................................................   5
     2.2   Expiration Date............................................................   6
     2.3   Possession.................................................................   6
     2.4   Delays Caused By Tenant....................................................   8
     2.5   Renewal Option.............................................................   8
     2.6   Right to Terminate.........................................................  11

ARTICLE 3: RENT.......................................................................  12
     3.1   Base Rent..................................................................  12
     3.2   Intentionally Omitted......................................................  13
     3.3   Additional Rent............................................................  13
     3.4   Determination and Payment of Additional Rent...............................  13
     3.5   Utilities..................................................................  26
     3.6   Common Areas...............................................................  26
     3.7   Late Charges...............................................................  27
     3.8   Interest on Past Due Obligations...........................................  27
     3.9   Abatement of Rent When Tenant Is Prevented From Using Premises.............  27

ARTICLE 4: ARBITRATION................................................................  29

ARTICLE 5: INDEMNITY; LEGAL COSTS.....................................................  31
     5.1   Indemnity..................................................................  32
     5.2   Legal Proceedings..........................................................  33
     5.3   Landlord's Consent.........................................................  33

ARTICLE 6: USE OF PROPERTY............................................................  33
     6.1   Permitted Use..............................................................  33
     6.2   Restrictions on Use........................................................  33
     6.3   Compliance With Governmental and Insurance Regulations;
           Assumption of Risk of Noncompliance........................................  34
     6.4   Landlord's Access..........................................................  34
     6.5   Hazardous Materials........................................................  35
     6.6   Compliance with Laws and Other Requirements................................  36
     6.7   Compliance by Other Tenants................................................  38

ARTICLE 7: MAINTENANCE, REPAIRS, AND ALTERATIONS......................................  39
     7.1   Tenant's Obligations.......................................................  39
     7.2   Landlord's Obligations.....................................................  39
</TABLE>
                                       i
<PAGE>

<TABLE>
<S>                                                                                    <C>
     7.3   Alterations, Additions, and Improvements...................................  41
     7.4   Condition Upon Termination.................................................  42
     7.5   Right to Repair............................................................  43

ARTICLE 8: DAMAGE OR DESTRUCTION......................................................  44
     8.1   Damage to Premises.........................................................  44
     8.2   Abatement of Rent..........................................................  46

ARTICLE 9: CONDEMNATION...............................................................  47

ARTICLE 10: ASSIGNMENT AND SUBLETTING.................................................  48
     10.1   Landlord's Consent Required...............................................  48
     10.2   Tenant Affiliate..........................................................  48
     10.3   No Release of Tenant......................................................  48
     10.4   Landlords Consent.........................................................  48
     10.5   Rent or Other Premiums....................................................  48
     10.6   Occupancy By Others.......................................................  49
     10.7   Recognition Agreement.....................................................  49

ARTICLE 11: DEFAULTS AND REMEDIES.....................................................  50
     11.1   Covenants and Conditions..................................................  50
     11.2   Defaults..................................................................  50
     11.3   Remedies..................................................................  51
     11.4   Landlord's Cure of Tenant's Default.......................................  52

ARTICLE 12: PROTECTION OF LENDERS.....................................................  53
     12.1   Subordination.............................................................  53
     12.2   Attornment................................................................  53
     12.3   Signing of Document.......................................................  53
     12.4   Estoppel Certificates.....................................................  54
     12.5   Tenant's Financial Condition..............................................  55
     12.6   Non-Disturbance Agreement.................................................  55
     12.7   Notice to Lenders.........................................................  55

ARTICLE 13: INSURANCE; INDEMNITY; WAIVERS.............................................  56
     13.1   Liability Insurance.......................................................  56
     13.2   Other Insurance: Landlord.................................................  56
     13.3   Other Insurance: Tenant...................................................  57
     13.4   Insurance Policies........................................................  57
     13.5   Waiver of Subrocation.....................................................  58
     13.6   Exemption of Landlord from Liability......................................  58

ARTICLE 14: HISTORIC CHARACTER OF THE BRADBURY BUILDING...............................  58

ARTICLE 15: QUIET ENJOYMENT...........................................................  59

ARTICLE 16: BROKERS...................................................................  59

ARTICLE 17: MISCELLANEOUS PROVISIONS..................................................  59
     17.1   Successors................................................................  59
     17.2   When Payment Is Due.......................................................  60
     17.3   Parking...................................................................  60
     17.4   Severability..............................................................  61
</TABLE>
                                      ii
<PAGE>

<TABLE>
<S>                                                                                    <C>
     17.5   Interpretation............................................................  61
     17.6   Incorporation of Prior Agreement; Modifications...........................  61
     17.7   Notices...................................................................  61
     17.8   Waivers...................................................................  61
     17.9   No Recordation............................................................  62
     17.10  Binding Effect; Choice of Law.............................................  62
     17.11  Corporate Authority; Partnership Authority................................  62
     17.12  Joint and Several Liability...............................................  62
     17.13  Force Majeure.............................................................  62
     17.14  Rules and Regulations.....................................................  62
     17.15  Landlord's Lease Undertakings.............................................  63
     17.16  Transfer of Landlord's Interest...........................................  63
     17.17  Consent Provisions........................................................  63
     17.18  Commercial Photography and Filming........................................  63
     17.19  Signage...................................................................  64
     17.20  Landlord Bankruptcy Proceeding............................................  64
     17.21  CPU Adjustments...........................................................  65
     17.22  Addenda...................................................................  65
</TABLE>

EXHIBITS

     A     -     Floor Plans
     B     -     Work Letter
     C     -     Rules and Regulations of the Building
     D     -     Non-Disturbance Agreement
     E     -     Estoppel Certificate
     F     -     Intentionally Omitted
     G     -     Right of First Offer

                                      iii
<PAGE>

                                                                       EXHIBIT G

                                  OFFICE LEASE


     THIS OFFICE LEASE ("Lease") is made and entered into as of November 22,
                         -----
1996, by and between BRADBURY ASSOCIATES, L.P., a California limited partnership
("Landlord") and CATELLUS DEVELOPMENT CORPORATION, a Delaware corporation
  --------
("Tenant").
--------


                              ARTICLE 1: PREMISES
                              -------------------

     1.1     Lease of Premises. Landlord hereby leases to Tenant and Tenant
             -----------------
hereby leases from Landlord those certain premises (the "Premises") which
                                                         --------
Premises are situated in that certain building (the "Building") located at 304
                                                     --------
South Broadway, City and County of Los Angeles, State of California 90013, upon
and subject to the terms, covenants and conditions set forth herein. Subject to
Section 1.5 below, the Premises consist of approximately fifteen thousand two
hundred thirty-nine (15,239) rentable square feet ("RSF") on the fourth (4th)
floor of the Building and approximately six thousand one hundred eighty-six
(6,186) RSF on the fifth (5th) floor of the Building which together constitute
approximately twenty-one thousand four hundred twenty-five (21,425) RSF of
office space designated as Suite Number 425. Floor plans showing the Premises
hatched in black are attached hereto as Exhibit A and incorporated herein by
                                        ---------
this reference.

     1.2   Basic Terms.
           -----------

           (a) Tenant's Trade Name: CATELLUS DEVELOPMENT CORPORATION.

           (b)  Lease Term:

                (i)  Initial Lease Term: six (6) years.

                (ii) Option Term: One (1) four (4) year renewal term commencing
           upon that date which is the first (1st) day after the Expiration Date
           (as defined in Section 2.2).

           (c) Scheduled Commencement Date: February 1, 1997

           (d) Scheduled Expiration Date: January 31, 2003.

           (e) Permitted Use: General office purposes, and any other legally
     permitted use which is in keeping with the character of the Building
     (except with respect to any exclusive use (i) already granted by Landlord
     to another tenant of the Building or (ii) then contained in a proposed
     lease which is then under "active negotiation," as defined below permitted
     by Landlord of comparable space on those floors in the Building other than
     the ground floor by other
<PAGE>

     than the ground floor by other occupants of the Building.  Notwithstanding
     the foregoing, Landlord agrees that Tenant may conduct from the Premises a
     real estate development operation subject to the restrictions set forth in
     Article 6. For the purposes of this Subsection (e), "active negotiation"
     means that (a) a letter of intent has been signed by the parties, (b) a
     draft (or drafts) of the proposed lease has been prepared and (c) the
     parties are still discussing the remaining open issues.

           (f) Base Rent: Tenant shall pay Landlord the following sums:

                (i)  Subject to adjustment pursuant to Section 1.5 below, from
           the Commencement Date (as defined in Section 2.1) through the
           Expiration Date (as defined in Section 2.2), Twenty-Seven Thousand
           Six Hundred Thirty-Eight and 25/100 Dollars ($27,638.25) per month
           ($1.29 per rentable square foot), being Three Hundred Thirty-One
           Thousand Six Hundred Fifty-Nine and 00/100 Dollars ($331,659.00) per
           annum; and

                (ii) Base Rent for the four (4) year renewal term shall be 90%
           of the then prevailing Fair Market Rate.

           (g) CPU: Los Angeles/Anaheim/Riverside; All Items Consumer Price
     Index (1982-84=100); Urban Wage Earners and Clerical Workers issued by the
     Bureau of Labor Statistics of the United States Department of Labor
     ("Bureau") (see Sections 3.4(j), 5.3 and 17.21 below).

           (h) Tenant's Proportionate Share as agreed by Landlord and Tenant,
     but subject to adjustment pursuant to Section 1.5 below:

                (i)  For those services and utilities which are provided only to
                                                                         ----
           the office space tenants and/or are provided to the retail tenants on
           a net basis and not included in Operating Expenses for the office
           space tenants: From the Commencement Date through the Expiration Date
           (and during the option term): thirty-five 07/100 percent (35.07%).

                (ii) For those services and utilities which are provided to both
           office space tenants and retail tenants and are included in Operating
           Expenses for the office space tenants: From the Commencement Date
           through the Expiration Date (and during the option term): twenty-
           seven 28/100 percent (27.28%).

Tenant's Proportionate Share in (ii) above represents the ratio of RSF in the
Premises to the RSF in the Building which total is 78,527 RSF; Tenant's
Proportionate Share in (i) above represents the ratio of RSF in the Premises to
the total office space RSF in

                                       2
<PAGE>

the Building, which total is 61,098 RSF. Landlord agrees that, for purposes of
calculating the amount of Additional Rent payable by Tenant during any calendar
year after the Base Year pursuant to Section 3.4 below, Landlord shall apply the
applicable Tenant's Proportionate Share set forth in either (i) or (ii) above-to
the different services and utilities provided to the tenants in the Building in
the same manner as was done in the Base Year and with no adverse effect on
Tenant.

           (i)  Security Deposit: None.

           (j)  Addresses for Notices:

Tenant:    After Commencement Date:

           Catellus Development Corporation
           304 South Broadway
           Suite 425
           Los Angeles, California 90013
           Attention: Ms. Jaime Gertmenian

           Before Commencement Date:

           Catellus Development Corporation
           800 North Alameda Street
           Suite 100
           Los Angeles, California 90012
           Attention: Ms. Jaime Gertmenian

           with a copy in either case to:

           Catellus Development Corporation
           201 Mission Street
           2nd Floor
           San Francisco, California 94105
           Attention: Mr. Nelson Rising

           Copies of any notice of default, requests for estoppel certificates
           and/or subordination agreements by Tenant are to be sent, in the same
           manner and at the same time, to:

           Pillsbury Madison & Sutro LLP
           725 South Figueroa Street
           Suite 1200
           Los Angeles, CA 90017-5443
           Attention: Michael E. Meyer, Esq.

Landlord:  Bradbury Associates, L.P.
           304 South Broadway
           Suite 201
           Los Angeles, CA 90013
           Attention: Ms. Francine Lipsman

                                       3
<PAGE>

           with a copy to:

           Rosenfeld, Meyer & Susman, LLP
           9601 Wilshire Boulevard
           Fourth Floor
           Beverly Hills, CA 90210-5288
           Attention: P. John Burke, Esq.

           (k)  Tenant's Guarantor: None.

           (l)  Landlord's Broker: None.

           (m)  Tenant's Broker: None.

     1.3   Tenant's Acceptance of Premises. Except as otherwise provided in
           -------------------------------
this Lease, Tenant acknowledges that neither Landlord nor any agent of Landlord
has made any representation or warranty with respect to the Premises or the
Building or with respect to the suitability of either for the conduct of
Tenant's business. The taking of possession of the Premises by Tenant shall
conclusively establish that the Premises and the Building were at such time in a
good and tenantable condition, except that Landlord shall repair or replace, as
necessary, (a) such defective items furnished or constructed by Landlord as
Landlord's Work (as defined in Exhibit B) of which items Tenant has advised
                               ---------
Landlord in writing not later than thirty (30) days after Tenant commences
business operations in the Premises and (b) any latent defects; provided,
however, that Landlord's obligation to repair or replace latent defects shall
terminate on the later of (i) the one (1) year anniversary of the Commencement
Date, and (ii) to the extent that such latent defect is covered by any
applicable warranty, the date upon which such warranty expires. Tenant hereby
waives any claim or rights it may have on account of the condition of the
Premises as accepted except as set forth in the preceding sentence, and agrees
that, except as otherwise provided in Section 7.2, Landlord shall not be
required to make any improvements, alterations, changes or repairs in or to the
Premises, or the Building, other than as required by this Lease or by the Work
Letter set forth as Exhibit B and incorporated herein by this reference.
                    ---------

     1.4   Rights Reserved to Landlord. Landlord reserves the right to install
           ---------------------------
and to repair utilities and appurtenances necessary or convenient in connection
therewith in, over, upon, and through the Premises or any part thereof, and to
enter the Premises for any and all such purposes. Landlord shall conduct its
entry either during or after Business Hours (as defined in Section 7.2(b)), but
in either case, absent an emergency, upon reasonable notice and in such a manner
as to cause minimal interference with the conduct of Tenant's business or
operations in the Premises.

     1.5   BONA Method of Measurement. The rentable and usable areas of the
           --------------------------
Premises and the Building have been or will be

                                       4
<PAGE>

determined in accordance with the standards set forth in ANSI Z65.1-1980, as
promulgated by the Building Owners and Managers Association ("BONA Standard").
                                                              -------------
Tenant shall have the right, exercisable within ninety (90) days after the later
of (a) the date Landlord gives Tenant written notice of the final field
measurements of the Premises and the Building, or (b) the date Tenant commences
business operations from the Premises (or, when appropriate, any additional
space leased by Tenant pursuant to the Lease), to have a qualified, licensed
surveyor remeasure the Premises and the Building within such ninety (90) day
period. Tenant agrees that it shall report the results of any such remeasurement
of the Premises and/or Building to Landlord. In the event that subsequent
remeasurement of the Premises and/or the Building by Tenant, within the time
period specified above, indicates that the square footage measurement prepared
by Landlord produces a square footage number in excess of or lower than the
square footage number which would have resulted had the BONA Standard been
properly utilized, any payments due to Landlord from Tenant based upon the
amount of square feet contained in the Premises shall be proportionally,-
retroactively and prospectively reduced or increased, as appropriate, to reflect
the actual number of square feet as properly remeasured under the BONA Standard.
If Landlord disagrees with Tenant's remeasurement and if a dispute occurs
regarding the final accuracy of the measurement of the Premises and the Building
in accordance with the BONA Standard, such dispute will be resolved pursuant to
binding arbitration pursuant to Article 4.

     1.6   Access to Building and Parking. Tenant shall be granted access to the
           ------------------------------
Building, the Premises and the Center (as defined in Section 17.3 but only to
the extent that Landlord, who does not own the Center, can negotiate such access
rights) twenty-four (24) hours per day, seven (7) days per week, every day of
the year.

     1.7   Additional Space. Tenant shall have the right to lease additional
           ----------------
spaces as set forth in Exhibit G attached hereto and made a part hereof by this
                       ---------
reference.

                             ARTICLE 2: LEASE TERM
                             ---------------------

     2.1   Commencement Date. The term of this Lease ("Lease Term") and Tenant's
           -----------------                           ----------
obligation to pay Rent (as defined in Section 3.3(a)) for the Premises shall
commence on the earlier of (a).the date Tenant first takes possession of the
Premises for the purpose of commencing its business operations therein, and (b)
that date which is one (1) week (which period is referred to as the "Move-In
                                                                     -------
Period") after the earlier of (i) the date Landlord delivers to Tenant a
------
factually correct written notice stating that the Work in the Premises is
Substantially Complete, and (ii) the date Landlord delivers to Tenant a
factually correct written notice stating the date the Work in the Premises would
have been Substantially Complete were it not for any Tenant Delays
("Commencement Date"). The Commencement Date shall be delayed by
-------------------

                                       5
<PAGE>

one (1) day for each day of delay in Tenant~s move, into the Premises that is
caused by any Force Majeure Event (as such term is defined in Section 17.13) or
by any act or omission of Landlord or Landlord's agents, employees or
contractors ("Landlord Delay"); provided, however, that (i) Tenant shall use
commercially reasonable efforts to mitigate the effects of any Force Majeure
Event which affects Tenant's move into the Premises and (ii) the Commencement
Date shall not be delayed by more than twenty (20) days as a result of delays
encountered by Tenant in its move into the Premises which are caused solely by
Force Majeure Events. The terms "Work," "Substantially Complete" and "Tenant
Delays" are defined in the Work Letter Agreement attached hereto as Exhibit B.
                                                                    ---------

     2.2   Expiration Date. If the Commencement Date is a date other than the
           ---------------
Scheduled Commencement Date, then the date upon which the Lease Term shall
expire (the "Expiration Date") shall be determined with reference to the length
of time described in Section 1.2(b)(i) of Article 1 hereof with respect to the
Premises; provided, however, should the Expiration Date as so determined occur
on a day other than the last day of a calendar month, then the Expiration Date
shall be extended to the last day of the calendar month in which the Expiration
Date would otherwise have occurred.

     2.3   Possession.
           ----------

           (a)  (i)  If Landlord fails to deliver possession of the Premises to
     Tenant upon the Scheduled Commencement Date with all of Landlord's Work
     Substantially Completed therein, then except as provided herein, Landlord
     shall not be liable to Tenant for any loss or damage resulting therefrom.
     However, notwithstanding anything to the contrary set forth in this Lease,
     in the event that Landlord has not delivered the entire Premises to Tenant
     with the Work Substantially Completed by March 1, 1997 (the "Outside
                                                                  -------
     Delivery Date"), Tenant shall have the right, at Tenant's sole option, to
     -------------
     elect to terminate this Lease by delivery to Landlord of a notice (the
     "Termination Notice"), which termination shall be effective thirty (30)
     -------------------
     days after Tenant's delivery of the Termination Notice to Landlord, unless
     within such thirty (30) day period Landlord shall deliver to Tenant the
     entire Premises with the Work Substantially Completed therein. The Outside
     Delivery Date shall be extended by one (l) day for each day of delay
     attributable to any (A) Tenant Delay (as defined in Section 6 of the Work
     Letter) or (B) Force Majeure Event (as defined in Section 17.13); provided,
     however, that notwithstanding the foregoing, the Outside Delivery Date
     shall in no event be extended by more than sixty (60) days for delays
     attributable to Force Majeure Events. In the event Tenant shall elect to
     terminate this Lease, Tenant must deliver to Landlord the Termination
     Notice prior to the date the entire Premises are delivered to Tenant with
     the Work Substantially Complete therein, and

                                       6
<PAGE>

     neither party shall have any further obligation to the other under this
     Lease.

                (ii) If the Lease Term with respect to the Premises commences on
           a date other than the Scheduled Commencement Date pursuant to the
           provisions herein, the parties agree to execute and acknowledge a
           written statement setting forth the actual Commencement Date for the
           Premises and the Expiration Date of this Lease; provided, however,
           this Lease shall not be affected in any manner should either party
           fail or refuse to execute such statement.

           (b) Tenant may enter the Premises upon receipt of Landlord's consent
     for the purpose of installing furniture, special flooring or carpeting,
     trade fixtures, telephones, computers, photocopy equipment and other
     business equipment ("Early Entry Work"); provided, however, that-in
     performing such Early Entry Work, Tenant shall not interfere with
     Landlord's Work (as defined in Section 1 of the Work Letter) in the
     Premises. Such early entry shall not advance the Commencement Date,
     provided Tenant does not commence business operations from any part of the
     Premises. Any such early entry into and occupancy of the Premises by Tenant
     or any person or entity working for or on behalf of Tenant shall be deemed
     to be subject to all of the terms, covenants, conditions and provisions of
     the Lease, and excluding only the covenant to pay Rent. In connection with
     such early entry, including any early entry into any staging area pursuant
     to Section 21 of the Work Letter, Landlord shall not be responsible for,
     and Tenant is required to obtain insurance covering any loss caused by
     Tenant or those entering the Premises on behalf of Tenant to perform such
     Early Entry Work, including theft, damage or destruction to any work or
     material installed or stored by Tenant or any contractor or individual
     involved in the construction of the Work or Early Entry Work, or for any
     injury to Tenant or Tenant's employees, agents, contractors, licensees,
     directors, officers, partners, trustees, visitors or invitees
     (collectively, "Tenant's Employees) or to any other person and provided
     further that Landlord shall have the right to post the appropriate notices
     of nonresponsibility and to require Tenant to provide Landlord with
     evidence that Tenant has fulfilled its obligation to provide insurance
     pursuant to Article 13 hereof. In the event that the performance of
     Tenant's Early Entry Work causes extra costs to Landlord (other than those
     permitted in Section 15 of the Work Letter) or requires the use of
     elevators during hours other than the Business Hours, Tenant shall
     reimburse Landlord for such extra cost and/or shall pay Landlord for such
     elevator service or other Building services at Landlord's Actual Cost (as
     such term is defined in Section 7.2(c)).

                                       7
<PAGE>

           (c) Tenant shall vacate the Premises upon the Expiration Date or
     earlier termination of this Lease. Tenant shall reimburse Landlord for and
     indemnify Landlord against all damage incurred by Landlord from any delay
     by Tenant in vacating the Premises. If Tenant continues to occupy the
     Premises after the Expiration Date or earlier termination of this Lease,
     and Landlord thereafter accepts Rent from Tenant, then Tenant's occupancy
     shall be a "month-to-month" tenancy, subject to all of the terms and
     provisions of this Lease, except that the Base Rent then in effect shall be
     increased to the greater of (A) one hundred thirty-five percent (135%) of
     the Base Rent in effect at the Expiration Date or earlier termination of
     this Lease and (B) one hundred thirty-five percent (135%) of the then
     prevailing monthly rental rate for similar commercial space, as determined
     by Landlord. This month-to-month tenancy may be terminated by Landlord or
     Tenant upon five (5) days' prior notice to the nonterminating party.

     2.4   Delays Caused By Tenant. Notwithstanding anything to the contrary
           -----------------------
contained in this Lease, if Landlord's failure to deliver possession of the
Premises to Tenant upon the Scheduled Commencement Date is the result of any
Tenant Delays (as defined in Section 6 of the Work Letter), the Rent and all
other sums and charges payable hereunder shall commence on the date upon which
Landlord would have delivered possession of the Premises with all of Landlord's
Work Substantially Completed therein but for the occurrence of any such Tenant
Delays.

     2.5   Renewal Option.
           --------------

           (a) Provided Tenant is not then in default under this Lease beyond
     any applicable notice and cure period and is current in all payments due
     hereunder, Tenant shall have the right to extend the term of this Lease
     ("Renewal Option") for one (1) additional four (4) year period, by written
       --------------
     notice to Landlord given no later than eight (8) months prior to the
     Expiration Date, under the same terms and conditions as set forth in this
     Lease, except that the Base Rent payable by Tenant during such option term
     shall be ninety percent (90%) of the then prevailing Fair Market Rate as
     determined in accordance with Section 2.5(b) below. When the rent for the
     said option term has been determined, the parties shall execute a
     modification of this Lease setting forth the Base Rent for such option
     term. This Renewal Option is not personal to Catellus Development
     Corporation, the Tenant herein named, and may be exercised by any assignee
     of the Lease permitted under the terms of the Lease. However, no such
     Renewal Option is assignable separate and apart from the Lease.

           (b) For the purposes of this Section 2.5, the term "Fair Market Rate"
                                                               ----------------
     shall mean the annual amount per RSF that Landlord has accepted in current
     transactions between non

                                       8
<PAGE>

     affiliated parties from new, non-expansion, non-renewal and non-equity
     tenants of comparable credit-worthiness, for comparable space, for a
     comparable use for a comparable period of time ("Comparable Transactions")
                                                      -----------------------
     in the Building, or if there are not a sufficient number of Comparable
     Transactions in the Building, what a comparable landlord of a Comparable
     Building (as defined in Section 6.6(b)) with comparable vacancy factors
     would accept in Comparable Transactions. In any determination of Comparable
     Transactions appropriate consideration shall be given to the annual rental
     rates per rentable square foot, the standard of measurement by which the
     rentable square footage is measured, the ratio of rentable square feet to
     usable square feet, the type of escalation clause (e.g., whether increases
     in additional rent are determined on a net or gross basis, and if gross,
     whether such increases are determined according to a base year or a base
     dollar amount expense stop), the extent of Tenant's liability under the
     Lease, abatement provisions reflecting free rent and/or no rent during the
     period of construction or subsequent to the commencement date as to the
     space in question, brokerage commissions, if any, which would be payable by
     Landlord in similar transactions, length of the lease term, size and
     location of premises being leased, building standard work letter and/or
     tenant improvement allowances, if any, and other generally applicable
     conditions of tenancy for such Comparable Transactions. The intent is that
     Tenant will obtain the same rent and other economic benefits that Landlord
     would otherwise give in Comparable Transactions and that Landlord will
     make, and receive the same economic payments and concessions that Landlord
     would otherwise make, and receive in Comparable Transactions.

           Landlord shall determine the Fair Market Rate by using its good faith
     judgment. Landlord shall provide written notice of such amount within
     fifteen (15) days (but in no event later than twenty (20) days) after
     Tenant provides the notice to Landlord exercising Tenant's option rights
     which require a calculation of the Fair Market Rate. Tenant shall have
     fifteen (15) days ("Tenant's Review Period") after receipt of Landlord's
                         ----------------------
     notice of the new rental within which to accept such rental or to
     reasonably object thereto in writing. In the event Tenant objects, Landlord
     and Tenant shall attempt to agree upon such Fair Market Rate, using their
     best good faith efforts. If Landlord and Tenant fail to reach agreement by
     that date which is six (6) months prior to the Expiration Date ("Outside
                                                                      -------
     Agreement Date"), then each party shall place in separate envelope their
     --------------
     final proposal as to Fair Market Rate and shall exchange such envelopes.
     Tenant may, within three (3) business days after such exchange, rescind its
     option to extend by written notice to Landlord within such three (3)
     business day period. If Tenant does not so rescind its option within such
     three (3) business day period, then Tenant's exercise of its

                                       9
<PAGE>

     option to extend will be irrevocable and the determination of Fair Market
     Rate shall be submitted to arbitration in accordance with subsections (i)
     through (v) below. Failure of Tenant to so accept such rental in writing
     within Tenant's Review Period shall conclusively be deemed its disapproval
     of the Fair Market-Rate determined by Landlord.

