<PAGE>
 
                                                                   EXHIBIT 10.22

TENANT: Qualix Group           SUBJECT PROPERTY: Bovet Office Centre, Suite 200
                               177 Bovet Road, San Mateo, California

LANDLORD: Casiopea Venture Corporation   DATE: April 24, 1997

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TABLE OF CONTENTS


SECTION                                                              PAGE
<S>                                                                 <C>
1.  LEASE OF PREMISES...............................................    3
2.  USES............................................................    4
3.  CONDITION OF THE PREMISES.......................................    5
4.  RENT............................................................    5
5.  PAYMENT OF TAXES, ASSESSMENTS, AND OPERATING EXPENSES...........    6
6.  SECURITY........................................................   11
7.  HAZARDOUS SUBSTANCES............................................   11
8.  NO LIGHT, AIR OR VIEW EASEMENT..................................   12
9.  ALTERATIONS.....................................................   12
10. REPAIR OBLIGATIONS..............................................   15
11. LIENS...........................................................   15
12. SIGNS; NAMES OF BUILDING AND FACILITY...........................   15
13. ASSIGNMENT AND SUBLETTING.......................................   16
14. INDEMNIFICATION; INSURANCE; ALLOCATION OF RISK..................   19
15. SECURITY SERVICES...............................................   23
16. BUILDING SERVICES...............................................   23
17. FORCE MAJEURE...................................................   24
18. RULES AND REGULATIONS...........................................   24
19. HOLDING OVER....................................................   24
20. SUBORDINATION...................................................   26
21. ENTRY BY LANDLORD...............................................   26
22. DEFAULTS AND REMEDIES...........................................   26
23. DAMAGE OR DESTRUCTION...........................................   27
24. EMINENT DOMAIN..................................................   29
25. SALE BY LANDLORD................................................   31
26. ESTOPPEL CERTIFICATES...........................................   31
27. REQUIREMENTS OF LANDLORD'S LENDERS..............................   31
28. SUBSTITUTION OF PREMISES........................................   32
29. ATTORNEYS' FEES.................................................   32
30. NON-WAIVER......................................................   32
31. NOTICES.........................................................   32
32. JOINT AND SEVERAL LIABILITY.....................................   33
33. TIME............................................................   33
34. SUCCESSORS......................................................   33
35. ENTIRE AGREEMENT................................................   33
36. RESTRICTIONS ON OPTIONS.........................................   33
37. RECORDING.......................................................   35
38. AUTHORIZATION TO SIGN LEASE.....................................   35
39. BROKER PARTICIPATION............................................   35
40. SURVIVAL OF CERTAIN RIGHTS AND OBLIGATIONS......................   35
41. PARKING.........................................................   35
42. SEVERABILITY....................................................   36
43. CERTAIN RIGHTS RESERVED BY LANDLORD.............................   36
44. WAIVER OF JURY TRIAL............................................   36
45. INTERPRETATION..................................................   36
46. COOPERATION WITH GOVERNMENT SPONSORED PROGRAMS..................   37
47. PARTIES TO ACT REASONABLY AND IN GOOD FAITH.....................   37
48. OFFER...........................................................   37
49. DUAL REPRESENTATION.............................................   37
50. CONTINGENCY AND OPTION TO RELOCATE..............................   37

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LIST OF ATTACHMENTS:

       Addendum A
       Lease Rider No. 1
       Lease Rider No. 2
       Exhibit A-1: Site Plan.
       Exhibit A-2: Floor Plan of the Premises.
       Exhibit B: Work Letter.
       Exhibit C: Rules and Regulations.
       Exhibit D: Standards for Utilities and Services.
       Exhibit E: Acknowledgment of Commencement of Term.
       Exhibit F: Adjustments to Monthly Rent.

This Lease, between the parties named below as Landlord and Tenant, is dated
April 24, 1997, for reference purposes only.

SALIENT LEASE TERMS AND DEFINITIONS.

       1.1 Salient Lease Terms.

                                                                   Page 1 of 38.
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          a. Rent Payment Address:
                c/o Birtcher Property Services
                177 Bovet Road, Suite 200
                San Mateo, CA 94402

          b. Parties and Notice Addresses:
              Landlord:

                Casiopea Venture Corporation
                c/o Birtcher Property Services
                177 Bovet Road, Suite 200
                San Mateo, CA 94402

              Tenant:

                Qualix Group, Inc.
                1900 Norfolk Avenue
                San Mateo, CA  94404

          c. Premises:

                1. Name and Location of Facility where the Building is located:
                   Bovet Office Centre

                2. Street Address of Building: 177 Bovet Road

                3. Suite No. of Premises: 200, located on the second floor of
                   the Building and Suite 110 on the ground floor.

                4. Approximate No. of net rentable square feet:

                        i.  the Premises: 18,886;

                        ii. the Building: 92,099

          d. Term:

                1. A period of 5 years.

                2. Scheduled to commence on July 1, 1997, or upon substantial
                   completion of tenant improvements whichever is later; and end
                   60 months after the commencement date subject to paragraph
                   50.

          e. Monthly Rent:

                1. Initial Monthly Rent: $46,270.70/month (subject to adjustment
                   per Exhibit F)

                2. Prepaid Rent: $46,270.70

          f. Deposit: $46,270.70

          g. Permitted Uses: The Premises shall be used solely for the following
          uses: General Office use and incidental uses directly related thereto.

          h. Tenant's Percentage Share: 20.5% (Subsection 5.1)

          i. Base Years: The Base Expense Year for Operating Expenses shall be
          calendar year 1997, and the Base Tax Year shall be the fiscal tax year
          commencing 1996, and ending 1997.

          j. Landlord's Broker: Cornish & Carey Commercial

          Tenant's Broker: Cornish & Carey Commercial

          k. Vehicle Parking Privileges Allocated to Tenant: 62

          l. Contents: This Lease consists of:

                Pages 1 through 37, and Sections 1 through 50
                Addendum A
                Exhibits:

                        Addendum A
                        Lease Rider No. 1
                        Lease Rider No. 2
                        Exhibit A-1: Site Plan.
                        Exhibit A-2: Floor Plan of the Premises.
                        Exhibit B: Work Letter.

                                                                   Page 2 of 38.
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                        Exhibit C: Rules and Regulations.
                        Exhibit D: Standards for Utilities and Services.
                        Exhibit E: Acknowledgment of Commencement of Term.
                        Exhibit F: Adjustments to Monthly Rent.

       1.2 Definitions. For the convenience of the parties, a listing of certain
       defined terms used in this Lease is set forth below:


Term                                                    Section Where Defined
 
ALTERATIONS  Subsection 10.1
 
ASSESSMENTS                                                   Subsection 6.2.2

BASE EXPENSE YEAR                                            Subsection 1.1(i)

BASE TAX YEAR                                                Subsection 1.1(i)

BUILDING                                                        Subsection 2.2

CASUALTY                                                       Subsection 24.2

CLAIMS                                                         Subsection 15.1

COMMENCEMENT DATE                                               Subsection 2.2

DEPOSIT                                                         Subsection 7.1

ENVIRONMENTAL REQUIREMENTS                                      Subsection 8.1

EVENT OF DEFAULT                                             Subsection 23.1.1

FACILITY                                                        Subsection 2.2

FORCE MAJEURE                                                       Section 18

GROSS RENT                                              Subsection 14.5.1(iii)

HAZARDOUS SUBSTANCE                                             Subsection 8.1

LANDLORD PARTIES                                               Subsection 15.1

LAWS                                                            Subsection 3.2

MINIMUM MONTHLY RENT                                            Subsection 5.1

OPERATING EXPENSES                                            Subsection 6.3.1

OPTION                                                         Subsection 37.1

PERSONAL PROPERTY                                            Subsection 10.3.2

PREMISES                                                        Subsection 2.2

REAL PROPERTY                                                   Subsection 2.2

READY FOR OCCUPANCY                                                  Exhibit B

RENT                                                            Subsection 5.3

RULES AND REGULATIONS                                               Section 19

SCHEDULED COMMENCEMENT DATE                                     Subsection 2.2

TAXES                                                         Subsection 6.2.1

TENANT DELAYS                                                        Exhibit B

TENANT IMPROVEMENTS                                Exhibit B & Subsection 10.1

TENANT PARTIES                                                 Subsection 11.1

TENANT'S PERCENTAGE SHARE                                       Subsection 6.1

TERM                                                            Subsection 2.2

TRANSFER                                                       Subsection 14.1

1. LEASE OF PREMISES:


       1.1 Demising Clause. Landlord hereby leases to Tenant, and Tenant leases
       from Landlord, the Premises for the entire Term upon and subject to the
       terms, covenants, and conditions set forth in this Lease, including the
       Salient Terms and Definitions in Section 1 and the attached exhibits.
       Tenant covenants as a material part of the consideration for this Lease
       to keep and perform each and all of said terms, covenants, and conditions
       applicable to Tenant hereunder. This Lease is made upon the condition of
       such performance. Landlord reserves to Landlord the areas beneath and
       above the Premises and the use thereof together with the right to
       install, maintain, use, repair and replace pipes, ducts, conduits, wires,
       and structural elements leading through the Premises and serving other
       parts of the Facility, so long as such items are concealed by walls,
       flooring or ceilings. Such reservation shall in no way affect the
       maintenance obligations imposed herein.

       1.2 Description. As used herein, the following capitalized terms shall
       have the indicated meanings:

          a. The "Facility" shall mean that certain real property (including the
          building(s), parking facilities, if any, and other improvements now
          located and/or subsequently constructed thereon) owned by Landlord and
          described in Exhibit A-1 attached hereto, said real property being
          described generally in Subsection 1.1(c)(1) above.

                                                                   Page 3 of 38.
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          b. The "Building" shall mean that certain building in which the
          Premises are located, said Building being a part of the Facility and
          being more particularly described in Subsection 1.1(c)(2) above.

          c. The "Premises" shall mean that certain space located in the
          Building and described in Subsection 1.1(c)(3) above and delineated on
          Exhibit A-2 attached hereto, which space consists of the approximate
          amount of rentable square footage specified in said Subsection
          1.1(c)(4).

          d. The "Term" shall mean the term of this Lease, which, subject to the
          provisions of this Lease concerning early occupation, early
          termination, and extensions, shall be for the period of time specified
          in Subsection 1.1(d)(1) above and shall commence on the earliest of
          (a) the date that the Tenant Improvements are substantially completed
          and the Premises are Ready For Occupancy (as defined in Exhibit B) or
          (b) the date the Tenant Improvements would have been substantially
          completed and the Premises would have been Ready For Occupancy except
          for Tenant Delays or (c) the date that Tenant, or any person occupying
          any of the Premises with Tenant's permission, commences business
          operations from the Premises (the "Commencement Date"). The
          anticipated commencement date of the Term of this Lease is specified
          in Subsection 1.1(d)(2) (the "Scheduled Commencement Date"). If the
          Term commences prior to the Scheduled Commencement Date, the length of
          the initial Term shall be extended to include such early occupancy
          period and the initial Term shall end on the scheduled termination
          date set forth in Subsection 1.1(d)(2). If the Term commences after
          the Scheduled Commencement Date, the initial Term shall expire on the
          last day of the calendar month in which the period of time specified
          in Subsection 1.1(d)(1) elapses.

       1.3 Delivery of Premises. The Premises shall be delivered to Tenant when
       the Tenant Improvements (as defined in Exhibit B) have been completed and
       the Premises are Ready For Occupancy. Delay of the Commencement Date to
       the extent not caused by Tenant Delays shall be Tenant's sole remedy for
       any delay in constructing the Tenant Improvements or making the Premises
       Ready For Occupancy.

       1.4 Notice of Commencement Date. Landlord shall send Tenant notice of the
       occurrence of the Commencement Date in the form of the attached Exhibit
       E, which notice Tenant shall acknowledge by executing a copy of the
       notice and returning it to Landlord. If Tenant fails to sign and return
       the notice to Landlord within ten (10) days after receipt of the notice
       from Landlord, the notice as sent by Landlord shall be deemed to have
       correctly set forth the Commencement Date. Failure of Landlord to send
       such notice shall have no effect on the Commencement Date.

2. USES:

       2.1 Permitted Uses. Except as otherwise expressly provided herein, the
       Premises shall be used only for the Permitted Uses specified in
       subsection 1.1(g) and for no other use or purpose.

       2.2 Restriction on Use. Without limitation to the generality of the
       foregoing use restriction, Tenant specifically covenants and agrees that
       it shall not (a) do, bring, or keep, or permit to be done, brought, or
       kept, anything in or about the Premises that will in any way (1) obstruct
       or interfere with the rights of any other tenants or occupants of the
       Facility or injure or annoy them, (2) cause a weight load or stress on
       the floor or any other portion of the Premises in excess of the weight
       load or stress that the floor or other portion of the Premises is
       designed to bear, (3) increase the existing rate of, or adversely affect,
       any fire or other insurance upon the Building or its contents, or (4)
       violate any of Landlord's Rules and Regulations; (b) use the Premises, or
       allow them to be used, for any residential or disreputable purpose; (c)
       commit or suffer to be committed any waste in or upon the Premises or the
       Facility; or (d) provided such exclusive does not prohibit Tenant from
       primarily using the Premises for the Permitted Uses specified in
       Subsection 1.1(g), Tenant shall not conduct or permit to be conducted on
       or from the Premises activities that violate any exclusive use right
       presently or subsequently granted by Landlord to another tenant. Tenant,
       at Tenant's sole cost, shall comply with all laws, statutes, rules,
       regulations, ordinances, codes, licenses, permits, orders, decrees,
       judgments, approvals, plans, authorizations, and similar items of any
       local, state, or federal 

                                                                   Page 4 of 38.
<PAGE>
 
       governmental or quasi-governmental authority (collectively, "Laws," or
       individually, a "Law") affecting the Premises, and with the requirements
       of any Board of Fire Underwriters or other similar body now or hereafter
       instituted, and shall also comply with any order, directive or
       certificate of occupancy, issued pursuant to any Laws, that affects the
       condition, use, or occupancy of the Premises, including, but not limited
       to, any requirements of structural changes related to or affected by
       Tenant's acts or use of the Premises.

       2.3 Compliance by Other Tenants. Upon Landlord's receipt of Tenant's
       written notice that another tenant or occupant of the Facility is
       engaging in conduct prohibited by this Section, to the material detriment
       of Tenant, Landlord agrees to use commercially reasonable efforts,
       consistent with Landlord's rights under the lease of such other tenant or
       occupant, to cause such party to desist from such prohibited conduct.
       Notwithstanding the foregoing, Landlord shall not be liable to Tenant for
       any such conduct on the part of other tenants or occupants of the
       Building.

