<PAGE>   1

                                                                    EXHIBIT 10.6







                            STANDARD INDUSTRIAL LEASE

                                 BY AND BETWEEN

                               MCCANDLESS LIMITED

                                   AS LANDLORD

                                       AND

                               OMNISKY CORPORATION

                                    AS TENANT



<PAGE>   2

                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
ITEM
<S>     <C>
1.      USE
2.      TERM
3.      POSSESSION
4.      MONTHLY RENT
5.      ADJUSTMENT OF BASIC RENT
6.      RESTRICTION ON USE
7.      COMPLIANCE WITH LAWS
8.      ALTERATIONS
9.      REPAIR AND MAINTENANCE
10.     LIENS
11.     INSURANCE
12.     UTILITIES AND SERVICE
13.     TAXES AND OTHER CHARGES
14.     ENTRY BY LANDLORD
15.     COMMON AREA; PARKING
16.     COMMON AREA CHARGES
17.     DAMAGE BY FIRE; CASUALTY
18.     INDEMNIFICATION
19.     ASSIGNMENT AND SUBLETTING
20.     DEFAULT
21.     LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT
22.     EMINENT DOMAIN
23.     NOTICE AND COVENANT TO SURRENDER
24.     TENANT'S QUITCLAIM
25.     HOLDING OVER
26.     SUBORDINATION
27.     CERTIFICATE OF ESTOPPEL
28.     SALE BY LANDLORD
29.     ATTORNMENT TO LENDER OR THIRD PARTY
30.     DEFAULT BY LANDLORD
31.     CONSTRUCTION CHANGES
32.     MEASUREMENT OF PREMISES
33.     ATTORNEY FEES
34.     SURRENDER
35.     WAIVER
36.     EASEMENTS; AIRSPACE RIGHTS
37.     RULES AND REGULATIONS
38.     NOTICES
39.     NAME
40.     GOVERNING LAW; SEVERABILITY
41.     DEFINITIONS
42.     TIME
43.     EXAMINATION OF LEASE
44.     INTEREST ON PAST DUE OBLIGATIONS; LATE CHARGE
45.     ENTIRE AGREEMENT
46.     CORPORATE AUTHORITY
47.     RECORDING
48.     REAL ESTATE BROKERS
49.     EXHIBITS AND ATTACHMENTS
50.     ENVIRONMENTAL MATTERS
51.     SIGNAGE
52.     SUBMISSION OF LEASE
53.     ADDITIONAL RENT
54.     CONDITION OF PROJECT
55.     PREMISES TAKEN "AS IS"
56.     CAPITAL EXPENDITURES
</TABLE>



<PAGE>   3

                                      LEASE


    THIS LEASE is made this 3rd day of March, 2000, by and between McCandless
Limited, a California limited partnership, ("Landlord") and OmniSky Corporation,
a Delaware corporation ("Tenant").


                                     W I T N E S S E T H:


    Landlord leases to Tenant and Tenant leases from Landlord those certain
premises outlined in red on Exhibit A (the "Premises") commonly known as 1001
and 1003 Elwell Court, Palo Alto, California, which Landlord and Tenant hereby
agree consists of approximately sixteen thousand two hundred and twenty-three
(16,223) square feet in 1001-1007 Elwell Court, Palo Alto, California (the
"Project"). As used herein the term Project shall mean and include all of the
land described in Exhibit B and all the buildings, improvements, fixtures and
equipment now or hereafter situated on said land.

    Tenant covenants, as a material part of the consideration of this lease, to
perform and observe each and all of the terms, covenants and conditions set
forth below, and this lease is made upon the condition of such performance and
observance.

    1.     USE

           Subject to the restrictions contained in paragraph 6 hereof, Tenant
shall use the Premises for sales, marketing, research and development and
general office and administrative uses and shall not use or permit the Premises
to be used for any other purpose.

    2.     TERM

           (a) The term shall be for seven (7) years (unless sooner terminated
as hereinafter provided) and, subject to paragraphs 2(b) and 3, shall commence
on April 1, 2000 and end on March 31, 2007.

           (b) Tenant acknowledges that the Premises is currently subject to a
lease between Landlord and Acta Technology, Inc. which does not expire until
December 31, 2002. Acta Technology, Inc. intends to vacate the Premises and
relocate to a new space by April 1, 2000 but has not yet executed an early
termination agreement respecting the Premises. Tenant acknowledges that this
lease shall not commence until (1) Landlord has obtained legal possession of the
Premises, which may include a written and fully executed termination agreement
between Landlord and Acta Technology, Inc. regarding same and (2) until Acta
Technology, Inc. vacates the Premises. Landlord shall be under no obligation to
Tenant to expend any legal fees to evict Acta Technology, Inc.

    3.     POSSESSION

           (a) If Landlord for any reason cannot deliver possession of the
Premises to Tenant by the date of commencement set forth in paragraph 2, this
lease shall not be void or voidable, Landlord shall not be liable to Tenant for
any loss or damage on account thereof and Tenant shall not be liable for rent
until Landlord delivers possession of the Premises. If the term commences on a
date other than the date specified in paragraph 2 above, then the parties shall
immediately execute an amendment to this lease stating the actual date of
commencement and the revised expiration date. The expiration date of the term
shall be extended by the same number of days that Tenant's possession of the
Premises was delayed from that set forth in paragraph 2.

           (b) Tenant's inability or failure to take possession of the Premises
when delivery is tendered by Landlord shall not delay the commencement of the
term of this lease or Tenant's obligation to pay rent. Tenant acknowledges that
Landlord shall incur significant expenses upon the execution of this lease, even
if Tenant never takes possession of the Premises, including without limitation
brokerage commissions and fees and legal and other professional fees. Tenant
acknowledges that all of said expenses shall be included in measuring Landlord's
damages should Tenant breach the terms of this lease.

           (c) Termination by Tenant. If Landlord shall not have delivered
possession of the Premises by June 30, 2000, Tenant may, at Tenant's option, by
notice in writing to Landlord within ten (10) days thereafter cancel this lease,
in which event the parties shall be discharged from all obligations hereunder,
provided, however, that if such written notice of Tenant is not received by
Landlord within said ten (10) day period, Tenant's right to cancel this lease
hereunder shall terminate and have no further force and effect.

    4.     MONTHLY RENT

           (a) Basic Rent. Tenant shall pay to Landlord as basic rent for the
Premises, in advance and subject to adjustment as provided in paragraph 5, the
sum of Seventy-Three Thousand and Three and 50/100 Dollars ($73,003.50) on or
before the first day of the first full calendar month of the term and on or
before the first day of each and every successive calendar month. Basic rent for
any partial month shall be payable in advance and shall be prorated at the rate
of 1/30th of the monthly basic rent per day.

           (b) Common Area Charges. In addition to the above basic rent, and as
additional rent, Tenant shall pay to Landlord, subject to adjustments and
reconciliation as provided in paragraph 16 of this lease, the sum of Three
Thousand Four Hundred and Sixty-Three and 00/100 Dollars ($3,463.00) on or
before the first day of the first full calendar month of the term and on the
first day of each and every succeeding calendar month, said sum representing
Tenant's estimated payment of its percentage share of common area charges as
provided for in paragraph 16 of this lease. Payment of common area charges for
any partial month shall be payable in advance and shall be prorated at the rate
of 1/30th of the monthly payment of common area charges per day.

           (c) Manner and Place of Payment. All payments of basic rent and
common area charges shall be paid to Landlord, without deduction or offset, in
lawful money of the United States of America, at the office of Landlord at 360
S. San Antonio Road, Suite 14, Los Altos, California 94022 or to such other
person or place as Landlord may from time to time designate in writing.

           (d) First Month's Rent. Concurrently with Tenant's execution of this
lease, Tenant shall deposit with Landlord, the sum of Seventy-Six Thousand Four
Hundred and Sixty-Six and 50/100 Dollars ($76,466.50), to be applied against the
basic rent and common area charges for the first lease month of the term.
<PAGE>   4

           (e) Security Deposit. Concurrently with Tenant's execution of this
lease, Tenant shall deposit with Landlord the sum of Seventy-Three Thousand and
Three and 50/100 Dollars ($73,003.50), which sum shall be held by Landlord as a
cash security deposit for the faithful performance by Tenant of all of the
terms, covenants and conditions of this lease to be kept and performed by
Tenant. If Tenant defaults with respect to any provision of this lease,
including but not limited to, the provisions relating to the payment of basic
rent and common area charges, Landlord may (but shall not be required to) use,
apply, or retain all or any part of this security deposit for the payment of any
amount which Landlord may spend by reason of Tenant's default or to compensate
Landlord for any other loss or damage which Landlord may suffer by reason of
default. If any portion of said deposit is so used, Tenant shall, within ten
(10) days after written demand therefor, deposit cash with Landlord in the
amount sufficient to restore the security deposit to its original amount;
Tenant's failure to do so shall be a material breach of this lease. Landlord
shall not be required to keep this security deposit separate from its general
funds and Tenant shall not be entitled to interest on such deposit. If Tenant is
not in default at the expiration or termination of this lease, the security
deposit or any balance thereof shall be returned to Tenant after Tenant has
vacated the Premises. In the event of termination of Landlord's interest in this
lease, Landlord shall transfer said deposit to Landlord's successor in interest,
and Tenant agrees that Landlord shall thereupon be released from liability for
the return of such deposit or any accounting therefor.

           (f) Letter Of Credit. In addition to the above cash security deposit,
Tenant shall deliver to Landlord concurrent with Tenant's execution of this
lease an unconditional irrevocable letter of credit in the amount of Eight
Hundred Thousand and 00/100 Dollars ($800,000.00) in favor of Landlord to secure
the faithful performance by Tenant of all of the terms, covenants and conditions
of this lease to be kept and performed by Tenant. Said letter of credit shall be
available by draft at sight, subject only to a receipt by the bank of a
notarized statement from Jean A. McCandless, Jett A. McCandless or Sandra S.
Simons (or if all three are deceased or incompetent then from any of the
trustees of their respective estate planning trusts) stating the amount demanded
as due and owing to Landlord, and shall otherwise be in a form reasonably
satisfactory to Landlord's attorney and drawn upon such U.S. bank licensed to do
business in the state of California as Landlord may reasonably approve in its
sole discretion. Said letter of credit shall by its terms expire not less than
one (1) year from the date issued, provided that unless Tenant deposits with
Landlord a cash security deposit of like amount, the letter of credit shall be
renewed for successive periods of not less than one (1) year each to and
including the date which is ten (10) days after the expiration of the term of
this lease. The bank's written renewal of the letter of credit shall be
delivered to Landlord not less than sixty (60) days prior to the expiration of
such letter of credit. If Landlord does not receive such written renewal at
least sixty (60) days prior to the expiration date of the letter of credit, then
Landlord shall be entitled to make demand for the principal amount of said
letter of credit and, thereafter, hold such funds in accordance with paragraph
4(d) above. Tenant's failure to so deliver, renew (including specifically but
not limited to the delivery to Landlord of such renewal not less than sixty (60)
days prior to the expiration of the letter of credit) and maintain such letter
of credit shall be a material breach of this lease.

           If Tenant defaults in the performance of any provision of this lease
to be performed by Tenant, including without limitation the timely payment of
basic rent and common area charges and other amounts due Landlord, Landlord may
immediately and without further notice resort to said letter of credit (or the
funds received therefrom) and use or apply all or any part of same to compensate
Landlord for any loss or expense occasioned thereby and for the payment of any
amount due Landlord under the terms of this lease. If any portion of said letter
of credit (or the funds received therefrom) is so used as specified above,
Tenant shall, within ten (10) days after written demand therefor, restore the
letter of credit (or the funds received therefrom) to its original amount, and
Tenant's failure to do so shall be a material breach of this lease.

           Landlord's resort to said letter of credit (or use of the funds
received therefrom) shall in no way or manner constitute an acceptance or waiver
of such default by Tenant; nor shall such resort or use terminate, or permit
Tenant to terminate, or constitute a forfeiture of, or be construed as an
election by Landlord to terminate, this lease; nor shall such resort or use
affect Landlord's remedies otherwise available under this lease or at law.

           Notwithstanding the foregoing, the amount of such letter of credit
shall be reduced to Four Hundred Thousand and 00/100 Dollars ($400,000) at the
beginning of the forty-third (43rd) lease month of the term.