           In the event that Landlord fails to timely generate the initial
     written notice of Landlord's opinion of the Fair Market Rate which triggers
     the negotiation period of this Section 2.5(b), then Tenant may commence
     such negotiations by providing the initial notice, in which event Landlord
     shall have fifteen (15) days ("Landlord's Review Period") after receipt of
                                    ------------------------
     Tenant's notice of the new rental within which to accept such rental. In
     the event Landlord fails to accept in writing such rental proposed by
     Tenant, then such proposal shall be-deemed rejected, and Landlord and
     Tenant shall attempt in good faith to agree upon such Fair Market Rate,
     using their best good faith efforts. If Landlord and Tenant fail to reach
     agreement by the Outside Agreement Date, then each party shall place in a
     separate sealed envelope their final proposal as to Fair Market Rate and
     shall exchange such envelopes. Tenant may, within three (3) business days
     after such exchange, rescind its option to extend by written notice to
     Landlord within such three (3) business day period. If Tenant does not so
     rescind its option within such three (3) business day period, then Tenant's
     exercise of its option to,extend will be irrevocable and the determination
     of Fair Market Rate shall be submitted to arbitration in accordance with
     subsections (i) through (v) below.

           (i) Landlord and Tenant shall meet with each other within five (5)
     business days of the Outside Agreement Date and exchange the sealed
     envelopes and then open such envelopes in each other's presence. If
     Landlord and Tenant do not mutually agree upon the Fair Market Rate within
     one (1) business day of the exchange and opening of envelopes, then, within
     ten (10) business days of the exchange and opening of envelopes Landlord
     and Tenant shall agree upon and jointly appoint a single arbitrator who
     shall by profession be a real estate lawyer or broker who shall have been
     active over the-five (5) year period ending on the date of such appointment
     in the leasing of comparable commercial properties in the vicinity of the
     Building. Neither Landlord nor Tenant shall consult with such broker or
     lawyer as to his or her opinion as to Fair Market Rate prior to the
     appointment. The determination of the arbitrator shall be limited solely to
     the issue of whether Landlord's or Tenant's submitted Fair Market Rate for
     the Premises is the closer to the actual Fair Market Rate for the Premises
     as determined by the arbitrator, taking into account the requirements of
     this Section 2.5(b). Such arbitrator may hold such hearings and require
     such briefs as the

                                       10
<PAGE>

     arbitrator, in his or her sole discretion, determines is necessary. In
     addition, Landlord or Tenant may submit to the arbitrator with a copy to
     the other party within five (5) business days after the appointment of the
     arbitrator any market data and additional information that such party
     deems-relevant to the determination of Fair Market Rate ("FMR Data") and
                                                               --------
     the other party may submit a reply in writing within five (5) business days
     after receipt of such FMR Data.

           (ii)  The arbitrator shall, within thirty (30) days of his or her
     appointment, reach a decision as to whether the parties shall use
     Landlord's or Tenant's submitted Fair Market-Rate, and shall notify
     Landlord and Tenant of such determination.

           (iii) The decision of the arbitrator shall be binding upon Landlord
     and Tenant, and shall be treated the same as the decision of the
     Arbitration Panel as provided in Section 4(d) below.

           (iv)  If Landlord and Tenant fail to agree upon and appoint an
     arbitrator, then the appointment of the arbitrator shall be made by the
     Presiding Judge of the Superior Court, or, if he or she refuses to act, by
     any judge having jurisdiction over the parties.

           (v)   The cost of arbitration shall be paid by Landlord and Tenant
     equally.

     2.6   Right to Terminate.
           ------------------

           (a) Notwithstanding anything in either Lease Sections 8 [Damage and
     Destruction] or 9 [Condemnation] to the contrary, and except as expressly
     set forth in Subsection (b) below and subject to Landlord's right to
     provide Substitute Parking as described in Section 17.3, in the event that
     Tenant is notified or becomes aware of the fact that:

               (i)   damage or destruction to the Premises, the Center and/or
     the Building or any part thereof so as to interfere substantially with
     Tenant's use of the Premises, the Center and/or the Building;

               (ii)  a taking by eminent domain or exercise of other
     governmental authority of the Premises, the Center and for the Building or
     any part thereof so as to interfere substantially with Tenant's use of the
     Premises, the Center and/or the Building;

               (iii) the inability of Landlord to provide services to the
     Premises, the Center and/or the Building so

                                       11
<PAGE>

     as to interfere substantially with Tenant's use of the Premises, the Center
     and/or the Building; or

               (iv)  any discovery of hazardous substances in, on or around the
     Premises, the Building and/or the Project not placed in, on or around the
     Premises, the Building and/or the Project by Tenant, that may, considering
     the nature and amount of the substances involved, substantially interfere
     with Tenant's use of the Premises or which present a health risk to any
     occupants of the Premises (each of the items set forth in provision (a)(i),
     (ii), (iii) and (iv) being referred to herein as a "Trigger Event"),
                                                         -------------
     then if Tenant cannot, within nine (9) months ("Non-Use Period") of the
                                                     --------------
     occurrence of the Trigger Event, be given reasonable use of, and access to,
     a fully repaired, restored, safe and healthful Premises, the Center and
     Building (except for minor "punch-list" items which will be repaired
     promptly thereafter), and the utilities and services pertaining to the
     Premises, the Center-and the Building, all suitable for the efficient
     conduct of Tenant's business therefrom, then Tenant may elect to exercise
     an ongoing right to terminate the Lease upon thirty (30) days' written
     notice sent to Landlord within thirty (30) days following the expiration of
     the Non-Use Period, but such termination shall be ineffective if the
     condition entitling Tenant to terminate is corrected within thirty (30)
     days ("Correction Period") of Landlord's receipt of such election. The nine
            -----------------
     (9) month Non-Use Period and the thirty (30) day Correction Period
     specified in the prior sentence shall be extended, on a day for day basis,
     by delays caused by Tenant in any required restoration or repair.

           (b) In the event of any Trigger Event occurring during the last year
     of the Lease Term or, if an applicable renewal option has been exercised,
     during the last year of any renewal term, should the Non-Use Period
     continue for thirty (30) days, Tenant may elect to exercise an ongoing
     right to terminate the Lease upon ten (10) days' written notice sent to
     Landlord at any time following the expiration of the Non-Use Period.

                                ARTICLE 3: RENT
                                ---------------

     3.1   Base Rent. Tenant shall pay to Landlord the Base Rent set forth in
           ---------
Article 1, payable in advance, in twelve equal monthly installments on the first
day of each calendar month during the Lease Term, except that Base Rent for the
first (1st) full~month of the Lease Term and any fractional month shall be paid
by Tenant to Landlord upon execution of this Lease. The Base Rent for any
fractional part of a month shall be prorated on the basis of the actual number
of days in such month. Base Rent shall be paid without prior notice or demand,
without deduction offset

                                       12
<PAGE>

except as otherwise expressly set forth in this Lease, in lawful money of the
United States.

     3.2   Intentionally Omitted.
           ---------------------

     3.3   Additional Rent.
           ---------------

           (a) All charges and sums payable by Tenant in addition to Base Rent
     shall be deemed Additional Rent (whether or not so designated herein).
     Landlord shall have such rights and remedies for Tenant's failure to pay
     Additional Rent when required by the Lease as are provided herein or at law
     or in equity for the failure to pay Base Rent. As used herein the term
     "Rent" shall mean both Base Rent and Additional Rent.

           (b) Tenant shall pay to Landlord in advance, in twelve equal monthly
     installments on the first day of each calendar month during the Lease Term,
     Additional Rent equal to Tenant's Proportionate Share (as set forth in
     Section 1.2(h) and as defined below) of the increase, if any, in Direct
     Costs, as defined herein, over the Base Year (as defined in Section 3.4(a)
     below). Tenant's Proportionate Share as set forth in Section 1.2(h)(ii) is
     calculated for those services and utilities which are provided to both
     office space tenants and retail tenants and are included in Operating
     Expenses for all tenants in the Building as a fraction, the numerator of
     which is the number of rentable square feet comprising the Premises and the
     denominator of which is the aggregate number of rentable square feet
     comprising the Building. Tenant's Proportionate Shares as set forth in
     Section 1.2(h)(i) is calculated for those services and utilities which are
     provided only to the office space tenants and/or are provided to the retail
     tenants on a net basis and not included in Operating Expenses for the
     office space tenants as a fraction, the numerator of which is the number of
     rentable square feet comprising the Premises and the denominator of which
     is the aggregate number of rentable square feet of office space in the
     Building.

     3.4   Determination and Payment of Additional Rent.
           --------------------------------------------

           (a) Increase in Tax Costs. Commencing on January 1, 1998, if, in any
     calendar year during the Lease Term (the "Comparison Year") Landlord's Tax
                                               ---------------
     Costs shall be higher than the Tax Costs for the calendar year 1997 (the
     "Base Year"), Tenant shall pay to Landlord, as Additional Rent for the
     ----------
     Comparison Year, Tenant's Proportionate Share of such increase.

           (b) Increase in Operating Costs. Commencing on January 1, 1998, if
     Landlord's Operating Costs for any Comparison Year shall be higher than the
     Operating Costs for

                                       13
<PAGE>

     the Base Year, the Additional Rent payable by Tenant hereunder for the
     Comparison Year shall be Tenant's Proportionate Share of such increase.

           (c) On the last day of January of the first Comparison Year and on
     the last day of every January thereafter during the Lease Term, Landlord
     shall furnish to Tenant a written statement showing in reasonable detail
     Landlord's actual Tax Costs and Operating Costs for the Base Year and
     Landlord's estimated Direct Costs for the then current Comparison Year and
     the amount, if any,of estimated Additional Rent payable by Tenant for such
     then current Comparison Year (the "Estimated Statement"). Such Estimated
     Statement shall not exceed 105% of the previous year's actual Tax Costs and
     Operating Costs unless evidenced by increases in existing rates or fees
     with evidence of such increases provided to Tenant ("specifically
     justified"). Following receipt of the Estimated Statement and a thirty (30)
     day period from the receipt of the Estimated Statement within which Tenant
     shall review the Estimated Statement, Tenant's next monthly Additional Rent
     payment shall include the projected amount set forth therein, multiplied by
     the number of rental payment dates which elapsed during the then current
     Comparison Year. Thereafter, the monthly Additional Rent payments becoming
     due hereunder shall be in the amount set forth in the Estimated Statement
     from Landlord. Landlord's failure to deliver the Estimated Statement in a
     timely manner shall neither constitute a default by Landlord hereunder nor
     a waiver of Landlord's right to Additional Rent; provided, however, that
     any delay by Landlord (or any successor to Landlord in the event the
     Building is conveyed to a new owner during the Lease Term) in billing
     Tenant for any Direct Costs of more than three (3) years (or two (2) years
     if this Lease has terminated) from the date Landlord incurred such Direct
     Costs shall be deemed a waiver of Landlord's right to require payment-of
     Tenant's obligations for any such Direct Costs. The Additional Rent due
     pursuant to this Section shall be in addition to the Base Rent due under
     Section 3.1 or any other rental, sums or charges due under any other
     provision of this Lease.

           (d) Within six (6) months following the close of each calendar year,
     Landlord shall furnish to Tenant a written statement of reconciliation
     itemized on a line item by-line item basis (the "Revised Statement")
                                                      -----------------
     setting forth (i) Landlord's actual Direct Costs for the Base Year and
     relevant Comparison Year, and (ii) the amount of any adjusted sum to be
     paid by or credited to Tenant in order to reconcile the sums paid by Tenant
     as estimated Additional-Rent during such Comparison Year with the actual
     Direct Costs paid by Landlord for such Comparison Year. If the Revised
     Statement shows that additional sums are due from Tenant, Tenant shall pay
     such sums to Landlord-with the next scheduled payment of Base Rent, or, at
     Tenant's option, in

                                       14
<PAGE>

     no event later than thirty (30) days from receipt of the Revised Statement.
     Alternatively, if a credit is due Tenant, such credit shall be deducted
     from the next sums due from Tenant hereunder as Rent; however, if this
     Lease has expired or been terminated, such sums shall be refunded to Tenant
     within thirty (30) days of Tenant's receipt of the Revised Statement. In
     the event this Lease has expired or otherwise has been terminated prior to
     the end of a calendar year, Tenant's obligation to pay prorated Additional
     Rent shall survive such expiration or termination.

           (e) Notwithstanding anything otherwise set forth herein, under no
     circumstances shall Tenant's Base Rent be reduced below the amount set
     forth in Section 1.2(f). Any reference to Landlord's "actual" Direct Costs
     in this Article 3 shall be deemed to include an allowance for an adjustment
     to reflect the level of occupancy of the Building to the extent provided
     for below.

           (f) In the event that Tenant disputes the accuracy of the Revised
     Statement, Tenant shall have the right, within the three (3)-year period
     ("Review Period") following Tenant's receipt of the Revised Statement,
       -------------
     after reasonable notice and at a reasonable time, to inspect Landlord's
     accounting records at the location at which they are maintained and stored
     by Landlord in the Los Angeles area. If, following such inspection Tenant
     continues to dispute the amount of the Additional Rent, Tenant, or an agent
     designated by Tenant, shall be entitled to audit and/or review Landlord's
     records to determine the proper amount of its Proportionate Share of Direct
     Costs. If such audit or review reveals that Landlord has overcharged
     Tenant, then within five (5) days after the results of such audit are made
     available to Landlord, Landlord shall reimburse Tenant the amount of such
     overcharge plus interest at the Interest Rate (as defined in Section 3.8).
     If the audit reveals that Tenant was undercharged, then within five (5)
     days after the results of the audit are made available to Tenant, Tenant
     shall reimburse Landlord the amount of such undercharge plus interest
     thereon at the Interest Rate. If Landlord desires to contest such audit
     results, Landlord may do so by submitting the results of the audit to
     arbitration pursuant to Article 4 within five (5) days of receipt of the
     results of the audit. Such arbitration shall be final and conclusive.
     Tenant shall pay the cost of such audit unless Tenant's Proportionate Share
     of the Direct Costs, as set forth in the Revised Statement, exceeds by more
     than two percent (2%) the actual Direct Costs determined by the
     arbitration. Landlord shall be required to maintain records of all Direct
     Costs and other Additional Rent for the entirety of the Review Period. The
     payment by Tenant of any amounts pursuant to this Article 3 shall not
     preclude Tenant from questioning the correctness of any Revised Statement
     provided by Landlord at any time during the Review Period,

                                       15
<PAGE>

     but the failure of Tenant to object thereto prior to the expiration of the
     Review Period shall be conclusively deemed Tenant's approval of the Revised
     Statement.

           (g) "Direct Costs" shall include both Tax Costs and Operating Costs.
                ------------
     Landlord may divide the Estimated Statement and/or the Revised Statement
     into separate statements for Tax Costs and Operating Costs. Additionally,
     Landlord may estimate Tax Costs or Operating Costs, or both, on a fiscal
     year instead of a calendar year basis and all notices referred to herein
     shall be adjusted accordingly. Provided, however, that notwithstanding
     anything to the contrary set forth herein, any decreases in Tax Costs will
     offset any increases in Operating Costs and any decreases in Operating
     Costs will offset any increases in Tax Costs but in no event will Tenant's
     Rent obligation under this Lease be less than the amount of the Base Rent
     set forth in Section 1.2(f) above.

           (h) "Tax Costs" shall mean the sum of the following: any and all real
                ---------
     estate taxes, other similar charges on real property or improvements,
     assessments, water and sewer charges, and all other charges assessed,
     levied, imposed or becoming a lien upon the Premises, in whole or in part,
     the real property upon which the Building is located, the Building or the
     appurtenances thereto and the facilities including, without limitation,
     hallways, common areas and landscaped areas. The Premises, the Building,
     the real property, the appurtenances thereto and the facilities shall
     collectively be referred to as the "Project." Tax costs shall include,
                                         -------
     without limitation, any charge imposed, levied or assessed on the rents,
     issues, profits or income received or derived from the Project by the
     United States, the state, county or city in which the Building is located,
     or any other local governmental authority, agency or political subdivision.
     If at any time any government authority shall impose (i) a tax, assessment,
     levy, imposition or charge wholly or partially as a net income, capital or
     franchise levy or otherwise on the rents, derived from the Project and/or
     (ii) a tax, assessment, levy (including, but not limited to, any municipal,
     state or federal levy), imposition or charge measured by or based in whole
     or in part upon the Project and imposed upon Landlord and/or (iii) a
     license fee measured by the Rent payable under this Lease, then all such
     taxes, assessments, levies, impositions or charges shall be deemed to be
     included in the Tax Costs. If the assessed valuation or Tax Costs of the
     building for the Base Year or any other calendar year during the Lease Term
     shall not be based upon a completed building at least ninety-five percent
     (95%) occupied with all tenants paying full rent, then the Tax Costs during
     such year or years shall be adjusted to reflect the taxes which would have
     been payable for such year or years if the Building had been completed and
     were ninety-five percent (95%) occupied

                                       16
<PAGE>

     with all tenants paying full rent. Tax Costs for each tax year shall be
     appropriately prorated to determine the Tax Costs for the subject calendar
     year. Notwithstanding anything to the contrary set forth in the Lease, the
     amount of Tax Costs for the Base Year and any subsequent comparison year
     shall be calculated without taking into account any decreases in real
     estate taxes obtained in connection with Proposition 8 or the proposed
     Mills Act, and, therefore, the Tax Costs in the Base Year and/or any
     subsequent comparison year may be greater than those actually incurred by
     Landlord, but shall, nonetheless, be the Tax Costs due under this Lease;
     provided that (i) any costs and expenses incurred by Landlord in securing
     any Proposition 8 or Mills Act reduction shall not be included in Building
     Direct Costs for purposes of this Lease, and (ii) tax refunds under
     Proposition 8 and/or the Mills Act shall not be deducted from Tax Costs,
     but rather shall be the sole property of Landlord. Landlord and Tenant
     acknowledge that this Section 3.4(h) is not intended to in any way affect
     (A) the inclusion in Tax Costs of the statutory two percent (2.0%) annual
     increase in Tax Costs (as such statutory increase may be modified by
     subsequent legislation), or (B) the inclusion or exclusion of Tax Costs
     pursuant to the terms of Proposition 13, which shall be governed pursuant
     to the terms of Sections 3.4(i)(xxix) below. Notwithstanding anything to
     the contrary contained herein, there shall be excluded from Tax Costs (i)
     all excess profits taxes, franchise taxes, gift taxes, capital stock taxes,
     inheritance and succession taxes, estate taxes, federal and state income
     taxes, and other taxes to the extent applicable to Landlord's general or
     net income (as opposed to rents, receipts or income attributable to
     operations at the Project), (ii) any items included as Operating Costs, and
     (iii) any items required to be paid directly by Tenant expressly pursuant
     to this Lease.

           (i) "Operating Costs" shall mean the sum of the following but subject
                ---------------
     to the exclusions from Operating Costs listed below: any and all expenses,
     costs and disbursements paid or incurred by Landlord in connection with the
     management, maintenance, operation and repair of the Project, including,
     but not limited to, salaries, wages, medical, surgical and general welfare
     benefits, pension payments, payroll taxes, worker's compensation, uniforms
     and dry cleaning thereof for employees engaged in the management,
     operation, maintenance and/or repair of the Building; management and
     professional fees for the management and operation of the Building, either
     as charged to Landlord by independent management companies or an amount not
     exceeding the amount typically charged by independent management companies
     if Landlord or an affiliate of Landlord manages the Building but in no
     event shall such management fees exceed five percent (5%) of office space
     rental income, (it being agreed and understood that such management fee

                                       17
<PAGE>

     will be five percent (5%) during the Base Year); attorneys and consultants
     retained to provide services relating to the management, maintenance,
     operation and repair of the Building provided that the fees, costs and
     disbursements for such attorneys and consultants are such that would
     normally be-incurred in connection with the management, maintenance,
     operation and repair of the Building; the cost of all charges to Landlord
     for electricity, air conditioning, steam, water and other utilities
     furnished to the Building, including any taxes thereon (provided, however,
     that notwithstanding anything else contained in this Section 3.4(i) or in
     this Lease to the contrary, all costs for materials, utilities, goods and
     services (i) furnished by Landlord which are not required to be furnished
     by Landlord and are furnished to less than all of the office tenants in the
     Building, (ii) directly paid for by Tenant or other tenants to Landlord and
     (iii) if Tenant directly and separately pays Landlord or the provider of
     such electric power, then all electric power consumed on the Premises or in
     any other tenant space in the Building, shall not be included in Operating
     Costs); the cost of all charges for fire and extended coverage, liability,
     rent loss and all other insurance for the Building; the cost of all
     building and cleaning supplies and materials; the cost of all charges for
     interior and exterior landscaping; the cost of all charges for security
     services, cleaning, maintenance and service contracts and other services
     with independent contractors, the cost of any janitorial, utility or other
     services provided by Landlord, including the cost of any of the foregoing
     as same relates to the Common Areas (as defined in Section 3.6); and any
     other expenses (amortized over the useful life, if applicable) which, in
     accordance with generally accepted accounting principles, consistently
     applied, would normally be treated as Direct Costs by landlords of
     Comparable Buildings. If, during the Base Year or any other calendar year,
     the Building is less than ninety-five percent (95%) occupied with all
     tenants paying full rent, the Operating Costs shall be adjusted to reflect
     the Operating Costs of the Building as though ninety-five percent (95%)
     occupied with all tenants paying full rent.

           Notwithstanding anything in the definition of Operating Costs in the
     Lease to the contrary, Operating Costs shall not include the following,
     except to the extent specifically permitted by a specific exception to the
     following:

                (i)   Any ground lease rental (provided, however, that Operating
           Costs may include the annual ground lease payments for those areas
           where the steps to the parking facility are located and the garbage
           cans are kept in the alley so long as such payments are in the Base
           Year and Tenant is liable only for its

                                       18
<PAGE>

           Proportionate Share of any increases in such payments over the Base
           Year);

                (ii)  Costs of items considered capital repairs, replacements,
           improvements and equipment under generally accepted accounting
           principles consistently applied or otherwise ("Capital Items");
           except for those Capital Items specifically permitted in Section 3.4
           (j) below;

                (iii) Rentals for items (except when needed in connection with
           normal repairs and maintenance of permanent systems) which if
           purchased, rather than rented, would constitute a Capital Item which
           is specifically excluded in (ii) above (excluding, however, equipment
           not affixed to the Building which is used in providing janitorial or
           similar services);

                (iv)  Costs incurred by Landlord for the repair of damage to the
           Building, to the extent that Landlord is reimbursed by insurance
           proceeds;

                (v)   Costs, including permit, license and inspection costs,
           incurred with respect to the installation of tenant or other
           occupants' improvements in the Building or incurred in renovating or
           otherwise improving, decorating, painting or redecorating vacant
           space for tenants or other occupants of the Building;

                (vi)  Depreciation, amortization and interest payments, except
           as provided herein and except on materials, tools, supplies and
           vendor-type equipment purchased by Landlord to enable Landlord to
           supply services Landlord might otherwise contract for with a third
           party where such depreciation, amortization and interest payments
           would otherwise have been included in the charge for such third
           party's services, all as determined in accordance with generally
           accepted accounting principles, consistently applied, and when
           depreciation or amortization is permitted or required, the item shall
           be amortized over its reasonably anticipated useful life;

                (vii) Marketing costs, including without limitation, leasing
           commissions, attorneys' fees in connection with the negotiation and
           preparation of letters, deal memos, letters of intent, leases,
           subleases and/or assignments, space planning costs, and other costs
           and expenses incurred in connection with lease, sublease and/or
           assignment negotiations and transactions with present or prospective
           tenants or other occupants of the Building;

                                       19
<PAGE>

               (viii) Expenses in connection with services or other benefits
           which are not offered to Tenant or for which Tenant is charged for
           directly but which are provided to another tenant or occupant of the
           Building;

                (ix)  Costs incurred by Landlord due to the violation by
           Landlord or any tenant of the terms and conditions of any lease of
           space in the Building;

                (x)   Overhead and profit increment paid to Landlord or to
           subsidiaries or affiliates of Landlord for goods and/or services in
           or to the Building to the extent the same exceeds the costs of such
           goods and/or services rendered by unaffiliated third parties on a
           competitive basis;

                (xi)  Interest, principal, points and fees on debts or
           amortization on any mortgage or mortgages or any other debt
           instrument encumbering the Building or the Site (except as permitted
           in (ii) above);

                (xii) Landlord's general corporate overhead and general and
           administrative expenses;

               (xiii) Any compensation paid to clerks, attendants or other
           persons in commercial concessions operated by Landlord or wherever
           Tenant is granted its parking privileges and/or all fees paid to any
           parking facility operator (on or off Site) (provided, however, that
           if Landlord provides such parking to Tenant free of charge or at a
           reduced rate, to the extent that Tenant's Proportionate Share of such
           expenses exceeds any amount paid by Tenant for such parking, these
           expenses may be included as a part of Operating Costs);

                (xiv) Rentals and other related expenses incurred in leasing
           HVAC systems, elevators or other equipment ordinarily considered to
           be Capital Items, except for (1) expenses in connection with making
           minor repairs on or keeping Building Systems in operation while minor
           repairs are being made and (2) costs of equipment not affixed to the
           Building which is used in providing janitorial or similar services;

                (xv)  Advertising and promotional expenditures, and costs of
           signs in or on the Building identifying the owner of the Building or
           other tenants' signs;

                (xvi) The cost of any electric power used by any tenant in the
           Building in excess of the consumption levels applicable to Tenant
           under Section 7.2(c), or

                                       20
<PAGE>

           electric power costs for which any tenant directly contracts with the
           local public service company or of which any tenant is separately
           metered or submetered and pays Landlord directly; provided, however,
           that if any tenant in the Building contracts directly for electric
           power service or is separately metered or submetered during any
           portion of the relevant period, the total electric power costs for
           the Building shall be "grossed up" to reflect what those costs would
           have been had each tenant in the Building used the consumption levels
           of electric power applicable to Tenant under Section 7.2(c);

                (xvii) Services and utilities provided, taxes attributable to,
           and costs incurred in connection with the operation of the retail and
           restaurant operations in the Building, except to the extent the
           square footage of such operations are included in the rentable square
           feet of the Building and do not exceed the services, utility and tax
           costs that would have been incurred had the retail and/or restaurant
           space been used for general office purposes;

               (xviii) Costs incurred in connection with upgrading the Building
           to comply with life, fire and safety codes, ordinances, statutes or
           other laws in effect prior to the date of this Lease, including,
           without limitation, the ADA, including penalties or damages incurred
           due to such non-compliance (provided, however, that n compliance"
           shall include any "grandfathering" with respect to any such codes,
           ordinances, statutes and laws or any waivers thereof legally in
           effect as of the date of this Lease);

                (xix)  Provided that Tenant is not in default in its payment of
           Rent, tax penalties incurred as a result of Landlord's failure to
           make payments and/or to file any tax or informational returns when
           due;