3. CONDITION OF THE PREMISES:

Except as otherwise expressly provided in Exhibit B attached hereto, it is
specifically understood and agreed that (a) Landlord has no obligation and has
made no promises to alter, remodel, improve, repair, decorate, or paint the
Premises or any part thereof, (b) Landlord has made no representations to Tenant
respecting the condition of the Premises or the Building or the suitability or
legality of the Premises for the uses contemplated by this Lease, and (c) by
accepting possession of the Premises after substantial completion of the work
(if any) to be performed by Landlord pursuant to such Exhibit B, Tenant
acknowledges that the Premises are in good condition, and with such acceptance
of possession Tenant waives any claim against Landlord or Landlord's agents or
contractors for the condition or functioning of any improvements within or about
the Premises.

4. RENT:

       4.1 Monthly Rent. From and after the Commencement Date, Tenant shall pay
       to the Landlord, for each calendar month of the Term, the Monthly Rent
       set forth in Subsection 1.1(e)(1), as the same may be adjusted from time
       to time as provided in Section 4.2. Monthly Rent shall be due and payable
       to Landlord in lawful money of the United States, in advance, on the
       first (1st) day of each calendar month of the Term, without abatement,
       deduction, claim or offset, and without prior notice, invoice or demand,
       at Landlord's address set forth in Subsection 1.1.(a) or at such place as
       Landlord may from time to time designate. Tenant's payment of Monthly
       Rent for the first (1st) month of the Term shall be delivered to Landlord
       concurrently with Tenant's execution of this Lease.

          4.1.1 Adjustments. Monthly Rent shall be adjusted from time to time as
          provided in Exhibit F.

       4.2 In the event that Landlord is unable to deliver to Tenant the notice
       of the increased Minimum Monthly Rent at least five (5) business days
       prior to the Adjustment Date, Tenant shall commence to pay the increased
       Minimum Monthly Rent on the first day of the month following the receipt
       of such notice, which notice must be sent at least five (5) business days
       prior to the first day of such month ("Payment Date"), and shall also
       pay, together with the first payment of the increased Minimum Monthly
       Rent, an amount determined by multiplying the amount of the increase in
       Minimum Monthly Rent times the number of months which have elapsed
       between the Adjustment Date and the Payment Date. Should the Bureau
       discontinue the publication of the Index, or publish the same less
       frequently, or alter the same in some other manner, Landlord, in its
       discretion, shall adopt a substitute index or procedure that reasonably
       reflects and monitors consumer prices.

       4.3 Definition of "Rent"; Prorations. Any and all payments of Minimum
       Monthly Rent and any and all taxes, assessments, fees, charges, costs,
       expenses, insurance obligations, late charges, Common Area Costs, and all
       other payments, disbursements, or reimbursements that are attributable
       to, payable by or the responsibility of Tenant under this Lease shall
       constitute "rent" for all purposes of this Lease and any applicable
       unlawful detainer statute. Any rent payable to Landlord by Tenant for any
       fractional month shall be prorated based upon the actual number of days
       in such calendar month.

                                                                   Page 5 of 38.
<PAGE>
 
       4.4 Place and Manner of Payment. All rent shall be paid by Tenant to
       Landlord in lawful money of the United States of America at Landlord's
       address set forth in Subsection 1.1(a) above, or to such other person or
       at such other place as Landlord may from time to time designate. All
       payments of rent shall be payable without prior notice or demand and
       shall be paid without deduction, setoff or counterclaim for any reason
       whatsoever.

       4.5  Late Charges. Tenant acknowledges that the late payment of rent will
       cause Landlord to incur damages, the exact amount of which would be
       impractical and extremely difficult to ascertain. Such damages may
       include, without limitation, processing, accounting, and other
       administrative costs, loss of use of the overdue funds, and late charges
       that may be imposed on Landlord by the terms of any encumbrance and note
       secured by any encumbrance covering the Premises. Landlord and Tenant
       agree that if Landlord does not receive a payment of rent within ten (10)
       days after such payment becomes due, Tenant shall pay to Landlord a late
       charge in an amount equal to five percent (5%) of such overdue rent. If
       Landlord does not receive a payment of rent within thirty (30) days after
       such payment becomes due, Tenant shall pay to Landlord additional late
       charges computed at the interest rate of ten percent (10%) per annum or,
       if lower, the maximum interest rate allowed by law. Such interest shall
       begin to accrue as of such 30th day after such rent payment became due.
       The parties agree that such late charges represent a fair and reasonable
       estimate of the cost that Landlord will incur by reason of late payment
       by Tenant. Acceptance of any late charge by Landlord shall not cure or
       waive Tenant's default, nor prevent Landlord from exercising, before or
       after such acceptance, any of the rights and remedies for a default
       provided by this Lease or at law. Tenant shall be liable for late charges
       regardless of whether Tenant's failure to pay the rent when due
       constitutes an Event of Default under this Lease.

       4.6 Time of Payment; Disputed Amounts. Tenant agrees to pay all rent
       required under this Lease within the applicable time limits set forth in
       this Lease. If no such time period is elsewhere specified herein for
       payment of a particular amount, then such amount shall be paid within ten
       (10) days after Landlord's delivery of an invoice or demand therefor. If
       Tenant receives from Landlord an invoice or statement, sent by Landlord
       in good faith, and Tenant in good faith disputes whether all or any part
       of such rent is due and owing, Tenant shall nevertheless pay to Landlord
       the amount of the rent indicated on the invoice or statement until such
       time as the dispute is resolved by mutual agreement of the parties or by
       final judgment from a court of competent jurisdiction (or when
       arbitration is permitted or required, by a final award from an
       arbitrator) relieving or mitigating Tenant's obligation to pay such rent.
       Failure by Tenant to pay any disputed amounts when due (as if there were
       no dispute) shall constitute an Event of Default under this Lease, and
       Landlord's rights shall be as provided for in Section 22 (Defaults and
       Remedies). In such instance where Tenant disputes its obligations to pay
       all or part of the rent indicated on such invoice or statement, Tenant
       shall, concurrently with the payment of such rent, provide Landlord with
       a written notice specifying in detail why Tenant is not required to pay
       all or part of such rent. Tenant shall be deemed to have waived its right
       to contest any past payment of rent unless it has filed a lawsuit against
       Landlord (or when arbitration is permitted or required, filed for
       arbitration) and has served Landlord with notice of such filing within
       one (1) year after such payment.

       4.7  Partial Payments. Any partial payment of rents outstanding hereunder
       shall be allocated to such outstanding rental charges as Landlord may
       elect. In the absence of a contrary election made by Landlord, payments
       by Tenant shall be applied against the then outstanding rental charges
       that first became due.

5. PAYMENT OF TAXES, ASSESSMENTS, AND OPERATING EXPENSES;

       5.1 Tenant's Percentage Share. In addition to paying the Minimum Monthly
       Rent, Tenant shall pay to Landlord the percentage set forth in subsection
       1.1(h) ("Tenant's Percentage Share") of the amounts set forth below in
       Subsections 5.2 and 5.3. Tenant's Percentage Share has been calculated by
       dividing the number of square feet of rentable area of the Premises by
       the number of square feet of rentable area in the Building, based upon
       the best information available to Landlord as of the execution of this
       Lease. Said Tenant's Percentage Share shall not be subject to correction
       or recalculation, except in the event the rentable area of the Building
       is changed due to events of damage, destruction, demolition, or
       construction. Tenant 

                                                                   Page 6 of 38.
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       hereby approves and accepts Landlord's calculations of the Tenant's
       Percentage Share as set forth in Subsection 1.1(h).

       5.2 Taxes and Assessments

          5.2.1 Tenant shall pay to Landlord an amount equal to Tenant's
          Percentage Share of any increase in Taxes above the amount of Taxes
          levied or assessed for the Base Tax Year set forth in Subsection
          1.1(i), either by way of increase in the rate or in the assessed
          valuation of the Real Property (or any portion thereof) or by
          imposition of any such charges by ordinance or statute of any
          authority having jurisdiction. As used in this Section 5, the term
          "Taxes" shall mean all taxes, excises, penalties (unless due solely to
          Landlord's negligence or willful misconduct), fees (including, without
          limitation, all license, permit and inspection fees), and other
          charges (but excluding Assessments, as defined in Subsection 5.2.2
          below) assessed, levied, charged, confirmed, or imposed by any
          federal, state, or local government, any political subdivision, public
          corporation, district, or other political or public entity or public
          authority (a) on the Real Property (or any portion thereof), (b) on
          Landlord with respect to the Real Property (or any portion thereof),
          (c) on the act of leasing or entering into leases of space in the Real
          Property, (d) on or measured by the rent payable under leases of
          space, or in connection with the business of leasing space, in the
          Real Property, or (e) on personal property of Landlord used in the
          operation of the Real Property (or any portion thereof). Such Taxes
          may be general or specific, ordinary or extraordinary, or of any kind
          or nature whatsoever, whether or not now customary or within the
          contemplation of the parties to this Lease. Notwithstanding the
          foregoing, documentary transfer taxes, gift, inheritance, succession,
          and estate taxes, and federal and state income taxes computed on
          Landlord's income shall not be included as Taxes, nor shall the
          computation of increases in Taxes for which Tenant shall pay Tenant's
          Percentage Share include any amounts paid by Tenant under Subsections
          5.2.3 and 5.2.4 or any amounts separately billed to a particular
          tenant of the Real Property with respect to similar matters (other
          than as its percentage share of increases in Taxes or Assessments).

          5.2.2 Tenant shall also pay to Landlord an amount equal to Tenant's
          Percentage Share of any increase in Assessments above the amount of
          Assessments levied or assessed against the Real Property for the Base
          Tax Year. As used in this Section 5, the term "Assessments" shall mean
          all assessments, transit charges, housing charges, and levies
          assessed, charged, levied, confirmed, or imposed by any federal,
          state, or local government, any political subdivision, public
          corporation, district, or other political or public entity or public
          authority on or with respect to any of the items described in clauses
          (a) through (e) of Subsection 5.2.1 or with respect to the use,
          occupancy, management, maintenance, alteration, repair, or operation
          of the Real Property (or any portion thereof) or any services or
          utilities furnished or consumed in connection therewith.

          5.2.3 In addition to paying Tenant's Percentage Share of increases in
          the Taxes and Assessments described in Subsections 5.2.1 and 5.2.2,
          Tenant shall pay one hundred per cent (100%) of the following, as
          reasonably determined by Landlord: any increase in Taxes or
          Assessments caused by the improvements described in Exhibit B or any
          other improvements or installations at any time made to the Premises
          by or at the sole instance of Tenant. The total amounts due under this
          Subsection 5.2.3 shall be paid to Landlord on or before the date full
          payment of such Taxes or Assessments shall become due, or if payable
          in installments, the date payment of the first installment of such
          Taxes or Assessments shall become due. In the event such Taxes or
          Assessments are paid by Landlord, Tenant forthwith upon demand
          therefor shall reimburse Landlord for all amounts of such Taxes or
          Assessments chargeable against Tenant pursuant to this Subsection
          5.2.3.

          5.2.4 Tenant shall pay, before delinquency, any and all levied or
          assessed taxes that become payable during or with respect to the Term
          upon Tenant's equipment, furnishings, fixtures, and other personal
          property located in the Premises, including carpeting installed by or
          at the instance of Tenant, even though said carpeting has become a
          part of the Premises. In the event said taxes are paid by Landlord,
          Tenant 

                                                                   Page 7 of 38.
<PAGE>
 
          forthwith upon demand therefor shall reimburse Landlord for all such
          taxes paid by Landlord.

          5.2.5 Any Taxes or Assessments that may be paid over more than a one-
          year period shall be apportioned evenly over the maximum period of
          time permitted by Law and only the portion thereof attributable to a
          given year shall be included in Taxes or Assessments for that year. In
          the event that Landlord contests the amount of any Taxes or
          Assessments and receives a refund or credit as a result thereof, then
          Landlord shall pay Tenant its pro rata share of such refund to the
          extent that the refund relates to Taxes or Assessments that have been
          paid by Tenant. Upon Tenant's request, Landlord shall provide a copy
          of all applicable tax bills.

       5.3 Operating Expense Increases

          5.3.1 Tenant shall pay to Landlord an amount equal to Tenant's
          Percentage Share of any increase in Operating Expenses above the
          Operating Expenses for the Base Expense Year. As used in this Section
          5, the term "Operating Expenses" shall mean all costs and expenses
          paid or incurred by Landlord in connection with the operation,
          management, or maintenance of the Real Property (which costs shall be
          accounted for under generally accepted accounting principles and shall
          be amortized when and as required thereunder), excluding, however, the
          items described in Subsection 5.3.2 below, which items shall not be
          included in Operating Expenses for purposes of this Lease. By way of
          illustration but not limitation, Operating Expenses shall include
          (subject to the specific exclusions described in Subsection 5.3.2
          below) all (a) costs for heating, cooling, ventilation, fuel, and
          utilities; (b) costs and expenses for maintenance, ordinary and
          extraordinary repairs and replacements, testing, and operation of
          building systems and components; (c) costs and expenses for security,
          landscaping, refuse disposal, janitorial services, labor, supplies,
          materials, equipment, and tools, including any sales, use, or excise
          taxes thereon; (d) reasonable management fees and other costs of
          managing the Real Property, whether managed by Landlord or an
          independent contractor; (e) the wages, salaries, bonuses, employee
          benefits and payroll burden of all Landlord's (or its agents') on-site
          employees engaged in the operation, maintenance, management, or
          security of the Real Property, including employers' payroll, social
          security, workers' compensation, unemployment, and similar taxes with
          respect to such employees; (f) all insurance premiums paid or incurred
          by Landlord with respect to the Real Property and all amounts paid in
          connection with claims or losses that are less than the amount of such
          deductibles or self-insured retentions as Landlord may have deemed
          reasonable for its insurance policies; (g) all costs and expenses of
          contesting by appropriate proceeding the amount or validity of any
          Taxes or Assessments; (h) the cost of any capital improvements or
          capital assets constructed, made, purchased, or installed in order to
          comply with the requirements of any governmental or quasi-governmental
          law or authority, or constructed, made, purchased, or installed in
          order to conserve energy or reduce other Operating Expenses, amortized
          over the useful life of such capital improvements or capital assets,
          as reasonably determined by Landlord, together with such interest and
          finance charges as Landlord may pay in financing such costs or (if
          such financing is not obtained) interest on the unamortized balance of
          such costs accruing at an annual interest rate equal to the interest
          rate from time to time publicly announced by the San Francisco Main
          office of Bank of America, NT&SA (or any successor bank thereto), as
          its prime annual interest rate (or "reference rate") charged to
          substantial commercial borrowers for 90-day loans; (i) the fair market
          rental value of the building office and other space in the building
          occupied by Landlord or its manager in connection with the operation
          or management of the Real Property; and (j) and all other costs and
          expenses that under generally accepted accounting principles and
          practices would clearly be included in operating expenses.