    5.     ADJUSTMENT OF BASIC RENT

           The basic rent provided for in paragraph 4 (a) shall be adjusted
periodically and the monthly basic rent for each period shall be as set forth
below:


<TABLE>
                  <S>                              <C>
                  Lease Months   1-12              $73,003.50 per month

                  Lease Months 13-24               $76,653.68 per month

                  Lease Months 25-36               $80,486.36 per month

                  Lease Months 37-48               $84,510.68 per month

                  Lease Months 49-60               $88,736.21 per month

                  Lease Months 61-72               $93,173.02 per month

                  Lease Months 73-84               $97,831.67 per month
</TABLE>


    6.     RESTRICTION ON USE

           Tenant shall not do or permit to be done in or about the Premises or
the Project, nor bring or keep or permit to be brought or kept in or about the
Premises or Project, anything which is prohibited by or will in any way increase
the existing rate of, or otherwise affect, fire or any other insurance covering
the Project or any part thereof, or any of its contents, or will cause a
cancellation of any insurance covering the Project or any part thereof, or any
of its contents. Tenant shall not do or permit to be done anything in or about
the Premises or the Project which will constitute waste or which will in any way
obstruct or interfere with the rights of other tenants, business invitees or
occupants of the Project or injure or annoy them, or use or allow the Premises
to be used for any unlawful purpose, nor shall Tenant cause, maintain or permit
any nuisance in or about the Premises or the Project. No loudspeaker or other
device, system or apparatus which can be heard outside the Premises shall be
used in or at the Premises without the prior written consent of Landlord. Tenant
shall not use the Premises for the preparation, or mixing of




<PAGE>   5

anything that might emit any objectionable odor, noise or light into the
adjoining premises or Common Area. Tenant shall not do anything on the Premises
that will cause damage to the Project and Tenant shall not overload the floor
capacity of the Premises or the Project. No machinery, apparatus or other
appliance shall be used or operated in or on the Premises that will in any
manner injure, vibrate or shake the Premises. Landlord shall be the sole judge,
of whether such odor, noise, light or vibration is such as to violate the
provisions of this paragraph. No waste materials or refuse shall be dumped upon
or permitted to remain upon any part of the Premises or the Project except in
trash containers placed inside exterior enclosures designated for that purpose
by Landlord, or where otherwise designated by Landlord; and no toxic or
hazardous materials shall be disposed of through the plumbing or sewage system.
No materials, supplies, equipment, finished products or semi-finished products,
raw materials or articles of any nature shall be stored or permitted to remain
outside of the building proper. No retail sales shall be made on the Premises
except for e-commerce sales by means of the internet.

    7.     COMPLIANCE WITH LAWS

           Tenant shall, in connection with its use and occupation of the
Premises, at its sole cost and expense, promptly observe and comply with (i) all
laws, statutes, ordinances and governmental rules, regulations and requirements
now or hereafter in effect, (ii) with the requirements of any board of fire
underwriters or other similar body now or hereafter constituted and (iii) with
any direction or occupancy certificate issued pursuant to law by any public
authority; provided, however, that no such failure shall be deemed a breach of
these provisions if Tenant, immediately upon notification, commences to remedy
or rectify said failure. The judgment of any court of competent jurisdiction or
the admission of Tenant in any action against Tenant (whether or not Landlord is
a party thereto) that Tenant has violated any such law, statute, ordinance or
governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. This lease shall remain
in full force and effect notwithstanding any loss of use or other effect on
Tenant's enjoyment of the Premises by reason of any governmental laws, statutes,
ordinances, rules, regulations and requirements now or hereafter in effect.

           Landlord and Tenant hereby acknowledge that the Americans with
Disabilities Act and Title 24 of the Code of California Regulations may affect
Tenant's use and occupancy of the Premises and require Tenant to modify or alter
the design, layout or other physical elements of the interior of the Premises or
provide auxiliary aids and services in connection with its business operations.
Tenant shall, at Tenant's sole cost and expense, comply in all respects with the
requirements of the Americans with Disabilities Act and Title 24 of the Code of
California Regulations as it affects Tenant's use and occupancy of the Premises
throughout the term of the lease, as may be extended, and Tenant acknowledges
and agrees that, notwithstanding any modifications to the Common Area which may
be made by Landlord in order to conform such areas with the requirements of the
Americans with Disabilities Act and Title 24 of the Code of California
Regulations, Landlord makes no representations or warranties regarding the
compliance of the Premises or the Project with the Americans with Disabilities
Act and Title 24 of the Code of California Regulations, nor shall Landlord have
any obligations or liabilities to Tenant to construct any modifications or
alterations to the interior of the Premises in order to comply with the
Americans with Disabilities Act and Title 24 of the Code of California
Regulations.

    8.     ALTERATIONS

           Tenant shall not make or suffer to be made any alteration, addition
or improvement to or of the Premises or any part thereof (collectively referred
to herein as "alterations") without (i) the prior written consent of Landlord,
(ii) a valid building permit issued by the appropriate governmental authority
and (iii) otherwise complying with all applicable laws, regulations and
requirements of governmental agencies having jurisdiction and with the rules,
regulations and requirements of any board of fire underwriters or similar body.
Notwithstanding the foregoing, Tenant may make non-structural alterations
costing in the aggregate less than one thousand dollars ($1,000.00) in any one
year of the term without the prior written consent of Landlord, provided that
such alterations do not materially reduce the marketability of the Premises, and
that Tenant promptly informs Landlord in writing of the nature of the
alterations, the cost thereof and the contractor engaged or proposed to be
engaged to perform such work, and provided further that all such work complies
with clauses (ii) and (iii) above. Any alteration made by Tenant (excluding
moveable furniture and trade fixtures not attached to the Premises) shall at
once become a part of the Premises and belong to Landlord. Without limiting the
foregoing, all heating, lighting, electrical (including all wiring, conduit,
outlets, drops, buss ducts, main and subpanels), air conditioning, partitioning,
drapery and carpet installations made by Tenant, regardless of how attached to
the Premises, together with all other alterations that have become an integral
part of the Project in which the Premises are a part, shall be and become part
of the Premises and belong to Landlord upon installation and shall not be deemed
trade fixtures, and shall remain upon and be surrendered with the Premises at
the termination of the lease.

           Regardless of whether Landlord's consent is required in connection
with the making of any alteration by Tenant, the same shall be made by Tenant at
its sole risk, cost and expense and only after Landlord's written approval of
any contractor or person selected by Tenant for that purpose, and the same shall
be made at such time and in such manner as Landlord may from time to time
designate. Tenant shall, if required by Landlord, secure at Tenant's cost a
completion and lien indemnity bond for such work. Upon the expiration or sooner
termination of the term, Landlord may, at its sole option, require Tenant, at
Tenant's sole cost and expense, to promptly both remove any such alteration made
by Tenant and designated by Landlord to be removed and repair any damage to the
Premises caused by such removal; provided, however, upon Tenant's written
request, Landlord shall inform Tenant at the time of consent to such alteration
whether Landlord shall require Tenant to remove such alteration at the
expiration of the term. Any moveable furniture and equipment or trade fixtures
remaining on the Premises at the expiration or other termination of the term
shall become the property of the Landlord unless promptly removed by Tenant.

           If during the term, and subject to paragraph 7 above, any alteration,
addition or change of the Premises or the Project is required by law,
regulation, ordinance or order of any public or quasi-public authority, Tenant,
at its sole cost and expense, shall promptly make the same. If during the term
any alterations, additions or changes to the Common Area or to the Project in
which the Premises is located is required by law, regulation, ordinance or order
of any public or quasi-public authority, and it is impractical in Landlord's
judgment for the affected tenants to individually make such alterations,
additions or changes, Landlord shall make such alterations, additions or changes
and the cost thereof shall be a common area charge and Tenant shall pay its
percentage share of such cost to Landlord as provided in paragraph 16.

    9.     REPAIR AND MAINTENANCE

           By entry hereunder, Tenant accepts the Premises as being in good and
sanitary order, condition and repair (excepting only "punchlist items"). Except
as expressly provided below, Tenant shall at its sole cost keep and maintain the
entire Premises and every part thereof including, without limitation, the
windows, window frames, plate glass, glazing, truck doors, doors and all door
hardware, the interior walls and partitions, lighting and the




<PAGE>   6

electrical, mechanical, and plumbing systems. Tenant shall also repair and
maintain the heating and air conditioning systems (unless Landlord has elected
to keep and maintain the heating and air conditioning systems as provided below)
which shall include, without limitation, a periodic maintenance agreement with a
reputable and licensed heating and air conditioning service company. If Tenant's
use of the heating and air conditioning systems is limited to normal business
hours (8:00 a.m. to 6:00 p.m.), such agreement shall provide for service at
least as often as every 60 days; if Tenant's use of the heating or air
conditioning systems extends beyond such normal business hours this service
shall be as often as may be required by landlord and in any event such service
shall meet all warranty enforcement requirements of such equipment and comply
with all manufacturer recommended maintenance. Landlord may elect, at its
option, to keep and maintain the heating and air conditioning systems of the
premises and in such event, Tenant shall pay to Landlord upon demand the full
cost of such maintenance.

           Subject to the provisions of paragraph 17, Landlord shall keep and
maintain the roof, structural elements, and exterior walls of the buildings
constituting the Project and Common Area in good order and repair. Tenant waives
all rights under and benefits of California Civil Code Sections 1932(1), 1941,
and 1942 and under any similar law, statute or ordinance now or hereafter in
effect. The cost of the repairs and maintenance which are the obligation of
Landlord hereunder, including without limitation, maintenance contracts and
supplies, materials, equipment and tools used in such repairs and maintenance
shall be a common area charge and Tenant shall pay its percentage share of such
costs to Landlord as provided in paragraph 16; provided, however, that if any
repairs or maintenance is required because of an act or omission of Tenant, or
its agents, employees or invitees, Tenant shall pay to Landlord upon demand the
full cost of such repairs or maintenance.

           As used herein, "punchlist items" shall mean minor repairs to
painting, carpets, walls and other interior improvements to the Premises as
reasonably determined by Tenant and disclosed to Landlord within thirty (30)
days of the date Tenant takes possession of the Premises. Landlord shall repair
all punchlist items subject to the terms of paragraph 16, below. Landlord shall
have no obligation to repair items that are not disclosed to Landlord by Tenant
in writing within thirty (30) days of the date possession of the Premises is
delivered to Tenant.

           Notwithstanding anything to the contrary herein, Landlord shall
deliver the Premises with the roof, air conditioning and heating (HVAC) systems,
lighting and electrical systems, and plumbing system in good working order and
repair as of the commencement of the term.

    10.    LIENS

           Tenant shall keep the Premises and the Project free from any liens
arising out of any work performed, materials furnished or obligations incurred
by Tenant, its agents, employees or contractors. Upon Tenant's receipt of a
preliminary twenty (20) day notice filed by a claimant pursuant to California
Civil Code Section 3097, Tenant shall immediately provide Landlord with a copy
of such notice. Should any such lien be filed against the Project, Tenant shall
give immediate notice of such lien to Landlord. In the event that Tenant shall
not, within ten (10) days following the imposition of such lien, cause the same
to be released of record, Landlord shall have, in addition to all other remedies
provided herein and by law, the right, but no obligation, to cause the same to
be released by such means as it shall deem proper, including payment of the
claim giving rise to such lien. All sums paid by Landlord for such purpose, and
all expenses (including attorneys' fees) incurred by it in connection therewith,
shall be payable to Landlord by Tenant on demand with interest at the rate of
ten percent (10%) per annum or the maximum rate permitted by law, whichever is
less. Landlord shall have the right at all times to post and, keep posted on the
Premises any notices permitted or required by law, or which Landlord shall deem
proper for the protection of Landlord, the Premises and the Project and any
other party having an interest therein, from mechanics' and material men's liens
and like liens. Tenant shall give Landlord at least fifteen (15) days prior
notice of the date of commencement of any construction on the Premises in order
to permit the posting of such notices. In the event Tenant is required to post
an improvement bond with a public agency in connection with any work performed
by Tenant on or to the Premises, Tenant shall include Landlord as an additional
obligee.