                (xx)   Costs for which Landlord has been compensated by a
           management fee, and any management fees in excess of those management
           fees which are normally and customarily charged by landlords of
           Comparable Buildings;

                (xxi)  Costs arising from the gross negligence or willful
           misconduct of other tenants or Landlord or its agents, or any
           vendors, contractors, or providers of materials or services selected,
           hired or engaged by Landlord or its agents including, without
           limitation, the selection of Building materials;

                (xxii) Notwithstanding any contrary provision of the Lease,
           including, without limitation, any

                                       21
<PAGE>

           provision relating to capital expenditures, any and all costs arising
           from the presence of hazardous materials or substances (as defined by
           Applicable Laws (as defined in Section 6.6(a)) in effect on the date
           of this Lease) in or about the Premises, the Building or the Project
           including, without limitation, hazardous substances in the ground
           water or soil, not placed in the Premises, the Building or the
           Project by Tenant;

               (xxiii) Costs arising from Landlord's charitable or political
           contributions;

                (xxiv) Costs arising from latent defects in the base, shell or
           core of the Building or improvements installed by Landlord or repair
           thereof;

                 (xxv) Costs arising from any mandatory or voluntary special
           assessment on the Building or the Site by any transit district
           authority or any other governmental entity having the authority to
           impose such assessment provided, however, that the Metro Rail
           assessment may be included in Direct Costs if at least $15,000.00 for
           such assessment is included in the Base Year;

                (xxvi) Costs for acquiring sculpture, paintings or other objects
           of art;

               (xxvii) Costs (including in connection therewith all attorneys'
           fees and costs of settlement judgments and payments in lieu thereof)
           arising from claims, disputes or potential disputes in connection
           with potential or actual claims litigation or arbitrations pertaining
           to Landlord and/or the Building and/or the Project, except to the
           extent related to other Direct Costs;

              (xxviii) Costs associated with the operation of the business of
           the partnership or entity which constitutes Landlord as the same are
           distinguished from the costs of operation of the Building, including
           partnership accounting and legal matters, costs of defending any
           lawsuits with any mortgagee (except as the actions of Tenant may be
           in issue), costs of selling, syndicating, financing, mortgaging or
           hypothecating any of Landlord's interest in the Building, costs of
           any disputes between Landlord and its employees (if any) not engaged
           in Building operation, disputes of Landlord with Building management,
           or outside fees paid in connection with disputes with other tenants;

                                       22
<PAGE>

                (xxix) Any increase of, or reassessment in, real property taxes
           and assessments in excess of two percent (2%) of the taxes for the
           previous year, resulting from any of the following events if they
           occur during the first three (3) years of the Term of this Lease: (1)
           any sale, transfer, or other change in ownership of the Building or
           the Site during the Lease Term or from major alterations,
           improvements, modifications or renovations to the Building or the
           Site (collectively, "Transfers"), or (2) any action, including,
           without limitation, judicial action or action by initiative, which
           serves to repeal, modify and/or limit the application of Article
           XIIIA of the California Constitution (otherwise known as Proposition
           13);

                (xxx) Costs of any "tap fees" or any sewer or water connection
           fees for the benefit of any particular tenant in the Building;

               (xxxi) Costs incurred in connection with any environmental
           clean-up, response action, or remediation on, in, under or about the
           Premises or the Building, including but not limited to, costs and
           expenses associated with the defense, administration, settlement,
           monitoring or management thereof;

              (xxxii) Any expenses incurred by Landlord for use of any portions
           of the Building to accommodate events including, but not limited to
           shows, promotions, kiosks, displays, filming, photography, private
           events or parties, ceremonies, and advertising beyond the normal
           expenses otherwise attributable to providing Building services, such
           as lighting and HVAC to such public portions of the Building in
           normal Building operations during standard Building hours of
           operation;

             (xxxiii) Any entertainment, dining or travel expenses for any
           purpose;

              (xxxiv) Any flowers, gifts, balloons, etc. provided to Tenant
           and other tenants (unless given generally to all tenants), employees,
           vendors, and prospective tenants;

               (xxxv) Any "validated" parking for any other tenant or such
           tenant's employees or invitees;

               (xxxvi) Any "finders fees" in connection with prospective
           tenants or brokerage commissions;

               (xxxvii) Any "above-standard cleaning, including, but not
           limited to construction cleanup or special

                                       23
<PAGE>

           cleanings associated with parties/events and specific tenant
           requirements in excess of service provided to Tenant, including
           related trash collection, removal, hauling and dumping;

                (xxxviii) The cost of any magazine, newspaper, trade or other
           subscriptions;

                  (xxxix) The cost of any training or incentive programs, other
           than for tenant life safety information services;

                  (xl)    The cost of any "tenant relations" parties, events or
           promotion unless available to all tenants;

                  (xli)  "In-house" legal fees; and

                  (xlii) Insurance deductibles in excess of (1) any commercially
           reasonable amount with respect to any coverage other than earthquake
           and (2) $25,000 for the Building in any calendar year for earthquake
           coverage, it being agreed and understood that any earthquake
           deductible amount shall be amortized over the useful life of the
           repairs made subsequent to the earthquake in question.

           (j) If, after the Commencement Date, Landlord is required, by any new
     or change in rule, regulation or law enacted after the date of this Lease
     by any governmental authority ("Building Regulations"), to make any
                                     --------------------
     changes, alterations or improvements to the Project (including, without
     limitation, electrical, mechanical or other systems or components)
     ("Required Alterations") (but excluding Required Alterations attributable
     ----------------------
     to (1) Tenant's particular manner of use and occupancy of the Premises for
     other than normal general office purposes, and (2) Required Alterations
     which would otherwise be "grandfathered" but which are triggered by the
     Work performed by Landlord in the Premises or by alterations performed by
     Tenant in the Premises, which alterations shall be Tenant's sole
     responsibility subject to Section 6.6) all costs relating to such Required
     Alterations (including all planning, legal, architectural, engineering,
     construction, financing and other costs) fairly characterized as "expenses"
     under generally accepted accounting principles, to the extent installed or
     paid for by Landlord, shall be fully included in Landlord's Operating
     Costs; provided, however, that all of such costs relating to Required
     Alterations must be amortized over the useful life of the applicable
     Required Alteration. The capital costs described above and below in this
     Section 3.4(j) shall include all costs relating to the financing of any
     such Required Alterations. Landlord's Operating Costs shall also include
     (i) the costs of capital improvements and the related financing costs, if
     any, of any equipment, device or

                                       24
<PAGE>

     capital improvement purchased or incurred as a labor-saving measure or to
     affect other economies in the operation or maintenance of the Building
     (provided any such costs are amortized over the useful life and the annual
     amortized cost does not exceed the actual cost savings realized and such
     savings do not redound primarily to the benefit of any particular tenant)
     and (ii) the costs of minor capital improvements, tools or expenditures to
     the extent the total cost of same are not in excess of Fifteen Thousand
     Dollars ($15,000) in any twelve (12) month period, which Fifteen Thousand
     Dollars ($15,000) shall be subject to a CPU adjustment on each anniversary
     of the Commencement Date (each, an "Adjustment Date") in accordance with
                                         ---------------
     Section 17.21 hereof. If Landlord internally finances any such capital
     costs specified in this Section 3.4(j), interest shall be added to such
     costs at an annual rate equal to the Prime Rate in effect at the start of
     the work plus two (2) percentage points. "Prime Rate" as referred to in
                                               ----------
     this Lease shall be the rate of interest announced, from time-to-time, by
     Bank of America National Trust and Savings Association at San Francisco,
     California as its prime (or reference) rate; provided, however, if Bank of
     America shall cease to announce such a rate, then the Prime Rate shall be
     the average rate of interest announced by the three (3) largest banks in
     the continental United States as their prime rate.

           (k) Notwithstanding anything herein to the contrary, Landlord shall
     not recover as Direct Costs more than 100% of the Direct Costs actually
     paid by Landlord plus interest imputed as specified in Section 3.4(j).
     Direct Costs shall be computed according to the cash or accrual basis of
     accounting, as Landlord may elect in accordance with standard and
     reasonable accounting principles employed by Landlord.

           (l) It is understood that Operating Costs shall be reduced by all
     cash discounts, trade discounts, or quantity discounts received by Landlord
     or Landlord's managing agent in the purchase of any goods, utilities, or
     services in connection with the operation of the Building. Landlord shall
     make payments for goods, utilities, or services in a timely manner to
     obtain the maximum possible discount consistent with customary business
     practices. If Capital Items which are customarily purchased by landlords of
     Comparable Buildings are leased by Landlord, rather than purchased, the
     decision by Landlord to lease the item in question shall not serve to
     increase Tenant's Proportionate Share of Operating Costs beyond that which
     would have applied had the item in question been purchased. Tenant's
     Proportionate Share of Operating Costs shall be adjusted to reflect any (i)
     repair or maintenance costs which are covered by a warranty or service
     contract in the Base Year and (ii) extraordinary repair costs in the Base
     Year.

                                       25
<PAGE>

           (m) In the event any facilities, services or utilities used in
     connection with the Building are provided from another building owned or
     operated by Landlord or vice versa, the costs incurred by-Landlord in
     connection therewith shall be allocated to Operating Costs by Landlord on a
     reasonably equitable basis.

           (n) In the event Tenant ceases to occupy (but still leases) the
     entire Premises or one or more floors of the Premises, Tenant shall receive
     a credit against Rent equal to the cost of electricity, janitorial service,
     water, HVAC and any other variable expenses not incurred as a result of
     such vacancy.

     3.5   Utilities.
           ---------

           (a) Tenant shall pay directly for all sewer, water, gas, heat, light,
     power, air conditioning, telephone and other utilities and services
     supplied to the Premises, which are separately metered, together with any
     taxes thereon and any connection fees, and Tenant shall indemnify Landlord
     against any liability for the charges therefor. In the event any such
     charges are not separately metered to Tenant, such charges shall be
     included in the Operating Costs. In the event any such charges are
     separately metered to Tenant and not to the other tenants of the Building,
     such charges for Tenant and for all other space in the Building except the
     Common Areas shall be excluded from Tenant's Proportionate Share of the
     Operating Costs.

           (b) Tenant shall comply with all rules and regulations which any
     governmental agencies or authorities or any utility company may establish
     for the use and protection of any such utility and shall comply with
     Landlord's reasonable rules and regulations related thereto in accordance
     with Section 17.14.

     3.6 Common Areas. Landlord hereby grants to Tenant for the common use of
         ------------
Tenant, its customers, employees, agents and invitees together with other
tenants of the Building, their customers, employees, agents and invitees
throughout the Lease Term, the right to use the common areas within the
Building. The term "Common Area," as used herein, shall refer to all portions of
                    -----------
the Building (except for the areas specifically leased to Tenants), including,
but not limited to, all aisles, corridors, stairways, entrances, sidewalks,
roofs, atriums, elevators, and all utility, mechanical, services, systems,
fixtures and facilities used in common by the tenants of the Building and
situated within or servicing the Building. The Common Areas shall be subject to
the exclusive control and management of Landlord and Landlord shall have the
right to establish reasonable rules and regulations with respect to the Common
Areas, to modify, change and rescind the same, from time to time, provided such
rules and regulations shall not be established or enforced in a

                                       26
<PAGE>

manner that unreasonably diminishes Tenant's rights to the Common Area or
materially adversely affects Tenant's access to the Premises or to the parking
facilities, and to enforce-the same under the terms of this Lease, and Tenant
covenants and agrees to abide by and conform with, and Tenant shall use
reasonable efforts to cause its employees, agents, tenants, sublessees,
assignees, representatives, guests, licensees and invitees to abide by and
conform with, such rules and regulations subject to Section 17.14. Landlord
shall have the right to use the Common Areas for charitable or commercial events
at reasonable times without obligation or compensation to Tenant provided such
uses do not materially interfere with Tenant's access to or use of the Premises
or its quiet enjoyment thereof. Landlord shall not alter the Common Area in such
a manner as to materially interfere with the conduct of Tenant's business on the
Premises or Tenant's access to the Premises or to the parking facilities without
Tenant's consent which Tenant may withhold in its sole discretion.

     3.7   Late Charges. Landlord and Tenant agree that (a) Tenant's failure to
           ------------
pay Rent promptly shall cause Landlord to incur unanticipated costs in the
nature of processing and accounting charges and penalties on mortgage or trust
deed payments (b) the late payment by Landlord of amounts owed to Tenant under
this Lease will cause Tenant to incur damages, including administrative costs,
loss of,use of the overdue funds and other costs. The exact amount of such costs
are impractical or extremely difficult to ascertain. Accordingly, if the party
who was entitled to receive a payment ("Payee") does not receive any such
                                        -----
payment within five (5) days following the delivery by Payee of notice to the
other party ("Payor") that such payment is overdue, Payor shall pay Payee a late
              -----
charge ("Late Charge") equal-to five percent (5%) of the overdue amount. The
         -----------
parties agree that such Late Charge represents a fair and reasonable estimate of
the costs Payee will incur by reason of such late payment.

     3.8   Interest on Past Due Obligations. Any amount owed by one party to the
           --------------------------------
other which is not paid when due shall bear interest from the date such amount
was due until the date such amount is paid in an amount equal to the Prime Rate
in effect at the time plus two (2) percentage points, but in no event to exceed
the maximum legal rate from the due date of such payment (the "Interest Rate").
                                                               -------------
Interest shall not be payable on Late Charges. A payment of interest on such
past due obligations shall not excuse or cure any default by either party under
this Lease.

     3.9   Abatement of Rent When Tenant Is Prevented From Using Premises. In
           --------------------------------------------------------------
the event that Tenant is prevented from using, and does not use, the Premises or
any substantial portion thereof, for five (5) consecutive business days or
fifteen (15) business days in any twelve (12) month period (the "Eligibility
                                                                 -----------
Period") as a result of (i) any damage or destruction to the Premises and/or the
------
Building, (ii) any repair, maintenance or alteration

                                       27
<PAGE>

performed by Landlord after the Commencement Date and required or permitted by
the Lease or any use of the Building or Common Areas for Filming (as described
in Section 17.18), which substantially interferes with Tenant's use of the
Premises, the Center (subject to Landlord's right to provide Substitute Parking
as described in Section 17.3) and/or the Building, (iii) any failure by Landlord
to provide Tenant with services or access to the Premises, the Center (subject
to Landlord's right to provide Substitute Parking as described in Section 17.3)
and/or the Building, (iv) because of an eminent domain proceeding or (v) because
of the presence of hazardous substances in, on or around the Premises, the
Building or the Project which poses a health risk to occupants of the Premises,
then Tenant's Rent shall be abated or reduced, as the case may be, after
expiration of the Eligibility Period for such time that Tenant continues to be
so prevented from using, and does not use, the Premises or a portion thereof, in
the proportion that the rentable area of the portion of the Premises that Tenant
is prevented from using, and does not use, bears to the total rentable area of
the Premises. However, in the event that Tenant is prevented from conducting,
and does not conduct, its business in any substantial portion of the Premises
for a period of time in excess of the Eligibility Period, and the remaining
portion of the Premises is not sufficient to allow Tenant to effectively conduct
its business therein, and if Tenant does not conduct its business from such
remaining portion, then for such time after expiration of the Eligibility
Period during which Tenant is so prevented from effectively conducting its
business therein, the Rent for the entire Premises shall be abated; provided,
however, if Tenant reoccupies and conducts its business from any portion of the
Premises during such period, the Rent allocable to such reoccupied portion,
based on the proportion that the rentable area of such reoccupied portion of the
Premises bears to the total rentable area of the Premises, shall be payable by
Tenant from the date such business operations commence. If Tenant's right to
abatement occurs because of an eminent domain taking and/or because of damage or
destruction to the Premises, the Building and/or Tenant's property, Tenant's
abatement period shall continue until Tenant has been given sufficient time, and
sufficient access to the Premises and/or the Building, to rebuild such portion
it is required to rebuild, to install its property, furniture, fixtures, and
equipment to the extent the same shall have been removed and/or damaged as a
result of such damage or destruction and/or eminent domain taking and to move in
over a weekend.

     In the event that Rent is abated pursuant to this Section 3.9 for longer
than a period of one hundred eighty (180) consecutive days (the "180 Day
                                                                 -------
Period"), Landlord shall have the right, exercisable by written notice to Tenant
given within thirty (30) days after the end of the 180 Day Period ("Landlord's
                                                                    ----------
Termination Notice") to terminate the Lease upon that date which is thirty (30)
------------------
days after Tenant receives Landlord's Termination Notice; provided, however,
that if at least ten (10) days prior to the scheduled termination date Tenant
provides Landlord with

                                       28
<PAGE>

written notice waiving Tenant's right to further rent abatement on account of
the specific event which initially triggered the; rent a basement, then this
Lease shall not terminate but shall continue in full force and effect.  To the
extent Tenant is entitled to abatement without regard to the Eligibility Period,
because of an event covered by Articles 8 [Damage or Destruction] and 9
[Condemnation] of the Lease, then the Eligibility Period shall not be
applicable.

                            ARTICLE 4: ARBITRATION.
                            ----------------------

     With the exception of the arbitration provisions which shall specifically
apply to the determination of the Fair Market Rate, as set forth in the
provisions of Section 2.5, and the right of either party to obtain temporary or
preliminary injunctive relief, this Article 4 contain the sole and exclusive
method, means and procedure to resolve any and all disputes or disagreements,
including whether any particular matter constitutes, or with the passage of time
would constitute, an event of default ("Event of Default"). The parties hereby
                                        ----------------
irrevocably waive any and all rights to the contrary and shall at all times
conduct themselves in strict, full, complete and timely accordance with the
provisions of this Article 4. Any and all attempts to circumvent the provisions
of this Article 4 shall be absolutely null and void and of no force or effect
whatsoever. As to any matter submitted to arbitration to determine whether it
would, with the passage of time, constitute an Event of Default, such passage of
time shall not commence to run until any such affirmative determination, so long
as it is simultaneously determined that the challenge of such matter as a
potential Event of Default was made in good faith, except with respect to the
payment of money. With respect to the payment of money, such passage of time
shall not commence to run only if the party which is obligated to make the
payment does in fact make the payment to the other party. Such payment can be
made "under protest," which shall occur when such payment is accompanied by a
good-faith notice stating why the party has elected to make a payment under
protest. Such protest will be deemed waived unless the subject matter identified
in the protest is submitted to arbitration, within sixty (60) days of the date
on which the parties agree that there is a dispute or disagreement or reach an
impasse with respect thereto, as set forth in the following:

           (a) Arbitration Panel. Within ninety (90) days after delivery of
               -----------------
     written notice ("Notice of Dispute") of the existence and nature of any
                      -----------------
     dispute given by any party to the other party, and unless otherwise
     provided herein in any specific instance, the parties shall each: (i)
     appoint one (1) lawyer actively engaged in the licensed and full-time
     practice of law, specializing in real estate, in the County of Los Angeles
     for a continuous period immediately preceding the date of delivery
     ("Dispute Date") of the Notice of Dispute of not less than ten (10) years,
     --------------
     but who has at no time ever represented or acted on behalf of any of the

                                       29
<PAGE>

     parties, and (ii) deliver written notice of the identity of such lawyer and
     a copy of his or her written acceptance of such appointment and
     acknowledgment of and agreement to be bound by the time constraints and
     other provisions of this Article 4 ("Acceptance") to the other parties
                                          ----------
     hereto. In the event that any party fails to so act, such arbitrator shall
     be appointed pursuant to the same procedure that is followed when agreement
     cannot be reached as to the third arbitrator. Within ten (10) days after
     such appointment and notice such lawyers shall appoint a third lawyer
     (together with the first two (2) lawyers, "Arbitration Panel") of the same
                                                -----------------
     qualification and background and shall deliver written notice of the
     identity of such lawyer and a copy of his or her written Acceptance of such
     appointment to each of the parties. Neither Landlord nor Tenant may consult
     with the third lawyer, directly or indirectly, to determine the third
     lawyer's position on the issue which is the subject of the dispute. In the
     event that agreement cannot be reached on the appointment of a third lawyer
     within such period, such appointment and notification shall be made as
     quickly as possible by any court of competent jurisdiction, by any
     licensing authority, agency or organization having jurisdiction over such
     lawyers, by,any professional association of lawyers in existence for not
     less than ten (10) years at the time of such dispute or disagreement and
     the geographical membership boundaries of which extend to the County of Los
     Angeles or by any arbitration association or organization in existence for
     not less than ten (10) years at the time of such dispute or disagreement
     and the geographical boundaries of which extend to the County of Los
     Angeles, as determined by the party giving such Notice of Dispute and
     simultaneously confirmed in writing delivered by such party to the other
     party; Any such court, authority, agency, association or organization shall
     be entitled either to directly select such third lawyer or to designate in
     writing, delivered to each of the parties, an individual who shall do so.
     In the event of any subsequent vacancies or inabilities to perform among
     the Arbitration Panel, the lawyer or lawyers involved shall be replaced in
     accordance with the provisions of this Article 4 as if such replacement was
     an initial appointment to be made under this Article 4 within the time
     constraints set forth in this Article 4, measured from the date of notice
     of such vacancy or inability, to the person or persons required to make
     such appointment, with all the attendant consequences of failure to act
     timely if such appointed person is a party hereto.

           (b) Duty. Consistent with the provisions of this Article 4, the
               ----
     members of the Arbitration Panel shall utilize their utmost skill and shall
     apply themselves diligently so as to hear and decide, by majority vote, the
     outcome and resolution of any dispute or disagreement submitted to the
     Arbitration Panel as promptly as possible, but in any event on or before
     the expiration of thirty (30)

                                       30
<PAGE>

     days after the appointment of the members of the Arbitration Panel. None of
     the members of the Arbitration Panel shall have any liability whatsoever
     for any acts or omissions performed or omitted in good faith pursuant to
     the provisions of this Article 4.

           (c) Authority. The Arbitration Panel shall (i) enforce and interpret
               ---------
     the rights and obligations set forth in the Lease, (ii) fix and establish
     any and all rules as it shall consider appropriate in its sole and absolute
     discretion to govern the proceedings before it, including any and all rules
     of discovery, procedure and/or evidence (Section 1283.05 of the California
     Code of Civil Procedure being deemed applicable to any such proceedings),
     and (iii) make and issue any and all orders, final or otherwise, and any
     and all awards, as a court of competent jurisdiction sitting at law or in
     equity could make and issue, and as it shall consider appropriate in its
     sole and absolute discretion, including the awarding of monetary damages,
     the awarding of reasonable attorneys' fees and costs to the prevailing
     party as determined by the Arbitration Panel and the issuance of injunctive
     relief. If the party against whom the award is issued complies with the
     award, within the time period established by the Arbitration Panel, then no
     Event of Default will be deemed to have occurred, unless the Event of
     Default pertained to the non-payment of money by Tenant or Landlord, and
     Tenant or Landlord failed to make such payment under protest.

           (d) Appeal. The decision of the Arbitration Panel shall be final and
               ------
     binding, may be confirmed and entered by any court of competent
     jurisdiction at the request of any party and may not be appealed to any
     court of competent jurisdiction or otherwise except upon a claim of fraud
     on the part of the Arbitration Panel. The Arbitration Panel shall retain
     jurisdiction over any dispute until its award has been implemented, and
     judgment on any such award may be entered in any court having appropriate
     jurisdiction.

           (e) Compensation. Each member of the Arbitration Panel (i) shall be
               ------------
     compensated for any and all services rendered under this Article 4 at a
     rate of compensation equal to the sum of (i) Two Hundred Fifty Dollars
     ($250.00) per hour and (ii) the sum of Ten Dollars ($10.00) per hour
     multiplied by the number of full years of the expired Lease Term, plus
     reimbursement for any and all expenses incurred in connection with the
     rendering of such services, payable in full promptly upon conclusion of the
     proceedings before the Arbitration Panel. Such compensation and
     reimbursement shall be borne by the nonprevailing party as determined by
     the Arbitration Panel in its sole and absolute discretion.

                       ARTICLE 5: INDEMNITY; LEGAL COSTS
                       ---------------------------------

                                       31
<PAGE>

     5.1 Indemnity. Tenant shall indemnify and hold Landlord, Landlord's agents,
         ---------
and employees harmless from any and all costs, claims or liabilities to the
extent arising from: (a) Tenant's use of the Premises; (b) the conduct of
Tenant's business or any conduct done or permitted by Tenant to be done in or
about the Premises; (c) all liens and claims of lien arising by reason of any
alteration or improvement of the Premises by Tenant or arising from any other
cause related to the Premises, the Building or Tenant's use thereof; (d) any
breach or default in the performance of Tenant's obligations under this Lease;
(e) any misrepresentation or breach of warranty by Tenant under the Lease; or
(f) other acts or omissions which relate to the Premises or the Building and
which amount to gross negligence or willful misconduct of Tenant, or any of its
agents, employees, invitees or licensees. Tenant shall defend Landlord against
any such cost, attorneys' fees, claim or liability at Tenant's expense with
counsel reasonably acceptable to Landlord or, at Landlord's election, Tenant
shall reimburse Landlord for any legal fees or costs incurred by Landlord in
connection with any such claim. As a material part of the consideration to
Landlord, Tenant hereby assumes all risk of damage to property or injury to
persons in or about the Premises arising from any cause, and Tenant hereby
waives all claims in respect thereof against Landlord, except for any claim
arising out of Landlord's gross negligence or willful misconduct.
Notwithstanding any provisions of Articles 5 and 13 to the contrary, Tenant
shall not be required to indemnify and hold Landlord harmless from any loss,
cost, liability, damage or expense, including, but not limited to, penalties,
fines, attorneys' fees or costs (collectively, "Claims"), to any person,
                                                ------
property or entity to the extent resulting from the acts or omissions or willful
misconduct of Landlord or its agents, contractors, servants, employees or
licensees, in connection with Landlord's activities in the Building or the
Project (except for damage to the Work and Tenant's personal property, fixtures,
furniture and equipment in the Premises or in the Building), and Landlord hereby
so indemnifies and holds Tenant harmless from any such Claims, including but not
limited to Claims arising from any noncompliance of the Building and/or the
Project with any laws relating to disabled access, or Claims arising from the
presence in the Premises and/or the Building of hazardous substances, except to
the extent such hazardous substances were placed in or on the Premises, the
Building and/or the Project by Tenant or its agents, contractors, servants,
employees, licensees or invitees. Landlord's and Tenant's respective indemnity
hereunder will survive the expiration of the Term of, or any termination of the
Lease. Provided, further, to the extent any damage or repair obligation is
covered by insurance obtained by Landlord as part of Operating Costs, but is not
covered by insurance obtained by Tenant, then Tenant shall be relieved of its
indemnity obligation up to the amount of the insurance proceeds which Landlord
is entitled to receive.The provisions of this Lease are not intended to and
shall not relieve any insurance carrier of its obligations under policies
required to be carried by Landlord or Tenant,

                                       32
<PAGE>

respectively, pursuant to the Lease. If Landlord or Tenant has been or at any
time hereafter is granted the right to self insure or if either party breaches
this agreement by its failure to carry required insurance, such failure shall
automatically be deemed to be a covenant and agreement by Landlord or Tenant,
respectively, to self-insure to the full extent of such required coverage, with
full waiver of subrogation. All of the provisions set forth herein are subject
to the provisions of Section 13.5.