          5.3.2. The following costs and expenses shall be excluded from the
          definition of "Operating Expenses" for purposes of this Lease: (a) any
          and all Taxes and Assessments, as defined in Subsections 5.2.1, 5.2.2,
          and 5.2.3 above; (b) any costs or expenses separately billed to a
          particular tenant of the Real Property and not billed as such tenant's
          percentage share of costs or expenses of that type (provided, however,
          Tenant's Percentage Share, as applied to such cost categories, shall
          be recomputed to exclude the 

                                                                   Page 8 of 38.
<PAGE>
 
          rentable area of premises of tenants being so billed separately); (c)
          costs for tenant improvements and leasing commissions; (d)
          depreciation on the Building and the equipment therein; (e) costs of
          capital improvements, other than such as are specifically described
          and included as Operating Expenses in Subsection 5.3.1 above; (f) any
          costs recovered from condemnation or insurance proceeds; (g)
          depreciation, amortization, and interest on and capital retirement of
          debt, except to the extent such costs shall have been elsewhere
          expressly included in the definition of Operating Expenses; (h)
          attorneys' fees, costs and disbursements and other expenses incurred
          in connection with negotiations or disputes with tenants, other
          occupants, or prospective tenants or other occupants of the Building;
          (i) costs of Landlord's general administration, other than as
          specifically described and set forth in Subsection 5.3.1; (j) costs
          incurred in advertising and promotional activities for marketing of
          the Building to persons other than the then occupants of the Building;
          (k) when and if any service (such as janitorial service) that is
          normally provided by Landlord to tenants of the Building is not
          provided by Landlord to Tenant in the Premises pursuant to agreement
          with Tenant under the specific terms of this Lease, then in
          determining Operating Expenses for Tenant, the cost of that service
          (except as it relates to common areas) shall be excluded; and (l)
          unless specifically included under Subsection 5.3.1 above, any other
          expense that under generally accepted accounting principles and
          practice would clearly be excluded from operating expenses;

          5.3.3. If at any time less than ninety-five percent (95%) of the
          rentable area of the Building is occupied, the Operating Expenses
          shall be reasonably adjusted by Landlord to approximate such operating
          and maintenance costs as would have been incurred if the Building had
          been at least ninety-five percent (95%) occupied.

       5.4 Allocations of Certain Costs. If any Taxes, Assessments, or Operating
       Expenses paid in one year relate to more than one calendar year, Landlord
       shall allocate such Taxes, Assessments, or Operating Expenses among the
       appropriate calendar years. If the Term ends other than on December 31,
       Tenant's obligations to pay Tenant's Percentage Share of estimated and
       actual amounts of increases in Taxes, Assessments, and Operating Expenses
       for such final calendar year shall be prorated to reflect the portion of
       such year included in the Term. Such proration shall be made by
       multiplying the total estimated or actual (as the case may be) Taxes,
       Assessments, and Operating Expenses for such calendar year by a fraction,
       the numerator of which shall be the number of days of the Term during
       such calendar year, and the denominator of which shall be 365. Landlord
       may, but shall not be required to, calculate prorations with regard to
       when during a calendar year particular items of Taxes, Assessments, and
       Operating Expenses were incurred. If any Taxes, Assessments, or Operating
       Expenses are not separately assessed against or separately charged to the
       Real Property, but are (a) jointly assessed against or charged to the
       Real Property and other land or improvements in the Facility, or (b)
       assessed against or charged to land or improvements in the Facility that
       are used as common areas for the benefit of the Building and one or more
       other buildings in the Facility, an equitable portion, as reasonably
       determined by Landlord, of such Taxes, Assessments, or Operating Expenses
       shall be allocated to the Real Property for purposes of this Section 5.

       5.5 Estimated Payments. Landlord shall notify Tenant of the estimated
       monthly amount of Tenant's Percentage Share of increases in Taxes,
       Assessments, or Operating Expenses and Tenant shall pay Landlord such
       estimated amount at the same time as and together with Tenant's Minimum
       Monthly Rent.  Landlord may from time to time, by notice to Tenant,
       change such estimated monthly or quarterly amounts based upon Landlord's
       actual or projected Taxes, Assessments, or Operating Expenses.

       5.6 Statement of Expenses. Landlord shall, after December 31 of each
       year, determine and furnish to Tenant a notice containing a computation
       of the charge or credit to Tenant for any difference between (a) Tenant's
       allocable share of the actual Taxes, Assessments, and Operating Expenses
       and (b) the estimated portion(s) thereof paid by Tenant for the preceding
       calendar year, and the amount of any underpayment shall be paid by Tenant
       within ten (10) days after delivery of said notice. Such notice shall
       contain a line item detail setting forth by categories the actual
       Operating Expenses incurred by Landlord for the previous year. In the
       event of overpayment by Tenant, Landlord shall credit such overpayment in
       full against Tenant's payment of rent next coming due hereunder. Upon
       expiration or sooner termination 

                                                                   Page 9 of 38.
<PAGE>
 
       of this Lease, if Tenant was not in material default hereunder
       immediately prior thereto, Landlord shall refund to Tenant any
       overpayment.

       5.7 Non-Waiver of Rights. Without limitation to the provisions of Section
       30 (Non-Waiver), no failure or determination of Landlord in any one year
       to include or exclude certain items in its computation of Taxes,
       Assessments, or Operating Expenses or to invoice Tenant for the full
       amount of Tenant allocable share of Taxes Assessments, or Operating
       Expenses shall be construed as depriving Landlord of the right to include
       such items as Taxes, Assessments, or Operating Expenses or to invoice
       Tenant for the full amount of Tenant's allocable share thereof in any
       subsequent year in strict accordance with the provisions of this Section
       5.

       5.8 Right to Audit:

          5.8.1 The good-faith determination of the accountant then serving
          Landlord shall be conclusive and determinative of what constitutes a
          Tax, Assessment, or Operating Expense each year. During the 30-day
          period commencing upon Tenant's receipt of any statement provided by
          Landlord under Subsection 5.6 above, Tenant shall have the right, at
          Tenant's expense and upon not less than forty-eight (48) hours' prior
          notice to Landlord, to inspect at reasonable times Landlord's books
          and records for the Facility for the calendar year covered by such
          statement, for purposes of verifying Landlord's calculation of Taxes,
          Assessments, and Operating Expenses. Such inspection may only be done
          by an accounting firm which is generally considered to be one of the
          ten (10) largest accounting firms headquartered in the United States.
          If Tenant shall not have availed itself of such inspection, Tenant
          shall be deemed to have accepted as final and determinative the
          amounts shown on the statement of expenses. If Tenant shall have
          availed itself of its right to inspect the books and records, and then
          disputes the accuracy of the information set forth in Landlord's books
          and records with respect to the statement of expenses, Tenant shall
          nevertheless continue to pay the amounts as required by the provisions
          of this Section 5; provided however, that no later than six (6) months
          after receipt of the statement of expenses, Tenant must (or its right
          to contest such charges shall be deemed waived) institute arbitration
          proceedings against Landlord, in an arbitration proceeding governed by
          the rules of the American Arbitration Association, to collect and
          recover any overpayment made by Tenant resulting from errors in the
          books and records of Landlord; and provided further, that Tenant
          shall, within ten (10) days after filing of the complaint, serve
          Landlord with a copy of the complaint filed in any such proceeding.
          Tenant shall be precluded from contesting Taxes, Assessments, or
          Operating Expenses, or Landlord's computations of the amounts payable
          by Landlord or Tenant pursuant to this Section 5, unless an
          arbitration complaint is filed and served within such six (6) month
          period. Should the arbitrator find errors in excess of ten percent
          (10%) of the statement of expenses, then Landlord shall be responsible
          for all reasonable fees incurred by Tenant with respect to the
          arbitration proceeding. Should the arbitrator find errors of less than
          four percent (4%) of the statement, then Tenant shall be responsible
          for all the reasonable fees incurred by Landlord with respect to the
          arbitration proceeding. Should the arbitrator find errors of between
          four percent (4%) and ten percent (10%) of the statement, then each
          party shall be responsible for all fees incurred by it with respect to
          the arbitration proceeding.

          5.8.2 If Tenant institutes such arbitration procedures, then the
          arbitrator shall determine whether or not Tenant was over-charged for
          Tenant's Percentage Share of increases in Taxes, Assessments, or
          Operating Expenses or undercharged for its share of increases. At the
          conclusion of the arbitration, the arbitrator shall issue a ruling as
          to what the Taxes, Assessments, and Operating Expenses, and Tenants
          Percentage Share of increases therein, should have been had Landlord
          strictly complied with the provisions of this Lease. If Landlord
          overcharged Tenant for increases in Taxes, Assessments, or Operating
          Expenses, the amount of the overcharge shall be returned to Tenant
          within thirty (30) days following the conclusion of the arbitration.
          If the arbitrator determines that Tenant was undercharged for
          increases in Taxes, Assessments, or Operating Expenses, Tenant shall
          pay the amount of such undercharge to Landlord within thirty (30) days
          following the issuance of the arbitration ruling.

                                                                  Page 10 of 38.
<PAGE>
 
6.  SECURITY:

       6.1 Deposit. Concurrently with the execution of this Lease, Tenant shall
       deposit with Landlord the amount specified in Subsection 1.1(f) (the
       "Deposit"), which shall be held by Landlord as security for the full and
       faithful performance of Tenant's covenants and obligations under this
       Lease. The Deposit is not an advance Minimum Monthly Rent deposit, an
       advance payment of any other kind, or a measure of Landlord's damages in
       case of Tenant's default. If Tenant fails to comply with the full and
       timely performance of any or all of Tenant's covenants and obligations
       set forth in this Lease, then Landlord may (but shall not be required
       to), from time to time, without waiving any other remedy available to
       Landlord, use the Deposit, or any portion of it, to the extent necessary
       to cure or remedy such failure or to compensate Landlord for all damages
       sustained by Landlord resulting from Tenant's failure to comply fully and
       timely with its obligations pursuant to this Lease. No acceptance of such
       payment shall be construed as an admission that Tenant has performed all
       of its obligations hereunder. If Landlord elects to make such application
       of all or any portion of the Deposit, Landlord shall notify Tenant of the
       nature and amount thereof and Tenant shall within ten (10) days
       thereafter deposit with Landlord an amount sufficient to increase the
       Deposit to an amount equal to one hundred ten percent (110%) of the
       amount thereof set forth in Subsection 1.1(f), as the same may have been
       increased by prior applications of this Subsection 6.1, and any Tenant
       failure to immediately do so shall constitute an Event of Default under
       this Lease. If Tenant is in compliance with this Lease's covenants and
       obligations as of the sixtieth (60th) day after the expiration or earlier
       termination of this Lease and Tenant's vacating of the Premises, Landlord
       shall thereupon return to Tenant the unused portion of the Deposit and
       any advance rent paid by Tenant. Each time the Minimum Monthly Rent shall
       increase pursuant to the provisions of this Lease, within five (5)
       business days thereafter, Tenant shall pay to Landlord as additional
       Deposit an amount equal to the difference between the new Minimum Monthly
       Rent and the Minimum Monthly Rent in effect immediately prior to such
       increase. Landlord's obligations with respect to the Deposit are those of
       a debtor and not a trustee. Landlord shall not be required to maintain
       the Deposit separate and apart from Landlord's general or other funds,
       and Landlord may commingle the Deposit with any of Landlord's general or
       other funds. Tenant shall not at any time be entitled to interest on the
       Deposit.

       6.2 No Bar or Defense to Other Remedies. No security or guaranty that may
       now or hereafter be furnished to Landlord for the payment of the rent
       herein reserved or for performance by Tenant of the other covenants or
       conditions of this Lease shall in any way be a bar or defense to any
       action in unlawful detainer, or for the recovery of the Premises, or to
       any action that Landlord may at any time commence for a breach of any of
       the covenants or conditions of this Lease.

7. HAZARDOUS SUBSTANCES:

       7.1 Definitions. As used herein, "Hazardous Substance" shall mean any
       substance, material, or waste that is or becomes regulated by any
       federal, state, or local governmental authority because of its toxicity,
       infectiousness, radioactivity, explosiveness, ignitability,
       corrosiveness, or reactivity; and "Environmental Requirements" shall mean
       all Laws relating to industrial hygiene, protection of human health,
       warnings, hazard communication, employee rights-to-know, environmental
       protection, or any Hazardous Substance.

       7.2 Consent Required for Hazardous Substances. Tenant shall not cause or
       permit any Hazardous Substance to be brought upon, generated, produced,
       kept or used in or about the Facility by Tenant or any Tenant Parties
       unless (a) such Hazardous Substance is necessary for Tenant's business
       (and such business is a Permitted Use) and (b) Tenant first obtains the
       consent of Landlord if such Hazardous Substance is other than (i) an
       "Article" (as defined in 29 C.F.R. (S)1910.1200) that is free of asbestos
       (whether friable or nonfriable) and polychlorinated biphenyls (PCBs) or
       (ii) a consumer product that is used on the Premises in quantities that
       would not require any notification or reporting under any Environmental
       Requirement, or any warnings to any persons located anywhere outside the
       Premises, if the entire quantities were released into the environment.
       Any request by Tenant for such consent shall be in writing and shall
       demonstrate to the reasonable satisfaction of Landlord that such
       Hazardous Substance will be stored, used, and disposed of in a manner
       that complies with all 

                                                                  Page 11 of 38.
<PAGE>
 
       Environmental Regulations applicable to such Hazardous Substance. Such
       consent shall not be unreasonably withheld, but Landlord shall in no case
       be obligated to consent to the presence of any Hazardous Substance that
       will increase the likelihood or magnitude of Landlord's liability, or to
       any treatment, storage, or disposal upon the Premises or the Facility of
       any Hazardous Substance whose treatment, storage, or disposal requires a
       permit or variance under applicable Environmental Requirements. In no
       event shall Landlord ever be obligated to execute any application for any
       such permit or variance.