    11.    INSURANCE

           Tenant, at its sole cost and expense, shall keep in force during the
term (i) commercial general liability and property damage insurance with a
combined single limit of at least $2,000,000 per occurrence insuring against
personal or bodily injury to or death of persons occurring in, on or about the
Premises or Project and any and all liability of the insured with respect to,
the Premises or arising out of Tenant 's maintenance, use or occupancy of the
Premises and all areas appurtenant thereto, (ii) direct physical loss-special
insurance covering the leasehold improvements in the Premises and all of
Tenant's equipment, trade fixtures, appliances, furniture, furnishings, and
personal property from time to time located in, on or about the Premises, with
coverage in the amount of the full replacement cost thereof, (iii) Worker's
Compensation Insurance as required by law, together with employer's liability
coverage with a limit of not less than $1,000,000 for bodily injury for each
accident and for bodily injury by disease for each employee. Tenant's commercial
general liability and property damage insurance and Tenant's Workers
Compensation Insurance shall be endorsed to provide that said insurance shall
not be canceled or reduced except upon at least thirty (30) days prior written
notice to Landlord and (iv) full replacement cost plate glass insurance.
Further, Tenant's commercial general liability and property damage insurance
shall be primary and shall name Landlord and McCandless Simons Company, Inc.,
and their respective partners, officers, directors and employees and such other
persons or entities as directed from time to time by Landlord as additional
insured for all liability using ISO Bureau Form CG20111185 (or a successor
form); shall contain a severability of interest clause and a cross-liability
endorsement; shall be endorsed to provide that the limits and aggregates apply
per location using ISO Bureau Form CG25041185; and shall be issued by an
insurance company admitted to transact business in the State of California and
rated A+VIII or better in Best's Insurance Reports (or successor report). The
deductibles for all insurance required to be maintained by Tenant hereunder
shall be no more than $5,000 per occurrence. The commercial general liability
insurance carried by Tenant shall specifically insure the performance by Tenant
of the indemnification provisions set forth in paragraph 18 of this lease
provided, however, nothing contained in this paragraph 11 shall be construed to
limit the liability of Tenant under the indemnification provisions set forth in
said paragraph 18. If Landlord or any of the additional insured named on any of
Tenant's insurance, have other insurance which is applicable to the covered loss
on a contributing, excess or contingent basis, the amount of the Tenant's
insurance company's liability under the policy of insurance maintained by Tenant
shall not be reduced by the existence of such other insurance. Any insurance
carried by Landlord or any of the additional insured named on Tenant's insurance
policies shall be excess and non-contributing with the insurance so provided by
Tenant.

           Tenant shall, prior to the commencement of the term, provide Landlord
with a completed Certificate of Insurance, using a form acceptable in Landlord's
reasonable judgment, attaching thereto copies of all endorsements required to be
provided by Tenant under this lease. Tenant agrees to increase the coverage or
otherwise comply with changes in connection with said commercial general
liability, property damage, direct physical loss and Worker's Compensation
Insurance as Landlord or Landlord's lender may from time to time require.



<PAGE>   7

           Landlord shall obtain and keep in force a policy or policies of
insurance covering loss or damage to the Premises and Project, in the amount of
the full replacement value thereof, providing protection against those perils
included within the classification of "all risk" insurance, with increased cost
of reconstruction and contingent liability (including demolition), plus a policy
of rental income insurance in the amount of one hundred percent (100%) of twelve
(12) months' rent (including sums paid as additional rent) and such other
insurance as Landlord or Landlord's lender may from time to time require.
Landlord may, but shall not be obligated to, also obtain flood and/or earthquake
insurance. Landlord shall have no liability to Tenant if Landlord elects not to
obtain flood and/or earthquake insurance. The cost of all such insurance
purchased by Landlord, plus any charges for deferred payment of premiums and the
amount of any deductible incurred upon any covered loss within the Project,
shall be common area charges and Tenant shall pay to Landlord its percentage
share of such costs as provided in paragraph 16.

           Landlord and Tenant hereby mutually waive any and all rights of
recovery against one another for real or personal property loss or damage
occurring to the Premises or the Project, or any part thereof, or to any
personal property therein, from perils insured against under fire and extended
insurance and any other property insurance policies existing for the benefit of
the respective parties so long as such insurance permits waiver of liability and
contains a waiver of subrogation without additional premiums.

           If Tenant does not take out and maintain insurance as required
pursuant to this paragraph 11, Landlord may, but shall not be obligated to, take
out the necessary insurance and pay the premium therefor, and Tenant shall repay
to Landlord promptly on demand, as additional rent, the amount so paid. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
additional rent, any and all reasonable expenses (including attorney fees) and
damages which Landlord may sustain by reason of the failure of Tenant to obtain
and maintain such insurance, it being expressly declared that the expenses and
damages of Landlord shall not be limited to the amount of the premiums thereon.

    12.    UTILITIES AND SERVICE

           Tenant shall pay for all water, gas, light, heat, power, electricity,
telephone, trash pickup, sewer charges and all other services supplied to or
consumed on the Premises. In the event that any service is not separately
metered or billed to the Premises, the cost of such utility service or other
service shall be a common area charge and Tenant shall pay its percentage share
of such cost to Landlord as provided in paragraph 16. In addition, the cost of
all utilities and services furnished by Landlord to the Common Area shall be a
common area charge and Tenant shall pay its percentage share of such cost to
Landlord as provided in paragraph 16.

           If Tenant's use of any such utility or service is materially in
excess of the average furnished to the other tenants of the Project, and such
utility or service is not separately metered, then Tenant shall pay to Landlord
upon demand, as additional rent, the full cost of such excess use, or Landlord
may cause such utility or service to be separately metered, in which case Tenant
shall pay the full cost of such utility or service and reimburse Landlord upon
demand for the cost of installing the separate meter.

           Landlord shall not be liable for, and Tenant shall not be entitled to
any abatement or reduction of rent by reason of, the failure of any person or
entity to furnish any of the foregoing services when such failure is caused by
accident, breakage, repairs, strikes, lockouts or other labor disturbances or
labor disputes of any character, governmental moratoriums, regulations or other
governmental actions, or by any other cause, similar or dissimilar, beyond the
reasonable control of Landlord. In addition, Tenant shall not be relieved from
the performance of any covenant or agreement in this lease because of any such
failure, and no eviction of Tenant shall result from such failure.

    13.    TAXES AND OTHER CHARGES

           All real estate taxes and assessments and other taxes, fees and
charges of every kind or nature, foreseen or unforeseen, which are levied,
assessed or imposed upon Landlord and/or against the Premises, building, Common
Area or Project, or any part thereof by any federal, state, county, regional,
municipal or other governmental or quasi-public authority, together with any
increases therein for any reason, shall be a common area charge and Tenant shall
pay its percentage share of such costs to Landlord as provided in paragraph 16.
By way of illustration and not limitation, "other taxes, fees and charges" as
used herein include any and all taxes payable by Landlord (other than state and
federal personal or corporate income taxes measured by the net income of
Landlord from all sources, and premium taxes), whether or not now customary or
within the contemplation of the parties hereto, (i) upon, allocable to, or
measured by the rent payable hereunder, including, without limitation, any gross
income or excise tax levied by the local, state or federal government with
respect to the receipt of such rent, (ii) upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any part thereof, (iii) upon or
measured by the value of Tenant's personal property or leasehold improvements
located in the Premises, (iv) upon this transaction or any document to which
Tenant is a party creating or transferring an interest or estate in the
Premises, (v) upon or with respect to vehicles , parking or the number of
persons employed in or about the Project, and (vi) any tax, license, franchise
fee or other imposition upon Landlord which is otherwise measured by or based in
whole or in part upon the Project or any portion thereof. If Landlord contests
any such tax, fee or charge, the cost and expense incurred by Landlord thereby
(including, but not limited to, costs of attorneys and experts) shall also be
common area charges and Tenant shall pay its percentage share of such costs to
Landlord as provided in paragraph 16. In the event the Premises and any
improvements installed therein by Tenant or Landlord are valued by the assessor
disproportionately higher than those of other tenants on the building or Project
or in the event alterations or improvements are made to the Premises, Tenant's
percentage share of such taxes, assessments, fees and/or charges shall be
readjusted upward accordingly and Tenant agrees to pay such readjusted share.
Such determination shall be made by Landlord from the respective valuations
assigned in the assessor's work sheet or such other information as may be
reasonably available and Landlord's determination thereof shall be conclusive.

           Tenant agrees to pay, before delinquency, any and all taxes levied or
assessed during the term hereof upon Tenant's equipment, furniture, fixtures and
other personal property located in the Premises, including carpeting and other
property installed by Tenant notwithstanding that such carpeting or other
property has become a part of the Premises. If any of Tenant's personal property
shall be assessed with the Project, Tenant shall pay to Landlord, as additional
rent, the amount attributable to Tenant's personal property within ten (10) days
after receipt of a written statement from Landlord setting forth the amount of
such taxes, assessments and public charges attributable to Tenant's personal
property.

    14.    ENTRY BY LANDLORD

           Landlord reserves, and shall at all reasonable times have, the right
to enter the Premises (i) to inspect the Premises, (ii) to supply services to be
provided by Landlord hereunder, (iii) to show the Premises to prospective




<PAGE>   8

purchasers, lenders or tenants and to put 'for sale' or 'for lease' signs
thereon, (iv) to post notices required or allowed by this lease or by law, (v)
to alter, improve or repair the Premises and any portion of the Project, and
(vi) to erect scaffolding and other necessary structures in or through the
Premises or the Project where reasonably required by the character of the work
to be performed. Notwithstanding the foregoing, and except in the case of
emergency, Landlord shall give Tenant at least twenty-four (24) hours prior
notice of its intent to enter the Premises. Landlord shall not be liable in any
manner for any inconvenience, disturbance, loss of business, nuisance or other
damage arising from Landlord's entry and acts pursuant to this paragraph and
Tenant shall not be entitled to an abatement or reduction of rent if Landlord
exercises any rights presented in this paragraph. For each of the foregoing
purposes, Landlord shall at all times have and retain a key with which to unlock
all of the doors in, on and about the Premises (excluding Tenant's vaults, safes
and similar areas designated in writing by Tenant in advance), and Landlord
shall have the right to use any and all means which Landlord may deem proper to
open said doors in an emergency in order to obtain entry to the Premises. Any
entry by Landlord to the Premises pursuant to this paragraph shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into or
a detainer of the Premises or an eviction, actual or constructive, of Tenant
from the premises or any portion thereof.

    15.    COMMON AREA; PARKING

           Subject to the terms and conditions of this lease and such rules and
regulations as Landlord may from time to time prescribe and so long as such
rules and regulations do not conflict with the terms and conditions of this
lease, Tenant and Tenant's employees and invitees shall, in common with other
occupants of the Project, and their respective employees and invitees and others
entitled to the use thereof, have the non-exclusive right to use the access
roads, parking areas and facilities within the Project provided and designated
by Landlord for the general use and convenience of the occupants of the Project
which areas and facilities shall include, but not be limited to, sidewalks,
parking, refuse, landscape and plaza areas, roofs and building exteriors, which
areas and facilities are referred to herein as "Common Area". This right shall
terminate upon the termination of this lease.

           Landlord reserves the right from time to time to make changes in the
shape, size, location, amount and extent of the Common Area. Landlord shall also
have the right at any time to change the name, number or designation by which
the Project is commonly known. Landlord further reserves the right to promulgate
such rules and regulations relating to the use of the Common Area, and any part
thereof, as Landlord may deem appropriate for the best interests of the
occupants of the Project. The rules and regulations shall be binding upon Tenant
upon delivery of a copy of them to Tenant and Tenant shall abide by them and
cooperate in their observance. Such rules and regulations may be amended by
Landlord from time to time, with or without advance notice.

           Tenant shall have the non-exclusive use of fifty-seven (57) parking
spaces in the Common Area as designated from time to time by Landlord. Landlord
reserves the right at its sole option to assign and label parking spaces, but it
is specifically agreed that Landlord is not responsible for policing any such
parking spaces. Tenant shall not at any time park or permit the parking of
Tenant's trucks or other vehicles, or the trucks or other vehicles of others,
adjacent to loading areas so as to interfere in any way with the use of such
areas; nor shall Tenant at any time park or permit the parking of Tenant's
vehicles or trucks, or other vehicles or trucks of Tenant's suppliers or others,
in any portion of the Common Area not designated by Landlord for such use by
Tenant. Tenant shall not park or permit any inoperative vehicle or equipment to
be parked on any portion of the Common Area. Tenant shall not permit, allow or
place any type of circulars or advertisements on vehicles parking in the Common
Area. Tenant shall not use any Common Area, including the space directly
adjacent to the Premises for sales or displays.

           Landlord shall operate, manage and maintain the Common Area. The
manner in which the Common Area shall be operated, managed and maintained and
the expenditures for such operation, management and maintenance shall be at the
sole discretion of Landlord. The cost of such maintenance, operation and
management of the Common Area, including but not limited to landscaping, repair
of paving, parking lots and sidewalks, repaving, resurfacing, repairs,
replacements, painting, lighting, cleaning, trash removal, roof replacement and
repair, heating, ventilating and air-conditioning repair and replacement, fire
protection and similar items; non-refundable contributions toward one or more
reserves for replacements other than equipment; rental on equipment; security
and exterminator services and salaries and employee benefits (including union
benefits) of on-site and accounting personnel engaged in such maintenance and
operations management, shall be a common area charge and Tenant shall pay to
Landlord its percentage share of such costs as provided in paragraph 16.