     5.2   Legal Proceedings. Landlord and Tenant agree that if any action or
           -----------------
arbitration for breach of or to enforce the provisions of this Lease is
commenced, the court or arbitrator in such action shall award to the party in
whose favor a judgment is entered, a reasonable sum as attorneys' fees and
costs. Such attorneys, fees and costs shall be paid by the losing party in such
action or arbitration. Each party (the "First party") also shall indemnify the
                                        -----------
other party (the "Other party") against and hold such Other party harmless from
                  -----------
all reasonable costs and expenses, demands and liability incurred by such Other
party if such Other party becomes or is made a party to any claim or action (a)
instituted by the First party, or by license of or agreement with the First
party; (b) for foreclosure of any lien for labor or material furnished to or for
the First party; (c) otherwise arising out of or resulting from any act or
transaction of the First party or such other person; or (d) necessary to protect
the Other party's interest under this Lease in a bankruptcy proceeding, or other
proceeding under Title 11 of the United States Code, as amended. This provision
shall survive the termination of the Lease.

     5.3   Landlord's Consent. In the event that Landlord shall consent to an
           ------------------
assignment or sublease pursuant to Article 10 (Assignment and Subletting),
Tenant shall pay Landlord's reasonable attorneys' fees incurred in connection
with Tenant's request for Landlord's consent, the aggregate of which fees shall
in no event exceed Five Hundred Dollars ($500.00) per each assignment or
sublease provided, however, that such amount shall be subject to a CPU
adjustment on each anniversary of the Commencement Date (each an "Adjustment
Date") in accordance with Section 17.21 hereof.

                           ARTICLE 6: USE OF PROPERTY
                           --------------------------

     6.1   Permitted Use. Tenant shall use the Premises for the Permitted Use
           -------------
set forth in Article 1 and shall not use or permit the Premises to be used for
any other purpose.

     6.2   Restrictions on Use.
           -------------------

     Tenant shall not do or permit anything to anyone which will in any way
unreasonably obstruct or interfere with the rights of other tenants or occupants
of the Building or injure them. Tenant shall not use or allow the Premises to be
used for any unlawful purpose, nor shall Tenant cause or maintain or permit any

                                       33
<PAGE>

nuisance in, on or about the Premises. Tenant shall not bring or keep anything
in, on or about the Premises which will increase the existing rate of or affect
any fire or other insurance upon the Building or any of its contents. Tenant
shall not use or allow any part of the Premises to be used for the manufacturing
or sale of food or beverages or for the manufacture or retail or auction of
merchandise or goods or property of any kind, or as a school or a classroom.
Tenant shall not use or allow any part of the Premises to be used for storage of
any of the foregoing, except for storage of minor amounts for Tenant's own use
on the Premises. Tenant shall not commit or allow to be committed any waste in,
on or about the Premises. Tenant shall not place any signs on the Building
without Landlord's prior written consent. Tenant shall not conduct business or
any other activity on or about the Premises of such a nature as to place an
unreasonable and excessive burden upon the public or common areas of the
Building.

     6.3   Compliance With Governmental and Insurance Regulations; Assumption of
           ---------------------------------------------------------------------
Risk of Noncompliance. Tenant shall not use or occupy the Premises in violation
---------------------
of the Certificate of Occupancy of the Building or the Premises or of any law,
ordinance or regulation or other directive of any governmental authority having
or exercising jurisdiction over the Building. If any governmental license or
permit shall be required for the proper and lawful conduct of Tenant's business
in the Premises, Tenant shall, at its sole cost and expense and except as
otherwise provided in this Lease, procure and at all times maintain such license
or permit and shall at all times comply with the terms and conditions thereof.

     6.4   Landlord's Access. Landlord may enter the Premises at reasonable
           -----------------
times to show the Premises to potential buyers, investors or tenants or other
parties, or for any other reasonable purpose Landlord deems necessary. Landlord
shall give reasonable prior notice of such entry, except in the case of' an
emergency. Landlord may place customary "For Sale" or "For Lease" signs on the
Premises or the Building; provided, however, that Landlord may only place such
signs on the Premises upon receipt of Tenant's consent, which shall not be
unreasonably withheld. Landlord shall at all times have and retain a master key
which will unlock all doors in, upon and about the Premises excluding vaults and
safes). Landlord shall conduct its entry in such a manner as to cause minimal
interference with the conduct of Tenant's business or operations in the
Premises. Notwithstanding the foregoing, Tenant may designate certain areas of
the Premises as "Secured Areas" should Tenant require such areas for the purpose
of securing certain valuable property or confidential information. Landlord may
not enter such Secured Areas except in the case of emergency or in the event of
a Landlord inspection, in which case Landlord shall provide Tenant with ten (10)
days' prior written notice of the specific date and time of such Landlord
inspection.

                                       34
<PAGE>

     6.5   Hazardous Materials.
           -------------------

           (a) Landlord represents and warrants that to Landlord's knowledge as
     of the date hereof, no Hazardous Materials (as hereinafter defined) are
     being Handled (as hereinafter defined) upon, about, above or beneath the
     Premises or any portion of the Building, except as has been disclosed in
     writing to Tenant as of the date hereof and to the extent that any such
     Hazardous Materials are discovered to exist, Landlord will, at its sole
     cost and expense (and without any deduction from any applicable tenant
     improvement allowance if done as part of Landlord's initial tenant
     improvement work in the Premises), promptly take all actions required by
     any federal, state or local governmental agency or political subdivision,
     which requirements arise from the Handling of Hazardous Materials upon,
     about, above or beneath the Premises or any portion of the Building.
     Notwithstanding the foregoing, if Landlord in good faith determines that
     the cost to Landlord of complying with the prior sentence would cost more
     than twenty-five percent (25%) of the functional replacement cost of the
     Building, then provided that Landlord concurrently terminates its leases
     with all of the other tenants in the Building, Landlord may terminate this
     Lease by providing Tenant with written notice of its election to so
     terminate, which notice shall be given within thirty (30) days after
     becoming aware of the anticipated amount of the cost of the compliance, and
     such termination shall be effective thirty (30) days after Tenant's receipt
     of Landlord's written notice. No Hazardous Materials shall be Handled upon,
     about, above or beneath the Premises or any portion of the Building by or
     on behalf of Landlord or Tenant (or Tenant's subtenants or assignees), or
     their respective contractors, clients, officers, directors, employees,
     agents, or invitees. Any such Hazardous Materials so Handled by Tenant
     shall be known as Tenant's Hazardous Materials. "Notwithstanding the
     foregoing, normal quantities of those Hazardous Materials customarily used
     in the conduct of general administrative and executive office activities
     (e.g., copier fluids and cleaning supplies) may be used and stored at the
     Premises or elsewhere at the Building, but only in compliance with all
     applicable Environmental Laws, as defined herein.

           (b) Notwithstanding the obligation of Tenant to indemnify Landlord
     pursuant to this Lease, Tenant shall, at its sole cost and expense,
     promptly take all actions required by any federal, state or local
     governmental agency or political subdivision, which requirements or
     necessity arises from the Handling of Tenant's Hazardous Materials up-on,
     about, above or beneath the Premises or any portion of the Building. Such
     actions shall include, but not be limited to, as such specifically relate
     to Tenant's Handling of Tenant's Hazardous Materials, the investigation of
     the environmental condition of the Premises or any portion of

                                       35
<PAGE>

     the Building, the preparation of any feasibility studies or reports and the
     performance of any cleanup, remedial, removal or restoration work. Tenant
     shall take all actions necessary to restore the Premises or any portion of
     the Building to the condition existing prior to the introduction of
     Tenant's Hazardous Materials, notwithstanding any less stringent standards
     or remediation allowable under applicable Environmental Laws except as
     otherwise provided in this Lease. Tenant shall nevertheless obtain
     Landlord's written approval prior to undertaking any actions required by
     this Section, which approval shall not be unreasonably withheld so long as
     such actions would not potentially have a material adverse long-term or
     short-term effect on the Premises or any portion of the Building.

           (c) "Environmental Laws" means and includes all now and hereafter
     existing statutes, laws, ordinances, codes, regulations, rules, rulings,
     orders, decrees, directives, policies and requirements by any federal,
     state or local governmental authority regulating, relating to, or imposing
     liability or standards of conduct concerning public health and safety or
     the environment.

           (d) "Hazardous Materials" means: (a) any material or substance: (i)
     which is defined or becomes defined as a "hazardous substance," "hazardous
     waste", "infectious waste", "chemical mixture or substance," or "air
     pollutant." under Environmental Laws; (ii) containing petroleum, crude oil
     or any fraction thereof which is liquid at standard conditions of
     temperature and pressure; (iii) containing polychlorinated biphenyls
     (PCBs); (iv) containing asbestos; (v) which is radioactive; or (b) any
     other pollutant or contaminant or hazardous, toxic, flammable or dangerous
     chemical, waste, material or substance, as all such terms are used in their
     broadest sense, and defined, regulated or become regulated by Environmental
     Laws, or which cause a nuisance upon or waste to the Premises or any
     portion of the Building.

           (e) "Handle", "Handled", or "Handling" shall mean any installation,
     handling, generation, storage, treatment, use, disposal, discharge,
     release, manufacture, refinement, presence, migration, emission, abatement,
     removal, transportation, or any other activity of any type in connection
     with or involving Hazardous Materials.

     6.6   Compliance with Laws and Other Requirements. Tenant shall comply with
           -------------------------------------------
the following laws and other requirements:

           (a) Except as otherwise provided herein, Tenant shall cause the
     Premises to comply in all material respects with all laws, ordinances,
     regulations and directives of any governmental authority having
     jurisdiction including without limitation any certificate of occupancy and
     any law,

                                       36
<PAGE>

     ordinance, regulation, covenant, condition or restriction affecting the
     Building or the Premises which in the future may become applicable to the
     Premises (collectively, "Applicable Laws").
                              ---------------

           (b) Tenant shall not use the Premises, or knowingly permit the
     Premises to be used, in any manner which: (i) violates any Applicable Law;
     (ii) causes or is reasonably likely to cause damage to the Building or the
     Premises; (iii) violates a requirement or condition of any fire and
     extended insurance policy covering the Building and/or the Premises; or
     increases the cost of such policy; (iv) constitutes or is reasonably likely
     to constitute a material nuisance, annoyance or inconvenience to other
     tenants or occupants of the Building or its equipment, facilities or
     systems; (v) unreasonably or unduly interferes with, or is reasonably
     likely to unreasonably or unduly interfere with the transmission or
     reception of microwave, television, radio, telephone, or other
     communication signals by antennae or other facilities located in the
     Building; or (vi) violates the Rules and Regulations of the Building, as
     defined in Section 17.14.

           Landlord hereby warrants to Tenant that (i) the Building and (ii)
     that portion of the Premises already constructed and to be constructed by
     Landlord or Landlord's contractor, have been or will be constructed and
     operated in a-first-class manner, free of all asbestos containing materials
     ("ACM") and in full compliance with all Applicable Laws existing at the
     later of the time of construction or the date of this Lease, in order to
     make the Premises, the Building and the site upon which the Building is
     situated (the "Site") suitable for business offices. For the purposes of
     this Section 6.6, Landlord shall be deemed to be in full compliance with
     all Applicable Laws even if such compliance includes any n grandfathering"
     or waivers applicable to the Premises and/or the Building with respect to
     any Applicable Law. The term "Applicable Laws" will be deemed to include
     any Environmental Laws. Notwithstanding anything contained in the Lease to
     the contrary, Landlord will be fully responsible for making all alterations
     and repairs to the Premises and the Building at its cost, which shall not
     be included as Operating Costs, (1) required in order to comply with the
     Americans with Disabilities Act of 1990, 42 U.S.C. 12101 et seq., as
     amended as of the date of this Lease (the "ADA"), (2) required to remove
     any and all ACM discovered at any time to have existed in the Premises as
     of the Commencement Date, or (3) resulting from or necessitated by the
     failure by Landlord and/or Landlord is contractor to comply with the
     Applicable Laws as of the date of this Lease, or from Landlord's and/or
     Landlord's contractor's utilization of Hazardous Materials as defined by
     Applicable Laws as of the date of this Lease in violation of such
     Applicable Laws or which could pose a health risk to

                                       37
<PAGE>

     occupants of the Premises. Notwithstanding the foregoing, if Landlord in
     good faith determines that the cost to Landlord of complying with the prior
     sentence would cost more than twenty-five percent (25%) of the functional
     replacement cost of the Building, then provided that Landlord concurrently
     terminates its leases with all of the other tenants in the Building,
     Landlord may terminate this Lease by providing Tenant with written notice
     of its election to so terminate which notice shall be given within thirty
     (30) days after becoming aware of the anticipated amount of the cost of the
     compliance, and such termination shall be effective thirty (30) days after
     Tenant's receipt of Landlord's written notice. With respect to any costs
     that Tenant incurs in connection with the construction of the Work or any
     Alterations (as defined in Section 7.3), which Tenant would not have had to
     incur if the Building and Premises, to the extent already constructed by
     Landlord, were constructed in full compliance with Applicable Laws in
     existence on the date of this Lease, then Landlord shall reimburse Tenant
     for such increased costs; provided, however, that to the extent any such
     compliance work would not have been required but for the tenant improvement
     work to be performed in the Premises, then the cost of such compliance work
     shall be paid by Tenant. Otherwise, Landlord shall, subject to Tenant's
     repair obligations set forth in the Lease, maintain and operate the
     Building in a first class manner, keep the Building Structure and the
     Building Systems (as such terms are defined in Section 7.2(a)) in first
     class condition and repair, maintain a safe and healthful environment in
     the Building, and operate, maintain, and provide services and security to,
     the Building in a manner comparable to other comparable office buildings in
     the vicinity of the Building ("Comparable Building"), the cost of which
     (except for certain specified capital improvements and repairs, as more
     specifically set forth in Section 3.4(i) above) shall be included in
     Operating Costs, or paid for directly by Tenant (for maintenance and repair
     of the Premises only to the extent required by the Lease) if not normally
     included in Operating Costs.

     6.7   Compliance by Other Tenants. Landlord shall use commercially
           ---------------------------
reasonable efforts (including, without limitation, unlawful detainer proceedings
where commercially reasonable efforts would require such) at least comparable to
those that would be used by other landlords of Comparable Buildings, to secure
the compliance by other tenants of the Building with all use restrictions
affecting the Building if the non-compliance with such use restrictions by other
tenants could materially and adversely affect Tenant; provided, however, that
Landlord shall not, so long as Landlord is using-commercially reasonable
efforts, be liable to Tenant for any other occupant's or tenant's failure to
conduct itself in accordance with the provisions of this Article 6, and Tenant
shall not be released or excused from

                                       38
<PAGE>

the performance of any of its obligations under the Lease solely because of any
such failure.

                ARTICLE 7: MAINTENANCE, REPAIRS, AND ALTERATIONS
                ------------------------------------------------

     7.1   Tenant's Obligations.
           --------------------

           (a) Tenant, at its sole cost and expense, shall keep the Premises
     other than the Building Structure and Building Systems (as those terms are
     hereinafter defined) in good order, condition and repair including, without
     limitation (i) decorations, fixtures, interior walls and interior surfaces
     of exterior walls, (ii) ceilings, interior windows, doors, plate glass and
     entrances within the Premises and (iii) any plumbing, heating, air
     conditioning and electrical facilities within the Premises which are not
     part of the Building Systems and are intended solely for the use of Tenant.
     Tenant shall keep the Premises at all times in a sanitary condition,
     reasonably free from waste or debris. Subject to the provisions of Section
     13.5 and to the extent not covered by the insurance on the Building
     required to be carried by Landlord hereunder and paid for by Tenant as part
     of Direct Expenses, all damage or injury to the Premises or the Building
     caused by the acts or negligence of Tenant, its agents or employees, shall-
     be promptly repaired by Tenant, at Tenant's sole cost and expense, to the
     reasonable satisfaction of Landlord.

           (b) All of Tenant's obligations to maintain and repair shall be
     accomplished at Tenant's sole expense except to the extent reimbursed by
     Landlord's insurance proceeds. If Tenant fails to maintain and repair the
     Premises, then Landlord, on ten (10) days' prior notice (except in the case
     of emergency whereupon no notice shall be required) may enter the Premises
     and perform such repair and maintenance and Tenant shall reimburse Landlord
     for all actual and reasonable costs incurred immediately upon demand
     therefor as Additional Rent.

           (c) Tenant hereby waives any and all rights under Sections 1941
     through 1942, inclusive, of the California Civil Code and hereby waives, to
     the extent permissible, any rights under other statutes or laws now or
     hereafter in effect which are contrary to the obligations of Tenant under
     this Lease, or which place obligations upon Landlord in addition to those
     provided in this Lease.

     7.2   Landlord's Obligations.
           ----------------------

           (a) Landlord shall repair and maintain in first-class condition the
     structural portions of the Building including the foundation, floor/ceiling
     slabs, roof, curtain wall, exterior glass and mullions, columns, beams,
     shafts (including elevator shafts), stairs, parking garage,

                                       39
<PAGE>

     stairwells, escalators, elevator cabs, plazas, art work, sculptures,
     washrooms, mechanical, electrical and telephone closets, and all Common
     Areas and public areas (collectively, "Building Structure"), and the HVAC
     (including primary and secondary loops connected to the core), mechanical,
     electrical, life safety, plumbing, sprinkler systems (connected to the
     core) and sanitary systems ("Building Systems") except to the extent such
     maintenance or repairs are caused in whole or in part by the act, neglect,
     fault or omission of Tenant, its agents, servants, employees or invitees
     (except to the extent the cost of any such maintenance or repair is covered
     by the insurance required to be carried by Landlord hereunder and paid for
     by Tenant as part of Direct Expenses) or by Tenant's use of the Premises
     for other than normal and customary business operations in which event
     Tenant shall pay to Landlord the cost of such maintenance or repairs upon
     demand. Landlord shall also repair and maintain the Common Areas of the
     Building the costs for which shall be considered Operating Costs to the
     extent permitted in Article 3, unless such maintenance or repairs are
     caused in whole, or in part, (i) by the act, neglect, fault or omission of
     Tenant, its agents, servants, employees or invitees, in which event Tenant
     shall pay to Landlord the cost of such maintenance or repairs upon demand
     (except to the extent the cost of any such maintenance or repair is covered
     by the insurance required to be carried by Landlord hereunder and paid for
     by Tenant as part of Direct Expenses), or (ii) by Tenant's use of the
     Premises for other than normal and customary business operations. Except as
     otherwise provided in this Lease, if the need for repair is not reasonably
     apparent, Landlord shall not be liable for failure to make any such repairs
     or to perform any maintenance unless such failure shall persist for an
     unreasonable time after written notice of the need of such repairs or
     maintenance is given to Landlord by Tenant or any other tenant or occupant
     of the Building. Except as provided in Section 7.5, Tenant waives the
     right to make repairs at Landlord's expense under any law or regulation now
     or hereafter in effect.

           (b) Landlord agrees to furnish to the Premises, (i) during the hours
     of 7:00 A.M. to 6:00 P.M. Monday through Friday and 8:00 A.M. to 1:00 P.M.
     on Saturday ("Business Hours") except for recognized national holidays,
     heat, ventilation and air conditioning ("HVAC") sufficient for the
     comfortable occupancy of the Premises, (ii) twenty four (24) hours a day,
     seven (7) days a week, every day of the year, elevator service, electric
     current sufficient for typical general office use for normal lighting and
     office machines, and water for lavatory and drinking purposes, all in such
     reasonable quantities as in the judgment of Landlord is necessary for the
     comfortable occupancy of the Premises, and (iii) janitorial services at
     least comparable to that

                                       40
<PAGE>

     provided in Comparable Buildings five (5) days per week. Landlord shall not
     be liable for any stoppage or interruption of any such services caused by
     riot, strike, labor disputes, breakdowns, accidents, necessary repairs or
     other cause. Except as specifically provided herein, Tenant agrees to pay
     for all utilities and other services utilized by Tenant for all overtime or
     additional building services furnished to Tenant not uniformly furnished to
     all tenants of the Building in accordance with Section 7.2(c) below.

           (c) In the event Tenant requires utilities (other than electricity),
     HVAC and/or services in excess of what Landlord is required to provide
     during Business Hours (as defined in Section 7.2(b)) or at times other than
     during Business Hours, Landlord agrees to provide such extra utilities and
     services, and Tenant agrees to reimburse to Landlord its actual costs of
     providing such extra utilities and services, without a profit to.Landlord
     but with, if applicable, a reasonable overhead and administration charge
     (which may include a depreciation factor if appropriate) by Landlord
     ("Actual Costs").

           (d) Landlord shall provide, twenty-four (24) hours per day, seven (7)
     days per week, every day of the year, onsite Building security equipment,
     personnel, procedures and systems. Subject to Landlord's reasonable
     approval, Tenant shall be entitled, at its sole cost, to install its own
     security systems for the Premises, which shall be located within the
     Premises and which shall not interfere with the Building Systems. Upon
     request, Landlord's security guards will, after normal business hours,
     accompany any employee or visitor of Tenant from the Building to the on-
     site garage and to the surface parking lots within one (1) block of the
     Building.

     7.3   Alterations, Additions, and Improvements.
           ----------------------------------------

     Following the date on which Tenant first occupies the Premises, Tenant
shall have the right to make alterations, additions, or improvements
("Alterations") to the Premises upon receipt of Landlord's prior written
consent, which will not be withheld unless the making or installation of the
Alterations (i) adversely affects the Building Structure, (ii) adversely affects
the Building Systems, (iii) affects the appearance of any part of the Building
visible from outside the Premises, (iv) does not comply with Applicable Laws, or
(v) unreasonably interferes with the normal and customary business operations of
the other tenants in the Building (individually and collectively, a "Design
Problem"). Landlord may, as a condition to the installation thereof and if such
request is made concurrently with the approval of the plans and specifications
therefor, require Tenant to remove any such Alterations at its sole cost and
expense, it being agreed and understood that in no event will Tenant have any
obligation to remove any such Alterations unless, in Landlord's

                                       41
<PAGE>

reasonable judgment, they do not qualify as standard office-type tenant
improvements. Notwithstanding anything to the contrary set forth herein, Tenant
shall not be required to obtain Landlord's prior consent with respect to any
strictly cosmetic work performed within the Premises by Tenant, such as the
installation of wall coverings or floor coverings or non-structural alterations
which do not exceed Twenty-Five Thousand Dollars ($25,000), which are not
visible from the outside of the Premises and which comply with all Rules and
Regulations, Building Regulations and Landlord's structural, engineering and
design requirements for the Building. Tenant shall give Landlord at least ten
(10) days' prior written notice of the commencement of any work on the Premises.
In no event shall Tenant be required to provide payment and performance bonds in
connection with any such Alteration work so long as the financial condition of
Tenant is satisfactory. Landlord may elect to record and post notices of non-
responsibility on the Premises or the Building. Upon Landlord's written request
Tenant shall promptly remove any Alterations constructed in violation of this
Section. All Alterations shall be accomplished at Tenant's sole cost and expense
in a good and workmanlike manner, in conformity with all applicable laws and
regulations, by a contractor and subcontractors chosen by Tenant and reasonably
approved by Landlord and shall be the property of Landlord. As soon as
reasonably practicable, Tenant shall provide Landlord with copies of all
construction contracts, and proof of payment for all labor and materials.
Promptly upon completion of any such work, Tenant shall provide Landlord with
any "as built. plans. Tenant shall promptly pay when due all claims for labor
and materials furnished to the Premises.

     7.4   Condition Upon Termination. Upon termination of this Lease, Tenant
           --------------------------
shall surrender the Premises to Landlord, broom clean and in the same condition
as received except for ordinary wear and tear which Tenant was not otherwise
obligated to remedy under any provisions of this Lease and except for the
Alterations (subject to Section 7.3) and Work in the Premises and except for any
casualty damage, if any, for which Tenant is not responsible. In addition,
Landlord may require Tenant to remove any Alterations (whether or not made with
Landlord's consent) upon the termination of the Lease Term and may, subject to
Section 7.3. require Tenant to restore the Premises to its original condition at
Tenant's expense; provided, however, that Landlord must elect to have Tenant
remove such Alterations by written notice to Tenant at the time Tenant requests
Landlord's consent to such Alterations for which Landlord's prior consent is
required and Tenant shall have no obligation to remove (a) any Alterations to
the extent the same are customary and typical for general business offices; and
(b) any Work installed in the Premises. Tenant may remove Tenant's machinery,
trade fixtures or equipment ("Personal Property") which can be removed without
leaving the Premises or the Building in a materially damaged condition. Tenant
shall repair, at Tenant's sole expense, any damage to the Premises caused by the
installation or removal of

                                       42
<PAGE>

any such Personal Property. Any of Tenant's Personal Property not so removed
shall, at the option of Landlord, upon five (5) business days' notice to Tenant
(unless Tenant effectuates the removal within such five (5) business day period)
automatically become the property of Landlord upon the expiration or termination
of the Lease. Thereafter, Landlord may retain or dispose of in any manner the
Personal Property not so removed, without any liability whatsoever to Tenant.

     7.5   Right to Repair. Notwithstanding any provision set forth in this
           ---------------
Lease to the contrary, if Tenant provides written or oral notice to Landlord of
an event or circumstance which requires the action of Landlord with respect to
repair and/or maintenance and which, in Tenant's reasonable judgment,
constitutes an emergency, and Landlord fails to provide such action within a
reasonable period of time, given the circumstances, after the receipt of such
notice, but in any event not later than twenty-one (21) days after receipt of
such notice, then Tenant may proceed to take the required action upon delivery
of an additional ten (10) business days' notice to Landlord specifying that
Tenant is taking such required action (provided, however, that neither of the
notices shall be required in the event of an emergency which threatens life or
where there is imminent danger to property and provided, further, that Tenant
shall use its good faith efforts to take only those actions which, in Tenant's
reasonable judgment, are required to resolve the emergency), and if such action
was required under the terms of the Lease to be taken by Landlord and was not
taken by Landlord within such ten (10) day period, then Tenant shall be entitled
to prompt reimbursement by Landlord of Tenant's reasonable costs and expenses in
taking such action plus interest thereon at the Interest Rate as defined in
Section 3.8. In the event Tenant takes such action, and such work will affect
the Building Structure and/or the Building Systems, Tenant shall use only those
contractors used by Landlord in the Building for work on such Building Structure
or Building Systems unless such contractors are unwilling or unable to perform;
or timely and competitively perform, such work, in which event Tenant may
utilize the services of any other qualified contractor which normally and
regularly performs similar work in Comparable Buildings. Furthermore, if
Landlord does not deliver a detailed written objection to Tenant within thirty
(30) days after receipt of an invoice by Tenant of its costs of taking action
which Tenant claims should have been taken by Landlord, and if such invoice from
Tenant sets forth a reasonably particularized breakdown of its costs and
expenses in connection with taking such action on behalf of Landlord, then
Tenant shall be entitled to deduct from Rent payable by Tenant under the Lease,
the amount set forth in such invoice. If, however, Landlord delivers to Tenant,
within thirty (30) days after receipt of Tenant's invoice, a written objection
to the payment of such invoice, setting forth with reasonable particularity
Landlord's reasons for its claim that such action did not have to be taken by
Landlord pursuant to the terms of the Lease or that the charges

                                       43
<PAGE>

are excessive (in which case Landlord shall pay the amount it contends would not
have been excessive), then Tenant shall not then be entitled to such deduction
from Rent, but as Tenant's sole remedy, Tenant may proceed to claim a default by
Landlord or, if elected by either Landlord or Tenant, the matter shall proceed
to resolution by the selection of an arbitrator to resolve the dispute, which
arbitrator shall be selected and qualified pursuant to the procedures set forth
in Article 4, and whose costs shall be paid for by the losing party, unless it
is not clear that there is a "losing party", in which event the costs of
arbitration shall be shared equally. If Tenant prevails in the arbitration, the
amount of the award which shall include interest at the Interest Rate (from the
time of each expenditure by Tenant until the date Tenant receives such amount by
payment or offset and attorneys' fees and related costs) may be deducted by
Tenant from the rents next due and owing under the Lease.