       7.3 Notices. Tenant shall promptly deliver to Landlord copies of any
       reports made to any environmental agency arising out of or relating to
       any Hazardous Substances in, on, or from the Premises and copies of all
       hazardous waste manifests reflecting the legal and proper disposal of all
       hazardous wastes removed by Tenant from the Facility. If at any time
       Tenant shall become aware, or have reasonable cause to believe that any
       Hazardous Substances, other than those already known by Landlord or
       permitted under this Lease, have come to be located in or about the
       Premises, or that any known Hazardous Substances have been, are being, or
       threaten to be released into the environment, Tenant shall, immediately
       upon discovering same, give notice of that condition to Landlord.

       7.4 Compliance with Environmental Requirements. Without limitation to the
       generality of Subsection 2.2 (Restriction on Use), Tenant shall at its
       own expense fully comply with all Environmental Requirements, prudent
       industry practices, and Landlord's Rules and Regulations regarding use,
       handling, disturbance, management, or disposal of Hazardous Substances,
       except as otherwise provided in Subsection 7.5 below. Except as
       discharged into the sanitary sewer in strict accordance and conformity
       with all applicable Environmental Requirements, Tenant shall cause any
       and all Hazardous Substances removed from the Premises (or from any other
       portion of the Facility, if their removal is at the instance or direction
       of Tenant) to be removed and transported solely by duly licensed haulers
       to duly licensed facilities for final disposal of such materials and
       wastes. Upon expiration or earlier termination of the Term, Tenant shall
       cause to be removed from the Premises and the Facility all Hazardous
       Substances that Tenant or any Tenant Parties caused or permitted to be
       located there. If the presence of Hazardous Substances brought onto the
       Facility by any of such persons results in contamination of any portion
       of the Facility, Tenant shall be solely responsible, at its sole expense,
       for taking any and all necessary steps to return the affected portion of
       the Facility to its condition prior to such contamination, as reasonably
       determined by Landlord; provided, however, that Tenant shall not take any
       remedial action (except in emergencies) in response to the presence of,
       nor enter into any settlement agreement, consent decree, or other
       compromise in respect to any claims relating to, any Hazardous Substance
       in any way connected with the Facility, without first notifying Landlord
       of Tenant's intention to do so and affording Landlord ample opportunity
       to appear, intervene, or otherwise appropriately assert and protect
       Landlord's interest with respect thereto; and further provided, that
       Landlord shall have the right (but not the obligation) to perform any
       such remediation on Tenant's behalf, in which event Tenant shall
       reimburse Landlord for all of Landlord's reasonable costs and expenses
       incurred in connection therewith.

       7.5 Landlord's Obligation. Subject to Landlord's right to reimbursement
       of certain costs or expenses under other provisions of this Lease,
       Landlord agrees to use commercially reasonable efforts to comply with all
       applicable Environmental Requirements regarding the use, management, or
       disposal of Hazardous Substances (a) that were existing on the Premises
       as of the date Tenant originally took occupancy thereof under a prior
       lease or (b) that were otherwise brought upon or kept or used in or about
       the Facility by Landlord, its agents, employees, or contractors.

8. NO LIGHT, AIR OR VIEW EASEMENT:

No diminution or shutting off of light, air, or view by any structure that may
be erected on the lands of the Facility or other nearby lands shall in any way
affect this Lease, abate any rent hereunder, or otherwise impose any liability
on Landlord.

9. ALTERATIONS:

       9.1 Tenant's Right to Make Alterations. Tenant shall not make or suffer
       to be made any alterations, additions, improvements, or utility
       installations of an amount greater than TEN 

                                                                  Page 12 of 38.
<PAGE>
 
       THOUSAND DOLLARS ($10,000.00) (collectively, "Alterations") to the
       Premises or any part thereof without the prior consent of Landlord.
       Tenant specifically acknowledges that it shall not be unreasonable for
       Landlord to withhold approval of any proposed contractor or subcontractor
       of Tenant on the grounds that Landlord believes that the performance of
       work in the Building by such contractor or subcontractor could result in
       labor disputes with Landlord's own contractors or Building employees of
       Landlord or Landlord's contractors. Landlord may, at any time during the
       Term, require Tenant to remove any or all Alterations made without
       Landlord's consent or otherwise made in material violation of any of the
       provisions of this Section 9. In no event shall Landlord be required to
       consent to any Alterations that would not be normal for the Permitted
       Uses, that might adversely affect the utility or value of the Premises or
       the Building for future tenants, that would alter the exterior appearance
       of the Building, that would be of a structural nature, that could
       adversely affect the plumbing, mechanical, or electrical systems
       servicing the Facility, that would be excessively expensive to remove, or
       that would otherwise be prohibited under this Lease. All permitted
       Alterations shall be made in conformity with the requirements of
       Subsection 9.2 below. Once any such Alterations have been completed,
       whether prior to or during the Term of this Lease, they shall thereafter
       be included in the designation of the Tenant Improvements.

       9.2 Installation of Alterations. Any Alterations installed by Tenant
       during the Term shall be done in strict compliance with all of the
       following requirements:

          9.2.1 No such work shall proceed without Landlord's prior written
          approval of (i) Tenant's contractor(s); (ii) certificates of insurance
          from a company or companies approved by Landlord, furnished to
          Landlord by Tenant's contractor, for combined single limit bodily
          injury and property damage insurance covering comprehensive general
          liability and automobile liability, in an amount not less than One
          Million Dollars ($1,000,000) per occurrence and endorsed to show
          Landlord, Landlord's property manager, and each general partner of
          Landlord (if Landlord is a partnership) as additional insureds, and
          for workers' compensation as required by law, endorsed to show a
          waiver of subrogation by the insurer to any claims Tenant's contractor
          may have against Landlord (provided, however, nothing in this
          Subsection 9.2.1 shall release Tenant of its other insurance
          obligations hereunder); and (iii) detailed plans and specifications
          for such work. Any changes in, deviations from, modifications of, or
          amendments to the approved plans and specifications shall also require
          Landlord's prior written approval.

          9.2.2 Tenant shall cause its contractor(s) to coordinate with
          Landlord's building management all construction and installation
          activities covered by this Subsection 9.2. All such work shall be done
          in a skillful and first class workmanlike manner, consistent with high
          quality practices and standards of the construction industry, and
          shall be pursued diligently and continuously until completed, always
          in conformity with the approved plans and specifications. All
          materials, equipment, and articles incorporated into the Alterations
          shall be new, and of recent manufacture, and of the most suitable
          grade for the purpose intended.

          9.2.3 No Alterations shall be commenced without Tenant first having
          obtained a valid building permit and/or all other permits or licenses
          when and where required, copies of which shall be furnished to
          Landlord before the work is commenced. Any work not acceptable to any
          governmental authority or agency having or exercising jurisdiction
          over such work, or not reasonably satisfactory to Landlord, shall be
          promptly replaced and corrected at Tenant's expense. Landlord's
          approval or consent to any such work shall not impose any liability
          upon Landlord. No work shall commence until and unless Landlord has
          received at least ten (10) days' notice that such work is to commence.

          9.2.4 Tenant shall immediately reimburse Landlord for any expense
          greater than FIVE HUNDRED DOLLARS ($500.00) incurred by Landlord in
          reviewing and approving the plans and specifications (and any
          modifications thereto) for such work or the work itself.

          9.2.5 If the estimated cost of the Alterations exceeds Five Thousand
          Dollars ($5,000.00), then (a) Tenant shall obtain any bonds required
          by Landlord pursuant to Section 11 

                                                                  Page 13 of 38.
<PAGE>
 
          below and (b) during all such times as the work is being performed,
          Tenant shall carry, or cause its approved contractors to carry,
          builder's risk completed value insurance, in an amount approved by
          Landlord.

          9.2.6 Prior to undertaking any physical work in or around the
          Premises, Tenant shall notify Landlord, in writing, of the exact
          nature and location of the proposed work and shall promptly supply
          such additional information regarding the proposed work as Landlord
          shall request. After receipt of Tenant's notice, Landlord may, to the
          extent appropriate, supply Tenant with the Building regulations and
          procedures for working in areas where there is a risk of coming into
          contact with materials or building systems that, if not properly
          handled, could cause health or safety risks or that could damage such
          systems and/or the Building. Tenant shall cause its contractors, at
          Tenant's sole cost and expense, strictly to comply with all such
          Building regulations and procedures established by Landlord and with
          all applicable Laws. Landlord shall have the right at all times to
          monitor the work for compliance with the Building regulations and any
          applicable Laws. If Landlord determines that any applicable Law or any
          Building regulations and/or procedures are not being strictly complied
          with, Landlord may immediately require the cessation of all work being
          performed in or around the Premises until such time as Landlord is
          satisfied that the applicable Laws and Building regulations and
          procedures will be observed. Neither Landlord's review and approval of
          the plans and specifications nor Landlord's monitoring of any work in
          or around the Premises shall not be deemed a certification by Landlord
          of compliance with any applicable Laws or with the Building
          regulations and procedures or a waiver by Landlord of its right to
          require strict compliance with such Laws, regulations, or procedures,
          nor shall such monitoring relieve Tenant from any liabilities relating
          to such work.

          9.2.7 Upon completion of any Alterations, Tenant shall provide
          Landlord with "as built" plans, copies of all construction contracts,
          and proof of payment for all labor and materials.

       9.3 Tenant Improvements--Treatment at End of Lease

          9.3.1 All Tenant Improvements (and all Alterations, upon their
          completion) made by or for Tenant, whether temporary or permanent in
          character, and whether made by Landlord or Tenant, shall be Landlord's
          property, and shall be surrendered to Landlord in good order,
          condition, and repair (ordinary wear and tear excepted), broom clean,
          upon the expiration or earlier termination of the Term, and Tenant
          shall not be entitled to any compensation therefor; provided however,
          that at the election of Landlord, exercisable by notice to Tenant,
          Tenant shall, at Tenant's sole expense, prior to the expiration of the
          Term, remove from the Premises all Tenant Improvements and Alterations
          (or such portion thereof as Landlord may require to be removed) and
          repair all damage to the Premises caused by such removal. At least
          thirty (30) days prior to the termination of this Lease, Tenant shall
          submit by notice to Landlord a written request of Landlord for
          instructions as to whether or not Landlord elects to require any such
          removal of Tenant Improvements or Alterations. Any damage or
          deterioration of the Premises or any Tenant Improvements that could
          have been prevented by good maintenance practices shall not be deemed
          to be ordinary wear and tear.

          9.3.2 All of Tenant's furniture, furnishings, trade fixtures,
          equipment not attached to the Building or the Premises, other personal
          property, and all trash and debris (collectively, the "Personal
          Property"), shall be completely removed by Tenant on or prior to the
          expiration of the Term; provided, however, that Tenant shall repair
          all damage caused by such removal prior to the expiration of the Term,
          and provided further, that any of Tenant's Personal Property not so
          removed shall, at the option of Landlord, automatically become the
          property of Landlord. Thereafter, Landlord may retain or in any manner
          dispose of said Personal Property not so removed, without liability to
          Tenant.

       9.4 Other Improvements in the Building. If as a result of any Alterations
       or Tenant Improvements or as a result of Tenant's particular use of the
       Premises, Landlord shall be required by any applicable Law to make other
       improvements (including, without limitation, upgrading of installations
       of life safety systems or compliance with standards for 

                                                                  Page 14 of 38.
<PAGE>
 
       handicapped persons) in or upon the Premises or any other portion of the
       Building or Facility, then Landlord shall have the right to charge Tenant
       for the cost of such other improvements.

10. REPAIR OBLIGATIONS:

       10.1 Tenant's Obligations. Except as otherwise provided in Section 9
       (Alterations), Section 16 (Building Services). and Section 23 (Damage or
       Destruction), Tenant, at its sole cost and expense, shall keep the
       Premises and every part thereof in good, clean, pest-free, and sanitary
       condition and repair at all times during the Term. All damage, injury or
       breakage to any part or portion of the Premises or the Facility caused by
       the willful or negligent act or omission of Tenant or any of its
       officers, directors, trustees, partners, agents, contractors, employees,
       licensees, invitees, visitors, customers, or trespassers (collectively,
       the "Tenant Parties") shall be promptly repaired at Tenant's sole cost
       and expense, to the satisfaction of Landlord; provided, however, that
       Tenant shall be entitled to receive reimbursement for such expense to the
       extent that the cost of any such repair is covered by insurance obtained
       by Landlord as part of Operating Expenses. Landlord shall have the right
       to perform such repair work. Tenant shall be solely responsible for the
       design and function of all of Tenant Improvements, whether or not
       installed by Landlord at Tenant's request. Tenant waives all rights to
       make repairs to the Premises or to the Facility at the expense of
       Landlord, or to deduct the cost of such repairs from any payment owed to
       Landlord under this Lease.

       10.2 Landlord's Obligations. Provided that no Event of Default shall have
       occurred and then remain uncured, Landlord shall keep in good condition
       and repair the foundations, exterior walls, structural condition of the
       interior bearing walls, and the roof of the Building, as well as any
       parking lots, parking structures, walkways, driveways, landscaping,
       fences, signs, and utility installations of the common areas. Landlord
       will make repairs at times and in such a manner as not to unreasonably
       disrupt Tenant's use. Landlord shall not, however, be obligated to paint
       the Facility; nor shall Landlord be required to maintain, repair, or
       replace windows, skylights, doors, or plate glass of the Premises.
       Landlord's obligations under this Subsection shall not apply to any non-
       insured damage or wear and tear caused by any breach or default by Tenant
       under this Lease or by any negligent or willful act or omission of Tenant
       or the Tenant Parties. Landlord shall not be obligated to perform repairs
       for which Tenant has expressly assumed responsibility under other
       provisions of this Lease. Landlord shall have no obligation to make any
       repairs under this Subsection until a reasonable time after receipt of
       notice from Tenant of the need for such repairs. Tenant hereby
       acknowledges that the foregoing description of certain obligations and
       rights of Landlord is not intended to limit or restrict Landlord's rights
       under other provisions of this Lease to reimbursement for costs and
       expenses incurred in connection with such matters.