    16.    COMMON AREA CHARGES

           Tenant shall pay to Landlord, as additional rent, an amount equal to
fifty and ten one hundredths percent (50.10%) of the total common area charges
as defined below. Tenant's percentage share of common area charges shall be paid
as follows:

           Tenant's estimated monthly payment of common area charges payable by
Tenant during the calendar year in which the term commences is set forth in
paragraph 4(b) of this lease. Prior to the commencement of each succeeding
calendar year of the term (or as soon as practicable thereafter), Landlord shall
deliver to Tenant a written estimate of Tenant's monthly payment of common area
charges. Tenant shall pay, as additional rent, on the first day of each month
during the term in accordance with paragraph 4(b) of the lease, its monthly
share of common area charges as estimated by Landlord. Within one hundred twenty
(120) days of the end of each calendar year and of the termination of this lease
(or as soon as practicable thereafter), Landlord shall deliver to Tenant a
statement of actual common area charges incurred for the preceding year. If such
statement shows that Tenant has paid less than its actual percentage then Tenant
shall on demand pay to Landlord the amount of such deficiency. If Tenant fails
to pay such deficiency due within ten (10) days after demand, Tenant shall pay
an additional ten percent (10%) of the amount due as a penalty. If such
statement shows that Tenant has paid more than its actual percentage share then
Landlord shall, at its option, promptly refund such excess to Tenant or credit
the amount thereof to the common area charge next becoming due from Tenant.
Landlord reserves the right to revise any estimate of common area charges if
actual or projected common area charges show an increase or decrease in excess
of 10% from any earlier estimate for the same period. In such event, Landlord
shall deliver the revised estimate to Tenant, together with an explanation of
the reasons therefor, and Tenant shall revise its payments accordingly.
Landlord's and Tenant's obligation with respect to adjustments at the end of the
term or earlier expiration of this lease shall survive such termination or
expiration.

           "Common area charges," as used in this lease, shall include, but not
be limited to, (i) all items identified in paragraphs 8, 9, 11, 12, 13 and 15 as
being common area charges; (ii) amortization of such capital improvements having
a useful life greater than one year as Landlord may have installed for the
purpose of reducing operating costs and/or to comply with governmental rules and
regulations promulgated after completion of the building (Tenant's share of any
such capital improvement shall equal Tenant's proportionate share of the
fraction of the cost of such capital improvement equal to the remaining term of
the lease over the useful life of such capital improvement); (iii) salaries and
employee benefits (including union benefits) of personnel engaged in the
operation




<PAGE>   9

and maintenance of the Project (or the building in which the Premises are
located) and payroll taxes applicable thereto; (iv) supplies, materials,
equipment and tools used or required in connection with the operation and
maintenance of the Project: (v) licenses, permits and inspection fees; (vi) a
reasonable reserve for repairs and replacement of equipment used in the
maintenance and operation of the Project; (vii) all other operating costs
incurred by Landlord in maintaining and operating the Project; and (viii) an
amount equal to five percent (5%) of the actual expenditures for the aggregate
of all other common area charges as compensation for Landlord's accounting and
processing services.

    17.    DAMAGE BY FIRE; CASUALTY

           In the event the Premises are damaged by any casualty which is fully
covered under an insurance policy required to be maintained by Landlord pursuant
to paragraph 11, Landlord shall be entitled to the use of all insurance proceeds
and shall repair such damage as soon as reasonably possible and this lease shall
continue in full force and effect.

           In the event the Premises are damaged by any casualty not fully
covered under an insurance policy required to be maintained pursuant to
paragraph 11, Landlord may, at Landlord's option, either (i) repair such damage,
at Landlord's expense, as soon as reasonably possible, in which event this lease
shall continue in full force and effect, or (ii) give written notice to Tenant
within thirty (30) days after the date of the occurrence of such damages of
Landlord's intention to cancel and terminate this lease as of the date of the
occurrence of the damages; provided, however, that if such damage is caused by
an act or omission of Tenant or its agent, servants or employees, then Tenant
shall repair such damage promptly at its sole cost and expense. In the event
Landlord elects to terminate this lease pursuant hereto, Tenant shall have the
right within ten (10) days after receipt of the required notice to notify
Landlord in writing of Tenant's intention to repair such damage at Tenant's
expense, without reimbursement from Landlord, in which event this lease shall
continue in full force and effect and Tenant shall proceed to make such repairs
as soon as reasonably possible. If Tenant does not give such notice within the
ten (10) day period, this lease shall be canceled and terminated as of the date
of the occurrence of such damage. Under no circumstances shall Landlord be
required to repair any injury or damage to (by fire or other cause), or to make
any restoration or replacement of, any of Tenant's personal property, trade
fixtures or property leased from third parties, whether or not the same is
attached to the Premises.

           If the Premises are totally destroyed during the term from any cause
(including any destruction required by any authorized public authority), whether
or not covered by the insurance required under paragraph 11, this lease shall
automatically terminate as of the date of such total destruction; provided,
however, that if the Premises can reasonably and lawfully be repaired or
restored within twelve (12) months of the date of destruction to substantially
the condition existing prior to such destruction and if the proceeds of the
insurance payable to the Landlord by reason of such destruction are sufficient
to pay the cost of such repair or restoration, then the insurance proceeds shall
be so applied, Landlord shall promptly repair and restore the Premises and this
lease shall continue, without interruption, in full force and effect. If the
Premises are totally destroyed during the last twelve (12) months of the term,
either Landlord or Tenant may at either parties' option cancel and terminate
this lease as of the date of occurrence of such damage by giving written notice
to the other of its' election to do so within thirty (30) days after the
occurrence of such damage.

           If the Premises are partially or totally destroyed or damaged and
Landlord or Tenant repair them pursuant to this lease, the rent payable
hereunder for the period during which such damage and repair continues shall be
abated only in proportion to the square footage of the Premises rendered
untenantable to Tenant by such damage or destruction. Tenant shall have no claim
against Landlord for any damage, loss or expense suffered by reason of any such
damage, destruction, repair or restoration or Landlord's election under this
paragraph 17 not to repair or restore such damage or destruction. The parties
waive the provisions of California Civil Code sections 1932(2) and 1933(4)
(which provisions permit the termination of a lease upon destruction of the
leased premises), and hereby agree that the provisions of this paragraph 17
shall govern in the event of such destruction.

    18.    INDEMNIFICATION

           Landlord shall not be liable to Tenant and Tenant hereby waives all
claims against Landlord for any injury to or death of any person or damage to or
destruction of property in or about the Premises or the Project (including but
not limited to damage to person or property caused by water leakage of any
character from the roof, walls, ceiling, basement or other portions of the
Project or caused by gas, fire, oil, fumes, electricity, steam or land or
structural movement) by or from any cause whatsoever except the material failure
of Landlord to perform its obligations under this lease where such failure has
persisted for an unreasonable period of time after written notice of such
failure. Without limiting the foregoing, Landlord shall not be liable to Tenant
for any injury to or death of any person or damages to or destruction of
property by reason of, or arising from, any latent defect in the Premises or
Project or the act or negligence of any other tenant of the Project. Tenant
shall immediately notify Landlord of any defect in the Premises or Project.

           Except as to injury to persons or damage to property the principal
cause of which is the material failure by Landlord to observe any of the terms
and conditions of this lease where such failure has persisted for an
unreasonable period of time after written notice of such failure, Tenant shall
hold Landlord harmless from and defend Landlord against any claim, liability,
loss, damage or expense (including attorney fees) arising out of any injury to
or death of any person or damage to or destruction of property occurring in, on
or about the Premises from any cause whatsoever or on account of the use,
condition, occupational safety or occupancy of the Premises. Tenant shall
further hold Landlord harmless from and defend Landlord against any claim,
liability, loss, damage or expense (including reasonable attorney fees) arising
(i) from Tenant's use of the Premises or from the conduct of its business or
from any activity or work done, permitted or suffered by Tenant or its agents or
employees in or about the Premises or Project, (ii) out of the failure of Tenant
to observe or comply with Tenant's obligation to observe and comply with laws or
other requirements as set forth in paragraph 7, (iii) by reason of Tenant's use,
handling, storage, or disposal of toxic or hazardous materials or waste, (iv) by
reason of any labor or service performed for, or materials used by or furnished
to, Tenant or any contractor engaged by Tenant with respect to the Premises, or
(v) from any other act, neglect, fault or omission of Tenant or its agents,
employees or invitees. The provisions of this paragraph 18 shall survive the
expiration or earlier termination of this lease.

    19.    ASSIGNMENT AND SUBLETTING

           Tenant shall not voluntarily assign, encumber or otherwise transfer
its interest in this lease or in the Premises, or sublease all or any part of
the Premises, or allow any other person, concessionaire or entity to occupy or
use all or any part of the Premises, without first obtaining Landlord's written
consent (which consent shall not be unreasonably withheld) and otherwise
complying with the requirements of this paragraph 19. Any assignment,
encumbrance or sublease without Landlord's consent, shall constitute a default.




<PAGE>   10

           If Tenant desires to sublet or assign all or any portion of the
Premises, Tenant shall give Landlord written notice thereof, specifying the
projected commencement date of the proposed sublet or assignment (which date
shall be not less than ten (10) business days or more than one-hundred and
twenty (120) calendar days after the date of such notice), the portions of the
Premises proposed to be sublet or assigned, and the identity of the proposed
assignee or subtenant. Tenant shall further provide Landlord with such other
information concerning the proposed assignee or subtenant as requested by
Landlord. Any proposed assignee or sublessee must agree to assume and agree to
perform all the covenants and conditions of Tenant under this lease. In the case
of any proposed assignment, or in the case of a proposed sublet of fifty percent
(50%) or more of the Premises at a time when Tenant has not occupied the
Premises, or if the proposed sublet is for fifty percent (50%) or more of the
Premises for a sublet term ending within the last twelve (12) months of the term
of this lease, Landlord shall have the right, exercisable by written notice to
be delivered to Tenant within thirty (30) days of receipt of Tenant's notice, to
terminate this lease effective as of the date specified in Tenant's notice as
the proposed commencement date of the assignment or sublease. If Landlord does
not elect to terminate this lease and if Landlord consents in writing to the
proposed assignment or sublet (regardless of whether Landlord had a termination
right), Tenant shall be free to assign or sublet all or a portion of the
Premises subject to the following conditions: (i) any sublease shall be on the
same terms set forth in the notice given to Landlord; (ii) no sublease shall be
valid and no subtenant shall take possession of the sublet premises until an
executed counterpart of such sublease has been delivered to Landlord: (iii) no
subtenant shall have a further right to sublet without Landlord's written
consent (which shall not be unreasonably withheld) and unless such subtenant
agrees in writing to comply with all the terms and conditions of this lease
(including, but not limited to, the provisions of this paragraph 19) and
executes a written sublease agreement in a form satisfactory to Landlord; (iv)
fifty percent (50%) of any sums or other economic consideration received by
Tenant as a result of such assignment or sublet (except rental or other payments
received which are attributable to the amortization over the term of this lease
of the cost of leasehold improvements constructed for such assignees or
subtenant, and brokerage fees) whether denominated rentals or otherwise, which
exceed, in the aggregate, the total sums which Tenant is obligated to pay
Landlord under this lease (prorated to reflect obligations allocable to that
portion of the Premises subject to such sublease), shall be payable to Landlord
as additional rent under this lease without affecting or reducing any other
obligation of Tenant hereunder; and (v) no sublet or assignment shall release
Tenant of Tenant's obligation or alter the primary liability of Tenant to pay
the rent and to perform all other obligations to be performed by Tenant
hereunder. Tenant shall pay to Landlord promptly upon demand as additional rent,
Landlord's actual attorneys' fees and other costs incurred for reviewing,
processing or documenting any requested assignment or sublease, whether or not
Landlord's consent is granted.

           If Tenant is a partnership, a withdrawal or change, voluntary or
involuntary or by operation of law, of any general partner or the dissolution of
the partnership shall be deemed an assignment of this lease subject to all the
conditions of this paragraph 19. If Tenant is a corporation any dissolution,
merger, consolidation or other reorganization of Tenant or the sale or other
transfer of a controlling percentage of the capital stock of Tenant or the sale
of more than fifty percent (50%) of the value of Tenant's assets shall be an
assignment of this lease subject to all the conditions of this paragraph 19. The
term "controlling percentage" means the ownership of, and the right to vote,
stock possessing more than 50% of the total combined voting power of all classes
of Tenant's capital stock issued, outstanding and entitled to vote. This
paragraph shall not apply if Tenant is a corporation the stock of which is
traded through an exchange.