                        ARTICLE 8: DAMAGE OR DESTRUCTION
                        --------------------------------

     8.1   Damage to Premises.
           ------------------

           (a) If the Premises or the Building are wholly or partially damaged
     or destroyed by an insured casualty or a casualty required to be insured
     against by Landlord pursuant to this Lease, occurring more than twelve (12)
     months prior to the Expiration Date which casualty renders the Premises
     totally or partially inaccessible or unusable by Tenant in the ordinary
     conduct of Tenant's business, then:

               (i) Repairs Which Can Be Completed Within Nine (9) Months. Within
                   -----------------------------------------------------
     twenty (20) days of notice to Landlord of such damage or destruction,
     Landlord shall provide Tenant with notice of its determination of whether
     the damage or destruction can be repaired within nine (9) months of such
     damage or destruction without the payment of overtime or other premiums. If
     all repairs to such Premises or Building can, in Landlord's judgment, be
     completed within nine (9) months following the date of such damage or
     destruction without the payment of overtime or other premiums, Landlord
     shall, at Landlord's expense, repair the same and this Lease shall remain
     in full force and effect and a proportionate reduction of the Rent shall be
     allowed Tenant for such portion of the Premises as shall be rendered
     inaccessible or unusable to Tenant, and which is not used by Tenant, during
     the period of time that such portion is unusable or inaccessible and not
     used by Tenant; provided, however, that if any such repair is not commenced
     by Landlord within ninety (90) days after the occurrence of such damage or
     destruction or is not substantially completed by Landlord within twelve
     (12) months after the occurrence of such damage or destruction, then in
     either such event Tenant may, at its option, upon written notice to
     Landlord, given within the thirty (30) day period after the expiration of
     the ninety (90) day period or twelve (12) month period, as the

                                       44
<PAGE>

     case may be, elect to terminate this Lease as of the date of the occurrence
     of such damage or destruction. Notwithstanding the foregoing, in the event
     that (A) the damage or destruction to the Premises or the Building is
     greater than or equal to twenty-five percent (25%) of the functional
     replacement cost of the Building, and (B) Landlord cancels its leases with
     all other tenants in the Building, then Landlord shall have the right to
     terminate this Lease upon written notice to Tenant, given within thirty
     (30) days after the date of the occurrence of such damage or destruction.

               (ii) Repairs Which Cannot Be Completed Within Nine (9) Months. If
                    --------------------------------------------------------
     all such repairs to the Building and Premises cannot, in Landlord's
     judgment, be completed within nine (9) months following the date of notice
     to Landlord of such damage or destruction without the payment of overtime
     or other premiums, Landlord shall notify Tenant of such determination
     within forty-five (45) days of notice to Landlord of such damage or
     destruction and either Landlord or Tenant may, at its option, upon written
     notice-to the other party given within sixty (60) days after the occurrence
     of such damage or destruction, elect to terminate this Lease as of the date
     of the occurrence of such damage or destruction. In the event that neither
     Landlord nor Tenant elect to terminate the Lease in accordance with the
     foregoing provisions, then Landlord shall, at Landlord's expense, repair
     such damage or destruction, and in such event, this Lease shall continue in
     full force and effect but the Rent shall be proportionately reduced as
     hereinabove provided in Section 8.1(a)(i); provided, however, that if any
     such repair is not commenced by Landlord within ninety (90) days after the
     occurrence of such damage or destruction or is not substantially completed
     by Landlord within twelve (12) months after the occurrence of such damage
     or destruction, then in either such event Tenant may, at its option, upon
     written notice to Landlord, given within the thirty (30) day period after
     the expiration of the ninety (90) day period or twelve (12) month period,
     as the case may be, elect to terminate this Lease as of the date of the
     occurrence of such damage or destruction.

           (b) If, at any time prior to the expiration or termination of this
     Lease, the Premises or the Building is totally or partially damaged or
     destroyed from a casualty, the loss to Landlord from which is not fully
     covered by insurance maintained by Landlord or for Landlord's benefit (or
     required to be maintained by Landlord pursuant to Article 13), which damage
     renders the Premises inaccessible or unusable to Tenant in the ordinary
     course of its business, Landlord may, at its option, upon written notice to
     Tenant within sixty (60) days after notice to Landlord of the occurrence of
     such damage or destruction, elect to repair or restore such damage or
     destruction, or Landlord

                                       45
<PAGE>

     may elect to terminate this Lease so long as (a) the uninsured portion of
     the damage or destruction is equal to or greater than ten percent (10%) of
     the functional replacement cost of the Building, (b) Landlord makes a
     decision not to commence such repairs within two (2) years of the
     occurrence of such damage and destruction, and (c) Landlord terminates
     every other lease in the Building which was affected by the casualty. If
     Landlord elects to repair or restore such damage or destruction, this Lease
     shall continue in full force and effect but the Rent shall be
     proportionately reduced as provided in Section 8.1(a)(i). If Landlord does
     not elect by notice to Tenant to repair such damage the Lease shall
     terminate. Notwithstanding the foregoing, if all repairs to the Premises or
     the Building cannot, in Landlord's reasonable judgment, be completed within
     nine (9) months following the date of such damage or destruction without
     the payment of overtime or other expenses; then either Landlord or Tenant
     may at its option, upon written notice to the other party given within
     sixty (60) days after the occurrence of such damage or destruction, elect
     to terminate this lease as of the date of the occurrence of such damage or
     destruction.

           (c) Notwithstanding anything to the contrary contained in Sections
     8.1(a) and (b) above, if the Premises or the Building is wholly or
     partially damaged or destroyed within the final twelve (12) months of the
     Term of this Lease, or, if an applicable renewal option has been exercised,
     during the last year of any renewal term, so that Tenant shall be prevented
     from using the Premises for thirty (30) consecutive days due to such damage
     or destruction, then either Landlord or Tenant may, at its option, by
     notice to the other party within sixty (60) days after the occurrence of
     such damage or destruction, elect to terminate the Lease.

           (d) Notwithstanding any contrary provision herein, and regardless of
     whether caused by casualty, Landlord shall not be required to repair any
     damage to property with respect to which Tenant is required to maintain
     property insurance pursuant to Section 13.3 below. Tenant hereby waives the
     provisions of Section 1932, subdivision 2, and Section 1933, subdivision 4,
     of the Civil Code of California, and any similar law, statute or ordinance
     now or hereafter in effect.

     8.2   Abatement of Rent. In the event of damage or destruction to the
           -----------------
Premises or Building, Rent payable hereunder shall be abated in accordance with
Section 8.1(a)(i) above. Except for abatement of rent and except as otherwise
provided in this Lease, if any, Tenant shall have no claim against Landlord for
any damage suffered by reason of (i) any damage to the Premises, (ii) such
repairs, or (iii) any inconvenience, interruption or annoyance caused by such
damage or repair.

                                       46
<PAGE>

                            ARTICLE 9: CONDEMNATION
                            -----------------------

     If all or any portion of the Premises is taken under the power of eminent
domain or sold under the threat of that power (all of which are called
"Condemnation"), this Lease shall terminate as to the part taken or sold on the
 ------------
date the condemning authority takes title or possession, whichever occurs first.
If the remaining portion of the Premises is not reasonably usable for the
conduct of Tenant's business, either Landlord or Tenant may-terminate this
Lease, and if more than twenty percent (20%) of rentable floor area of the
Building excluding the Premises is taken, Landlord may terminate this Lease, in
either event as of the date the condemning authority takes title or possession,
by delivering written notice to the other within ten (10) days after receipt of
written notice of such taking. If neither Landlord nor Tenant terminates this
Lease, this Lease shall remain in effect as to the portion of the Premises not
taken, except that the Base Rent shall be reduced in proportion to the reduction
in the rentable floor area of the Premises. Any Condemnation award or payment
shall be distributed in the following order; (a) first, to any mortgagee or
beneficiary under a deed of trust encumbering the Premises, the amount of its
interest in the Premises; (b) second, to Tenant, only the amount of any award
specifically designated for loss of or damage to Tenant's trade fixtures or
removable personal property; and (c) third, to Landlord, the remainder of such
award, whether as compensation for reduction in the value of the leasehold, the
taking of the fee, or otherwise; provided, however, that nothing contained in
this Article 9 shall be deemed to give Landlord any interest in or to require
Tenant to assign to Landlord any award made to Tenant for (a) the taking of
Tenant's Personal Property, (b) interruption of or damage to Tenant's business,
or (c) Tenant's unamortized cost of the Work to the extent paid for by Tenant.
Furthermore, Tenant is granted the right to recover from the condemning
authority fifty percent (50%) of the "Bonus Value" of the leasehold estate which
shall be equal to the difference between the rental rate payable under the Lease
and the rate established by the condemning authority as an award for
compensation purposes, together with any amount Tenant is able to obtain from
the condemning authority attributable to Tenant's relocation expenses. If this
Lease is not terminated, Landlord shall repair any damage to the Premises caused
by the Condemnation, except that Landlord shall not be obligated to repair any
damage for which Tenant has been reimbursed by the condemning authority. If the
severance damages received by Landlord are not sufficient to pay for such repair
and the amount of such deficiency is in excess of ten percent (10%) of the
functional replacement value of the Building, then Landlord shall have the right
to either (i) terminate this Lease (provided, however, that Landlord terminate
all other leases in the Building) upon written notice to Tenant given within
thirty days after the date that Landlord determines, or should have able to
determine, that the severance damages received by Landlord would be insufficient
to the degree set forth above, (ii) make such repair at Landlord's expense.

                                       47
<PAGE>

                     ARTICLE 10: ASSIGNMENT AND SUBLETTING
                     -------------------------------------

     10.1  Landlord's Consent Required.  No portion of the Premises or of
           ---------------------------
Tenant's interest in this Lease may be acquired by any other person or entity,
whether by assignment, mortgage, sublease, transfer, operation of law, or act of
Tenant, without Landlord's prior written consent, except as provided in Sections
10.2 and 10.6. Landlord shall grant or withhold its consent as provided in
Section 10.4. Any attempted transfer without consent shall be void. If Tenant is
a partnership, any cumulative transfer of fifty percent (50%) or more of the
limited partnership interests or any transfer of a general partners interest
shall require Landlord's consent.

     10.2  Tenant Affiliate.  Tenant may assign this Lease or sublease the
           ----------------
Premises, without Landlord's consent, upon notice to Landlord, to any entity
which controls, is controlled by or is under common control with Tenant, or to
any entity resulting from the acquisition of, merger of or consolidation with
Tenant ("Tenant's Affiliate"). In the case of an assignment to a Tenant's
         ------------------
Affiliate, any Tenant's Affiliate shall assume in writing all of Tenant's
obligations under this Lease.

     10.3  No Release of Tenant.  No transfer permitted by this Article 10
           --------------------
whether with or without Landlord's consent, shall release Tenant or change
Tenant's primary liability to pay Rent and to perform all other obligations of
Tenant under this Lease. Landlord's acceptance of Rent from any other person is
not a waiver of any provision of this Article 10. Consent to one transfer is not
a consent to any subsequent transfer. If Tenant's transferee defaults under this
Lease, Landlord may proceed directly against Tenant without pursuing remedies
against the transferee.

     10.4  Landlords Consent.  Tenant's request for Landlord's consent to any
           -----------------
transfer described in Section 10.1 shall be accompanied by a written statement
setting forth the details of the proposed transfer, including the name, business
and financial condition of the prospective transferee, the nature of the
proposed transferees business to be carried on in the Premises, financial
details of the proposed transfer (e.g., the term of and rent and security
deposit payable under any assignment or sublease), and any other information
Landlord reasonably deems relevant. Landlord shall have the right to reasonably
withhold consent; it shall not be deemed unreasonable for Landlord to withhold
consent to any proposed transfer if the proposed transferee is not sufficiently
credit-worthy to discharge the obligations of Tenant under this Lease, intends
to occupy the Premises for purposes other than the Permitted Use, or is unable
to fully and completely comply with all of the terms and provisions of this
Lease.

     10.5  Rent or Other Premiums.  As a condition to Landlord's consent to any
           ----------------------
subletting, assignment or other transfer of

                                       48
<PAGE>

Tenant's interest in this Lease, Landlord shall be entitled to receive fifty
percent (50%) of any Profits (as defined below) actually received by Tenant
pursuant to such approved assignment or sublease. Whenever Landlord is entitled
to share in any excess income resulting from an assignment or sublease of the
Premises, the following shall constitute the definition of "Profits": the gross
                                                            -------
revenue received from the assignee or sublessee during the sublease term or
during the assignment, with respect to the space covered by the sublease or the
assignment ("Transferred Space") less:  (a) the gross revenue paid to Landlord
             -----------------
by Tenant during the period of the sublease term or during the assignment with
respect to the Transferred Space; (b) the gross revenue as to the Transferred
Space paid to Landlord by Tenant for all days the Transferred Space was vacated
from the date that Tenant first vacated the Transferred Space until the date the
assignee or sublessee was to pay Rent; (c) any improvement allowance or other
economic concession (planning allowance, moving expenses, etc.), paid by Tenant
to sublessee or assignee; (d) brokers' commissions paid by Tenant; (e)
attorneys' fees paid by Tenant; (f) lease takeover payments paid by Tenant; (g)
costs of advertising the space for sublease or assignment paid by Tenant; (h)
unamortized cost of initial and subsequent improvements to the Premises by
Tenant; and (i) any other costs actually paid by Tenant in assigning or
subletting the Transferred Space; provided, however, under no circumstance shall
Landlord be paid any Profits until Tenant has recovered all the items set forth
in subparts (a) through (i) for such Transferred Space, it being understood that
if in any year the gross revenues, less the deductions set forth in subparts (a)
through (i) above (the "Net Revenues"), are less than any and all costs actually
                        ------------
paid in assigning or subletting the affected space (collectively, "Transaction
                                                                   -----------
Costs"), the amount of the excess Transaction Costs shall be carried over to the
-----
next year and then deducted from net Revenues with the procedure repeated until
a Profit is achieved. Landlord's consent to any such assignment or sublease
shall be effected on forms approved by Landlord and its counsel.

     10.6  Occupancy By Others. Tenant may allow any person or company which is
           -------------------
a client or customer of Tenant or which is providing service to Tenant or one of
Tenant's clients to occupy certain portions of the Premises without such
occupancy being deemed an assignment or subleasing as long as no new demising
walls are constructed to accomplish such occupancy and as long as such
relationship was not created as a subterfuge to avoid the  obligations set forth
in this Article 10.

     10.7  Recognition Agreement. To the extent that Tenant enters into an
           ---------------------
assignment of the Lease, Landlord, if it grants its consent to such assignment
as provided in this Article 10, shall also simultaneously execute and deliver a
recognition agreement pursuant to which Landlord shall agree that in the event
Tenant defaults under the Lease, the assignment shall be recognized as a direct
lease between Landlord and the assignee on the terms and conditions of the
assignment.

                                       49
<PAGE>

                       ARTICLE 11: DEFAULTS AND REMEDIES
                       ---------------------------------

     11.1  Covenants and Conditions. Time is of the essence in the performance
           ------------------------
of all covenants and conditions contained in this Lease.

     11.2  Defaults. Tenant shall be in default under this Lease upon the
           --------
occurrence of any of the following:

           (a) If Tenant fails to pay Rent or other charges required to be paid
     by Tenant, when such failure continues for five (5) business days following
     notice to Tenant from Landlord. Any such notice shall be in addition to,
     and not in lieu of, any notice required under Section 1161 of the
     California Code of Civil Procedure.

           (b) If Tenant fails to perform any of Tenant's nonmonetary
     obligations under this Lease for a period of twenty (20) days after written
     notice from Landlord; provided that if more than twenty (20) days are
     required to complete such performance, Tenant shall not be in default if
     Tenant commences such performance within the twenty (20) day period and
     thereafter diligently pursues its completion. Tenant and Landlord each
     shall have, and under no circumstances shall Tenant or Landlord be deemed
     to have waived, the rights set forth in Sections 1174 and 1179 of the
     California Civil Code of Procedure except that Tenant's rights with respect
     to personal property shall be limited to those provided in Section 7.4 of
     this Lease and Landlord shall have all rights specified in said Section
     7.4.

           (c) If Tenant makes a general assignment or general arrangement for
     the benefit of creditors; (ii) if a petition for adjudication of bankruptcy
     or for reorganization or rearrangement is filed by or against Tenant and is
     not dismissed within sixty (60) days; (iii) if a trustee or receiver is
     appointed to take possession of substantially all of Tenant's assets
     located at the Premises or of Tenant's interest in this Lease and
     possession is not restored to Tenant within sixty (60) days; or (iv) if
     substantially all of Tenant's assets located at the Premises or of Tenant's
     interest in this Lease is subjected to attachment, execution or other
     judicial seizure which is not discharged within sixty (60) days. If a court
     of competent jurisdiction determines that any of the acts described in this
     subsection (e) is not a default under this Lease, and a trustee is
     appointed to take possession (or if Tenant remains a debtor in possession)
     and such trustee or Tenant transfers Tenant's interest hereunder, then
     Landlord shall receive, as Additional Rent, the difference between the rent
     (or any other consideration) paid in connection with such assignment or
     sublease and the rent payable by Tenant hereunder.

                                       50
<PAGE>

     11.3  Remedies. Upon the occurrence of any default by Tenant, Landlord
           --------
shall have the following rights and remedies at any time thereafter, with or
without notice or demand and without limiting Landlord in the exercise of any
right or remedy which Landlord may have:

           (a) The right to declare this Lease ended and terminated, to reenter
     the Premises, to remove and eject all persons therefrom, to take possession
     thereof, and to enjoy the Premises together with all additions, alterations
     and improvements thereto, and Tenant shall thereupon have no further claim
     thereon or thereunder;

           (b) The right, even though Landlord may have reentered the Premises
     without having declared this Lease ended and terminated, to thereafter
     elect to terminate this Lease and all of the rights of Tenant in and to the
     Premises;

           (c) The rights available to Landlord under Section 1951.4 of the
     California Civil Code, which Section is incorporated herein by this
     reference as though set forth in full;

           (d) In the event Landlord elects its rights and remedies under
     Section 1951.4, Landlord may relet the Premises, or any part thereof, for
     the account of Tenant for the remainder of the Lease Term and any extension
     terms (if such extension was properly exercised by Tenant), at such rental,
     and upon such other provisions as Landlord, in its reasonable discretion,
     may deem advisable. Landlord shall have the right, in reletting the
     Premises, to make reasonable alterations and repairs to the Premises, at
     Tenant's expense. In the event of any such reletting, Tenant shall pay to
     Landlord any unpaid Rent and all other amounts payable hereunder to the
     date of such reletting, and shall also pay upon demand all of the costs and
     expenses of recently, alterations, repairs, and reletting, including, but
     not limited to, attorneys' fees and leasing commissions. Thereafter, upon
     the first day of each calendar month during the remainder of the Lease
     Term, Tenant shall pay to Landlord an amount equal to the excess, if any,
     of the Base Rent and Additional Rent over the amount received by Landlord.
     In the event Landlord, upon such reletting, receives amounts in excess of
     the Rent hereunder, such excess shall be held by Landlord and applied in
     payment of future Rent, as the same may become due and payable hereunder,
     or applied to other obligations due to the Landlord from Tenant;

           (e) Should Landlord elect to terminate this Lease under the
     provisions of Sections 11.3(a) or (b) hereof, Landlord shall have all of
     the rights and remedies of a landlord provided in Section 1951.2 of the
     California Civil

                                       51
<PAGE>

     Code, which Section is incorporated herein by this reference as though set
     forth in full. In computing Landlord's damages pursuant to Sections
     1951.2(1) and (2) of the Civil Code, the "worth at the time of award" shall
     be computed by allowing interest at the Interest Rate (as defined in
     Section 3.8). The amount of damages which Landlord may recover in the event
     of such termination shall include the worth at the time of award of the
     amount by which the unpaid rent for the balance of the Lease Term after the
     time of award exceeds the amount of rental loss that Tenant proves could be
     reasonably avoided, computed in accordance with Civil Code Section
     1951.2(b), plus reasonable attorneys' fees and leasing commissions;;

           (f) In the event of default, all of Tenant's fixtures, furniture,
     equipment, improvements, additions, alterations and other personal property
     shall remain on the Premises, and Landlord shall have the right to remove
     and store such property at Tenant's sole cost and expense, or take
     exclusive possession of same and to use same, rent or charge free, until
     all defaults are cured, or at its option, to require Tenant to forthwith
     remove same;

           (g) Tenant hereby waives all claims and demands against Landlord for
     damages or loss arising out of or in connection with any reentering and
     taking possession of the Premises as provided in this Article;

           (h) In the event of the exercise by Landlord of any one or more of
     its rights and remedies under this Article, Tenant hereby expressly waives
     any and all rights of redemption or relief from forfeiture under California
     Code of Civil Procedure Section 1174 or 1179, or granted by or under any
     present or future laws, and further releases Landlord, from any and all
     claims, demands and liabilities by reason of such exercise by Landlord; and

           (i) The various rights, options, elections, powers and remedies
     reserved to Landlord herein shall be-cumulative and, except as otherwise
     provided by statute, Landlord may pursue any or all such rights and
     remedies, whether at the same time or otherwise, and no single right shall
     be deemed to be exclusive of any of the others or of any right or priority
     allowed by law or in equity. No delay or omission of Landlord to exercise
     any right or remedy shall be construed as a waiver of any such right or
     remedy or waiver of any default by Tenant. In addition to the foregoing,
     Landlord may exercise any other remedy now or hereafter available to a
     landlord against a defaulting tenant under the laws of the State of
     California.

     11.4  Landlord's Cure of Tenant's Default. If at any time during the Lease
           -----------------------------------
Term, Tenant fails, refuses or neglects to perform any of its obligations under
this Lease beyond the

                                       52
<PAGE>

applicable notice and such period provided in Section 11.2 above, Landlord shall
have the right, but not the obligation, to perform such obligation at the
expense and for the account of Tenant. The amount of any monies so expended or
obligations so incurred by Landlord, together with interest thereon at the
Interest Rate (as defined in Section 3.8), shall be repaid to Landlord within
five (5) days of Tenant's receipt of Landlord's statement.

                       ARTICLE 12: PROTECTION OF LENDERS
                       ---------------------------------

     12.1  Subordination. The provisions of this Section 12.1 and the
           -------------
obligations created herein are expressly subject to and conditioned upon
Landlord performing all of Landlord's obligations pursuant to Section 12.6 below
and Tenant's receipt of a commercially reasonable non-disturbance agreement as
described therein and in accordance with the terms thereof where required
thereunder. Landlord shall have the right to subordinate this Lease to any
ground lease, deed of trust or mortgage encumbering the Premises, any advances
made on the security thereof and any renewals, modifications, consolidations,
replacements or extensions thereof, whenever made or recorded. However, Tenant's
right to quiet possession of the Premises during the Lease Term shall not be
disturbed if Tenant pays the Rent and performs all of Tenant's obligations under
this Lease and is not otherwise in default. If any ground lessor, beneficiary or
mortgagee elects to have this Lease prior to the lien of its deed of trust or
mortgage and gives written notice thereof to Tenant, this Lease shall be deemed
prior to such deed of trust or mortgage whether this Lease is dated prior or
subsequent to the date of such deed of trust or mortgage or the date of
recording thereof. Landlord represents and warrants that, as of the execution
and delivery of this Lease, there is no ground lease, deed of trust or mortgage
encumbering the Premises or the Building.

     12.2  Attornment. The provisions of this Section 12.2 and the obligations
           ----------
created herein are expressly subject to and conditioned upon Landlord performing
all of Landlord's obligations pursuant to Section 12.6 below and Tenant's
receipt of a commercially reasonable non-disturbance agreement as described
therein and in accordance with the terms thereof where required thereunder. If
Landlord's interest in the Premises is acquired by any ground lessor,
beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure
sale, Tenant shall attorn to the transferee of or successor to Landlord's
interest in the Premises and recognize such transferee or successor as Landlord
under this Lease. Tenant waives the protection of any statute or rule of law
which gives or purports to give Tenant any right to terminate this Lease or
surrender possession of the Premises upon the transfer of Landlord's interest.

     12.3  Signing of Document. Each party hereunder shall sign and deliver any
           -------------------
instrument or documents necessary or appropriate to evidence any such non-
disturbance, attornment or subordination

                                       53
<PAGE>

or agreement to do so requested in accordance with this Article 12. Each party
agrees to do so within a reasonable period of time after written request
therefor. Tenant shall not be required to sign or deliver any such instrument or
document providing for such attornment or subordination unless such instrument
or document includes non-disturbance protection consistent with Section 12.1
above and 12.6.

     12.4  Estoppel Certificates.
           ---------------------

           (a) Upon the written request of either party hereunder ("Requesting
                                                                    ----------
     Party"), the other party hereunder ("Certifying Party") shall execute,
     -----                                ----------------
     acknowledge and deliver to the Requesting Party a written statement
     substantially in the form of Exhibit E attached hereto and incorporated
                                  ---------
     herein by this reference ("Estoppel Certificate") certifying:  (i) that
                                --------------------
     none of the terms or provisions of this Lease have been changed (or if they
     have been changed, stating how they have been changed); (ii) that this
     Lease has not been canceled or terminated; (iii) the last date of payment
     of the Base Rent and other charges and the time period covered by such
     payment; (iv) that the Requesting Party is not in default under this Lease
     (or, if the Requesting Party is claimed to be in default, stating why); and
     (v) such other matters as may be reasonably requested. The Certifying Party
     shall deliver such Estoppel Certificate to the Requesting Party within
     twenty (20) days after the Requesting Party's request therefor. For
     purposes of this Section 12.4, an Estoppel Certificate shall not be deemed
     to be commercially reasonable if it amends or modifies any of the
     provisions of this Lease or attempts to clarify them. Any such Estoppel
     Certificate may be given to any prospective purchaser or encumbrancer of
     the Premises or any prospective assignee or sublessee of the Premises
     (collectively, "Third Parties"); provided, however, Tenant may not request
                     -------------
     an Estoppel Certificate until Landlord has approved the subletting or
     assignment giving rise to the request, to the extent Landlord's approval is
     required. Such Third Parties may rely conclusively upon such statement as
     true and correct, subject to the provisions and time frames set forth in
     Section 12.4(b) below.