11. LIENS:

Tenant shall keep the Premises, the Building, and the rest of the Facility free
from liens arising out of any work or materials actually or allegedly performed
or furnished, or obligations incurred, by or for Tenant. At any time Tenant
either desires or is required to make any Alterations whose estimated cost is
greater than $5,000.00, Landlord may, without limitation to the provisions of
Section 9 (Alterations) above, (a) require Tenant, at Tenant's sole cost and
expense, to obtain and provide to Landlord a completion or performance bond, in
a form and by a surety acceptable to Landlord and in an amount not less than one
and one-half (1-1/2) times the estimated cost of such Alterations, to insure
Landlord against liability from mechanics' and materialmen's liens and to insure
completion of the work, and (b) require such additional items or assurances as
Landlord in its sole discretion may deem reasonable or desirable. Tenant agrees
to indemnify and hold Landlord harmless from and against any and all claims for
mechanics', materialmen's or other liens in connection with any Alterations,
repairs, or any work performed, materials furnished, or obligations incurred by
or for Tenant. In the event any such lien is filed or asserted, Tenant shall
immediately post any bond required to release the Premises and the Facility
therefrom.

12. SIGNS; NAMES OF BUILDING AND FACILITY:

Except for a sign (which shall comply with Landlord's building standard
criteria) placed on the entry door to the Premises, Tenant shall not place any
logo, sign, advertisement, announcement, warning, or notice upon or in front of
the Premises or any common areas. Tenant shall not use any name, insignia, or
logotype of the Building or Facility for any purpose. Tenant shall not use any
picture of the Building or 

                                                                  Page 15 of 38.
<PAGE>
 
Facility in its advertising or stationery or in any other manner. Landlord
expressly reserves the right, in Landlord's sole and absolute discretion, at any
time to change the name, insignia, logotype, or street address of the Building
or the Facility without in any manner being liable to Tenant.

13. ASSIGNMENT AND SUBLETTING:

       13.1 "Transfer" Defined. As used herein, the term "Transfer" shall mean
       any assignment of this Lease (including, without limitation, assignment
       by operation of law--e.g., death of an individual tenant or merger,
       dissolution, consolidation, or other reorganization of a corporate
       tenant), subletting of all or any part the Premises, or transfer of
       possession, or right of possession or contingent right of possession of
       all or any portion of the Premises, including without limitation,
       concession, mortgage, encumbrance, devise, hypothecation, agency,
       franchise, or management agreement, or to suffer any other person (the
       agents and employees of Tenant excepted) to occupy or use the said
       Premises or any portion thereof. If Tenant is a corporation that is not
       deemed a public corporation, or is an unincorporated association or
       partnership, or if Tenant consists of more than one party, the transfer,
       assignment (including, without limitation, assignment by operation of
       law), or hypothecation of any stock of or interest in Tenant in the
       aggregate in excess of forty percent (40%), shall also be deemed to be a
       "Transfer." If Tenant is a partnership or consists of more than one
       party, then any of the foregoing events with respect to any such party
       comprising Tenant, or with respect to any general partner of Tenant or
       any such party, shall also be deemed to be a "Transfer." Notwithstanding
       the foregoing, occupancy of all or part of the Premises by parent,
       subsidiary, or affiliated companies of Tenant shall not be deemed a
       "Transfer," provided that such parent, subsidiary or affiliated companies
       were not formed as a subterfuge to avoid the obligations of this Section
       13.

       13.2 No Transfer Without Consent. Tenant shall not, either voluntarily or
       by operation of law or otherwise, suffer a Transfer without the prior
       written consent of Landlord, which consent shall not be unreasonably
       withheld, except as otherwise expressly provided below. Landlord's
       consent to one Transfer shall not be deemed to be a consent to any
       subsequent Transfer; nor shall Landlord's consent constitute an
       acknowledgment that no default then exists under this Lease of the
       obligations to be performed by Tenant; nor shall such consent be deemed a
       waiver of any then existing default, except as may be otherwise stated in
       writing by Landlord at the time; nor shall Landlord's acceptance of rent
       from any person be deemed a waiver by Landlord of any provision of this
       Section 13. If Landlord's approval or consent for any agreement or
       instrument is required hereunder, then no amendment or modification shall
       be made thereto without Landlord's prior consent. Any Transfer that is
       not in compliance with the provisions of this Section 13 shall be
       voidable at Landlord's election.

       13.3 Procedure for Assignment and Subletting/Landlord's Recapture Rights.
       Tenant shall advise Landlord by written notice of (a) Tenant's intent to
       make a Transfer, (b) the name of the proposed transferee, and evidence
       reasonably satisfactory to Landlord that such proposed transferee is
       comparable in reputation, stature and financial condition to the other
       tenants then leasing comparable space in the Facility (such evidence
       shall include, without limitation, [i] a description of the proposed
       transferee's business background and experience, [ii] the past two year's
       Federal Income Tax returns of the proposed transferee, [iii] the proposed
       transferee's audited annual Balance Sheets and Profit and Loss Statements
       for the past two year, certified correct by a Certified Public
       Accountant, [iv] banking references of the proposed transferee, and [v]
       at least five business and three personal references for the proposed
       transferee), and (c) the terms of the proposed assignment or subletting
       (including the financial terms and the intended use of the Premises),
       together with a copy of the proposed Transfer documents. Landlord need
       not commence its review of any proposed Transfer, or respond to any
       request by Tenant with respect to such, unless and until Landlord has
       received all of the foregoing documentation from Tenant. Landlord shall,
       within thirty (30) days after receipt of such notice and documentation,
       and any additional information reasonably requested by Landlord, elect
       one of the following:

          (i)  Consent to such proposed Transfer;

          (ii) Refuse such consent, which refusal shall be on reasonable
          grounds, subject to the provisions of Subsection 13.4 below; or

                                                                  Page 16 of 38.
<PAGE>
 
          (iii) Elect to terminate this Lease in the event of an assignment, or
          in the case of a sublease, terminate this Lease as to the portion of
          the Premises proposed to be sublet for the proposed term of the
          sublease. If Landlord exercises such termination option, then (A) this
          Lease shall terminate as to all or such portion, as the case may be,
          of the Premises effective as of the date on which the proposed
          Transfer was intended to have become effective, or in the event of a
          sublease the Lease shall be deemed suspended as to the sublet premises
          for the period of the proposed sublease, (B) Tenant shall vacate such
          portion of the Premises prior to such date, and (C) Landlord and
          Tenant shall have no further liability to each other under this Lease
          from and after such date, except as otherwise provided in Section 41
          (Survival of Certain Rights and Obligations). If this Lease is
          terminated as to less than all of the Premises pursuant to the
          preceding sentence, the rent under this Lease shall be equitably
          adjusted by Landlord on the basis that the rentable area of the
          portion of the Premises remaining bears to the rentable area of the
          entire Premises. No failure of Landlord to exercise its termination
          option hereunder shall be deemed a waiver of the right to terminate
          this Lease subsequently in accordance with the terms hereof, as it is
          intended that this option to terminate shall continue to exist during
          the entire Term.

       13.4 Conditions to Approval

          13.4.1 It is understood and agreed that, without limiting Landlord's
          right of consent as provided herein, Landlord's withholding consent
          shall be deemed reasonable if the proposed assignment or sublease
          fails to meet any one or more of the following criteria: (i) neither
          the proposed Transfer nor the proposed use of the Premises by the
          proposed transferee shall conflict with or result in a breach of
          Subsections 2.2 (Restriction on Use), 7.2 (Consent Required for
          Hazardous Substances), or 13.8 (Non-Competition), or any other
          provision of this Lease, nor shall it violate any exclusivity
          arrangement that Landlord may then have with any other tenant of the
          Facility; (ii) the proposed transferee shall not be a governmental
          entity; (iii) if Tenant's obligations under this Lease have been
          guaranteed by one or more third parties, then each such guarantor's
          written consent to the proposed Transfer shall have been furnished to
          Landlord; (iv) the tenancy of the proposed transferee shall not have a
          disadvantageous impact on the Common Areas or the other occupants of
          the Facility; (v) the occupation of the proposed transferee in the
          Premises shall not cause a diminution in the reputation of the
          Facility or the other businesses located therein; (vi) the proposed
          transferee shall be at least comparable in reputation, stature and
          financial condition to the other tenants then leasing comparable space
          in the Facility; and (vii) the rent payable by any proposed assignee
          or subtenant be at least at the then current rental rates for the
          Premises or comparable premises in the Facility, but not less than the
          then current Minimum Monthly Rent under this Lease.

          13.4.2 In the event that Landlord shall consent to a proposed
          Transfer, or shall reasonably disapprove a proposed Transfer (other
          than in connection with an exercise of Landlord's recapture rights
          under Subsection 13.3), pursuant to the provisions of this Section 13,
          Tenant shall pay Landlord's processing costs and attorneys' fees
          (including reasonable costs of Landlord's in-house counsel) not
          greater than ONE THOUSAND DOLLARS ($1,000.00) incurred in connection
          with such matter, as reasonably determined by Landlord.

       13.5 Landlord's Right to Bonus Rentals

          13.5.1 If Tenant at any time duly assigns this Lease (including,
          without limitation, a sale of all or substantially all of Tenant's
          assets or corporate stock) or subleases the Premises or any part
          thereof, then Tenant shall pay to Landlord, immediately upon Tenant's
          receipt thereof, ninety percent (90%) of the "Rent Differential"
          received by Tenant in connection with or in respect to such assignment
          or subletting. For purposes of this Subsection, the following
          definitions shall apply:

                (i)   the term "Rent Differential" shall mean the excess of (a)
                any and all "Proceeds" payable to Tenant over (b) Tenant's
                "Allowed Costs";

                                                                  Page 17 of 38.
<PAGE>
 
                (ii)  the term "Proceeds" shall mean any and all fees, rents,
                charges, payments, or other sums or consideration payable or
                deliverable to Tenant in connection with such assignment or
                subletting, regardless of whether any or all of such Proceeds
                are deemed to be allocable to the leasehold or to Tenant's
                corporate stock or to Tenant's business at the Premises or to
                Tenant's trade fixtures, equipment, furnishings, accounts
                receivable, or inventory at the Premises or to any other
                tangible or intangible personal property of Tenant connected
                with the Premises or Tenants business there conducted; and

                (iii) the term "Allowed Costs" shall mean (a) reasonable
                attorneys' fees and reasonable broker's commissions and fees
                paid by Tenant to nonaffiliated attorneys or brokers in
                connection with such assignment or subletting, plus (b) the
                reasonable costs of constructing any tenant improvements Tenant
                is required to furnish to such assignee or subtenant, plus (c)
                in the case of an assignment, all of the Gross Rent, or in the
                case of a subletting, the proportionate amount of the Gross Rent
                allocable to the portion of the Term and portion of the Premises
                (if less than all) covered by such subletting, as reasonably
                determined by Landlord, plus (d) the lesser of (1) the fair
                market value, as reasonably determined by Landlord, of any of
                Tenant's trade fixtures, equipment, furniture, accounts
                receivable, and/or tangible or intangible personal property sold
                to such subtenant or assignee in connection with such assignment
                or subletting or (2) the actual consideration therefor received
                by Tenant. For purposes of this Lease, the term "Gross Rent"
                shall mean Minimum Monthly Rent and the sums payable pursuant to
                Subsections 5.1, 5.2.1, 5.2.2, 5.2.3, 5.3.1, and 5.5 of this
                Lease.

          13.5.2 In the event the Proceeds are paid in installments (e.g.,
          monthly subrent), then the Allowed Costs shall be amortized over the
          scheduled number of installment payments, and Landlord's share of the
          Rent Differential shall be payable at the same time such installment
          payments are made.

          13.5.3 Tenant covenants that any allocation of payments or other
          consideration payable or deliverable to Tenant in connection with any
          subletting of the Premises or assignment of this Lease shall be made
          in good faith and not with a purpose to avoid Tenant's obligation to
          pay 90% of the Rent Differential to Landlord.

       13.6 Joint and Several Obligations. Each permitted subtenant or assignee
       shall assume all obligations of Tenant under this Lease with respect to
       the Premises, or such portion thereof as may be covered by the sublease,
       and shall be and remain jointly and severally liable with Tenant for the
       payment of Minimum Monthly Rent and additional rent and the performance
       of all of the terms, covenants, conditions, and agreements herein
       contained on Tenant's part to be performed with respect to such space;
       provided, however, that without limiting the obligations of Tenant under
       this Lease, such subtenant shall be liable to Landlord for rent only in
       the amount set forth in the sublease, unless otherwise agreed in writing
       by the parties thereto. No Transfer shall be valid and no transferee
       shall take possession of the Premises or any part thereof unless, within
       ten (10) days after the execution of the documentary evidence thereof,
       Tenant shall deliver to Landlord a duly executed duplicate original of
       the Transfer instrument in a form satisfactory to Landlord that (i)
       provides that the transferee assumes Tenant's obligations for the payment
       of rent and for the full and faithful observance and performance of the
       covenants, terms and conditions contained herein, applicable to the
       Premises in the event of an assignment or applicable to the subleased
       space in the event of a sublease, (ii) provides that the transferee will,
       at Landlord's election, attorn directly to Landlord in the event Tenant's
       Lease is terminated for any reason on the terms set forth in the
       instrument of transfer, and (iii) contains such other assurances as
       Landlord reasonably deems necessary. The failure or refusal of a
       transferee to execute such an instrument of assumption shall not release
       or discharge the assignee from its obligations set forth above.

       13.7 Assignment of Subrents. Tenant hereby assigns and transfers to
       Landlord all of Tenant's interest in any rentals or other income arising
       from any sublease heretofore or hereafter made by Tenant. Landlord may
       collect such rentals and income and apply same toward Tenant's
       obligations under this Lease; provided, however, that until an Event of
       Default shall have occurred, Tenant shall be entitled to receive,
       collect, and enjoy such rentals and income, 

                                                                  Page 18 of 38.
<PAGE>
 
       subject to the provisions of Subsection 13.5 above. Landlord shall not,
       by reason of this or any other assignment of any sublease to Landlord,
       nor by reason of any collection of rentals from a subtenant, be deemed
       liable to such subtenant for any failure of Tenant to perform or comply
       with any of Tenant's obligations to such subtenant under its sublease.
       Tenant hereby irrevocably authorizes and directs any such subtenant, upon
       receipt of a written notice from Landlord stating that an Event of
       Default has occurred under this Lease, to pay to Landlord the rentals due
       and to become due under the sublease. Tenant agrees that such subtenant
       shall have the right to rely upon any such statement and request from
       Landlord, and that such subtenant shall pay such rents to Landlord
       without any obligation or right to inquire as to whether such Event of
       Default has occurred and notwithstanding any notice from or claim from
       Tenant to the contrary. Tenant shall have no right or claim against such
       subtenant or Landlord for any such rentals so paid by such subtenant to
       Landlord.