           The acceptance of rent by Landlord from any other person shall not be
deemed to be a waiver by Landlord of any provision hereof. Consent to one
assignment or sublet shall not be deemed consent to any subsequent assignment or
sublet. In the event of default by any assignee of Tenant or any successor of
Tenant in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
such assignee or successor. Landlord may consent to subsequent assignments or
sublets of this lease or amendments or modifications to this lease with
assignees of Tenant, without notifying Tenant, or any successor of Tenant, and
without obtaining its or their consent thereto and such action shall not relieve
Tenant of liability under this lease.

           No interest of Tenant in this lease shall be assignable by operation
of law (including, without limitation, the transfer of this lease by testacy or
intestacy). Each of the following acts shall be considered an involuntary
assignment: (i) if Tenant is or becomes bankrupt or insolvent, makes an
assignment for the benefit of creditors or institutes a proceeding under the
Bankruptcy Act in which Tenant is the bankrupt; or, if Tenant is a partnership
or consists of more than one person or entity, if any partner of the partnership
or other person or entity is or becomes bankrupt or insolvent, or makes an
assignment for the benefit of creditors; (ii) if a writ of attachment or
execution is levied on this lease; or (iii) if, in any proceeding or action to
which Tenant is a party, a receiver is appointed with authority to take
possession of the Premises. An involuntary assignment shall constitute a default
by Tenant and Landlord shall have the right to elect to terminate this lease, in
which case this lease shall not be treated as an asset of Tenant.

           Tenant immediately and irrevocably assigns to Landlord, as security
for Tenant's obligations under this lease, all rent from any subletting of all
or a part of the Premises as permitted by this lease, and Landlord, as assignee
and as attorney-in fact for Tenant, or a receiver of Tenant appointed on
Landlord's application, may collect such rent and apply it toward Tenant's
obligations under this lease; except that, until the occurrence of an act or
default by Tenant, Tenant shall have the right to collect such rent, subject to
promptly forwarding to Landlord any portion thereof to which Landlord is
entitled pursuant to this paragraph 19.

           Notwithstanding the above requirement that Tenant obtain the consent
of Landlord prior to any assignment or sublet, Tenant may, without obtaining the
prior consent of Landlord, assign or sublease the whole or any part of the
Premises to any corporation or other entity which is wholly owned by Tenant or
of which Tenant is a wholly owned subsidiary, or which is wholly owned by either
of the foregoing or which merges with Tenant provided that (i) Tenant shall give
written notice thereof to Landlord in the manner required for other assignments
or subleases by this paragraph 19; (ii) Tenant shall continue to be fully
obligated under this lease; (iii) any such assignee or sublessee shall expressly
assume and agree to perform all of the terms and conditions of this lease to be
performed by Tenant; and (iv) any such assignment of sublet shall be subject to
all other terms and conditions of this paragraph 19 pertaining to assignments
and/or sublets (excepting only the requirement concerning prior written consent
of Landlord).

    20.    DEFAULT

           The occurrence of any of the following shall constitute a default by
Tenant: (i) failure of Tenant to pay any rent or other sum payable hereunder
within three (3) days of when due; (ii) abandonment of the Premises (Tenant's
failure to occupy and conduct business in the Premises for fourteen (14)
consecutive days shall be deemed an abandonment), provided, however, if Tenant
gives prior written notice to Landlord of its intention not to so occupy the
Premises, reaffirms and continues to meet its obligations under this lease,
including, but not limited to




<PAGE>   11

the payment of basic rent, common area charges and all other sums due hereunder,
provides adequate security for the Premises and otherwise continues to perform
each and every obligation to be performed by Tenant hereunder, then the failure
to occupy and conduct business on the Premises for less than six (6) months
shall not constitute an abandonment; or (iii) failure of Tenant to perform any
other term, covenant or condition of this lease if the failure to perform is not
cured within thirty (30) days after notice thereof has been given to Tenant
(provided that if such default cannot reasonably be cured within thirty (30)
days, Tenant shall not be in default if Tenant commences to cure such failure to
perform within the thirty (30) day period and diligently and in good faith
continues to cure the failure to perform). The notice referred to in clause
(iii) above shall specify the failure to perform and the applicable lease
provision and shall demand that Tenant perform the provisions of this lease
within the applicable period of time. No notice shall be deemed a forfeiture or
termination of this lease unless Landlord so elects in the notice. No notice
shall be required in the event of abandonment or vacation of the Premises.

           In addition to the above, the occurrence of any of the following
events shall also constitute a default by Tenant: (i) Tenant fails to pay its
debts as they become due or admits in writing its inability to pay its debts, or
makes a general assignment for the benefit of creditors (for purposes of
determining whether Tenant is not paying its debts as they become due, a debt
shall be deemed overdue upon the earliest to occur of the following: thirty (30)
days from the date a statement therefor has been rendered; the date on which any
action or proceeding therefor is commenced; or the date on which a formal notice
of default or demand has been sent); or (ii) any financial statements given to
Landlord by Tenant, any assignee of Tenant, subtenant of Tenant, any guarantor
of Tenant, or successor in interest of Tenant (including, without limitation,
any schedule of Tenant's aged accounts payable) are materially false. At any
time during the term of this lease Landlord, at Landlord's option, shall have
the right to receive from Tenant upon Landlord's request, a current annual
balance sheet for Landlord's review. If the balance sheet shows a negative net
worth, Landlord may terminate this lease by giving Tenant sixty (60) days prior
notice.

           In the event of a default by Tenant, then Landlord, in addition to
any other rights and remedies of Landlord at law or in equity, shall have the
right either to terminate Tenant's right to possession of the Premises (and
thereby terminate this lease) or, from time to time and without termination of
this lease, to relet the premises or any part thereof for the account and in the
name of Tenant for such term and on such terms and conditions as Landlord in its
sole discretion may deem advisable, with the right to make alterations and
repairs to the Premises.

           Should Landlord elect to keep this lease in full force and effect,
Landlord shall have the right to enforce all of Landlord's rights and remedies
under this lease, including but not limited to the right to recover and to relet
the Premises. If Landlord relets the Premises, then Tenant shall pay to
Landlord, as soon as ascertained, the costs and expenses incurred by Landlord in
such reletting and in making alterations and repairs. Rentals received by
Landlord from such reletting shall be applied (i) to the payment of any
indebtedness due hereunder, other than basic rent and common area charges, from
Tenant to Landlord; (ii) to the payment of the cost of any repairs necessary to
return the Premises to good condition normal wear and tear excepted, including
the cost of alterations and the cost of storing any of Tenant's property left on
the Premises at the time of reletting; and (iii) to the payment of basic rent or
common area charges due and unpaid hereunder. The residue, if any, shall be held
by Landlord and applied in payment of future rent or damages in the event of
termination as the same may become due and payable hereunder and the balance, if
any at the end of the term of this lease, shall be paid to Tenant. Should the
basic rent and common area charges received from time to time from such
reletting during any month be less than that agreed to be paid during that month
by Tenant hereunder, Tenant shall pay such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. No such reletting of the
Premises by Landlord shall be construed as an election on its part to terminate
this lease unless a notice of such intention is given to Tenant or unless the
termination hereof is decreed by a court of competent jurisdiction.
Notwithstanding any such reletting without termination, Landlord may at any time
thereafter elect to terminate this lease for such previous breach, provided it
has not been cured. Landlord shall have the remedy described in California Civil
Code section 1951.4 (Landlord may continue the lease in effect after Tenant's
breach and abandonment and recover as rent as it becomes due, if Tenant has the
right to sublet or assign, subject only to reasonable limitations).

           Should Landlord at any time terminate this lease for any breach, in
addition to any other remedy it may have, it shall have the immediate right of
entry and may remove all persons and property from the Premises and shall have
all the rights and remedies of a landlord provided by California Civil Code
Section 1951.2 or any successor code section. Upon such termination, in addition
to all its other rights and remedies, Landlord shall be entitled to recover from
Tenant all damages it may incur by reason of such breach, including the cost of
recovering the Premises and including (i) the worth at the time of award of the
unpaid rent which had been earned at the time of termination; (ii) the worth at
the time of award of the amount by which the unpaid rent which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided; (iii) the
worth at the time of the award of the amount by which the unpaid rent for the
balance of the term after the time of award exceeds the amount of such rental
loss that Tenant proves could be reasonably avoided; and (iv) any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this lease or which in the
ordinary course of events would be likely to result therefrom. The "worth at the
time of award of the amounts referred to in (i) and (ii) above is computed by
allowing interest at the rate of twelve percent (12%) per annum or the maximum
rate permitted by law, whichever is less. The "worth at the time of award of the
amount referred to in (iii) above shall be computed by discounting such amount
at the discount rate of the federal reserve bank of San Francisco at the time of
award plus one percent (1%). Property removed from the Premises may be stored in
a public or private warehouse or elsewhere at the sole cost and expense of
Tenant. In the event that Tenant shall not immediately pay the cost of storage
of such property after the same has been stored for a period of thirty (30) days
or more, Landlord may sell any or all thereof at a public or private sale in
such manner and at such times and places that Landlord, in its sole discretion,
may deem proper, without notice to or demand upon Tenant.

    21.    LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT

           Landlord, at any time after Tenant commits a default, may, but shall
not be obligated to, cure the default at Tenant's cost. If Landlord at any time,
by reason of Tenant's default, pays any sum or does any act that requires the
payment of any sum, the sum paid by Landlord shall be due immediately from
Tenant to Landlord and shall bear interest at the rate of twelve percent (12%)
per annum or the maximum rate permitted by law, whichever is less, from the date
the sum is paid by Landlord until Landlord is reimbursed by Tenant. Amounts due
Landlord hereunder shall be additional rent.

    22.    EMINENT DOMAIN

           If all or any part of the Premises shall be taken by any public or
quasi-public authority under the power of eminent domain or conveyance in lieu
thereof, this lease shall terminate as to any portion of the Premises so taken
or conveyed on the date when title vests in the condemnor, and Landlord shall be
entitled to any and all payments, income, rent, award or any interest therein
whatsoever which may be paid or made in connection with




<PAGE>   12

such taking or conveyance. Tenant shall have no claim against Landlord or
otherwise for the value of any unexpired term of this lease. Notwithstanding the
foregoing, Tenant shall be entitled to any compensation for depreciation to and
cost of removal of Tenant's equipment and fixtures and any compensation for its
relocation expenses necessitated by such taking, but in each case only to the
extent the condemning authority makes a separate award therefor or specifically
identifies a portion of the award as being therefor. Each party waives the
provisions of Section 1265.130 of the California Code of Civil Procedure (which
section allows either party to petition the Superior Court to terminate this
lease in the event of a partial taking of the Premises).

           If any action or proceeding is commenced for such taking of the
Premises or any portion thereof or of any other space in the Project, or if
Landlord is advised in writing by any entity or body having the right or power
of condemnation of its intention to condemn the Premises or any portion thereof
or of any other space in the Project, and Landlord shall decide to discontinue
the use and operation of the Project or decide to demolish, alter or rebuild the
Project, then Landlord shall have the right to terminate this lease by giving
Tenant written notice thereof within sixty (60) days of the earlier of the date
of Landlord's receipt of such notice of intention to condemn or the commencement
of said action or proceeding. Such termination shall be effective as of the last
day of the calendar month next following the month in which such notice is given
or the date on which title shall vest in the condemnor, whichever occurs first.
In the event of a partial taking, or conveyance in lieu thereof, of the Premises
and twenty-five percent (25%) or more of the number of square feet in the
Premises are taken then Tenant may terminate this lease. Any election by Tenant
to so terminate shall be by written notice given to Landlord within sixty (60)
days from the date of such taking or conveyance and shall be effective on the
last day of the calendar month next following the month in which such notice is
given or the date on which title shall vest in the condemnor, whichever occurs
first.

           If a portion of the Premises is taken by power of eminent domain or
conveyance in lieu thereof and neither Landlord nor Tenant terminates this lease
as provided above, then this lease shall continue in full force and effect as to
the part of the Premises not so taken or conveyed and all payments of rent shall
be apportioned as of the date of such taking or conveyance so that thereafter
the amounts to be paid by Tenant shall be in the ratio that the area of the
portion of the Premises not so taken bears to the total area of the Premises
prior to such taking.