           (b) If the Certifying Party does not deliver such Estoppel
     Certificate to the Requesting Party within three (3) business days after
     the Certifying Party's receipt of notice from the Requesting Party given
     after such twenty (20) day period, the Requesting Party, and any Third
     Party, may conclusively presume and rely upon the following facts: (i) that
     the terms and provisions of this Lease have not been changed except as
     otherwise represented by the Requesting Party; (ii) that this Lease has not
     been canceled or terminated except as otherwise represented by the
     Requesting Party; (iii) that not more than one month's Base Rent or other
     charges have been paid in advance; and (iv)

                                       54
<PAGE>

     that the Requesting Party is not in default under the Lease. In such event,
     the Certifying Party shall be estopped from denying the truth of such
     facts.

     12.5  Tenant's Financial Condition. Tenant shall deliver to any lender or
           ----------------------------
prospective purchaser designated by Landlord any financial statements reasonably
required by such lender or purchaser to the extent that Tenant has any such
requested financial statements to facilitate the financing or refinancing or
sale of the Premises. Tenant represents, warrants and covenants to Landlord that
each such financial statement is a true and accurate statement as of the date of
such statement. All financial statements shall be confidential and shall be used
only for the purposes set forth herein.

     12.6  Non-Disturbance Agreement.
           -------------------------

     Landlord agrees to provide Tenant with commercially reasonable non-
disturbance, subordination and attornment agreement(s) ("non-disturbance
                                                         ---------------
agreement(s)") substantially in the form of Exhibit D attached to this Lease and
------------                                ---------
made a part hereof, in favor of Tenant from any ground lessors, mortgage holders
or lien holders (each, a "Superior Mortgagee") of Landlord who later come(s)
                          ------------------
into existence at any time prior to the expiration of the Term of the Lease, as
it may be extended, in consideration of, and as a condition precedent to,
Tenant's agreement to be bound by Lease Sections 12.1 and 12.2. Said non-
disturbance agreements shall be in recordable form and may recorded at Tenant's
election and expense.

     All non-disturbance agreements shall acknowledge that, and Landlord hereby
independently agrees that, to the extent Landlord has failed to fulfill its
obligations with respect to the payment of any (i) Allowance for initial
construction, or the cost incurred by Tenant of constructing or completing the
Work which was required to be constructed or completed by Landlord at Landlord's
expense, or (ii) unpaid arbitration or court award, ("Key Obligations"), Tenant
                                                      ---------------
may deduct the amount of the Key Obligation which Landlord has not paid,
together with interest thereon at the Interest Rate, from the Rent next coming
due and payable, from time to time, under the Lease.

     In addition to the foregoing, Landlord agrees that in the event Landlord
has failed to pay its Key Obligations, Tenant may deduct the amount of the Key
Obligations which Landlord has not paid, together with interest at the Interest
Rate, from the Rent next coming due and payable, from time to time, under the
Lease.

     12.7  Notice to Lenders. Tenant shall have no rights as a result of any
           -----------------
default by Landlord until Tenant gives any Superior Mortgagee for which Tenant
has been given an address, a copy of any default notice sent to Landlord. Such
Superior Mortgagee shall then have the right to cure such default, and Landlord
shall not be deemed in default if such Superior Mortgagee cures

                                       55
<PAGE>

such default within ten (10) days after the later of (i) Superior Mortgagee's
receipt of such notice of default, or (ii) the expiration of Landlord's cure
period under the Lease, or such longer period as may be reasonably required for
the Superior Mortgagee to cure such default so long as such Superior Mortgagee
commences such cure within such ten (10) day period and thereafter diligently
prosecutes the same to completion.

                   ARTICLE 13: INSURANCE; INDEMNITY; WAIVERS
                   -----------------------------------------

     13.1  Liability Insurance.
           -------------------

           (a) Tenant at all times during the Lease Term, at its sole cost and
     expense, shall maintain in effect workers' compensation insurance, as well
     as a policy of commercial general liability insurance with a combined
     single limit of Three Million Dollars ($3,000,000) per occurrence. Such
     policy shall specifically include, without limitation, personal injury,
     broad form property damage, and contractual liability coverage, the last of
     which shall cover the insuring provisions of this Lease and the performance
     by Tenant of the indemnity agreements herein. Such insurance shall provide
     coverage on an occurrence basis. In no event shall the coverage limits
     under these policies limit the liability of Tenant under this Lease.

           (b) Landlord shall obtain and keep in force during the Lease Term a
     policy of commercial general liability insurance, insuring Landlord against
     any liability arising out of the ownership, use, occupancy or maintenance
     of the Building in an amount not less than Three Million Dollars
     ($3,000,000). The cost of such insurance shall be included in the Operating
     Costs.

     13.2  Other Insurance: Landlord. Landlord, at all times during the Lease
           -------------------------
Term, shall maintain a policy of "all risk" property insurance ("AR Insurance")
                                                                 ------------
covering one hundred percent (100%) of the full functional replacement cost
valuation of the Building, the Alterations, Landlord's personal property
(including its business papers, furniture, fixtures and equipment), the Premises
and Landlord's Work, protecting against (a) any peril included within the
classification "Standard Fire and Extended Coverage", (b) vandalism and
malicious mischief and (c) all other risks normally covered by "all risk"
policies carried by landlords of Comparable Buildings. Except as otherwise
provided by the provisions of Article 8, the proceeds of these policies shall be
used to repair the insured property. The cost of such AR Insurance shall be
included in the Operating Costs. Notwithstanding any contrary provision herein,
Landlord shall not be required to carry insurance covering the property
described in Section 13.3 below or covering earthquake or flood.

Landlord shall also obtain and keep in full force (i) loss of rent insurance and
(ii) workers' compensation insurance, all such

                                       56
<PAGE>

insurance being in amounts and with deductibles comparable to the insurance
being carried by landlords of Comparable Buildings.

     13.3  Other Insurance: Tenant.
           -----------------------

           (a) Tenant, at all times and at its sole cost and expense, shall
     maintain in effect a policy or policies of AR Insurance against fire,
     vandalism, malicious mischief and any peril included within the
     classification "Standard Fire and Extended Coverage" covering its trade
     fixtures, equipment and other personal property, including coverage for
     earthquake sprinkler leakage in an amount not less than the replacement
     cost thereof from time to time. Such AR Insurance shall name Tenant as the
     insured and, to the extent of any of their interests in such property,
     shall name Landlord's Agents as additional insureds.

           (b) The proceeds of such AR Insurance shall be used to repair or
     replace the insured property, during the Lease Term unless the Lease is
     terminated, in which case Tenant may retain such proceeds.

           (c) Notwithstanding the foregoing, all of the insurance requirements
     set forth herein-on the part of Tenant to be observed shall be deemed
     satisfied if the Premises are covered by a blanket insurance policy
     insuring all or most of Tenant's facilities in Southern California so long
     as the coverage required to be carried by Tenant under this Lease is not
     reduced or otherwise adversely affected.

     13.4  Insurance Policies. Any insurance required hereunder shall be written
           ------------------
by companies which have a "General Policyholder's Rating "A-VII" or-better, as
set forth in Best's Insurance Guide and qualified to do business in California.
Tenant shall provide to Landlord copies of policies of all such insurance, or
certificates of insurance, showing Landlord, its lenders and agents as
additional insureds thereunder. All public liability policies shall contain a
provision that Landlord shall be entitled to recovery under the policies for any
loss to Landlord, or Landlord's servants, agents, partners or employees by
reason of the acts or omissions of Tenant, including but not limited to
negligence. All policies of insurance to be obtained by Tenant must: (a) contain
a provision that the company writing such policy will give Landlord thirty (30)
days' notice in writing in advance of any cancellation or lapse of the coverage
thereunder, or of any reduction in the amounts or types of coverage of
insurance; and (b) be primary with respect to, and noncontributory with, any
other insurance available to Landlord. Landlord shall have the right to
periodically review Tenant's insurance hereunder and require Tenant to obtain
and maintain in effect additional or modified insurance which provides coverage
comparable to that carried by tenants in Comparable Buildings provided that such
insurance is then available at commercially reasonable rates; provided, further,
that Landlord shall not have

                                       57
<PAGE>

the right to require Tenant to so obtain additional or modified insurance more
frequently than once in any three (3) year period.

     13.5  Waiver of Subrocation. Each party hereto hereby releases the other
           ---------------------
party hereto from any claims, and waives any and all rights to recover against
the other party, or against the officers, directors, employees, shareholders or
principals thereof, for loss or damage arising from any peril to the extent
insured against under any property or workers' compensation insurance policy
carried by such waiving party. Each such policy shall be endorsed to reflect the
foregoing. Neither Landlord nor Tenant shall be liable to the other for any
damage caused by fire or any of the risks insured against under any insurance
policy required by the Lease. If an insurance policy cannot be obtained with a
waiver of subrogation, or is obtainable only by the payment of an additional
premium charge above that charged by insurance companies issuing policies
without waiver of subrogation, the party undertaking to obtain the insurance
shall notify the other party of this fact. The other party shall have a period
of ten (10) days after receiving the notice either to place the insurance with a
company that is reasonably satisfactory to the other party and that will carry
the insurance with a waiver of subrogation at no additional cost, or to agree to
pay the additional premium if such a policy is obtainable at additional cost. If
the insurance cannot be obtained or the party in whose favor a waiver of
subrogation is desired refuses to pay the additional premium charged, the other
party is relieved of the obligation to obtain a waiver of subrogation with
respect to the particular insurance involved.

     13.6  Exemption of Landlord from Liability. Except as otherwise provided in
           ------------------------------------
this Lease, Tenant hereby agrees that Landlord shall not be liable for injury to
Tenant's business or any loss of income therefrom or for damage to the property
of Tenant, Tenant's employees, invitees, or any other person in or about the
Premises or the Building, nor shall Landlord be liable for injury to the person
of Tenant's employees, agents or "invitees, whether such damages or injury is
caused by or results from fire, steam, electricity, gas, water or rain, or from
the breakage, leakage, obstruction or other defects of pipes, sprinklers,wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether said damage or injury results from conditions arising upon the
Premises or upon other portions of the Building, or from other sources or places
and regardless of whether the cause of such damage or injury or the means of
repairing the same is inaccessible to Tenant. Except as otherwise provided in
this Lease, Landlord shall not be liable for any damages arising from any act or
neglect of any other lessee, occupant or user of the Building, nor from the
failure of Landlord to enforce the provisions of any other lease of the
Building.

            ARTICLE 14: HISTORIC CHARACTER OF THE BRADBURY BUILDING
            -------------------------------------------------------

                                       58
<PAGE>

     Tenant acknowledges that the Building is a National Historical Landmark.
Therefore, all work and improvements in the Building must comply with all
criteria established from time to time for National Historical Landmark
buildings and as otherwise established for the Building by Landlord These
standards and criteria shall be observed by Tenant in discharging its obligation
to repair and maintain the Premises and in making any modifications to the
Premises; provided, however, if because of such historical designation Tenant
incurs increased design or construction costs, or increased costs relating to
obtaining permits and approvals, then fifty percent (50%) of such costs shall be
reimbursed by Landlord within ten (10) days after receipt by Landlord from
Tenant of an invoice documenting and evidencing such increased costs. Any delay
in the design or construction of the Work as a result of the Building being
declared an historical landmark shall constitute a Landlord Delay.

                          ARTICLE 15: QUIET ENJOYMENT
                          ---------------------------

     Landlord covenants that if, and so long as, Tenant pays all of the Base
Rent and Additional Rent hereunder, and keeps and performs each and every
covenant, agreement, term, provision and condition on the part of Tenant to be
kept and performed, Tenant shall quietly enjoy the Premises without hindrance or
molestation by Landlord or by any other person lawfully claiming the same,
subject to the covenants, agreements, terms, provisions and conditions of this
Lease and to any mortgages or deeds of trust and covenants, restrictions,
easements and agreements of record to which this Lease is subordinate.

                              ARTICLE 16: BROKERS
                              -------------------

     Landlord and Tenant each warrant to the other that neither has had any
dealings with any real estate broker, agent, or finder in connection with this
Lease. Each party hereto agrees to defend, indemnify and hold the other harmless
from any claim for any compensation, commission, fee or other charge by any real
estate broker or agent or finder claiming through the indemnifying party.

                      ARTICLE 17: MISCELLANEOUS PROVISIONS
                      ------------------------------------

     17.1  Successors.
           ----------

           (a) As used in this Lease, the term "Landlord" means only the current
     owner(s) of the fee title to the Building and all successors thereto, as
     such successors become the fee owners of the Building. Each Landlord is
     obligated to perform the obligations of Landlord under this Lease only
     during the time such Landlord owns such interest or title. Any Landlord who
     transfers its title or interest is relieved of all liability with respect
     to the obligations of Landlord under this Lease to be performed on or after
     the date of

                                       59
<PAGE>

     transfer. However, each Landlord shall deliver to its transferee all funds
     previously paid by Tenant if such funds have not yet been applied under the
     terms of this Lease.

           (b) Tenant shall give written notice of any failure by Landlord to
     perform any of its obligations under this Lease to Landlord and to any
     mortgagee or beneficiary under any deed of trust encumbering the Premises
     whose name and address have been furnished to Tenant in writing. Landlord
     shall not be in default under this Lease unless Landlord (or such mortgagee
     or beneficiary) fails to cure such nonperformance within thirty (30) days
     after receipt of Tenant's notice. However, if such non-performance
     reasonably requires more than thirty (30) days to cure, Landlord shall not
     be in default if such cure is commenced within such thirty (30) day period
     and thereafter diligently pursued to completion.

     17.2  When Payment Is Due. Whenever in this Lease a payment is required to
           -------------------
be made by one party to the other, but a specific date for payment is not set
forth or a specific number of days within which payment is to be made is not set
forth, or the words "immediately", "promptly" and/or "on demand", or the
equivalent, are used to specify when such payment is due, then such payment
shall be due *thirty (30)* days after the party which is entitled to such
payment sends written notice to the other party demanding payment.

     17.3  Parking. Tenant acknowledges that there are no parking facilities in
           -------
the Building. Landlord has made arrangements with Broadway/Spring Center Parking
Facility ("Center") to make available parking spaces to tenants of the Building
           ------
upon terms and conditions to be established from time to time by Center or the
operator of such parking facility. Landlord does not warrant or represent that
such parking will continue to be available to Tenant during the Lease Term;
provided, however, that Landlord acknowledges and agrees that Landlord is
obligated to provide Tenant with the ability to lease Sixty-four (64) parking
spaces (based on three (3) spaces per one thousand (1,000) RSF in the Premises)
(the "Required Parking Spaces") during the Term of this Lease (including any
      -----------------------
extension thereof), and to the extent that at any time during the Term (or any
extension thereof) such Required Parking Spaces become unavailable at the
Center, Landlord shall provide Tenant with the ability to lease (at reasonable
rates comparable to those rates charged by parking facilities comparable to the
Center) the Required Parking Spaces in a parking facility (which may be surface
parking) located within one (1) block of the Building. In the event that
Landlord fails to provide Tenant with the Required Parking Spaces as provided in
this Section 17.3, Tenant shall have the right to terminate this Lease upon
thirty (30) days' prior written notice to Landlord.

                                       60
<PAGE>

     17.4  Severability. A determination by a court of competent jurisdiction
           ------------
that any provision of this Lease or any part hereof is illegal or unenforceable
shall not cancel or invalidate the remainder of such provision or provisions of
this Lease, which shall remain in full force and effect.

     17.5  Interpretation. The captions of the Articles or Sections of this
           --------------
Lease are to assist the parties in reading this Lease and are not a part of the
terms or provisions of this Lease. Whenever required by the context of this
Lease, the singular shall include the plural and the plural shall include the
singular. The masculine, feminine and neuter genders shall each include the
other. In any provision relating to the conduct, acts or omissions of Tenant,
the term "Tenant" shall include Tenant's agents, employees, contractors,
invitees, successors or others using the Premises with Tenant's express or
implied permission. All references to "days" involving less than five (5) days
shall mean business days, and all references to "notice" shall mean written
notice given in compliance with Section 17.7 of the Lease.

     17.6  Incorporation of Prior Agreement; Modifications. This Lease is the
           -----------------------------------------------
only agreement between the parties pertaining to the lease of the Premises and
no other agreements are effective. All amendments to this Lease shall be in
writing and signed by all parties.  Any other attempted amendment shall be void.

     17.7  Notices. All notices required or permitted under this Lease shall be
           -------
in writing and shall be personally delivered or sent by certified mail, return
receipt requested, postage prepaid. Notices to Tenant shall be delivered to the
address specified in Article 1, except that upon Tenant's taking possession of
the Premises, the Premises shall be one of Tenant's addresses for notice
purposes in addition to any addresses specified in Article 1. Notices to
Landlord shall be delivered to the address specified in Article 1. All notices
shall be deemed effective upon the earlier of the date of actual receipt or
forty eight (48) hours after mailing, except that all notices of change of
address shall be deemed given as of the date of receipt thereof. Either party
may change its notice address upon written notice to the other party.

     17.8  Waivers. All waivers must be in writing and signed by the waiving
           -------
party. Landlord's failure to enforce any provision of this Lease or its
acceptance of rent shall not be a waiver and shall not prevent Landlord from
enforcing that provision of this Lease in the future. No statement on a payment
check from Tenant or in a letter accompanying a payment check shall be binding
on Landlord. Landlord may, with or without notice to Tenant, negotiate such
check without being bound to the conditions of such statement.

                                       61
<PAGE>

     17.9  No Recordation. This Lease shall not be recorded. No memorandum or
           --------------
short form hereof shall be recorded without Landlord's prior written consent.

     17.10 Binding Effect; Choice of Law. This Lease binds any party who legally
           -----------------------------
acquires any rights or interest in this Lease from Landlord or Tenant. However,
Landlord shall have no obligation to Tenant's successor unless the rights or
interests of Tenant's successor are acquired in accordance with the terms of
this Lease. The laws of the State of California shall govern this Lease.

     17.11 Corporate Authority; Partnership Authority. If either party hereunder
           ------------------------------------------
("Representing Party") is a corporation, each person signing this Lease on
  ------------------
behalf of the Representing Party represents and warrants that he or she has full
authority to do so and that this Lease binds the corporation, and within thirty
(30) days after this Lease is signed, the Representing Party shall deliver to
the other party hereunder ("Receiving Party"), within thirty (30) days after
                            ---------------
Receiving Party's written request therefor, a certified copy of a resolution of
Representing Partys Board of Directors authorizing the execution of this Lease
or other evidence of such authority reasonably acceptable to Receiving Party. If
the Representing Party is a partnership, each person signing this Lease for
Representing Party represents and warrants that he or she is a general partner
of the partnership, that he or she has full authority to sign for the
partnership and that this Lease binds the partnership and all general partners
of the partnership and within thirty (30) days after this Lease is signed,
Representing Party shall deliver to Receiving Party a copy of Representing
Party's recorded Statement of Partnership or Certificate of Limited Partnership.

     17.12 Joint and Several Liability. All parties signing this Lease as Tenant
           ---------------------------
shall be jointly and severally liable for all obligations of Tenant.

     17.13 Force Majeure. Except as otherwise expressly provided in this Lease,
           -------------
if either party hereunder is delayed, prevented or stopped from performing any
of its obligations due to Force Majeure Events (as hereinafter defined), the
time provided for performing such obligations shall be extended by a period of
time equal to the duration of such Force Majeure Events. "Force Majeure Events"
                                                          --------------------
include acts of God, war, civil commotion, labor disputes, strikes, fire, flood
or other casualty, shortages of labor or material, government regulation or
restriction and weather conditions; provided, however, in no event shall
financial incapability excuse the performance of either party.

     17.14 Rules and Regulations. Tenant shall comply with all Rules and
           ---------------------
Regulations applicable to tenants of the Building established by Landlord for
use of the Building attached hereto as Exhibit C, incorporated herein by this
                                       ---------
reference, as reasonably amended from time to time, provided Landlord has given

                                       62
<PAGE>

Tenant ten (10) days' prior notice of any modifications and additions to the
Rules and Regulations from time to time put into effect by Landlord; provided,
however, that no modifications or additions to the Rules and Regulations shall
unreasonably interfere with Tenant's permitted use of the Premises as set forth
in Section 6.1. Landlord shall not be liable to Tenant for the failure of any
tenant or occupant of the Building to observe the Rules and Regulations and all
amendments and additions thereto.

     17.15 Landlord's Lease Undertakings. Notwithstanding anything to the
           -----------------------------
contrary contained in this Lease or in any exhibits or addenda hereto attached
(collectively, the "Lease Documents"), it is expressly understood and agreed by
                    ---------------
and between the parties hereto to that: (a) the recourse of Tenant or its
successors or assigns against Landlord with respect to the alleged breach by or
on the part of Landlord of any representation, warranty, covenant, undertaking
or agreement contained in any of the Lease Documents (collectively,  "Landlord's
                                                                      ----------
Lease Undertakings") shall extend only to Landlord's interest in the real estate
------------------
of which the Premises demised under the ease Documents are a part ("Landlord's
                                                                    ----------
Real Estate") and not to any other assets of Landlord or its officers, directors
-----------
or shareholders; (b) except to the extent of Landlord's interest in Landlord's
Real Estate, no personal liability or personal responsibility of any sort with
respect to any of Landlord's Lease Undertakings or any alleged breach thereof is
assumed by, or shall at any time be asserted or enforceable against, Landlord,
or The Yellin Company, or against any of their respective constituent partners,
trustees, representatives, officers, directors or agents.

     17.16 Transfer of Landlord's Interest. Landlord and each successor to
           -------------------------------
Landlord shall be fully released from the performance of Landlord's obligations
accruing or to be performed subsequent to their transfer of Landlord's interest
in the Building. Landlord shall not be liable for any obligation hereunder
accruing or to be performed after a transfer of its interest in the Building.

     17.17 Consent Provisions. Whenever consent shall be required by either
           ------------------
Landlord or Tenant under this Lease, neither party shall unreasonably withhold,
condition or delay the giving of such consent except (a) as otherwise set forth
in this Lease, and (b) with respect to consent required in connection with any
alterations, additions or improvements to the Premises visible from outside the
Premises or affecting (i) the structure or the mechanical, electrical or other
systems of the Building or, (ii) the historic character of the Building,
whereupon in each such case each party's duty is to act in good faith and in
compliance with the Lease.

     17.18 Commercial Photography and Filming. Tenant agrees that Landlord may
           ----------------------------------
authorize the use of the Premises, the Building

                                       63
<PAGE>

and/or Common Areas, or any part or parts thereof (excluding the Premises), for
filming of motion pictures, television tapes or films, commercials, videos,
documentaries, commentaries, and any and all other still, electronic, and for
other motion picture filming purposes ("Filming"), if Landlord deems such
                                        -------
Filming to be beneficial to the Building for purpose of promotion, advertising,
publicity, or for civic, cultural, or historical purposes; provided, however,
that if such Filming is to take place during Business Hours, Landlord shall
provide Tenant with at least forty eight hours' prior written notice thereof.
Tenant agrees that any such filming may be performed during, before, or after
the Building's Business Hours or on days the Building is not open to the public
for business, as Landlord may determine provided that Landlord shall use its
best efforts to minimize the impact of such filming activities on Tenant's
business. Tenant acknowledges that certain inconveniences may result from such
Filming (by way of example only:  noises, lights, heat, temporary blockage,
closure, or re-routing of aisles, corridors, or doors, and temporary re-routing
of pedestrian traffic), and Tenant agrees that except as otherwise provided in
this Lease, including without limitation Section 3.9 and this Section 17.18,
Landlord shall not be liable for any losses or damages and that there shall be
no reduction or abatement in any Rent or other charges payable hereunder.
Landlord, in its reasonable discretion, may elect to permit such filming without
any fee or other form of compensation or benefits or may elect to charge a fee
or other form of compensation or benefits for such Filming; any such fee,
compensation, or benefits may, in Landlord's reasonable discretion, be retained
by Landlord for its sole use, be disbursed to one or more tenants of the
Building, or be applied to certain operating or promotional expenses of the
Building. Notwithstanding anything to the contrary contained in this Section
17.18, Landlord covenants that such Filming shall not interfere with Tenant's
use of or access to the Premises, the Center or the Common Areas during Business
Hours, and to the extent such Filming does substantially interfere with Tenant's
use of or access to the Premises, the Center or the Common Areas during Business
Hours, Landlord shall be required to compensate Tenant for the inconvenience of
such interference.

     17.19 Signage. Tenant, at Tenant's sole cost and expense shall be entitled
           -------
to install appropriate signage, including Tenant's corporate name and logo, in
the Building, including (a) on or adjacent to the entrance doors to Tenant's
Premises, and (b) on the directory board located in the main entrance to the
Building. Any such signage installed by Tenant shall be consistent or compatible
with the Building's design, signage and graphics program and subject to
Landlord's reasonable approval. Tenant shall be responsible for the removal of
its signs, and the cost of repairing any resulting damage to the Building and/or
Premises upon the termination or assignment of the Lease.

     17.20 Landlord Bankruptcy Proceeding. In the event that the obligations of
           ------------------------------
Landlord under the Lease are not performed during

                                       64
<PAGE>

the pendency of a bankruptcy or insolvency proceeding involving the Landlord as
the debtor, or following the rejection of this Lease in accordance with Section
365 of the United States Bankruptcy Code, then notwithstanding any provision of
this Lease to the contrary, Tenant shall have the right to set off against Rents
next due and owing under this Lease (i) any and all damages caused by such non-
performance of Landlord's obligations under the Lease by Landlord, debtor-in-
possession, or the bankruptcy trustee, and (ii) any and all damages caused by
the nonperformance of Landlord's obligations under the Lease following any
rejection of the Lease in accordance with Section 365 of the United States
Bankruptcy Code.

     17.21 CPU Adjustments. As of any applicable Adjustment Date (as defined in
           ---------------
Sections 3.4(j) and 5.3) the applicable amount shall be increased to an amount
equal to the original applicable amount as increased by the percentage by which
the New CPI exceeds the Old CPU. As used herein, the term "New CPI" means the
                                                           -------
CPI (as defined in Section 1.2(g)) as published for the month which is three (3)
months prior to the applicable Adjustment Date. "Old CPI" means the CPI as
published for the month which is three (3) months prior to the Commencement
Date. In no event shall the applicable amount be less than the applicable amount
for the immediately preceding calendar year. Should the Bureau (as such term is
defined in Section 1.2(g)) discontinue the publication of the CPU, or publish
the same less frequently, or alter the same in some other manner, then Landlord
shall adopt a substitute index or substitute procedure which most closely
approximates the discontinued CPU.