       13.8 Non-Competition. In no event shall Tenant, without Landlord's prior
       consent, assign this Lease or sublet the Premises or any portion thereof
       to any then tenant or occupant of space in the Facility, or any
       prospective tenant with whom to the best of Tenant's knowledge and
       without inquiry. Landlord is then, or has within six (6) months prior
       thereto, engaged in lease negotiations or discussions that included the
       delivery of written correspondence concerning same by at least one of the
       parties thereto, or by its broker agent or representative to the best of
       Tenant's knowledge and without inquiry.

       13.9 No Merger. The voluntary or other surrender of this Lease by Tenant
       or mutual cancellation of this Lease shall not work a merger. At the
       option of Landlord, any such surrender or cancellation of this Lease
       shall either terminate any and all then existing subleases or
       subtenancies or operate as an assignment to Landlord of Tenant's interest
       in any and all such subleases or subtenancies.

       13.10 Landlord's Right to Assign. Landlord shall have the right to sell,
       encumber, convey, transfer, and/or assign any of its rights and
       obligations under this Lease.

14. INDEMNIFICATION; INSURANCE; ALLOCATION OF RISK:

       14.1 Indemnification. Except as to any Claims (as defined below) from
       which Landlord releases Tenant from liability pursuant to Subsection 14.5
       below, Tenant shall at its expense defend (by counsel reasonably approved
       by Landlord), protect, indemnify, and hold harmless Landlord and
       Landlord's subsidiaries, affiliates, partners, and agents, their
       respective directors, officers, stockholders, trustees, attorneys,
       employees, successors, and assigns (collectively, the "Landlord Parties")
       from and against any and all Claims for injury (including death and
       physical, psychological, and emotional injuries) to any person or damage
       to any property whatsoever, arising from or caused by (whether in whole
       or in part, directly or indirectly) any of the following occurrences or
       circumstances:

          (i) any occurrence in, on, or about the Premises or any part thereof,
          arising from any cause whatsoever, except to the extent caused by the
          sole or gross negligence or willful misconduct of Landlord and/or the
          Landlord Parties, unless covered by insurance obtained by Tenant, in
          which event such indemnification and agreement to hold harmless shall,
          to the extent of such insurance, apply even if Landlord or the
          Landlord Parties were solely negligent or engaged in gross negligence
          and/or willful misconduct;

          (ii) any occurrence in, on, or about any part of the Facility, the use
          of which Tenant may have in conjunction with other tenants or
          occupants of the Facility, to the extent such injury or damage shall
          be caused in whole or in part by Tenant or any Tenant Parties;

          (iii) any Hazardous Substances that Tenant or any Tenant Parties
          caused or permitted to be used, analyzed, stored, transported,
          disposed, deposited, generated, discharged, or released in, on, under,
          to, from, or about the Facility or any nearby property; or

          (iv) any misrepresentation, breach, or default under this Lease by
          Tenant.

                                                                  Page 19 of 38.
<PAGE>
 
       As used herein, the term "Claims" shall mean claims, liabilities,
       penalties, fines, judgments, forfeitures, losses (including, without
       limitation, diminution in the value of the Facility, and damages for the
       loss or restriction on use of rentable or usable space or of any amenity
       of the Facility), expenses (including, without limitation, reasonable
       attorneys' fees, consultant fees, expert fees, and court costs), and
       costs, including, without limitation, and whether foreseeable or
       unforeseeable, any and all costs incurred in connection with any
       investigation of site conditions, and any and all costs of any required
       or necessary repair, cleanup, detoxification, decontamination, or other
       remedial work concerning the Facility. BY SIGNING ITS INITIALS BELOW,
       TENANT ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS THE MEANING AND
       RAMIFICATIONS OF THE PROVISIONS SET FORTH IN THIS SUBSECTION AND FURTHER
       ACKNOWLEDGES THAT SUCH PROVISIONS WERE SPECIFICALLY NEGOTIATED.

       _____________ TENANT'S INITIALS

       14.2 Tenant's Insurance. Tenant shall have the following insurance
       obligations:

          14.2.1 Liability Insurance. Tenant shall, at Tenant's expense, obtain
          and keep in force at all times during the Term, a policy of commercial
          general liability and property damage insurance (including automobile
          liability). The minimum limits of liability shall be a combined single
          limit of not less than ONE MILLION DOLLARS ($1,000,000.00) per
          occurrence. The policy shall state that Landlord and the Landlord
          Parties are named as additional insureds and are entitled to recovery
          for the negligence of Tenant. The policy shall also provide for
          severability of interest; shall provide that an act or omission of one
          of the insured or additional insureds that would void or otherwise
          reduce coverage shall not void or reduce coverages as to other insured
          or additional insureds; shall insure performance by Tenant of the
          indemnity provisions of this Lease; and shall afford coverage after
          the Term of this Lease (by separate policy or extension if necessary)
          for all claims based on acts, omissions, injury or damage that
          occurred or arose in whole or in part during the term of this Lease.
          The policy shall be primary coverage for Tenant and Landlord for any
          liability arising out of Tenant's and the Tenant Parties' use,
          occupancy or maintenance of the Premises and all areas appurtenant
          thereto. The limits of said insurance shall not, however, limit any
          liability of Tenant under Subsection 14.1.

          14.2.2 Personal Property Insurance. Tenant shall maintain in full
          force and effect on all of its fixtures, personal property, and
          equipment in the Premises a policy or policies of fire and casualty
          insurance in "all risk" form (including water damage) to the extent of
          at least ninety percent (90%) of their replacement cost (without
          deduction for depreciation), or that percentage of the replacement
          cost required to negate the effect of a coinsurance provision,
          whichever is greater. No such policy shall have a deductible in a
          greater amount than FIVE HUNDRED DOLLARS ($500.00). Tenant shall also
          insure in the same manner the physical value of all its leasehold
          improvements, if any, in the Premises. The "full replacement value" of
          the improvements to be insured under this Subsection 14.2.2 shall be
          determined by the company issuing the insurance policy at the time the
          policy is initially obtained. Not less frequently than once every
          three (3) years, Landlord shall have the right to notify Tenant that
          it elects to have the replacement value redetermined by an insurance
          company or insurance consultant. The redetermination shall be made
          promptly and in accordance with the rules and practices of the Board
          of Fire Underwriters, or a like board recognized and generally
          accepted by the insurance company, and each party shall be promptly
          notified of the results by the company. The insurance policy shall be
          adjusted according to the redetermination. During the Term, the
          proceeds from any such policy or policies of insurance shall be used
          for the repair or replacement of the fixtures, equipment, and
          leasehold improvements so insured. Landlord shall have no interest in
          said insurance, and will sign all documents necessary or proper in
          connection with the settlement of any claim or loss by Tenant. Tenant
          shall also maintain insurance for all plate glass upon the Premises.
          All such insurance shall contain waivers of subrogation to the extent
          available on a commercially reasonable basis.

                                                                  Page 20 of 38.
<PAGE>
 
          14.2.3 Worker's Compensation Insurance. Tenant shall carry and
          maintain Workers Compensation and Employer's Liability insurance as
          required by applicable Laws.

          14.2.4 Business Interruption. Tenant shall maintain loss of income and
          business interruption insurance in such amounts as will reimburse
          Tenant for direct or indirect loss of earnings attributable to all
          perils commonly insured against by prudent tenants or attributable to
          prevention of access to the Premises or to the Building as a result of
          such perils, but in no event in an amount less than the Gross Rent
          payable hereunder for six (6) months. All such insurance shall contain
          waivers of subrogation to the extent available on a commercially
          reasonable basis.

          14.2.5 Other Coverage. Not more frequently than every three (3) years,
          if, in the reasonable opinion of Landlord's lender or of the insurance
          consultant retained by Landlord, the amount of public liability and
          property damage insurance coverage at that time is not adequate, or
          additional coverages not specified above should be obtained, Tenant,
          at its cost, shall increase such insurance coverage, and/or obtain
          such additional coverages, as required by either Landlords's lender or
          Landlord's insurance consultant, consistent with the then prevailing
          custom for new leases of similar space in the business district where
          the Facility is located.

          14.2.6 Insurance Criteria. All the insurance required to be carried by
          Tenant (except Tenant's Personal Property Insurance and Workers
          Compensation Insurance) hereunder shall:

               (i)   Be issued by insurance companies that are qualified and
               admitted to do business in the State where the Facility is
               located and that carry a designation in "Best's Insurance
               Reports," as issued from time to time throughout the Term, as
               follows: Policy holders' rating of A; financial rating of not
               less than X;

               (ii)  Be issued in a form acceptable to Landlord.

               (iii) Contain an endorsement requiring thirty (30) days' written
               notice from the insurance company to both parties and to
               Landlord's lender before cancellation or expiration or decrease
               in the coverage, scope, or amount of any policy.

               (iv)  Waive subrogation, as required by Subsections 14.2.2,
               14.2.4, and 14.5, with respect to property loss or damage by fire
               or other casualty.

               (v)   Name Landlord and its property manager as additional
               insureds and, at Landlord's request, shall carry a lender's loss
               payee endorsement in favor of Landlord's lender and such other
               endorsement(s) as Landlord may reasonably require from time to
               time.

          14.2.7 Evidence of Coverage. An executed copy of each insurance
          policy, or a certificate thereof with the actual policy attached,
          shall be delivered to Landlord prior to Tenant's commencing remodeling
          work in or taking occupancy of the Premises, and Tenant shall keep
          each such policy in full force and effect throughout the Term. Renewal
          policies or certificates thereof shall be delivered to Landlord at
          least thirty (30) days in advance of the expiration dates of the
          expiring policies.

          14.2.8 Tenant Insurance Default. In the event that Tenant fails to
          deliver to Landlord any policy, certificate, or renewal notice
          hereunder required within the prescribed time period, or if any such
          policy is canceled or modified during the Term without Landlord's
          consent, Landlord may at its option, but shall not be obligated to,
          obtain such insurance on behalf of Tenant and bill Tenant, as
          additional rent, for the cost thereof. The provisions of this Section
          14 are for the benefit of Landlord and its lenders only and are not
          nor shall they be construed to be for the benefit of any employee of
          Tenant, any other tenant or occupant of the Building or the Facility,
          or any other person whatsoever.

                                                                  Page 21 of 38.
<PAGE>
 
       14.3 Landlord's Insurance. Landlord shall maintain policies of insurance
       covering loss of or damage to the Building in the full amount of its
       replacement cost. Such policies shall provide protection (subject to
       reasonable deductibles) against all perils included within the
       classification of fire, extended coverage, vandalism, malicious mischief,
       special extended perils (all risk), sprinkler leakage, and any other
       perils (e.g., flood and earthquake) that Landlord reasonably deems
       appropriate. Landlord shall not obtain insurance for Tenant's trade
       fixtures or equipment.

       14.4 Exculpation. Except to the extent otherwise expressly provided below
       in this Subsection, Tenant hereby waives all Claims against Landlord and
       the Landlord Parties for any loss, theft, or damage to Tenant's business
       or Personal Property or injury (including death and physical,
       psychological, and emotional injuries) to persons, in, upon or about the
       Premises and/or the Facility from any cause whatsoever, including,
       without limitation, the active or passive negligence of Landlord or the
       Landlord Parties.  Without limiting the generality of the foregoing,
       Tenant specifically acknowledges that such waived Claims includes
       injuries, losses, and damage resulting from the following causes:

       Fire; smoke; explosion; falling plaster, ceiling tiles, fixtures, or
       signs; broken glass; steam; gas; fumes; vapors; odors; dust; dirt;
       grease; acid; oil; any other Hazardous Substance; debris; noise; air or
       noise pollution; vibration; theft; breakage; vermin; electricity;
       computer or electronic equipment or systems malfunction or stoppage;
       water; rain; flooding; freezing; windstorm; snow; sleet; hail; frost;
       ice; excessive heat or cold; sewage; sewer backup; toilet overflow; leaks
       or discharges from or into the Premises or any other part of the
       Facility, or from any pipes, sprinklers, appliances, equipment
       (including, without limitation, heating, ventilating, and air-
       conditioning equipment); electrical or other wiring; plumbing fixtures;
       roofs; windows; skylights; doors; trapdoors; the surface or subsurface of
       any floor or ceiling of any part of the Facility; dampness or climatic
       conditions; maintenance, repair, or construction activities; renovation
       work; and any interruption, cessation, or failure of any public or other
       utility service.

       The foregoing notwithstanding, neither Landlord nor the Landlord Parties
       shall be released from liability for their own gross negligence or
       willful misconduct or Landlord's negligent failure to respond to written
       notice from Tenant of deficiencies that result in such loss, damage, or
       injury (provided that the correction of such deficiencies is the
       obligation of Landlord hereunder). However, Landlord's liability shall be
       subject to the further limitations set forth in Subsection 22.6. BY
       SIGNING ITS INITIALS BELOW, TENANT ACKNOWLEDGES THAT IT HAS READ AND
       UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THE PROVISIONS SET FORTH IN
       THIS SUBSECTION AND FURTHER ACKNOWLEDGES THAT SUCH PROVISIONS WERE
       SPECIFICALLY NEGOTIATED.

       _____________ TENANT'S INITIALS

       14.5 Allocation of Insured Risks/Subrogation.

          14.5.1 Landlord and Tenant release each other from any Claims of
          whatever nature for damage, loss, or injury to the Premises, the
          Building, and/or the Facility, or to the other's property in, on, or
          about the Premises and the Facility, to the extent of any insurance
          proceeds that are received or receivable (or that would have been
          receivable but for such releasing party's breach or default of its
          obligations under this Lease), even if such damage, loss, or injury
          shall have been caused by the fault or negligence (but not willful
          misconduct) of the other party or anyone for whom such party may be
          responsible. Landlord and Tenant shall each cause their respective
          insurance policies to provide that the insurance company waives all
          right of recovery by way of subrogation against either Landlord or
          Tenant in connection with any damage covered by any policy. To the
          extent of any insurance proceeds actually received, or that would have
          payable but for a breach of this Lease, neither Landlord nor Tenant
          shall be liable to the other for any damage caused by fire or any of
          the risks insured against under any insurance policy required by this
          Lease.