    23.    NOTICE AND COVENANT TO SURRENDER

           On the last day of the term or on the effective date of any earlier
termination, Tenant shall surrender to Landlord the Premises and all of Tenant's
improvements and alterations in their condition existing as of the commencement
of the term (normal wear and tear excepted), with all originally painted
interior walls washed or repainted if marked or damaged, interior vinyl covered
walls cleaned and repaired or replaced if marked or damaged, all carpets
shampooed and cleaned, the air conditioning and heating system serviced and
repaired by a reputable and licensed service firm (unless Landlord has elected
to maintain such system pursuant to paragraph 9) and all floors cleaned and
waxed; all to the reasonable satisfaction of Landlord, Tenant shall remove all
of Tenant's personal property and trade fixtures, together with improvements or
alterations that Tenant is obligated to remove pursuant to the provisions of
paragraph 8, from the Premises, and all such property not removed shall be
deemed abandoned.

           If the Premises are not surrendered as required in this paragraph,
Tenant shall indemnify Landlord against all loss, liability and expense
(including but not limited to, attorney fees) resulting from the failure by
Tenant in so surrendering the Premises, including, without limitation, any
claims made by any succeeding tenants. It is agreed between Landlord and Tenant
that the provisions of this paragraph shall survive termination of this lease.

    24.    TENANT'S QUITCLAIM

           At the expiration or earlier termination of this lease, Tenant shall
execute, acknowledge and deliver to Landlord, within ten (10) days after written
demand from Landlord to Tenant, any quitclaim deed or other document required to
remove the cloud or encumbrance created by this lease from the real property of
which the Premises are a part. This obligation shall survive said expiration or
termination.

    25.    HOLDING OVER

           Any holding over after the expiration or termination of this lease
with the written consent of Landlord shall be construed to be a tenancy from
month to month at one hundred and fifty percent (150%) the monthly rent as
adjusted, in effect on the date of such expiration or termination. All
provisions of this lease, except those pertaining to the term and any option to
extend, shall apply to the month to month tenancy. The provisions of this
paragraph are in addition to, and do not affect, Landlord's right of reentry or
other rights hereunder or provided by law.

           If Tenant shall retain possession of the Premises or any part thereof
without Landlord's consent following the expiration or sooner termination of
this lease for any reason, then Tenant shall pay to Landlord for each day of
such retention double the amount of the daily rental in effect during the last
month prior to the date of such expiration or termination. Tenant shall also
indemnify and hold Landlord harmless from any loss, liability and expense
(including, but not limited to, attorneys fees) resulting from delay by Tenant
in surrendering the Premises, including without limitation any claims made by
any succeeding tenant founded on such delay. Acceptance of rent by Landlord
following expiration or termination shall not constitute a renewal of this
lease, and nothing contained in this paragraph shall waive Landlord's right to
re-entry or any other right. Tenant shall be only a Tenant at sufferance,
whether or not Landlord accepts any rent from Tenant, while Tenant is holding
over without Landlord's written consent.

    26.    SUBORDINATION

           In the event Landlord's title or leasehold interest is now or
hereafter encumbered in order to secure a loan to Landlord, Tenant shall, at the
request of Landlord or the lender, execute in writing an agreement subordinating
its rights under this lease to the lien of such encumbrance, or, if so
requested, agreeing that the lien of lender's encumbrance shall be or remain
subject and subordinate to the rights of Tenant under this lease. Tenant hereby
irrevocably appoints Landlord the attorney-in-fact of Tenant to execute, deliver
and record any such instrument or instruments for and in the name and on behalf
of Tenant. Notwithstanding any such subordination, Tenant's possession under
this lease shall not be disturbed if Tenant is not in default and so long as
Tenant shall pay all amounts due hereunder and otherwise observe and perform all
provisions of this lease. In addition, if in connection with any such loan the
lender shall request reasonable modifications of this lease as a condition to
such financing, Tenant will not unreasonably withhold, delay or defer its
consent thereof, provided that such modifications do not increase the
obligations of Tenant hereunder or materially adversely affect the leasehold
interest hereby created or Tenant's rights hereunder.




<PAGE>   13

           Within ten (10) days after written request from Landlord, Tenant
shall deliver to Landlord such financial statements as are reasonably required
by Landlord or Landlord's lender to verify the net worth of Tenant. In addition,
Tenant shall deliver to Landlord's lender any financial statements required by
such holder to facilitate the financing or refinancing of Landlord's interest in
the Project. Tenant represents and warrants 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.

    27.    CERTIFICATE OF ESTOPPEL

           Each party shall, within five (5) calendar days after request
therefor, execute and deliver to the other party, in recordable form, a
certificate stating that the lease is unmodified and in full force and effect,
or in full force and effect as modified and stating the modifications. The
certificate shall also state the amount of the monthly rent, the date to which
monthly rent has been paid in advance, the amount of the security deposit and/or
prepaid monthly rent, and, if the request is made by Landlord, shall include
such other items as Landlord or Landlord's lender may reasonably request.
Failure to deliver such certificate within such time shall constitute a
conclusive acknowledgment by the party failing to deliver the certificate that
the lease is in full force and effect and has not been modified except as may be
represented by the party requesting the Certificate. Any such Certificate
requested by Landlord may be conclusively relied upon by any prospective
purchaser or encumbrance of the Premises or Project. Further, within five (5)
calendar days following written request made from time to time by Landlord,
Tenant shall furnish to Landlord current financial statements of Tenant.

    28.    SALE BY LANDLORD

           In the event the original Landlord hereunder, or any successor owner
of the Project or Premises, shall sell or convey the Project or Premises, all
liabilities and obligations on the part of the original Landlord, or such
successor owner, under this lease accruing thereafter shall terminate, and
thereupon all such liabilities and obligations shall be binding upon the new
owner. Tenant agrees to attorn to such new owner and to look solely to such new
owner for performance of any and all such liabilities and obligations.

    29.    ATTORNMENT TO LENDER OR THIRD PARTY

           In the event the interest of Landlord in the land and buildings in
which the Premises are located (whether such interest of Landlord is a fee title
interest or a leasehold interest) is encumbered by deed of trust, and such
interest is acquired by a lender or any other third party through judicial
foreclosure or by exercise of a power of sale at private trustee's foreclosure
sale, Tenant hereby agrees to release Landlord of any obligation arising on or
after any such foreclosure sale and to attorn to the purchaser at any such
foreclosure sale and to recognize such purchaser as the Landlord under this
lease.

    30.    DEFAULT BY LANDLORD

           Landlord shall not be in default unless Landlord fails to perform
obligations required of Landlord within a reasonable time but in no event
earlier than thirty (30) days after written notice by Tenant to Landlord and to
the holder of any first mortgage or deed of trust covering the Premises
specifying wherein Landlord has failed to perform such obligations; provided,
however, that if the nature of Landlord's obligations is such that more than
thirty (30) days are required for performance, then Landlord shall not be in
default if Landlord commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion.

           If Landlord is in default of this lease, Tenant's sole remedy shall
be to institute suit against Landlord in a court of competent jurisdiction, and
Tenant shall have no right to offset any sums expended by Tenant as a result of
Landlord's default against future rent and other sums due and payable pursuant
to this lease. If Landlord is in default of this lease, and as a consequence
Tenant recovers a money judgment against Landlord, the judgment shall be
satisfied only out of the proceeds of sale received on execution of the judgment
and levy against the right, title and interest of Landlord in the Project of
which the Premises are a part, and out of rent or other income from such real
property receivable by Landlord or out of the consideration received by Landlord
from the sale or other disposition of all or any part of Landlord's right, title
and interest in the Project of which the Premises are a part. Neither Landlord
nor any of the partners comprising the partnership designated as Landlord shall
be personally liable for any deficiency.

    31.    CONSTRUCTION CHANGES

           It is understood that the description of the Premises and the
location of ductwork, plumbing and other facilities therein are subject to such
changes as Landlord or Landlord's architect determines to be desirable in the
course of construction of the Premises and/or the improvements constructed or
being constructed therein and no such changes or any changes in plans for any
other portions of the Project, shall affect this lease or entitle Tenant to any
reduction of rent hereunder or result in any liability of Landlord to Tenant.

    32.    MEASUREMENT OF PREMISES

           Tenant understands and agrees that any reference to square footage of
the Premises is approximate only and includes all interior partitions, columns
and exterior walls, and one-half of the partitions separating the Premises from
the rest of the Project, Tenant's proportionate share of the Common Area and, if
applicable, covered areas immediately outside the entry doors or loading docks.
Tenant waives any claim against Landlord regarding the accuracy of any such
measurement and agrees that there shall not be any adjustment in basic rent or
common area charges or other amounts payable hereunder by reason of inaccuracies
in such measurement.

    33.    ATTORNEY FEES

           If either party commences an action against the other party arising
out of or in connection with this lease, the prevailing party shall be entitled
to have and recover from the losing party all expenses of litigation, including,
without limitation, travel expenses, reasonable attorney fees, expert witness
fees, trial and appellate court costs, and deposition and transcript expenses.
If either party becomes a party to any litigation concerning this lease, or
concerning the Premises or the Project, by reason of any act or omission of the
other party or its authorized representatives, the party that causes the other
party to become involved in the litigation shall be liable to the other party
for all expenses of litigation reasonably incurred, including, without
limitation, travel expenses, attorney fees, expert witness fees, trial and
appellate court costs, and deposition and transcript expenses.

    34.    SURRENDER




<PAGE>   14

           The voluntary or other surrender of this lease or the Premises by
Tenant, or a mutual cancellation of this lease, shall not work a merger, and at
the option of Landlord shall either terminate all or any existing subleases or
subtenancies or operate as an assignment to Landlord of all or any such
subleases or subtenancies.

    35.    WAIVER

           No delay or omission in the exercise of any right or remedy of either
party on any default by the other party shall impair such right or remedy or be
construed as a waiver. The receipt and acceptance by Landlord of delinquent rent
or other payments shall not constitute a waiver of any other default and
acceptance of partial payments shall not be construed as a waiver of the balance
of such payment due. No act or conduct of Landlord, including, without
limitation, the acceptance of keys to the Premises, shall constitute an
acceptance of the surrender of the Premises by Tenant before the expiration of
the term. Only a written notice from Landlord to Tenant shall constitute
acceptance of the surrender of the Premises and accomplish a termination of this
lease. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by Tenant.
Any waiver by Landlord of any default must be in writing and shall not be a
waiver of any other default concerning the same or any other provision of this
lease.

    36.    EASEMENTS; AIRSPACE RIGHTS

           Landlord reserves the right to alter the boundaries of the Project
and grant easements and dedicate for public use portions of the Project without
Tenant's consent, provided that no such grant or dedication shall interfere with
Tenant's use of the Premises or otherwise cause Tenant to incur cost or expense.
From time to time, and upon Landlord's demand, Tenant shall execute, acknowledge
and deliver to Landlord, in accordance with Landlord's instructions, any and all
documents, instruments, maps or plats necessary to effectuate Tenant's covenants
hereunder.

           This lease confers no rights either with regard to the subsurface of
or airspace above the land on which the Project is located or with regard to
airspace above the building of which the Premises are a part. Tenant agrees that
no diminution or shutting off of light or view by a structure which is or may be
erected (whether or not by Landlord) on property adjacent to the building of
which the Premises are a part or to property adjacent thereto, shall in any way
affect this lease, or entitle Tenant to any reduction of rent, or result in any
liability of Landlord to Tenant.

    37.    RULES AND REGULATIONS

           Landlord shall have the right from time to time to promulgate rules
and regulations for the safety, care and cleanliness of the Premises, the
Project and the Common Area, or for the preservation of good order. On delivery
of a copy of such rules and regulations to Tenant, Tenant shall comply with the
rules and regulations, and a violation of any of them shall constitute a default
by Tenant under this lease. If there is a conflict between the rules and
regulations and any of the provisions of this lease, the provisions of this
lease shall prevail. Such rules and regulations may be amended by Landlord from
time to time with or without advance notice.

    38.    NOTICES

           All notices, demands, requests, consents and other communications
which may be given or are required to be given by either party to the other
shall be in writing and shall be sufficiently made and delivered if personally
served or if sent by United States first class mail, postage prepaid. All such
communications from Landlord to Tenant shall be addressed to Tenant at the
Premises. All such communications by Tenant to Landlord shall be sent to
Landlord at its offices at 360 S. San Antonio Road, Suite 14, Los Altos,
California 94022. Either party may change its address by notifying the other of
such change. Each such communication shall be deemed received on the date of the
personal service or mailing thereof in the manner herein provided, as the case
may be.