     17.22 Addenda. Additional provisions may be set forth in an addendum or
           -------
addenda attached hereto. All such addenda and all exhibits referred to in this
Lease or which are executed concurrently herewith and attached hereto, are
incorporated by this reference as though fully set forth herein. Therefore,
references to "this Lease" (or similar language) shall be deemed to refer to the
entire Lease, including all addenda and exhibits, and the inclusion of phrases
such as "in this Lease and the Work Letter" in particular places shall not be
used to derogate from the generality of the foregoing.

     IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date first hereinabove set forth.


                         "LANDLORD"

                         BRADBURY ASSOCIATES, L.P.,
                         a California limited partnership

                         By:  AY Associates,
                              a California limited partnership
                              General Partner

                                       65
<PAGE>

                              By:   The Yellin Company,
                                    a California corporation
                                    General Partner

                                    By:  /s/ Anne Mueller
                                         ------------------------
                                         Anne Mueller
                                         Vice President

                         "TENANT"

                         CATELLUS DEVELOPMENT CORPORATION,
                         a Delaware corporation


                         By:  /s/ Nelson C. Rising
                              ----------------------------
                         Its:
                              ----------------------------

                                       66
<PAGE>

                                   EXHIBIT A
                                   ---------

                                  FLOOR PLANS
                                  -----------





                                  EXHIBIT A-1
<PAGE>

                             CATELLUS DEVELOPMENT
                             THE BRADBURY BUILDING

                              304 South Broadway

                           Los Angeles, California

                                   4TH FLOOR




                           [FLOOR PLAN APPEARS HERE]







                                  EXHIBIT "A"
                                    1 of 2
<PAGE>

                             CATELLUS DEVELOPMENT
                             THE BRADBURY BUILDING

                              304 South Broadway

                           Los Angeles, California

                                   5TH FLOOR




                           [FLOOR PLAN APPEARS HERE]







                                  EXHIBIT "A"
                                    2 of 2
<PAGE>

                                   EXHIBIT B
                                   ---------

                             WORK LETTER AGREEMENT
                             ---------------------

                            [Landlord Performs Work]
                                  [Allowance]

     This Work Letter Agreement ("Work Letter") is executed simultaneously with
                                  -----------
that certain Office Lease (the "Lease") between Catellus Development
                                -----
Corporation, as "Tenant," and Bradbury Associates, L.P., as "Landlord," relating
to demised premises ("Premises") at the building commonly known as The Bradbury
                      --------
Building, 304 South Broadway, Los Angeles, California 90013 (the "Building"),
                                                                  --------
which Premises are more fully identified in the Lease. Capitalized terms used
herein, unless otherwise defined in this Work Letter, shall have the respective
meanings ascribed to them in the Lease.

     For and in consideration of the agreement to lease the Premises and the
mutual covenants contained herein and in the Lease, Landlord and Tenant hereby
agree as follows:

     1.    TENANT'S INITIAL PLANS; THE WORK. Tenant desires Landlord to perform
           --------------------------------
and Landlord agrees to perform certain leasehold improvement work in the
Premises in substantial accordance with the plan or plans (collectively, the
"Initial Plan") prepared by Sonnenleiter Associates dated 8-22-96 and last
-------------
revised 11-15-96, copies of which are attached hereto as Schedule 1. Such work,
                                                         ----------
as shown in the Initial Plan and as more fully detailed in the Working Drawings
(as defined and described in Paragraph 2 below) shall be hereinafter
collectively referred to as the "Work." Not later than twenty (20) days after
Landlord's request therefor, Tenant shall furnish to Landlord such additional
plans, drawings, specifications and finish details as Landlord may reasonably
request to enable Landlord's architects and engineers to prepare mechanical,
electrical and plumbing plans and to prepare the Working Drawings, including a
final telephone layout and special electrical connection requirements, if any.
All plans, drawings, specifications and other details describing the Work which
have been or are hereafter furnished by or on behalf of Tenant shall be subject
to Landlord's approval, which Landlord agrees shall not be unreasonably
withheld. Landlord shall not be deemed to have acted unreasonably if it
withholds its approval of any plans, specifications, drawings or other details
or of any Additional Work (as defined in Paragraph 7 below) because, in
Landlord's reasonable opinion, the Work, as described in any such item, or the
Additional Work, as the case may be:  (a) adversely affects Building Systems (as
defined in Section 7.2(a) of the Lease), the Building Structure (as defined in
Section 7.2(a) of the Lease) or the safety of the Building and/or its occupants;
(b) might impair Landlord's ability to furnish required services to Tenant or
other tenants in the Building; (c) would increase the cost of operating the
Building,

                                  EXHIBIT B-1
<PAGE>

in Landlord's reasonable judgment, more than a "de minimis" amount; (d) would
violate any Applicable Laws; (e) contains or uses Hazardous Materials in
violation of Applicable Laws; (f) would adversely affect the appearance of the
Building; (g) would, in Landlord's reasonable judgment, adversely affect the
normal and customary business operations of another tenant's premises; (h) is
prohibited by any ground lease affecting the Building or any mortgage, trust
deed or other instrument encumbering the Building; or (i) is likely to be
substantially delayed because of unavailability or shortage of labor or
materials necessary to perform such Work or the difficulties of such Work (each,
a "Design Problem"). The foregoing reasons shall be the only reasons for which
   --------------
Landlord may withhold its approval. Neither the approval by Landlord of the Work
or the Initial Plan or any other plans, drawings, specifications or other items
associated with the Work nor Landlord's performance, supervision or monitoring
of the Work shall constitute any warranty by Landlord to Tenant of the adequacy
of the design for Tenant's intended use of the Premises.

     2.    WORKING DRAWING.  If necessary for the performance of the Work and
           ---------------
not included as part of the Initial Plan attached hereto, Landlord shall prepare
or cause to be prepared final working drawings and specifications for the Work
(the "Working Drawings") based on and consistent with the Initial Plan and the
      ----------------
other plans, drawings, specifications, finish details and other information
furnished by Tenant to Landlord and approved by Landlord pursuant to Paragraph 1
above. So long as the Working Drawings are consistent with the Initial Plan and
otherwise reasonably acceptable to Tenant, Tenant shall approve the Working
Drawings within seven (7) business days after receipt of same from Landlord by
initialing and returning to Landlord each sheet of the Working Drawings or by
executing Landlord's approval form then in use, whichever method of approval
Landlord may designate.

     3.    PERFORMANCE OF THE WORK: ALLOWANCE.
           ----------------------------------

          (a) Selection of Contractor. Landlord's contractor, Krismar
              -----------------------
Construction Company, Inc. ("Contractor") shall enter into a construction
                             ----------
contract with Landlord to construct the Work ("Construction Contract"). The
                                               ---------------------
Construction Contract shall not, unless Tenant otherwise directs, require the
Contractor to post a completion bond or contain any provision penalizing the
Contractor for not completing the Work within a specific period of time.

          (b) Use of Building Standards. Except as hereinafter provided to the
              -------------------------
contrary, Landlord shall cause the performance of the Work using (except as may
be stated or shown otherwise in the Working Drawings) building standard
materials, quantities and procedures then in use by Landlord as listed in
Schedule 2 attached hereto ("Building Standards").
                             ------------------

                                  EXHIBIT B-2
<PAGE>

          (c) Cost of the Work; Tenants Contribution. Landlord shall pay for the
              --------------------------------------
"Cost of the Work" (as defined below); provided, however, that Tenant shall pay
Landlord the sum of Two Hundred Thousand Dollars ($200,000.00) as its
contribution ("Tenant's Contribution") toward the Cost of the Work, which amount
               ---------------------
shall be payable after Landlord has expended Three Hundred Eighty Thousand
Dollars ($380,000.00) toward the Cost of the Work. For purposes of this Work
Letter, the term "Cost of the Work" shall, except as otherwise expressly set
                  ----------------
forth in this Work Letter, mean and include any and all costs and expenses of
the design and construction of the Work, including, without limitation, the cost
of the Working Drawings and of all labor (including overtime) and materials
constituting the Work.

          (d) Base Building. Landlord hereby agrees that the Base Building of
              -------------
the Building has been, or is to be, constructed by Landlord at Landlord's sole
cost and expense. To the extent that any work which would, in accordance with
industry standards, be considered Base Building work is required in connection
with or as a part of the Work, then any such Base Building work shall be
performed at Landlord's sole cost and expense without any contribution thereto
from Tenant and the cost thereof shall not count toward the Three Hundred Eighty
Thousand Dollars ($380,000.00) referenced above.

     4.    PAYMENT.
           -------

          (a) Cost of Work. Prior to commencing the Work, Landlord shall submit
              ------------
to Tenant a written statement of the total Cost of the Work (which shall include
the amount of any overtime projected as necessary to substantially complete the
Work by the Scheduled Commencement Dates specified in Section 1.2(c) of the
                                                      -------
Lease as then known by Landlord. Tenant agrees, within three (3) days after
submission to it of such statement, to execute and deliver to Landlord, in the
form then in use by Landlord, an authorization to proceed with the Work. No Work
shall be commenced until Tenant has signed the authorization to proceed in
compliance with the preceding provisions of this Paragraph 4.

          (b) Chance Orders. In the event that Tenant requests any changes to
              -------------
the Working Drawings, Landlord shall not unreasonably withhold its consent to
any such changes, and shall notify Tenant if Landlord's consent is granted to
such changes within two (2) business days after Landlord's receipt of same,
provided the changes do not create a Design Problem. In the event, and each
time, that any such change order which is initiated by Tenant and is not
necessitated by any act or omission by Landlord or Landlord's agents, employees
or contractors or any Tenant Delay or any other event or circumstance caused by
Tenant (collectively, "Tenant-Caused Changes") causes the Cost of the Work to be
                       ---------------------
increased after the time that Landlord delivers to Tenant the aforesaid initial
statement of the Cost of the Work, Landlord shall deliver to

                                  EXHIBIT B-3
<PAGE>

Tenant a revised statement of the total Cost of the Work, indicating the amount
of the increased cost, accompanied by invoices documenting and evidencing such
increased costs. Tenant shall, but only to the extent that the Cost of the Work
actually exceeds or is reasonably estimated to exceed, Five Hundred Eighty
Thousand Dollars ($580,000.00) solely as a result of Tenant Caused Changes, pay
to Landlord an amount equal to such increased costs, as shown in such revised
statement within ten (10) days after Tenant's receipt of an invoice therefor and
any supporting documentation reasonably requested by Tenant, and Landlord shall
not be required to proceed further with the Work if Tenant has not paid such
amount within such ten (10) day period unless a good faith dispute exists with
respect to Tenant's obligation to pay all or any portion of such increased cost,
it being agreed that Tenant will be obligated to pay any undisputed amount of
such increased cost. Delays in the performance of the Work resulting from the
failure of Tenant to comply with the provisions of this Paragraph 4 shall be
deemed to be delays caused by Tenant, subject to Paragraph 6 below. Any costs
charged by Landlord to Tenant pursuant to this Section 4(b) shall in no event be
greater than the amount equal to the actual costs incurred by Landlord to review
the requested changes and revise the Final Plans, including reasonable charges
for Landlords general administrative and overhead costs not to exceed seven
percent (7%) of the Differential ("Actual Costs"), plus the amount required to
                                   ------------
cause the Work, as reflected by revised Working Drawings, to be constructed
above the costs that Landlord would have had to pay to cause the Work to be
constructed if such changes had not been made ("Differential"). Except as
expressly provided in this Paragraph 4(b), Tenant shall not be required to pay
more than the amount of Tenant's Contribution set forth above for the Work.

     5.    SUBSTANTIAL COMPLETION.
           ----------------------

          (a) Definition of Substantial Completion. Landlord shall cause the
              ------------------------------------
Work for the Premises to be "substantially completed" on or before the scheduled
date of commencement of the term of the Lease with respect thereto as specified
in Section 1.2(c) of the Lease, subject to delays caused by strikes, lockouts,
boycotts or other labor problems, casualties, discontinuance of any utility or
other service required for performance of the Work, unavailability or shortages
of materials or other problems in obtaining materials necessary for performance
of the Work (other than Building Standards) or any other matter beyond the
reasonable control of Landlord (or beyond the reasonable control of Landlord's
contractors or subcontractors performing the Work) and also subject to "Tenant
Delays" (as defined and described in Paragraph 6 of this Work Letter). The Work
for the Premises shall be deemed to be "Substantially Completed" for all
purposes under this Work Letter and the Lease if and when:  (i) the shell and
core of the Building are substantially complete and in compliance with all

                                  EXHIBIT B-4
<PAGE>

Applicable laws to the extent necessary to enable Landlord to obtain a
certificate of occupancy for the Premises, and all of the Building Systems are
operational to the extent necessary to service the Premises; (ii) Landlord's
architect issues a written certificate to Landlord and Tenant, certifying that
the Work has been substantially completed (i.e., completed except for
"punchlist" items listed in such architect's certificate) in substantial
compliance with the Working Drawings; (iii) Landlord as obtained a certificate
of occupancy or its equivalent for the Premises (except to the extent delayed by
any Tenant Delay); and (iv) Tenant has been delivered access to the Premises
(and other required portions of the Building and the Site), sufficient to allow
Tenant to install its freestanding work stations, fixtures, furniture,
equipment, and telecommunication and computer cabling systems and to move into
the Premises over the Move-In Period. If the Work for the Premises is not deemed
to be Substantially Completed on or before the scheduled date of the
commencement of the term of the Lease with respect thereto as specified in
Section 1.2(c) of the Lease, (a) Landlord agrees to use reasonable efforts to
complete the Work as soon as practicable thereafter, (b) except as otherwise
provided in the Lease, the Lease shall remain in full force and effect, (c)
except as otherwise provided in the Lease, Landlord shall not be deemed to be in
breach or default of the Lease as a result thereof and Landlord shall have no
liability to Tenant as a result of any delay in occupancy (whether for damages,
abatement of Rent or otherwise), and (d) the Commencement Date of the Lease Term
for the Premises shall be determined as specified in Article 2 of the Lease. At
the request of either Landlord or Tenant in the event the Commencement Date of
the term of the Lease is other than the Scheduled Commencement Date therefor,
Tenant and Landlord shall execute and deliver an amendment to the Lease
reflecting the actual Commencement Date therefor. Landlord agrees to use
reasonable diligence to complete all punchlist work listed in the aforesaid
architect's certificate promptly after Substantial Completion.

          (b) Delivery of Premises to Tenant and Notice of Substantial
              --------------------------------------------------------
Completion. Landlord shall deliver possession of the Premises to Tenant when the
----------
Work therein has been constructed so that Tenant will have access to the
Premises during the Move-In Period in accordance with Section 5(a)(iv) of this
Work Letter. Landlord shall deliver to Tenant at least two (2) weeks' prior
written notice stating the date that the Premises is expected to be
Substantially Complete, or would be Substantially Complete were it not for any
Tenant Delay. Delay of the Commencement Date, to the extent not caused by a
Tenant Delay, and Tenant's right to cancel pursuant to Section 2.3(a)(i) of the
Lease shall be Tenant's sole remedy for any delay in the construction by
Landlord of the Work or making the Premises Substantially Complete.

     6.    TENANT DELAYS. The term "Tenant Delays" shall mean:
           -------------            -------------

                                  EXHIBIT B-5
<PAGE>

            (i)  the failure of Tenant to furnish all or any plans, drawings,
     specifications, finish details or the other information required by this
     Work Letter on or before the time periods specified in this Work Letter;

           (ii)  the failure of Tenant to grant authorizations or approvals
     within the time periods required by this Work Letter;

           (iii) the failure of Tenant to comply with the requirements of
     Paragraph 4 above;

           (iv)  Tenant's changes or additions to the Working Drawings or to the
     Work requested by Tenant which are not necessitated by any act or omission
     of Landlord or Landlord's agents, employees or contractors, including
     changes or additions concerning requirements for special work or materials,
     finishes, or installations other than the Building Standards or Tenant's
     requirement for special construction staging or phasing provided that
     Landlord provides Tenant with notice of such delay within reasonable
     promptness after Landlord becomes aware thereof;

           (v)   the performance of any Additional Work (as defined in Paragraph
     7 below) required by Tenant or the performance of any work in the Premises
     by any person, firm or corporation employed by or on behalf of Tenant, or
     any failure to complete or delay in completion of such work; or

           (vi)  any other act or omission of Tenant or its agents or
     contractors which causes Landlord to be delayed in the performance of its
     obligations under this Work Letter.

     Notwithstanding anything contained in the Lease or in this Work Letter to
the contrary, no Tenant Delay shall be deemed to have occurred unless and until
Landlord has provided written notice to Tenant specifying the action or inaction
that Landlord contends constitutes a Tenant Delay. Once such notice is sent, no
further notice need be sent by Landlord during the continuance of the same
action or inaction. A Tenant Delay, as set forth in such notice, shall be deemed
to have occurred commencing as of the date such notice is received and
continuing for the number of days the design and/or construction of the Work was
in fact delayed as a direct result of such action or inaction.

     7.    ADDITIONAL WORK. Upon Tenant's request and submission by Tenant (at
           ---------------
Tenant's sole cost and expense) of the necessary information and/or plans and
specifications for work other than the Work described in the Working Drawings
("Additional Work") and the approval by Landlord of such Additional Work, which
-------------------
approval Landlord agrees shall not be unreasonably withheld, Landlord shall
perform such Additional Work, at Tenant's sole cost--and expense, subject,
however, to the following provisions

                                  EXHIBIT B-6
<PAGE>

of this Paragraph 7. Prior to commencing any Additional Work requested by
Tenant, Landlord shall submit to Tenant a written statement of the cost of such
Additional Work, which cost shall be competitive with the cost that other
general contractors would charge for the same work and which shall include (i) a
fee payable to Landlord in an amount to be agreed upon at the time by Landlord
and Tenant as compensation to Landlord for monitoring the Additional Work and
for administration, overhead and field supervision associated with the
Additional Work and (ii) an additional charge payable to Landlord in an amount
to be agreed upon at the time by Landlord and Tenant as compensation for
Landlord's general conditions (such fee and additional charge being hereinafter
referred to collectively as "Landlord's Additional Compensation"), and,
                             ----------------------------------
concurrently with such statement of cost, Landlord shall also submit to Tenant a
proposed tenant extra order (the "TEO") for the Additional Work in the standard
                                  ---
form then in use by Landlord. Tenant shall execute and deliver to Landlord such
TEO and shall pay to Landlord the entire cost of the Additional Work within ten
(10) days after Landlords submission of such statement and TEO to Tenant. If
Tenant fails to execute or deliver such TEO or pay the entire cost of the
Additional Work within such 10-day period, then Landlord shall not be obligated
to do any of the Additional Work and may proceed to do only the Work, as
specified in the Working Drawings.

     8.    INTENTIONALLY OMITTED.
           ---------------------

     9.    LEASE PROVISIONS. The terms and provisions of the Lease, insofar as
           ----------------
they are applicable to this Work Letter, are hereby incorporated herein by
reference. All amounts payable by Tenant to Landlord hereunder shall be deemed
to be additional Rent under the Lease and, upon any default in the payment of
same beyond any applicable notice and cure periods provided for in the Lease,
Landlord shall have all of the rights and remedies provided for in the Lease.

     10.   MISCELLANEOUS.
           -------------

           (a) This Work Letter shall be governed by the laws of the state of
     California.

           (b) This Work Letter may not be amended except by a written
     instrument signed by the party or parties to be bound thereby.

           (c) Any person signing this Work Letter on behalf of Landlord or
     Tenant warrants and represents he/she has authority to sign and deliver
     this Work Letter and bind Landlord or Tenant, as appropriate.

           (d) Notices under this Work Letter shall be given in the same manner
     as under the Lease.

                                  EXHIBIT B-7
<PAGE>

           (e) The headings set forth herein are for convenience only.

           (f) This work Letter sets forth the entire agreement of Tenant and
     Landlord regarding the Work.

           (g) In the event that the final working drawings and specifications
     are included as part of the Initial Plan attached hereto, or in the event
     Landlord performs the Work without the necessity of preparing working
     drawings and specifications, then whenever the term "Working Drawings" is
     used in this Agreement, such term shall be deemed to refer to the Initial
     Plan and all supplemental plans and specifications approved by Landlord.

     11. EXCULPATION OF LANDLORD. Notwithstanding anything to the contrary
         -----------------------
contained in this Work Letter, it is expressly understood and agreed by and
between the parties hereto that:

           (a) The recourse of Tenant or its successors or assigns against
     Landlord with respect to the alleged breach by or on the part of Landlord
     of any representation, warranty, covenant, undertaking or agreement
     contained in this Work Letter or the Lease (collectively, "Landlord's Work
                                                                ---------------
     Letter Undertakings") shall extend only to Landlord's interest in the real
     -------------------
     estate, of which the Premises demised under the Lease Documents are a part
     (hereinafter, "Landlord's Real Estate") and not to any other assets of
                    ----------------------
     Landlord or its beneficiar(y)(ies); and

           (b) Except to the extent of Landlord's interest in Landlord's Real
     Estate, no personal liability or personal responsibility of any sort with
     respect to any of Landlord's Work Letter Undertakings or any alleged breach
     thereof is assumed by, or shall at any time be asserted or enforceable
     against, Landlord, its beneficiar(y)(ies), or against any of their
     respective directors, officers, employees, agents, constituent partners,
     beneficiaries, trustees or representatives.

     12.   INSPECTION. After the Work is Substantially Completed (excepting
           ----------
punch list items) and prior to Tenant's move-in into the Premises ("First
                                                                    -----
Time"), and within thirty (30) days after the expiration of the Move-In Period
-----
("Second Time"), in each case following two (2) days' advance written notice
  -----------
from Tenant to Landlord, Landlord shall cause the Contractor to inspect the
Premises with a representative of Tenant and complete a punch list of unfinished
items of the Work. Authorized representatives for Landlord and Tenant shall
execute said punch list to indicate their approval thereof. The items listed on
such punch list shall be completed by the Contractor within thirty (30) days
after the approval of such punch list or as soon thereafter as reasonably
practicable.

                                  EXHIBIT B-8
<PAGE>

     13.  NO FEE TO LANDLORD. Except as otherwise provided in the Lease,
          ------------------
Landlord shall receive no fee for supervision, profit, overhead or general
conditions in connection with the Work.

     14.   CLEAN-UP EXPENSES. Landlord shall clean the Premises (a) prior to the
           -----------------
commencement of the Move-In Period and (b) following Tenant's move-in into the
Premises, including removal of all rubbish and debris. The cleaning referenced
in (b) shall leave the Premises in a manner consistent with the commencement of
business from comparable premises in Comparable Buildings, such that Tenant may
commence its business operations from the Premises immediately after Landlord
completes such clean-up. The costs of the cleaning provided by Landlord pursuant
to this Paragraph 14 shall not be included in Operating Costs for the Building
prior to Tenant's occupancy of the Premises.

     15.   NO MISCELLANEOUS CHARGES. Tenant shall note charged for, and
           ------------------------
Landlord shall provide for Tenant's architects, designers, contractors and
subcontractors (including those people working on the Work) the use of
electricity, water, toilet facilities, HVAC, security and elevators during the
Move-In Period. All such equipment, areas, elevators and utilities shall be made
reasonably available to Tenant during the Move-In Period.

     16.   BONDING. Notwithstanding anything to the contrary set forth in the
           -------
Lease, Tenant shall not be required to obtain or provide any completion or
performance bond in connection with the initial tenant improvement work in the
Premises.

     17.   DEMOLITION. In the event that the Premises have been previously built
           ----------
out, Tenant shall not be required to pay for any costs of demolition of the
existing tenant improvements in the Premises.

     18.   PRESENCE OF HAZARDOUS SUBSTANCES. In the event that at any point in
           --------------------------------
time the Premises and/or the Common Areas of the Building are determined to
contain hazardous substances (as defined by Applicable Laws), Tenant shall have
the right, by notice to Landlord, to require Landlord to remove, at Landlord's
sole cost and expense, all such hazardous substances in accordance with the
provisions of the Lease. Any delay incurred by Tenant in the design of its Work
or its move-in into the Premises because of the presence of hazardous substances
shall constitute a Landlord Delay.

     19.   LIFE-FIRE SAFETY CODES/DISABLED ACCESS CODES/ EARTHQUAKE SAFETY
           ---------------------------------------------------------------
CODES. In the event that, because the Premises and/or the Building as initially
constructed do not comply with current life-fire safety codes, disabled access
codes (including, without limitation, the ADA), and/or earthquake safety codes
(it being agreed and understood that any applicable current waivers of such
codes and/or "grandfathering," with respect thereto shall be considered
compliance), Tenant incurs increased design or

                                  EXHIBIT B-9
<PAGE>

construction costs that it would not have incurred had the Premises and/or the
Building already been in compliance with the applicable life-fire safety codes,
disabled access codes (including, without limitation, the ADA), and/or
earthquake safety codes, applicable to new construction, then such costs shall
be reimbursed by Landlord to Tenant within ten (10) days after receipt by
Landlord from Tenant of an invoice documenting and evidencing such increased
costs. Any delay in Tenant's move-in into the Premises because of the non-
compliance of the Building and/or Premises with the applicable life-fire safety
codes-and-disabled access codes (including, without limitation, the ADA), and/or
earthquake safety codes shall constitute a Landlord Delay.

     20.   INTENTIONALLY OMITTED.
           ---------------------

     21.   STAGING AREA. During the period prior to the Commencement Date,
           ------------
Tenant shall have the right, without the obligation to pay Rent, to use empty
space in the basement of the Building designated by Landlord for the purposes of
storing and staging its furniture and equipment only. With respect to this free
storage space, Tenant shall be responsible for providing all insurance and for
providing any necessary fencing or other protective facilities. Tenant shall
hold Landlord harmless and shall indemnify Landlord from and against any and all
loss, liability or cost arising out of or in connection with use of such storage
space by Tenant. Tenant shall be obligated to remove all of the stored materials
and its fencing and other facilities within ten (10) days after Tenant's receipt
of written notice from Landlord that such staging area is needed by Landlord, in
which event comparable space, to the extent available, shall be made available
to Tenant as a substitute staging area.

     22.   MOVE-IN PRIORITY. Provided that Tenant moves into the Building during
           ----------------
the Move-In Period, or, in the event Tenant moves into the Building at some time
other than the Move-In Period, and provided that Tenant has provided Landlord at
least two (2) weeks' prior written notice of Tenant's move into the Building,
Tenant shall have the right to use the passenger elevators and the exclusive
right to use the freight elevator during the weekend that it moves into the
Building, but, with respect to Tenant's exclusive use of the freight elevator,
only to the extent such exclusive use is necessary for Tenant to complete its
move into the Building over one (1) weekend in an orderly and efficient manner.

                                  EXHIBIT B-10
<PAGE>

     IN WITNESS WHEREOF, this Work Letter Agreement is executed as of November
22, 1996.