          14.5.2 If an insurance policy cannot be obtained with a waiver of
          subrogation, or is obtainable only by the payment of an additional
          premium charge above that charged by 

                                                                  Page 22 of 38.
<PAGE>
 
          insurance companies issuing policies without waiver of subrogation,
          the party undertaking to obtain the insurance shall notify the other
          party of this fact. The other party shall have a period of ten (10)
          days after receiving the notice either to place the insurance with a
          company that is reasonably satisfactory to the other party and that
          will carry the insurance with a waiver of subrogation, or to agree to
          pay the additional premium if such a policy is obtainable at
          additional cost. If the insurance cannot be obtained or the party in
          whose favor a waiver of subrogation is desired refuses to pay the
          additional premium charged, the other party is relieved of the
          obligation to obtain a waiver of subrogation with respect to the
          particular insurance involved.

15. SECURITY SERVICES:

       15.1 Landlord's Obligation to Furnish Security Services. Landlord may,
       but shall not be obligated to, furnish security services for the Premises
       and/or the Building and/or the Facility as Landlord deems appropriate in
       its sole and absolute discretion. In the event Landlord does furnish or
       contract to furnish any such services, Tenant shall nevertheless have
       sole responsibility for the protection of itself, the Tenant Parties and
       all property of Tenant and the Tenant Parties located in, on, or about
       the Premises or the Building or the Facility, and the provisions of
       Section 14 shall nevertheless continue in full force and effect.

       15.2 Tenant's Right to Install Security System. If Tenant wishes to
       establish or install any automated and/or non-automated security system
       in, on, or about the Premises, Tenant shall first notify Landlord of
       Tenant's plan for any such system, and Landlord shall have the right to
       review and approve or disapprove said plan in Landlord's discretion;
       however, Landlord's approval will not be unreasonably withheld. If
       Landlord approves any such plan and Tenant establishes or installs any
       automated and/or non-automated security system in, on, or about the
       Premises, and should such system adversely affect the Premises or the
       Facility or the desirability of the Premises or the Facility as
       commercial space for its then current uses, or have an adverse effect on
       other tenants, respectively, Landlord shall subsequently have the right
       to review Tenant's security system from time to time and request Tenant
       to make such changes in personnel and/or equipment. Tenant shall make
       said requested changes immediately thereafter.

16. BUILDING SERVICES:

       16.1 Standard Building Services. Subject to the full performance by
       Tenant of all of Tenant's obligations under the Lease, Landlord shall
       furnish the Premises with the standard building services and utilities as
       set forth in the attached Exhibit D.

       16.2 Additional Services. Tenant shall not, without the consent of
       Landlord, (a) use any equipment, apparatus, or device in the Premises
       that will in any way increase the amount of electricity, cooling
       capacity, or water usually furnished or supplied for use of the Premises
       for general office purposes or (b) connect with electric current, except
       through existing electrical outlets in the Premises, or connect to water
       pipes, any apparatus or device for the purpose of using electric current
       or water. Tenant agrees to pay immediately upon demand all reasonable
       charges imposed by Landlord from time to time for all building services
       and utilities supplied to or used by Tenant in excess of or in addition
       to those standard building services and utilities described in Exhibit D.
       Such excess and additional building services and utilities are
       hereinafter referred to as "Additional Services." Landlord may at any
       time cause a switch and/or metering system to be installed at Tenant's
       expense (which expense Tenant shall pay within ten (10) working days
       after receipt of an invoice from Landlord covering the installment cost
       of such switch or metering system) to measure the amount of building
       services, utilities, and/or Additional Services consumed by Tenant or
       used in the Premises.

       16.3 Conservation. Tenant shall cooperate fully with Landlord to effect
       conservation of all utilities in the Building and shall use reasonable
       efforts to minimize its use of water, heat, electricity, and air
       conditioning.

       16.4 Landlord's Right to Cease Providing Services.  Landlord reserves the
       right, in its sole and absolute discretion with respect to item (a)
       below, and in its reasonable discretion  and with reasonable notice with
       respect to item (b) below, to reduce, interrupt, or cease service of the
       heating, air conditioning, ventilation, elevator, plumbing, electrical
       systems, telephone 

                                                                  Page 23 of 38.
<PAGE>
 
       systems, and/or utility services of the Premises, the Building, or the
       Facility, for any of the following reasons or causes:

          (a) any accident, emergency, Law, or Force Majeure (as defined in
          Section 17); or

          (b) the making of any repairs, additions, alterations, or improvements
          to the Premises, the Building, or the Facility, until such repairs,
          additions, alterations, or improvements shall have been completed.

       No such interruption, reduction, or cessation of any such building
       services or utilities shall constitute an eviction or disturbance of
       Tenant's use or possession of the Premises or common areas, or a breach
       of Landlord's obligations hereunder, or render Landlord liable for any
       damages (including, without limitation, any damages, compensation, or
       claims arising from any interruption or cessation of Tenant's business),
       or entitle Tenant to be relieved from any of its obligations under the
       Lease, or result in any abatement of rent. However, Landlord shall use
       commercially reasonable diligence to restore such service, and to
       minimize any disturbance to Tenant, where it is within Landlord's
       commercially reasonable control to do so.

17. FORCE MAJEURE:
Except as otherwise expressly provided elsewhere in this Lease with respect to
Tenant's right to abatement of Gross Rent under certain circumstances, Landlord
shall not be chargeable with, liable for, or responsible to Tenant for anything
or in any amount for any failure to perform or delay caused by any of the
following events (collectively, "Force Majeure"): fire; earthquake; explosion;
flood; hurricane; the elements; acts of God or the public enemy; actions,
restrictions, limitations or interference of governmental or quasi-governmental
authorities or agents; war; invasion; insurrection; rebellion; riots; strikes or
lockouts; inability to obtain necessary materials, goods, equipment, services,
utilities or labor; accident; breakage; or any other cause whether similar or
dissimilar to the foregoing which is beyond the reasonable control of Landlord;
and any such failure or delay due to said causes or any of them shall not be
deemed a breach of or default in the performance of this Lease by Landlord.

18. RULES AND REGULATIONS:
Tenant, its agents, employees, and servants and those claiming under Tenant will
at all times observe, perform, and abide by all of the general rules and
regulations promulgated by Landlord as set forth in Exhibit C, and as reasonably
modified, supplemented, or amended by Landlord from time to time (the "Rules and
Regulations"). Landlord shall not be responsible to Tenant for the
nonperformance by any other tenant or occupant of the Facility of any of said
rules and regulations, and Landlord reserves the right to make reasonable
exceptions for specific tenants or occupants with respect to the application of
certain rules and regulations. Subject to the foregoing, Landlord agrees to use
commercially reasonable efforts, consistent with Landlord's rights under
applicable leases, to apply the Rules and Regulations in a fair, responsible,
and equitable manner. If there is a conflict between the Rules and Regulations
and any provision of this Lease, the provisions of this Lease shall prevail.

19. HOLDING OVER:

       19.1 Surrender of Possession. Tenant shall surrender possession of the
       Premises immediately upon the expiration of the Term or termination of
       this Lease. If Tenant retains possession of the Premises or any part
       thereof after the expiration or earlier termination of the Term, whether
       with or without Landlord's consent, all of the provisions of this Lease
       pertaining to the obligations of Tenant and the rights of Landlord during
       the Term shall apply to such holdover period, except as expressly
       modified by this Section 19.

       19.2 Holding Over With Consent. If Tenant, with Landlord's consent,
       retains possession of the Premises after the expiration of the Term,
       Tenant shall become a tenant from month-to-month, at a monthly rental
       equal to one hundred fifty percent (150%) of the Minimum Monthly Rent
       applicable immediately prior to the expiration of the Term. Such month-
       to-month tenancy shall be terminable in the manner provided by law.

       19.3 Holding Over Without Consent. If Tenant, without Landlord's consent,
       retains possession of the Premises after the expiration or earlier
       termination of Term (or, in the case

                                                                  Page 24 of 38.
<PAGE>
 
       of a month-to-month tenancy under Subsection 19.2, after the duly noticed
       termination date of such tenancy), then Tenant shall pay to Landlord
       monthly rental equal to two hundred percent (200%) of the Minimum Monthly
       Rent applicable immediately prior to the expiration or earlier
       termination of the Term, and Tenant shall indemnify Landlord from and
       against all losses, costs, claims, liabilities, and expenses (including,
       without limitation, reasonable attorneys' fees and disbursements)
       sustained by Landlord by reason of such retention (including, without
       limitation, claims for damages by any other person to whom Landlord may
       have agreed to lease all or any part of the Premises effective on or
       after the date Tenant was obligated to surrender possession of the
       Premises). No acceptance by Landlord of rent during any such holding over
       without Landlord's approval shall reinstate, continue, or extend the Term
       of this Lease or shall affect any notice of termination given to Tenant
       prior to the payment of such money, it being agreed that after the
       service of such notice or the commencement of any suit by Landlord to
       obtain possession of the Premises, Landlord may receive and collect when
       due any and all payments owed by Tenant under this Lease, and otherwise
       exercise its rights and remedies. The making of any such payments by
       Tenant shall not waive such notice, or in any manner affect any pending
       suit or judgment obtained.

20. SUBORDINATION:
This Lease shall, at Landlord's sole option, be subject and subordinate at all
times to the lien of any mortgages or deeds of trust in any amounts whatsoever
now or hereafter placed on or against the Facility (or any portion thereof) or
on or against Landlord's interest or estate therein without the necessity of
having further instruments on the part of Tenant to effectuate such
subordination. Notwithstanding such subordination, Tenant's right to quiet
possession of the Premises shall not be disturbed as a result of any foreclosure
or deed in lieu of any mortgage or deed of trust hereafter placed on or against
the Facility, if and so long as Tenant is not in default of any of its
obligations under this Lease, unless this Lease is otherwise terminated pursuant
to its terms. If any mortgagee, trustee or ground lessor shall elect to have
this Lease deemed to be prior to the lien of its mortgage, deed of trust, or
ground lease, and shall give written notice thereof to Tenant, then this Lease
shall be deemed to be prior to such instrument, regardless of whether this Lease
is dated prior or subsequent to the execution or recording date thereof. Tenant
covenants and agrees to execute and deliver, upon demand, such further
instruments evidencing such subordination of this Lease as may be required by
Landlord, provided that said instruments recognize that Tenant's right to quiet
possession of the Premises shall not be disturbed if and so long as Tenant is
not in default of its obligations under this Lease. Tenant hereby irrevocably
appoints Landlord the attorney-in-fact of Tenant to execute and deliver any such
instruments for or in the name of Tenant.

21. ENTRY BY LANDLORD:

       21.1 Landlord reserves and shall have the right to enter the Premises at
       any and all reasonable times to inspect the same, to verify Tenant's
       compliance with its obligations under this Lease, to post notices of non-
       responsibility (if permitted by the Laws of the State where the Facility
       is located), to post any notices Landlord reasonably believes are
       required by law to be posted on the Premises, to deliver notices to
       Tenant or any subtenant or occupant of any portion of the Premises, to
       supply any service to be provided by Landlord to Tenant hereunder, to
       submit the Premises to prospective lender, purchasers, investors, or
       tenants. Landlord may, during the last six (6) months of the Term, place
       "For Lease" signs on or about the Premises.

       21.2 Landlord also reserves and shall have the right to enter the
       Premises, upon reasonable prior written notice (except in emergencies),
       to alter, improve, renovate, or repair the Premises and any portion of
       the Facility or its mechanical systems, and Landlord may for such
       purposes erect scaffolding and other appropriate structures where
       reasonably required by the character of the work to be performed. In the
       event that any such entry by Landlord into the Premises, or such work
       performed by Landlord at the Facility, prevents Tenant from gaining
       access to all or any significant portion of the Premises for more than
       five (5) consecutive business days, then Minimum Monthly Rent shall be
       abated in proportion to the part of the Premises (if less than all) to
       which Tenant shall have been denied access, but there shall be no
       abatement of rent by reason of all or any portion of the Premises being
       inaccessible for a period of five (5) or fewer consecutive business days.
       Further, Tenant shall not be entitled to any abatement of rent on account
       of any noise, vibration, or other disturbance to Tenant's business at the
       Premises that may arise out of any such entry by Landlord into the
       Premises or out of Landlord's performance of any such work at the
       Facility, 

                                                                  Page 25 of 38.
<PAGE>
 
       and under no circumstances shall any such noise, vibration, disturbance,
       work, or entry by Landlord be construed or deemed to be a forcible or
       unlawful entry into or a detainer of the Premises or an eviction of
       Tenant from the Premises or any portion thereof. Landlord shall use
       commercially reasonable efforts (which shall not include any obligation
       to employ labor at overtime rates) to avoid or minimize disruption of
       Tenant's business during any such entry or work by Landlord.

       21.3 Landlord shall have the right to use any and all means that Landlord
       may deem appropriate to open any doors in an emergency in order to obtain
       entry to the Premises.

22. DEFAULTS AND REMEDIES:

       22.1 Events of Default

          22.1.1 Definition. In addition to those events designated as Events of
          Default in other provisions of this Lease, each of the following shall
          constitute an "Event of Default" by Tenant and a material breach of
          this Lease:

                (1) Tenant's failure to make any payment owed by Tenant under
                this Lease, as and when due, where such failure is not cured
                within three (3) days following Tenant's receipt of Landlord's
                written notice thereof; or

                (2) Tenant's failure to observe, keep, or perform any of the
                terms, covenants, agreements, or conditions under this Lease
                that Tenant is obligated to observe or perform, other than that
                described in subdivision (1) above, for a period of ten (10)
                days after delivery of notice to Tenant of said failure;
                provided however, that if the nature of Tenant's default is such
                that more than ten (10) days are reasonably required for its
                cure, then Tenant shall not be deemed to be in default under
                this Lease if Tenant shall commence the cure of such default so
                specified within said ten (10) day period and diligently
                prosecute the same to completion; or

                (3) Landlord's discovery that any financial statement given to
                Landlord by Tenant, by any assignee or subtenant of Tenant, by
                any successor in interest of Tenant, or by any guarantor of any
                obligations of Tenant under this Lease, was materially false,
                where Tenant fails, within ten (10) days after delivery of
                Landlord's written demand, to give Landlord such additional
                assurances or security for the full and faithful performance of
                all Tenant's obligations under this Lease as Landlord shall
                reasonably have demanded; or

                (4) The occurrence of any of the events described in Subsection
                36.5 (Events of Bankruptcy) below with respect to any guarantor
                of any obligations of Tenant under this Lease, where Tenant
                fails to furnish a substitute guarantor, or alternative
                security, satisfactory to Landlord within ten (10) days after
                Landlord's delivery of Landlord's written demand therefor.