    39.    NAME

           Tenant shall not use the name of the Project for any purpose, other
than as the address of the business conducted by Tenant in the Premises, without
the prior written consent of Landlord.

    40.    GOVERNING LAW; SEVERABILITY

           This lease shall in all respects be governed by and construed in
accordance with the laws of the State of California. If any provision of this
lease shall be held or rendered invalid, unenforceable or ineffective for any
reason whatsoever, all other provisions hereof shall be and remain in full force
and effect.

    41.    DEFINITIONS

           As used in this lease, the following words and phrases shall have the
following meanings:

           Additional Rent: any amount described in paragraph 53, below.

           Authorized representative: any of officer, agent, employee or
independent contractor retained or employed by either party, acting within
authority given him by that party.

           Encumbrance: any deed of trust, mortgage or other written security
device or agreement affecting the Premises or the Project that constitutes
security for the payment of a debt or performance of an obligation, and the note
or obligation secured by such deed of trust, mortgage or other written security
device or agreement.

           Lease month: the period of time determined by reference to the day of
the month in which the term commences and continuing to one day short of the
same numbered day in the next succeeding month; e.g., the tenth day of one month
to and including the ninth day in the next succeeding month.

           Lender: the beneficiary, mortgagee or other holder of an encumbrance,
as defined above.

           Lien: a charge imposed on the Premises by someone other than
Landlord, by which the Premises are made security for the performance of an act.
Most of the liens referred to in this lease are mechanic's liens.

           Maintenance: repairs, replacement, repainting and cleaning.




<PAGE>   15

           Monthly Rent: the sum of the monthly payments of basic rent and
common area charges.

           Person: one or more human beings, or legal entities or other
artificial persons, including, without limitation, partnerships, corporations,
trusts, estates, associations and any combination of human being and legal
entities.

           Provision: any term, agreement, covenant, condition, clause,
qualification, restriction, reservation or other stipulation in the lease that
defines or otherwise controls, establishes or limits the performance required or
permitted by either party.

           Punchlist Items: minor repairs to painting, carpets, walls and other
interior improvements as described in paragraph 9, above.

           Rent: basic rent, common area charges, additional rent, and all other
amounts payable by Tenant to Landlord required by this lease or arising by
subsequent actions of the parties made pursuant to this lease.

    Words used in any gender include other genders. If there be more than one
Tenant, the obligations of Tenant hereunder are joint and several. All
provisions whether covenants or conditions, on the part of Tenant shall be
deemed to be both covenants and conditions. The paragraph headings are for
convenience of reference only and shall have no effect upon the construction or
interpretation of any provision hereof.

    42.    TIME

           Time is of the essence of this lease and of each and all of its
provisions.

    43.    EXAMINATION OF LEASE

           Submission of this lease for examination or signature by Tenant does
not constitute a reservation or option for a lease, and this lease is not
effective until its execution and delivery by both Landlord and Tenant.

    44.    INTEREST ON PAST DUE OBLIGATIONS; LATE CHARGE

           Any amount due from Tenant to Landlord hereunder which is not paid
within thirty (30) days of the date due shall bear interest at the rate of ten
percent (10%) per annum from when due until paid, unless otherwise specifically
provided herein, but the payment of such interest shall not excuse or cure any
default by Tenant under this lease. In addition, Tenant acknowledges that late
payment by Tenant to Landlord of basic rent or common area charges or of any
other amount due Landlord from Tenant, will cause Landlord to incur costs not
contemplated by this lease, the exact amount of such costs being extremely
difficult and impractical to fix. Such costs include, without limitation,
processing and accounting charges, and late charges that may be imposed on
Landlord, e.g., by the terms of any encumbrance and note secured by any
encumbrance covering the Premises. Therefore, if any such payment due from
Tenant is not received by Landlord within five (5) days of the date due (without
the requirement of providing Tenant notice), Tenant shall pay to Landlord an
additional sum of five percent (5%) of the overdue payment as a late charge. The
parties agree that this late charge represents a fair and reasonable estimate of
the costs that Landlord will incur by reason of late payment by Tenant.
Acceptance of any late charge shall not constitute a waiver of Tenant's default
with respect to the overdue amount, nor prevent Landlord from exercising any of
the other rights and remedies available to Landlord. No notice to Tenant of
failure to pay shall be required prior to the imposition of such interest and/or
late charge, and any notice period provided for in paragraph 20 shall not affect
the imposition of such interest and/or late charge.

    45.    ENTIRE AGREEMENT

           This lease, including any exhibits and attachments, constitutes the
entire agreement between Landlord and Tenant relative to the Premises and this
lease and the exhibits and attachments may be altered, amended or revoked only
by an instrument in writing signed by both Landlord and Tenant . Landlord and
Tenant agree hereby that all prior or contemporaneous oral agreements between
and among themselves or their agents or representatives relative to the leasing
of the Premises are merged in or revoked by this lease.

    46.    CORPORATE AUTHORITY

           If Tenant is a corporation, each individual executing this lease on
behalf of the corporation represents and warrants that he is duly authorized to
execute and deliver this lease on behalf of the corporation in accordance with a
duly adopted resolution of the Board of Directors of said corporation and that
this lease is binding upon said corporation in accordance with its terms. If
Tenant is a corporation, Tenant shall deliver to Landlord, within ten (10) days
of the execution of this lease, a copy of the resolution of the Board of
Directors of Tenant authorizing the execution of this lease and naming the
officers that are authorized to execute this lease on behalf of Tenant, which
copy shall be certified by Tenant's president or secretary as correct and in
full force and effect.

    47.    RECORDING

           Neither Landlord nor Tenant shall record this lease nor any short
form memorandum heretofore without the consent of the other.

    48.    REAL ESTATE BROKERS

           Each party represents that it has not had dealings with any real
estate broker finder or other person with respect to this lease in any manner,
except Cornish & Carey Commercial-Oncor International. Each party shall hold
harmless the other party from all damages resulting from any claims that may be
asserted against the other party by any broker, finder or other person with whom
the other party has or purportedly has dealt.

    49.    EXHIBITS AND ATTACHMENTS

           All exhibits and attachments to this lease are a part hereof.

    50.    ENVIRONMENTAL MATTERS

           A. Tenant's Covenants Regarding Hazardous Materials.

                  (1) Without limiting Tenant's obligations under paragraph 7
hereof, Tenant shall comply with




<PAGE>   16

and shall cause the Project to comply with, all federal, state, and local laws,
statutes, rules, regulations, codes, ordinances, and other governmental
requirements (including, without limitation, permits, licenses, consent decrees
and administrative orders) now or hereafter in effect relating or pertaining in
any way to (i) human health, safety or protection, (ii) workplace safety, (iii)
industrial hygiene, (iv) the use, generation, handling, maintenance, treatment,
removal, transportation, storage, release, discharge, disposal, or disclosure of
Hazardous Materials, or (v) the protection or regulation of the environment, all
as amended and modified from time to time (collectively, "Environmental
Requirements"). Tenant shall cause all governmental permits and other approvals
relating to the use or operation of the Project required by applicable
Environmental Requirements or any other applicable laws to all times remain in
effect, and Tenant shall at all times comply with such permits and other
approvals.

                  (2) Tenant shall not cause, or permit to occur, any release,
discharge, use, generation, manufacture, storage, treatment, transportation, or
disposal by Tenant or any of its employees, agents, contractors, visitors,
clients, customers, sublessees, assignees, successors, licensees or invitees, of
any Hazardous Materials on, in, under, about, or from the Premises or any other
part of the Project. However, notwithstanding the foregoing, Tenant may use on
the Premises, without Landlord's prior written consent, but only upon written
notice to Landlord and in compliance with all Environmental Requirements and
other applicable laws, any ordinary and customary materials reasonably required
for use by Tenant in the normal course of the permitted use described in
paragraph 1 hereof and further, but only so long as such use is not a Reportable
Use (defined below) and does not expose the Premises or any other part of the
Project or neighboring properties to any meaningful risk of contamination or
damage or expose Landlord to any liability whatsoever therefor. In addition,
Landlord may (but without any obligation to do so ) condition its consent to any
Reportable Use of any Hazardous Materials by Tenant upon Tenant's giving
Landlord such additional assurances as Landlord in its sole discretion, deems
necessary to protect itself, the public, the Premises, the Project, and the
environment against damage, contamination or injury and/or liability therefor,
including but not limited to the installation (and, at Landlord's option,
removal on or before the expiration or earlier termination of this lease) of
reasonably necessary protective modifications to the Premises (such as concrete
encasement) and/or the deposit of an additional security deposit. As used
herein, "Reportable Use" shall mean (i) the installation or use of any above or
below ground storage tank, (ii) the release, generation, possession, storage,
use, transportation, discharge or disposal of any Hazardous Materials that
requires a permit from, or with respect to which a report, notice, registration
or business plan is required to be filed with, any governmental agency or
authority, and (iii) the presence in, on or about the Premises, the Project of
any Hazardous Materials with respect to which any Environmental Requirements or
other applicable laws require that a notice be given to persons entering or
occupying the Premises, the Project or neighboring properties.

                  (3) If Tenant knows, or has reasonable cause to believe, that
any Hazardous Materials have come to be located in, on, under or about the
Premises or the Project (other than those Hazardous Materials that have come to
be located beneath and/or in the vicinity of the Project prior to the date of
this lease and other than those Hazardous Materials as previously consented to
by Landlord in writing, if any), to by Landlord, Tenant shall immediately give
Landlord written notice thereof, together with a copy of any statement, report,
notice, registration, application, permit, business plan, license, claim,
action, or proceeding, given to, or received from, any governmental authority or
private party concerning the presence, spill, release, discharge of, or exposure
to, such Hazardous Materials including but not limited to all such documents as
may be involved in any Reportable Use involving the Premises or the Project.
Landlord's receipt of any notice, documents or other information from Tenant as
provided above in this paragraph shall not create any obligation on the part of
Landlord to respond in any way to such notice, documents or information or the
conditions described therein.

                  (4) Tenant shall immediately notify Landlord and provide
copies upon receipt of all written complaints, claims, citations, demands,
inquiries, reports, or notices relating to the condition of the Premises or
compliance with Environmental Requirements (provided, however, that Landlord's
receipt of any of the foregoing shall in no way create or impose any duty or
obligation upon Landlord to respond thereto. Tenant shall promptly cure and have
dismissed with prejudice any of those actions and proceedings to the
satisfaction of Landlord.

                  (5) Landlord, its agents, employees, contractors and
designated representatives, and the holders of any mortgages, deeds of trust or
ground leases on the Premises or Project shall have the right, but not the
obligation, to enter the Premises at any time in the case of an emergency, and
otherwise at reasonable times, for the purpose of inspecting the condition of
the Premises and for verifying compliance by Tenant with this lease (including
compliance with Environmental Requirements) and Landlord shall be entitled to
employ experts and/or consultants in connection therewith to advise Landlord
with respect to Tenant's activities, including but not limited to Tenant's use,
storage, handling, transportation, maintenance, or removal of any Hazardous
Materials on or from the Premises. The costs and expenses of any such
inspections shall be paid by the party requesting same, unless a default or
breach of this lease by Tenant or a violation of any Environmental Requirement
or a contamination caused or materially contributed to by the Tenant is found to
exist or to be imminent , or unless the inspection is requested or ordered by a
governmental agency or authority as the result of any such existing or imminent
violation or contamination, in such case, Tenant shall upon request reimburse
Landlord, for the costs and expenses of such inspections.

                  (6) If Tenant breaches any of its warranties, representations,
or covenants under this paragraph 50, Landlord may, without obligation, cause
the removal (or other cleanup or other response acceptable to Landlord) of any
Hazardous Materials from the Project, and the costs of any Hazardous Materials
removal, remediation, detoxification, or other response (including, without
limitation, disposal, transportation and storage costs and all costs of
refitting or otherwise altering the Premises or any other part of the Project
shall be covered by the indemnity in paragraph 50B, below, whether or not a
court or other governmental authority has ordered such removal, remediation,
detoxification or other response and those costs shall become due and payable on
demand by Landlord. Tenant shall give Landlord, its agents, contractors, and
employees access to the Premises to remove, remediate, detoxify, clean up or
otherwise respond to any Hazardous Materials, and this lease shall not be
construed as creating any such obligation.