TENANT:                                LANDLORD:
------                                 --------

                                       BRADBURY ASSOCIATES, L.P.,
CATELLUS DEVELOPMENT                   a California limited partnership
CORPORATION,
a Delaware corporation
                                       By:  AY Bradbury Associates, a
                                            California limited
By: /s/ Nelson Rising                       partnership General Partner
    -----------------------
Title:                                      By:  The Yellin Company, a
      ---------------------                      California
                                                 corporation (Its
                                                 General Partner)

                                                  By:  /s/ Anne Mueller
                                                       ----------------
                                                       Anne Mueller
                                                       Vice President


                                  EXHIBIT B-11
<PAGE>

                            SCHEDULE 1 TO EXHIBIT B
                            -----------------------

                                 INITIAL PLAN
                                 ------------



                          SCHEDULE 1 TO EXHIBIT B - 1
<PAGE>

                             CATTELUS DEVELOPMENT

                                   5TH FLOOR



                           [FLOOR PLAN APPEARS HERE]





                       SCHEDULE 1 TO EXHIBIT "B" 1 OF 2
<PAGE>

                             CATTELUS DEVELOPMENT

                                   4TH FLOOR



                           [FLOOR PLAN APPEARS HERE]





                       SCHEDULE 1 TO EXHIBIT "B" 2 OF 2
<PAGE>

                            SCHEDULE 2 TO EXHIBIT B
                            -----------------------

                               BUILDING STANDARDS
                               ------------------


A.   DRYWALL PARTITIONS
     ------------------

     1.    Interior Partitions (1 LF of partition / 12 SF):  2-1/2" metal stud,
           25 GA @ 24" on center with 5/8" gyp. board each side from floor to
           hung ceiling, partition taped smooth to receive paint or wall
           covering.


B.   DOORS, FRAMES AND HARDWARE
     --------------------------

     1.    Interior Door Assembly (1 Door /300 SF):  3'-0" x 7'-7" x 1-3/4"
           solid core, rift cut, red oak, veneer door set in Western Integrated,
           medium bronze anodized frame. Each door to receive two (2) pairs of
           4-1/2" butt Hinges. Hardware to be Schlage "L" series, lever type
           latchset with quality #432 floor stop. Finish to be oil rubbed
           bronze.

     2.    Corridor Assembly: All are existing, to be re-used in existing
           locations.


C.   ELECTRICAL/TELEPHONE/DATA
     -------------------------

     1.    Electrical Wall Outlets (1 outlet / 100 SF):  Leviton "Decora"
           series, 2 pole, 3 wire, duplex outlet. Outlets are to be mounted
           vertically. Color: White.

     2.    Telephone / Data Outlets (1 outlet / 150 SF):  Single gang outlet box
           on interior walls with 1/2" metal conduit from the outlet box to
           above ceiling line. outlets are to be mounted vertically. Color:
           white.


D.   LIGHTING / SWITCHES
     -------------------

     1.    Lighting (1 Fixture / 80 SF): 2' X 4', recessed, fluorescent, 3 tube
           light fixture with 4 8 cell parabolic lens, warm white light bulbs.

     2.    Switches (per code):  Leviton "Decora" series rocker type switch,
           double switched as required for Title 24 Regulations.

     3.    Exit Signs:  Self illuminated, per code


                          SCHEDULE 2 TO EXHIBIT B - 1
<PAGE>

                            SCHEDULE 2 TO EXHIBIT B
                            -----------------------

                               BUILDING STANDARDS
                               ------------------



 E.  SUSPENDED CEILING
     -----------------

     1.    Ceiling Grid: 2' x 2' suspended grid, white finish Chicago Metallic
           3500 Series, Fine Line.

     2.    Ceiling Tile: Celotex Cashmere 2' x 2' lay-in-tile.

     3.    Perimeter and atrium curtain pocket with approximately 9' ceiling
           heights (standard).


F.   SPRINKLERS
     ----------

     1.    Sprinkler heads to be semi-recessed chrome heads, fitted with white,
           domed escutcheon plates.


G.   HEATING AND AIR CONDITIONING
     ----------------------------

     1.    Zones (1 Zone / 600 SF):  Water cooled heat pump unit located in the
           tenant plenum with low pressure, distribution ductwork and zones as
           required.

     2.    Supply Air Grilles: Directional louvers connected to low pressure
           duct work. Color:  White.

     3.    Return Air Grilles:  Directional louvers to return air plenum.

     4.    Thermostats:  Carrier model#MP-10


H.   FINISHES
     --------

     1.    Floor Covering ($14.0/0)Yard installed, with pad):

           Carpet:  Shaw Industries "Bay-Hill 32" over pad

     2.    Floor base:

           Existing Historic Base:  Patched and repaired as required

           New Base:  4" Burke or 5" x 1/2" Oak stained base.

     3.    Wall Finish:  "Sinclair" paint throughout lease area


                          SCHEDULE 2 TO EXHIBIT B - 2
<PAGE>

                            SCHEDULE 2 TO EXHIBIT B
                            -----------------------

                               BUILDING STANDARDS
                               ------------------


     4.    Window Covering:  M & B, 1", horizontal mini-blinds to fit within
           each window on exterior and atrium windows. Color:  Alibaster



                          SCHEDULE 2 TO EXHIBIT B - 3
<PAGE>

                                   EXHIBIT C
                                   ---------

                     RULES AND REGULATIONS OF THE BUILDING
                     -------------------------------------

     1.    Tenant and Tenant's employees shall not loiter in the entrance of
corridors of the Building or in any way obstruct the sidewalks, entry passages,
halls, stairways and elevators in and around the building, and shall use the
same only as passageways, and means of passage, to and from their respective
offices.

     2.    The doors, sashes, windows, glass doors, lights and skylights that
reflect or admit light into the halls or other places of the Building shall not
be covered or obstructed, and doors leading into the corridors shall not be
suffered to remain open. The water closets and urinals shall not be used for any
purposes other than those for which they were constructed, and no rubbish,
newspapers or other substances of any kind shall be thrown into them. Subject to
Section 7.3 of the Lease, Tenant shall not mark, drive nails, screw or drill
into, paint, or in any way deface the walls, ceilings, partitions, floors, wood,
stone or iron work of the Building. The expense of any breakage, stoppage or
damage resulting from a violation of this rule shall be borne by Tenant.

     3.    Subject to Section 17.19 of the Lease, no awning, shade, sign,
advertisement or notice shall be inscribed, painted or affixed on or to any part
of the outside or inside of the Building, except by the written consent of
Landlord and unless it be of such color, size and style and in such place upon
or in the Building as may be designated by Landlord. If Tenant desires window
curtains [in addition to those already in the Premises and owned by Landlord],
the same must be of such uniform shape, color, material and make as may be
prescribed by Landlord and must be put up in the manner directed by Landlord,
and paid for by Tenant. Tenant shall cooperate with Landlord in order to
preserve the efficiency of the heating and [air conditioning] systems in the
Building.

     4.    Electric wiring of every kind shall be introduced and connected as
directed by Landlord, and no boring or cutting for wires shall be allowed except
with the consent of Landlord.

     5.    Tenant shall not use any machinery in the Premises which may cause
any excessive noise, as determined by Landlord in its sole judgment, reasonably
exercised, or may cause any jar or tremor to the floors or walls, or which by
its weight may injure the floors of the building.

     6.    Landlord may limit the weight, size and position of all safes and
concentrations of files used in the Building and such safes and concentrations
of files shall in all cases stand on wood or metal of such size as shall be
designated by Landlord. All damage done to the Building by putting in, taking
out or

                                  EXHIBIT C-1
<PAGE>

maintaining a safe or a concentration of files shall be repaired at the expense
of Tenant. Landlord may likewise limit the weight, size and position of any
equipment and machinery of every kind used in the Building. No machinery of any
kind, whether manually or electrically operated, including, without limitation,
IBM or other forms of electronic business machines, heating or air conditioning
machines, and air or water cooling machines but excluding electrically operated
typewriters and adding or calculating machines) will be allowed in the Building
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed.

     7.    Tenant and Tenant's officers, agents and employees shall neither make
nor permit any sound to be made in the Premises or the Building which would
disrupt or interfere with the other tenants of the Building, nor make nor permit
any other improper noises in the Building, nor interfere in any other way with
other tenants or those having business in the Building, nor bring into nor keep
within the Building any animal, bird or bicycle. Tenant and Tenant's officers,
agents and employees shall not throw cigar or cigarette butts or other items of
any kind out the windows or doors or down the passageways or skylights of the
Building, or sit on or place anything upon the window sills or outside ledges.

     8.    All freight must be moved into, within and out of the Building must
be coordinated with, and under the supervision of, Landlord, and according to
such regulations as may be posted in the Building, and shall be moved only
between the hours of 9:00 a.m. and 11:00 a.m., and 2:00 p.m. and 4:00 p.m. of
days other than Saturdays, Sundays and holidays (no moving being permitted on
Saturdays, Sundays or holidays without Landlord's permission), but Landlord
shall not be responsible for the loss of or damage to such freight from any
cause.

     9.    All keys shall be obtained from Landlord and all keys shall be
returned to Landlord upon the termination of this Lease. Tenant shall not change
the locks or install other locks on the doors. Neither Tenant, his agents nor
employees shall have any duplicate key made.

     10.   Use of the Premises before 8:00 a.m. or after 6:00 p.m., Monday
through Friday, before 9:00 a.m. or after 2:00 p.m. on Saturdays, or at any time
during Sundays and legal holidays, shall be subject to such reasonable rules and
requirements as Landlord may from time to time prescribe.

     11.   The bulletin board or directory of the Building will be provided
exclusively for the display of the name and location of Tenant only, and
Landlord reserves the right to exclude all other names therefrom and to make a
reasonable charge for each and every name other than the name of Tenant which
Tenant may

                                  EXHIBIT C-2
<PAGE>

desire to be placed upon such bulletin board and to which Landlord may consent.

     12.   No person shall be employed by Tenant to do janitorial work in any
part of the Building without the prior written consent of Landlord.

     13.   Landlord reserves the right to exclude or expel from the Building any
person who, in the judgment of Landlord: is intoxicated or under the influence
of liquor, drugs or any unlawful substance; displays boisterous, violent or
reckless behavior; does not conduct themselves in a manner reasonably
appropriate for an office building; presents themselves in a condition that
could reasonably be considered offensive to others; or shall in any manner do
any act in violation of the rules and regulations of the Building.

     14.   Subject to Tenant's right of access to the Premises twenty-four hours
a day, seven days a week, Landlord reserves the right to close and keep locked
all entrance and exit doors of the Building and gates or doors closing the
stairways thereof during such hours as Landlord may deem to be advisable for the
adequate protection of the Building.

     15.   Tenant, Tenant's employees, agents or associates, or other persons
entering or leaving the Building when it is so locked may be required to sign
the Building register when so doing, and the watchman in charge may refuse to
admit Tenant or any of Tenant's employees, agents or associates or any other
person to the Building while it is so locked, without a pass previously arranged
or other satisfactory identification, showing such person's right to access to
the Building at such time However, Landlord assumes no responsibility whatsoever
in connection therewith and shall not be liable for any damage resulting from
any error in regard to any such pass or identification or from the admission of
any unauthorized person to the Building.

     16.   Landlord reserves the right to require issuance of a permit or pass
authorizing removal by Tenant or its employees, agents or associates of any
furniture, parcel, crate, typewriter or other sizable or valuable item of
personal property from the Building.

     17.   Neither Tenant nor its servants, employees, agents, visitors or
licensees shall at any time bring or keep upon the Premises any flammable,
combustible or explosive fluid, chemical or substance, except for a reasonable
quantity of such material reasonably necessary for the conduct of Tenant's trade
or business.

     18.   Tenant agrees that at no time will it permit any equipment, machinery
or device of any kind to be extended out of

                                  EXHIBIT C-3
<PAGE>

any window of the Premises or on any ledge outside of any such window,
specifically including any air conditioner or air conditioning equipment.

     19.   Landlord reserves the right at any time to change or rescind any one
or more of these rules or regulations or to make such other further reasonable
rules and regulations applicable to all tenants of the Building as in Landlord's
reasonable judgment may from time to time be necessary for the management,
safety, care and cleanliness of the Premises and the Building, and for the
preservation of good order therein as well as for the convenience of other
occupants and tenants therein. Subject to Section 6.7 of the Lease, Landlord
shall not be responsible to Tenant herein or to any other person for the
nonobservance or violation of the rules and regulations by any other tenant or
other person. Tenant shall be deemed to have read these rules and regulations
and to have agreed to abide by them as a condition to Tenant's occupancy of the
Premises.

     20.   Tenant at all times agrees to abide by any additional rules or
regulations which are ordered or requested by any governmental or military
authority.

     In the event of a conflict between one of the rules and regulations and a
provision in the Lease, the provisions of the Lease shall control.

                                  EXHIBIT C-4
<PAGE>

                                   EXHIBIT D
                                   ---------

                FORM OF NON-DISTURBANCE AND ATTORNMENT AGREEMENT
                ------------------------------------------------

     This Agreement is made on ____________, between _______________________
("Superior Mortgagee"), whose address is ________________, ____________________
__________ ("Landlord"), whose address is ______________________________, and
________________, a _________________ corporation ("Tenant"), whose address is
_________________________________, who agree as follows:

     1.    Recitals. This Agreement is made with reference to the following
           --------
facts and objectives:

           (a) Superior Mortgagee is, or it is anticipated that Superior
     Mortgagee will become, the beneficiary under a certain deed of trust
     ("Trust Deed") on improved property located at 304 South Broadway, City and
     County of Los Angeles, State of California, 90013 ("Property"). Superior
     Mortgagee shall also be deemed to include any lender who executes this
     Agreement and subsequently acquires title to the Building pursuant to a
     bankruptcy proceeding involving Landlord.

           (b) On or about August __, 1996, Landlord leased to Tenant, and
     Tenant leased from Landlord, a portion of the Property. A copy of the lease
     between Landlord and Tenant ("Lease") is attached hereto as Schedule "1"
     and made a part hereof by this reference.

           (c) The parties desire, under the provisions set forth in this
     Agreement, to assure Tenant that in the event of the foreclosure of the
     Trust Deed, or in the event of a sale in lieu of such foreclosure, or in
     the event that Superior Mortgagee directly or indirectly becomes the new
     landlord of the Building because of its providing financing to Landlord,
     the terms of the Lease shall not be terminated, disturbed, or adversely
     affected, provided an Event of Default has not occurred under Section 11.2
     of the Lease and subject to the cure rights set forth in Section 11.2 of
     the Lease ("Tenant Default").

     2.    Attornment. If Landlord is in default under the Trust Deed after
           ----------
expiration of the applicable period that Landlord has in which to cure its
default, and if a foreclosure sale takes place due to such default, or if
Superior Mortgagee shall notify Tenant of such transfer of title to the Property
or if Superior Mortgagee becomes the new Landlord of the Building, after receipt
of such notice, upon the effective date of such transfer of title, and after
Tenant has received written notice of such transfer of title, Tenant shall
attorn to Superior Mortgagee and shall recognize Superior Mortgagee as Tenant's
landlord under the

                                  EXHIBIT D-1
<PAGE>

Lease, and Tenant agrees to execute any instruments reasonably requested to
evidence such attornment. Upon attornment, the Lease shall continue in full
force and effect, so long as a Tenant Default has not occurred, and Tenant shall
perform all Tenant's obligations under the Lease directly to Superior Mortgagee,
as if Superior Mortgagee were the landlord under the Lease. Tenant agrees to
make any modifications of the Lease requested by Superior Mortgagee hereunder,
provided that such modifications do not adversely affect any right of Tenant
under the Lease or increase any of Tenant's monetary obligations under the
Lease.

     3.    Non-Disturbance by Superior Mortgagee. If a Tenant Default is not in
           -------------------------------------
existence at the time of the transfer of title as provided in the above
paragraph, the Lease shall continue with the same force and effect as if
Superior Mortgagee and Tenant had entered into a lease with the same provisions
as those contained in the Lease, and the terms of the Lease and Tenant's
leasehold estate in the Property shall not be terminated, disturbed, or
adversely affected, except according to the terms of the Lease.

     4.    Conditions of Superior Mortgagee's Recognition.  Until a Tenant
           ----------------------------------------------
Default occurs, Superior Mortgagee or such other purchaser shall recognize the
leasehold estate of Tenant under all of the terms, covenants and conditions of
the Lease for the remaining balance of the term and any renewals thereof with
the same force and effect as if Superior Mortgagee or such other purchaser were
the landlord under the Lease, and Superior Mortgagee and Tenant shall
immediately enter into a written agreement with the same provisions as those in
the Lease, except for any technical changes that are necessary because of the
substitution of Superior Mortgagee in place of Landlord; provided, however, that
Superior Mortgagee, or such other purchaser, shall not be (i) liable for any act
or omission of Landlord or any other prior lessor which occurred prior to the
time the Superior Mortgagee purchased or acquired its interest under the Lease,
except with respect to Tenant's right to deduct from rents next due under the
Lease, together with interest thereon at the Interest Rate, as defined in the
Lease, any (a) unpaid tenant improvement allowance (including allowances for
initial construction), or the cost incurred by Tenant in constructing or
completing the tenant improvements which were required to be constructed or
completed by Landlord at Landlord's expense, or (b) unpaid arbitration or court
award, (ii) except as provided in (i) to the contrary, obligated to cure any
defaults of Landlord or any other prior lessor under the Lease which occurred
prior to the time that Superior Mortgagee purchased or acquired its interest
under the Lease (except to the extent that the default is not monetary and
remains in existence at the time the Superior Mortgagee purchased or acquired
its interest under the Lease), (iii) except as provided in (i) to the contrary,
subject to any offsets or defenses which Tenant may be entitled to assert
against Landlord or any other prior lessor; (iv) bound by any payment of rent or
additional rent by Tenant to Landlord

                                  EXHIBIT D-2
<PAGE>

or any other prior lessor for more than one month in advance, bound by any
amendment or modification of the Lease which would adversely affect any right of
Landlord under the Lease made without the written consent of Superior Mortgagee
or such other purchaser who has first, in writing, notified Tenant of its
interest, which consent cannot be unreasonably withheld, or (vi) except as
provided in (i) to the contrary, liable or responsible for or with respect to
the retention, application and/or return to Tenant of any security deposit paid
to Landlord or any other prior lessor, whether or not still held by Landlord,
unless and until Superior Mortgagee or such other purchaser has actually
received for its own account as landlord the full amount of such security
deposit, or any portion thereof (such liability and responsibility being limited
to the amount received, if any).

     5.    Special Payment. Notwithstanding anything to the contrary set forth
           ---------------
in this Agreement or in the Lease, in the event that the Landlord fails to pay
to Tenant (a) any tenant improvement allowance, or (b) unpaid final arbitration
award or court judgment, Superior Mortgagee or such other successor to the
interests of Landlord and/or the Superior Mortgagee shall pay to the Tenant,
together with interest at the Interest Rate, such unpaid amounts. With respect
to all such payments, interest shall be computed from the date such amounts are
in fact paid.

     In the event Landlord, Superior Mortgagee or such other successor to the
interests of Landlord and/or Superior Mortgagee shall fail to pay to Tenant such
unpaid amounts, Tenant may deduct such amounts, together with interest thereon
at the Interest Rate and computed as set forth above, from the rent next
becoming due and payable under the Lease.

     6.    Covenants of Superior Mortgagee.
           -------------------------------

           (a) Superior Mortgagee shall, at the request of Tenant, oppose any
     rejection of this Lease in the event a bankruptcy proceeding is instituted
     involving Landlord as the debtor.

           (b) Superior Mortgagee shall serve Tenant, in the same manner and at
     the same time, with a copy of all notices it serves on Landlord with
     respect to any default by Landlord on any obligation of Landlord to
     Superior Mortgagee.

     7.    Miscellaneous.
           -------------

           (a) No Effect on Trust Deed. Nothing in this Agreement shall be
               -----------------------
     deemed to change in any manner the provisions of the Trust Deed as between
     Superior Mortgagee and Landlord, to waive any right that Superior Mortgagee
     may now have or later acquire against Landlord by reason of the Trust Deed.

                                  EXHIBIT D-3
<PAGE>

     (b) Attorneys' Fees. If any party commences an action against any of the
         ---------------
     other parties arising out of or in connection with this Agreement, the
     prevailing party shall be entitled to recover from the losing party
     reasonable attorneys' fees and costs of such action.

           (c) Notice. Any notice, demand, request, consent, approval, or
               ------
     communication that any party desires or is required to give to another
     party or any other person shall be in writing and either served personally
     or sent by prepaid, first-class mail. Any notice, demand, request, consent,
     approval, or communication that any party desires or is required to give to
     the other party shall be addressed to the other party at the address set
     forth in the introductory paragraph of this Agreement. Any party may change
     its address by notifying the other parties of the change of address. Notice
     shall be deemed communicated within two (2) business days from the time of
     mailing, if mailed as provided in this paragraph.

           (d) Successors. This Agreement shall be binding on and inure to the
               ----------
     benefit of the parties and their successors.

           (e) Governing Law. This Agreement shall be governed by, and construed
               -------------
     in accordance with, the laws of the State of California.

           (f) No Modifications Unless in Writing. This Agreement contains all
               ----------------------------------
     of the agreements and understandings between the parties regarding this
     Agreement relating to the leasing of the Premises and the obligations of
     Landlord and Tenant in connection with such Lease. This Agreement
     supersedes any and all prior agreements and understandings between
     Landlord, Tenant and Superior Mortgagee and alone expresses the agreement
     of the parties. This Agreement shall not be amended, changed or modified in
     any way unless in writing executed by Landlord, Tenant and Superior
     Mortgagee. Landlord, Tenant and Superior Mortgagee shall not have waived or
     released any of their rights hereunder unless in writing and executed by
     Landlord, Tenant and Superior Mortgagee.

                                  EXHIBIT D-4
<PAGE>

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

                              LANDLORD:

                              _______________________________,
                              a _____________________________


                              By: ___________________________
                              Its: __________________________


                              TENANT:

                              _______________________________,
                              a _________________________


                              By: ___________________________
                              Its: __________________________


                              SUPERIOR MORTGAGEE:
                              ------------------

                              _______________________________,
                              a _____________________________


                              By: ___________________________
                              Its: __________________________



                                  EXHIBIT D-5
<PAGE>

                            SCHEDULE 1 TO EXHIBIT D
                            -----------------------

                                     LEASE


                              [* TO BE ATTACHED *]



                                  EXHIBIT D-6
<PAGE>

                                   EXHIBIT E
                                   ---------

                          FORM OF ESTOPPEL CERTIFICATE
                          ----------------------------

TO:        _________________________________________________

FROM:      _________________________________________________

RE:        _________________________________________________

          [*LANDLORD/TENANT*] hereby certifies the information set forth below
with respect to the Lease as of the date of this certificate.

          1.    The Lease is unmodified and in full force and effect [or "The
Lease, as modified by the above-referenced amendment(s), is in full force and
effect" except as noted herein].

          2.    Tenant made its latest payments of Base Rent and Additional Rent
(in respect to Tax Costs and Operating Costs) under the Lease on the following
dates, in the following amounts:

                         Date                      Amount
                         ----                      ------

Base Rent:      _____________, 19__           $_______________

Additional
   Rent              _____________, 19__             $_______________

          3.    To the best knowledge of [*LANDLORD/TENANT*], [except as set
forth below,] [*TENANT/LANDLORD*] is not in default under the Lease.

Date: _________          ______________________________,
                              a ____________________________


                              By: __________________________

                              Title: _______________________


                                  EXHIBIT E-1
<PAGE>

                                   EXHIBIT F
                                   ---------

                             INTENTIONALLY OMITTED



                                  EXHIBIT F-1
<PAGE>

                                   EXHIBIT G
                                   ---------

                              RIGHT OF FIRST OFFER
                              --------------------

     A.    Tenant shall have the right to send to Landlord a notice (the
"Request Notice") advising Landlord that Tenant is interested in possibly
---------------
leasing additional space in the Building. Within ten (10) days of receipt of a
Request Notice, Landlord shall promptly notify Tenant of when and what space in
the Building is or will be so available within the next six (6) months (the

"Available Space"). Tenant thereupon shall have the right (the "ROFO") to lease
----------------                                                ----
all or any part of such Available Space at the Fair Market Rate for the
remaining term of the Lease, except that Tenant shall have no such right:

     1.    if Tenant is in default pursuant to Section 11.2 of the Lease; or

     2.    if the portion of the Available Space not leased by Tenant is not in
a rentable configuration or size; or

     3.    after that date which is the five (5) year anniversary of the
Commencement Date; provided, however, that if Tenant exercises its Renewal
Option (as set forth in Section 2.5 of the Lease), then Tenant's rights pursuant
to this Exhibit G shall resume commencing on the first (1st) day of the renewal
        ---------
term (the "Renewal Term Commencement Date") and terminating on that date which
           ------------------------------
is the two (2) year anniversary of the Renewal Term Commencement Date.

     B.    The ROFO shall be exercised by Tenant's notifying Landlord, within
ten (10) days after Tenant's receipt of the notice of availability of the
Available Space, of Tenant's exercise of its right to lease such Available Space
(or such portion of such Available Space identified by Tenant in such notice
which thereupon shall be deemed the Available Space) upon the terms of this
Exhibit G. If Tenant so notifies Landlord, Landlord shall deliver the Available
---------
Space to Tenant upon the date such space is available and shall prepare an
amendment to the Lease adding the Available Space to the Premises on the date of
delivery on the terms set forth in this Exhibit G, which amendment shall be
                                        ---------
delivered to Tenant promptly after exercise and executed by Tenant within thirty
(30) days after Tenant's receipt of same from Landlord. The privileges for
parking which Tenant receives in connection with the Available Space shall be
within one (1) block of the Building and shall be at the higher of three (3)
privileges per 1,000 RSF or the parking rights determined in accordance with the
definition of Fair Market Rate.

     C.    Tenant may not send a Request Notice until six (6) months have
elapsed since the day Tenant previously sent a Request Notice to Landlord
following the execution by Tenant of rejection of the right to lease the
Available Space.

                                  EXHIBIT G-1
<PAGE>

     D.    If Landlord and Tenant are unable to agree as to the Fair Market Rate
within thirty (30) days following Tenant's exercise of each such ROFO, then
Landlord must lease such Available Space to Tenant at the Fair Market Rate
determined in accordance with Section 2.5(b) of the Lease. To the extent Tenant
is granted other concessions in accordance with the determination of Fair Market
Rate such as any allowance, etc., such concessions shall be provided to Tenant
with Landlord incorporating the appropriate provisions of the Lease in the
amendment to reflect any allowance, Build-Out Period (as defined in Paragraph E
below), disbursement procedures, etc., to reflect the implementation of the Fair
Market Rate determination.

     E.    Rent for the Available Space shall commence upon the earlier of (i)
the date Tenant commences business operations from such Available Space and (ii)
the date determined in accordance with the definition of Fair Market Rate for
the build out of the Available Space (the "Build-Out Period"), which Build-Out
                                           ----------------
Period shall be extended one (1) day for each day Tenant is delayed in designing
or constructing its tenant improvements because of any delay caused by Landlord
or Landlord's agents employees or contractors or Force Majeure Events (as
defined in Section 17.13 of the Lease).

                                  EXHIBIT G-2