           B. Indemnification of Landlord. Tenant agrees to indemnify, defend
(with counsel acceptable to Landlord and at Tenant's sole cost), and hold
Landlord and Landlord's partners, employees, agents, attorneys, successors and
assigns free and harmless from and against any and all losses, liabilities,
obligations, penalties, claims, litigation, orders, demands, defenses, costs,
judgments, suits, penalties, proceedings, damages (including, without
limitation, consequential damages, diminution of the value of the Premises or
Project, disbursements, losses, or expenses of any kind (including, without
limitation, attorneys' and experts' fees and expenses incurred in investigating,
defending, or prosecuting any litigation, claim, or proceeding) that may at any
time be imposed upon, suffered by, incurred by, or asserted or awarded against
Landlord or any of its partners, employees, agents, attorneys, successors or
assigns in connection with or arising directly or indirectly out of:

                  (1) Any release, threatened release, discharge, handling, use,
storage, presence, transportation, or disposal of any Hazardous Materials
(whether or not the use thereof is a Reportable Use or has




<PAGE>   17

been consented to by Landlord on, in, under, or affecting all or any part of the
Premises or Project which is (or are) attributable, in whole or in part,
directly or indirectly, to any act or omission of Tenant or any employee, agent,
contractor, visitor, client, customer, sublessee, assignee, successor, licensee
or invitee of Tenant;

                  (2) Any misrepresentation, inaccuracy, or breach of any
warranty, covenant, or agreement contained or referred to in this paragraph 50;

                  (3) Any failure by Tenant or any employee, agent, contractor,
visitor, customer, sublessee, assignee, successor, client, licensee or invitee
of Tenant to comply with any Environmental Requirement or other applicable law,
whether such failure was made knowingly or unknowingly or intentionally or
unintentionally.

           This indemnification is the personal obligation of Tenant and shall
survive the expiration or sooner termination of this lease. Tenant, its
successors, and assigns waive, release, and agree not to make any claim or bring
any cost recovery action against Landlord under the Comprehensive Environmental
Response, Compensation and Liability Act, as amended and reauthorized to date
(42 U.S.C. Section Section 9601 et seq.) ("CERCLA"), or any state equivalent or
any similar law now existing or enacted after this date. To the extent that
Landlord is strictly liable under any such law, regulation, ordinance, or
requirement, Tenant's obligation to Landlord under this indemnity shall also be
without regard to fault on the part of Tenant with respect to the violation or
condition that results in liability to Landlord.

           C. Definition of Hazardous Materials. "Hazardous Materials" means any
product substance, chemical, material or waste whose presence, nature, quantity
and/or intensity or existence, use, manufacture, disposal, transportation,
spill, release, or effect, either by itself or in combination with any other
materials, substances or chemicals is either (i) potentially injurious or
harmful to the public health, safety or welfare, the Premises, or the
environment (including, without limitation, any soil, air, groundwater, and
subsurface media on, in, under, above or about the Project); (ii) regulated or
monitored by any federal, state or local governmental authority; or (iii) a
basis for potential liability of Landlord to any governmental agency, private
party, or other third party under any Environmental Requirement or any other
applicable statute, regulation, code, ordinance or common law theory. Without
limiting the scope or generality of the foregoing, Hazardous Materials shall
include, but not be limited to any petroleum or petroleum byproducts or
petroleum hydrocarbons, flammable explosives, asbestos, urea formaldehyde,
radioactive materials or waste and any "hazardous substance" or "toxic waste" as
those terms are defined under the provision of the California Health and Safety
Code and/or CERCLA.

           D. Survival. The provisions of this paragraph 50 shall survive the
expiration or earlier termination of the term of this lease.

    51.    SIGNAGE

           Tenant shall not, without obtaining the prior written consent of
Landlord, install or attach any sign or advertising material on any part of the
outside of the Premises, or on any part of the inside of the Premises which is
visible from the outside of the Premises, or in the halls, lobbies, windows or
elevators of the building in which the Premises are located or on or about any
other portion of the Common Area or Project. If Landlord consents to the
installation of any sign or other advertising material, the location, size,
design, color and other physical aspects thereof shall be subject to Landlord's
prior written approval and shall be in accordance with any sign program
applicable to the Project. In addition to any other requirements of this
paragraph 51, the installation of any sign or other advertising material by or
for Tenant must comply with all applicable laws, statutes, requirements, rules,
ordinances and any C.C.&R.'s or other similar requirements. With respect to any
permitted sign installed by or for Tenant, Tenant shall maintain such sign or
other advertising material in good condition and repair and shall remove such
sign or other advertising material on the expiration or earlier termination of
the term of this lease. The cost of any permitted sign or advertising material
and all costs associated with the installation, maintenance and removal thereof
shall be paid for solely by Tenant. If Tenant fails to properly maintain or
remove any permitted sign or other advertising material, Landlord may do so at
Tenant's expense. Any cost incurred by Landlord in connection with such
maintenance or removal shall be deemed additional rent and shall be paid by
Tenant to Landlord within ten (10) days following notice from Landlord. Landlord
may remove any unpermitted sign or advertising material without notice to Tenant
and the cost of such removal shall be additional rent and shall be paid by
Tenant within ten (10) days following notice from Landlord. Landlord shall not
be liable to Tenant for any damage, loss or expense resulting from Landlord's
removal of any sign or advertising material in accordance with this paragraph
51. The provisions of this paragraph 51 shall survive the expiration or earlier
termination of this lease.

           Notwithstanding the above, Landlord hereby consents to the
installation of signage bearing Tenant's name and corporate logo on (1) the
existing monument sign facing the Bayshore freeway and frontage road and (2) on
a portion of the existing monument sign facing Elwell Court, so long as the
location and size of the signage is the same as that of the presently existing
signage. Installation of such sign is however subject to all required
governmental permits and approvals as described above and to Landlord's approval
of the signs specific location, size, design, color and other criteria as
described above, which approval shall not be unreasonably withheld.

    52.    SUBMISSION OF LEASE

           The submission of this lease to Tenant is not an offer to lease the
Premises, or an agreement by Landlord to reserve the Premises for Tenant.
Landlord will not be bound to Tenant until Tenant has duly executed and
delivered duplicate original leases to Landlord and Landlord has duly executed
and delivered one of those duplicate original leases to Tenant.

    53.    ADDITIONAL RENT

           All costs, charges, fees, penalties, interest and any other payments
(including Tenant's reimbursement to Landlord of costs incurred by Landlord)
which Tenant is required to make to Landlord pursuant to the terms and
conditions of this lease and any amendments to this lease shall be and
constitute additional rent payable by Tenant to Landlord when due as specified
in this lease and any amendments to this lease.

    54.    CONDITION OF PROJECT

           Tenant acknowledges that, except as expressly contained in this
lease, neither Landlord nor anyone acting for or on behalf of Landlord has made
any representation, warranty or promise to Tenant concerning the physical
aspects or condition of any of the Project; the feasibility, desirability or
convertibility of any of the Project into any particular use; the zoning,
building or land use restrictions applicable to the zoning, building or land use
restrictions applicable to the Project; the projected income or expenses for any
of the Project or any business conducted thereon; the suitability of the Project
for any particular use; or the presence or absence of any Hazardous

<PAGE>   18

Materials; and that in entering into this lease, Tenant has not relied upon any
representation, statement or warranty of Landlord or anyone acting for or on
behalf of Landlord, other than as expressly contained in this lease, and that
all matters concerning the Premises shall be independently verified by Tenant
and that Tenant shall enter into this lease on Tenant's own examination thereof
(or Tenant's election not to do so). Tenant does hereby waive, and Landlord does
hereby disclaim, all warranties of any type or kind whatsoever with respect to
the Project, express or implied, including by way of description, but not
limitation, those of fitness for a particular purpose, tenantability,
habitability and use. Tenant hereby expressly assumes the risk that adverse
physical conditions and the full extent thereof (including, without limitation,
soil, groundwater and surface water contamination and air pollution from
Hazardous Materials) may not be revealed by Tenant's inspections, reviews and
studies of the Project prior to the date of possession.

           No person acting on behalf of Landlord is authorized to make, and by
execution hereof Tenant acknowledges that no such person has made, any
representation, warranty, guaranty or promise except as may be expressly set
forth herein; and no agreement, statement, representation, guaranty or promise
made by any such person which is not expressly contained herein shall be valid
or binding on Landlord and Landlord's agents, heirs, successors or assigns. The
only representations or warranties outstanding with respect to the Project, or
Landlord, either express or implied by law, are expressly set forth herein.

    55.    PREMISES TAKEN "AS IS"

           Tenant is leasing the Premises from Landlord "as is" in its existing
condition as of the date hereof. Landlord shall have no obligation to alter or
improve the Premises except only to professionally clean the Premises (including
carpets) as reasonably necessary and except for Landlord's obligation deliver
the Premises with the roof, air conditioning and heating (HVAC) systems,
lighting and electrical systems, and plumbing system in good working order and
repair as of the commencement of the term to pursuant to paragraph 9 of this
lease.

           Tenant acknowledges that, except as expressly contained in this
lease, neither Landlord nor anyone acting for or on behalf of Landlord has made
any representation, warranty or promise to Tenant concerning the physical
aspects or condition of any of the Project; the feasibility, desirability or
convertibility of any of the Project into any particular use; the zoning,
building or land use restrictions applicable to the zoning, building or land use
restrictions applicable to the Project; the projected income or expenses for any
of the Project or any business conducted thereon; the suitability of the Project
for any particular use; or the presence or absence of any Hazardous Materials;
and that in entering into this lease, Tenant has not relied upon any
representation, statement or warranty of Landlord or anyone acting for or on
behalf of Landlord, other than as expressly contained in this lease, and that
all matters concerning the Premises shall be independently verified by Tenant
and that Tenant shall enter into this lease on Tenant's own examination thereof
(or Tenant's election not to do so). Tenant does hereby waive, and Landlord does
hereby disclaim, all warranties of any type or kind whatsoever with respect to
the Project, express or implied, including by way of description, but not
limitation, those of fitness for a particular purpose, tenantability,
habitability and use. Tenant hereby expressly assumes the risk that adverse
physical conditions and the full extent thereof (including, without limitation,
soil, groundwater and surface water contamination and air pollution from
Hazardous Materials) may not be revealed by Tenant's inspections, reviews and
studies of the Project prior to the date of possession.

           No person acting on behalf of Landlord is authorized to make, and by
execution hereof Tenant acknowledges that no such person has made, any
representation, warranty, guaranty or promise except as may be expressly set
forth herein; and no agreement, statement, representation, guaranty or promise
made by any such person which is not expressly contained herein shall be valid
or binding on Landlord and Landlord's agents, heirs, successors or assigns. The
only representations or warranties outstanding with respect to the Project, or
Landlord, either express or implied by law, are expressly set forth herein.

           Tenant acknowledges that any and all documentary information, soil
reports, environmental audits, site assessments, analyses or reports, insurance
policies or other information of whatever type which Tenant has received or may
receive from Landlord or Landlord's agents is furnished on the express condition
that Tenant shall make Tenant's own independent verification of the accuracy and
completeness of such information. Tenant agrees that Tenant shall not attempt to
assert any liability upon Landlord or Landlord's agents for furnishing such
information and Tenant does hereby release Landlord and Landlord's agents,
heirs, successors and assigns free and harmless from and against, any and all
such claims or liability.

    56.    CAPITAL EXPENDITURES

           Notwithstanding anything to the contrary in paragraphs 7 and 8, (i)
as to any required capital improvement to the Premises having a useful life of
more than one year and which is not required by reason of Tenant's specific use
of or activities on the Premises, Landlord shall make such capital improvement
and Tenant shall pay to Landlord, as additional rent and in equal monthly
installments over the remaining term of this lease, the fraction of the cost of
such capital improvements equal to the remaining term of this lease over the
useful life of such capital improvement; (ii) as to any required capital
improvement to the common area having a useful life of more than one year and
which is not required by Tenant's specific use of or activities on the Premises,
the cost thereof shall be included within common area charges ratably over the
useful life of such capital improvement. Any determination of useful life, as
such term is used in this paragraph 56, shall be reasonably made by Landlord.


           IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered
this lease on the date first above written.

<TABLE>
<CAPTION>
Landlord:                                   Tenant:
--------                                    ------
<S>                                         <C>
McCandless Limited , a                      OmniSky Corporation
California Limited Partnership              a Delaware corporation

By: /s/ JEAN McCANDLESS                     By: /s/ MICHAEL DOLBEC
   ----------------------------             ------------------------------------
                                                      (Signature)

Sandra S. Simons or Jean McCandless, as     Mike Dolbec
Trustee under the Charles S. and Jean       ------------------------------------
A. McCandless Inter Vivos Trust                      (Printed Name)
Agreement dated January 25, 1977,  a
General Partner                             CFO
                                            ------------------------------------
                                                         (Title)

Date: 3/16/00                               Date: 3/13/00
      --------------------------                  --------------------------
</TABLE>