          22.1.2 Notice of Default. The notices of default provided for in
          Subsection 22.1.1(1) and (2), and the written demands provided for in
          Subsection 22.1.1(3) and (4), shall in each case be in lieu of, and
          not in addition to, any notice required under applicable unlawful
          detainer Laws;

       22.2 Remedies. Upon the occurrence of any Event of Default, Landlord may
       exercise any one or more of the termination rights and other remedies
       described in Addendum A, in addition to all other rights and remedies now
       or hereafter provided at law or in equity.

       22.3 Right to Cure. All covenants and agreements to be performed by
       Tenant under this Lease shall be performed by Tenant at Tenant's sole
       cost and expense. If Tenant shall fail to perform any act on its part to
       be performed under this Lease, and such failure shall continue for three
       (3) days after notice thereof to Tenant (except that no notice shall be
       required in cases of emergency), Landlord may, but shall not be obligated
       to do so, without waiving or releasing Tenant from any obligations of
       Tenant, perform any such act on Tenant's part to be 

                                                                  Page 26 of 38.
<PAGE>
 
       performed as provided in this Lease. All costs incurred by Landlord with
       respect to any such performance by Landlord (including reasonable
       attorneys' fees) shall be paid by Tenant to Landlord immediately upon
       demand.

       22.4 Waiver of Redemption. Tenant hereby waives, for itself and all
       persons claiming by and under Tenant, all rights and privileges which it
       might have under any present or future law to redeem the Premises or to
       continue the Lease after being dispossessed or ejected from the Premises.

       22.5 Remedies Cumulative. All remedies of Landlord under this Lease are
       cumulative. Efforts by Landlord to mitigate the damages caused by
       Tenant's default shall not constitute a waiver of Landlord's right to
       recover damages, nor shall Landlord have any obligation to mitigate
       damages, except to the extent otherwise provided by applicable Laws.

       22.6 Default by Landlord. In no event shall Landlord be deemed to be in
       default of any obligation hereunder unless and until thirty (30) days
       have expired after delivery of notice of such deficiency to Landlord and
       to anyone else, or to any lien holder, to whom Landlord has instructed
       Tenant to send duplicative notices, specifying in detail Landlord's
       failure to perform, to Landlord and to the holder of any recorded
       interest pertaining to the Building; provided, however, that if such
       deficiency cannot be cured or corrected within such 30-day period
       Landlord shall not be in default if Landlord or anyone on behalf of
       Landlord commences such cure or correction within such 30-day period and
       thereafter diligently prosecutes the same to completion. If Landlord is
       deemed to be in default under the provisions of this Subsection, Tenant
       shall be entitled to bring an action for declaratory judgment or specific
       performance, or for damages (subject to the provisions of this Lease
       limiting Landlord's liability) shown by Tenant to have been proximately
       caused by such default. Notwithstanding anything to the contrary in this
       Lease, Tenant agrees that, in the event that it becomes entitled to
       receive damages from Landlord, Tenant shall not be allowed to recover
       from Landlord consequential damages or damages in excess of the out-of-
       pocket expenditures incurred by Tenant as a result of a default by
       Landlord. Landlord's liability to Tenant for damages resulting from
       Landlord's breach of any provision or provisions of the Lease shall not
       exceed the value of Landlord's equity interest in the Facility. Tenant
       hereby expressly waives its rights under any and all Laws, now or
       hereafter in effect, to terminate this Lease (whether prior to or after
       the commencement of the Term) or to withhold any payment owed by Tenant
       under this Lease, on account of any damage, condemnation, destruction, or
       state of disrepair of the Premises, or any part thereof, it being the
       parties' intent that the provisions of this Lease shall govern the
       parties' rights and obligations with respect to such matters.

23. DAMAGE OR DESTRUCTION:

       23.1 Total or Substantial Destruction. In the event that the Facility or
       Building shall be destroyed to the extent of forty percent (40%) or more
       of the replacement cost thereof, Landlord may elect to terminate this
       Lease, whether the Premises be damaged or not, upon written notice to
       Tenant not later than the 60th day after the date of such destruction.

       23.2 Loss Covered by Insurance. If, at anytime prior to the expiration or
       termination of this Lease, (a) all or any portion of the Premises, or any
       portion of the Common Areas whose use is required for Tenant's business,
       shall be wholly or partially damaged or destroyed by fire or other
       casualty or peril (collectively, a "Casualty"), and (b) at least ninety
       percent (90%) of the total costs of performing the necessary repairs and
       replacements under then applicable Law will be fully covered and paid for
       by available proceeds of insurance maintained by Landlord, and (c) such
       damage or destruction shall render the Premises totally or partially
       inaccessible or unusable by Tenant in the ordinary conduct of Tenant's
       business, then:

          23.2.1 Repairs That Can Be Completed Within One Hundred Eighty Days.
          Within sixty (60) days after the date of Tenant's notice to Landlord
          of such damage or destruction (the "Damage Notice Date"), Landlord
          shall give Tenant notice of Landlord's good faith determination of
          whether the damage or destruction can be repaired under applicable
          Laws, without the payment of overtime or other premiums, within one
          hundred eighty (180) days after the date such determination of
          Landlord is made. If all such repairs to the 

                                                                  Page 27 of 38.
<PAGE>
 
          Premises and/or such portions of the Common Areas can, in Landlord's
          good faith judgment, be substantially completed in such manner within
          such one hundred eighty (180) day period, Landlord shall undertake
          such repairs and this Lease shall remain in full force and effect.

          23.2.2 Repairs That Cannot Be Completed Within One Hundred Eighty
          Days. In the event that Landlord ever determines that such repairs to
          the Premises or to such portions of the Common Areas cannot, in
          Landlord's good faith judgment, be substantially completed under
          applicable Laws, without the payment of overtime or other premiums,
          within one hundred eighty days after the date of such determination,
          then Landlord shall notify Tenant of such determination. In such
          notice Landlord shall either agree to undertake such repairs (in which
          even the notice shall include Landlord's estimate of the time required
          to complete same) or elect to terminate this Lease. If Landlord so
          agrees to undertake repairs, but states that the required repairs will
          not be completed within 180 days after delivery of such notice, then
          Tenant shall have an option, exercisable by written notice thereof
          delivered to Landlord not later than the tenth (10th) after Landlord's
          delivery of Landlord's notice that the repairs will not be completed
          within such 180-day period, to terminate this Lease. If neither
          Landlord nor Tenant exercise such a right of termination following
          Landlord's determination that repairs will take more than 180 days,
          then Landlord shall diligently undertake to repair such damage or
          destruction.

       23.3 Loss Not Covered By Insurance. If, at anytime prior to the
       expiration or termination of this Lease, (a) all or any portion of the
       Premises, or any portion of the Common Areas whose use is required for
       Tenant's business, is wholly or partially damaged or destroyed by a
       Casualty, and (b) less than ninety percent (90%) (if any) of the total
       costs of performing the necessary repairs and replacements will be fully
       covered and paid for by available proceeds of insurance maintained by
       Landlord, and (c) such damage or destruction renders the Premises totally
       or partially inaccessible or unusable by Tenant in the ordinary conduct
       of Tenant's business, then:

          23.3.1 Landlord shall deliver to Tenant, within sixty (60) days after
          the Damage Notice Date, a written notice whereby Landlord shall either
          (a) elect to terminate this Lease or (b) agree to undertake such
          repairs, in which latter event such notice shall include a statement
          of Landlord's good faith estimate of the number of days required in
          order to achieve substantial completion, under applicable Laws, of
          such repair and restoration work. If Landlord does not elect by such
          notice to Tenant to repair such damage, this Lease shall be deemed to
          have been terminated by Landlord.

          23.3.2 If pursuant to Subsection 23.3.1 Landlord elects to undertake
          such repairs, but states that the required repairs will not be
          completed within 180 days after delivery of such notice, then Tenant
          shall have an option, exercisable by written notice thereof delivered
          to Landlord not later than the tenth (10th) after Landlord's delivery
          of Landlord's notice that the repairs will not be completed within
          such 180-day period, to terminate this Lease. If neither Landlord nor
          Tenant exercise such a right of termination with respect to a Casualty
          covered by this Subsection 23.3, then Landlord shall diligently
          undertake to repair such damage or destruction.

       23.4 Destruction During Final Year. Notwithstanding anything to the
       contrary contained in Subsections 23.1 or 23.2, if the Premises or the
       Building or a portion of the Common Areas required for Tenant's business
       are wholly or partially damaged or destroyed within the final twelve (12)
       months of the Term of this Lease, and no renewal rights have been
       exercised prior to such damage or destruction, and if as a result of such
       damage or destruction Tenant is denied access or use of the Premises for
       the conduct of its business operations for a period of ten (10)
       consecutive business days, Landlord or Tenant may, at its option, by
       giving the other written notice prior to substantial completion of the
       repairs, and in no event later than the 60th day after the Damage Notice
       Date, elect to terminate this Lease.

       23.5 Effective Date of a Lease Termination. Any notice of Tenant's
       election to terminate under this Section 23 shall include a statement of
       the effective date of such termination, which shall not be more than
       sixty (60) days after the date such notice is delivered. Any notice of

                                                                  Page 28 of 38.
<PAGE>
 
       Landlord's election to terminate under this Section 23 shall be effective
       (a) on the tenth (10th) day after delivery of the notice, if the damage
       or destruction shall have prevented Tenant from conducting business at
       the Premises, or (b) on the sixtieth (60th) day after delivery of the
       notice, in the event that Tenant shall not have been so prevented from
       conducting business at the Premises.

       23.6 Abatement of Gross Rent. In the event that all or any portion of the
       Premises shall be rendered inaccessible or unusable to Tenant, and unused
       by Tenant, for a period of more than ten (10) consecutive days as a
       result of any damage or destruction caused by any Casualty (and provided
       that such Casualty shall not have arisen in whole or in part out of any
       gross negligence or willful misconduct on Tenant), then Gross Rent shall
       be reduced proportionately for such portion of the Premises as shall be
       rendered inaccessible or unusable to Tenant, and unused by Tenant, during
       the period of time that such portion is unusable or inaccessible to
       Tenant, and unused by Tenant.

       23.7 Destruction of Tenant's Personal Property, Tenant Improvements or
       Property of the Tenant Parties. In the event a Casualty causes damage to
       or destruction of the Premises or the Building or the Facility, under no
       circumstances shall Landlord be required to repair damage to, or make any
       repairs to or replacements of, Tenant's Personal Property. However, as
       part of Common Area Costs, Landlord shall cause to be insured Tenant
       Improvements and Alterations that do not consist of Tenant's Personal
       Property and shall cause proceeds of such insurance to be applied to the
       cost of repairing or restoring such Tenant Improvements and Alterations,
       but Tenant shall pay for such portion of those costs as may be uninsured
       or be subject to a deductible. Landlord shall have no responsibility for
       any contents placed or kept in or on the Premises or the Building or the
       Facility by Tenant or the Tenant Parties.

       23.8 Exclusive Remedy. The remedies provided for in this Section 23 shall
       be Tenant's sole and exclusive remedy in the event a Casualty causes
       damage to or destruction of all or any portion of the Premises, Building,
       or Facility, and Tenant, as a material inducement to Landlord's entering
       into this Lease, irrevocably waives and releases the provisions of any
       Law that would automatically terminate this Lease or otherwise be
       contrary to the provisions of this Section in the event of any such
       damage or destruction.

24. EMINENT DOMAIN:

       24.1 Definitions. The following terms shall have the indicated
       definitions as used herein: (a) "Condemnation" or "Taking" means (i) the
       exercise of any governmental or power, whether by legal proceedings or
       otherwise, by a Condemnor and/or (ii) a voluntary sale or transfer by
       Landlord to any Condemnor, either under threat of eminent domain or while
       legal proceedings for eminent domain are pending; (b) "Date of Taking"
       means the date the Condemnor has the right to possession of the property
       being condemned; (c) "Award" means all compensation, sums, or anything of
       value awarded, paid, or received on a total or partial Condemnation; and
       (d) "Condemnor" means any public or quasi-public authority, or private
       corporation or individual, having the power of eminent domain.

       24.2 Permanent Taking

          24.2.1 Total Taking. If the Premises are totally taken by
          Condemnation, this Lease shall terminate on the Date of Taking.

          24.2.2 Partial Taking; Common Areas

                24.2.2.1 If any portion of the Premises is taken by
                Condemnation, this Lease shall remain in effect, except that
                Tenant shall have the right to elect to terminate this Lease if
                forty percent (40%) or more of the rentable square footage of
                the Premises is taken, or if the portion taken renders the
                remainder of the Premises economically unusable by Tenant, as
                determined by Landlord's architect. To be effective, such
                election to terminate must be made by written notice delivered
                to Landlord within twenty (20) days after Tenant's obtaining
                knowledge of the impending acquisition of such portion of the
                Premises by Condemnation. Tenant shall be deemed to have
                knowledge of such impending acquisition if Tenant enters into
                negotiations with the 

                                                                  Page 29 of 38.
<PAGE>
 
                Condemnor's representatives, on receipt of service of complaint
                and summons or order for immediate possession, or on receipt of
                a letter of inquiry from Landlord advising Tenant of the
                impending acquisition and requesting notice of Tenant's
                resulting elections and contentions. Tenant's notice shall
                contain a clear and unequivocal statement of its election to
                terminate, and its reasons for this election.

                24.2.2.2 If any part of the Common Areas of the Facility is
                taken by Condemnation, this Lease shall remain in full force and
                effect so long as there is no material interference with the
                access to the Premises. If such a Taking materially interferes
                with access to the Premises, either party shall have the
                election to terminate this Lease pursuant to this Section 24.

                24.2.2.3 If forty percent (40%) or more of the Building or the
                Facility is taken by Condemnation (whether or not any Portion of
                the Premises shall have been taken), Landlord shall have the
                election to terminate this Lease in the manner prescribed
                herein.

                24.2.3 Termination or Abatement. If either party elects to
                terminate this Lease under the provisions of Subsection 24.2.2
                (such party is hereinafter referred to as the "Terminating
                Party"), it must terminate by giving notice to the other party
                (the "Nonterminating Party") within twenty (20) days after the
                nature and extent of the Taking have been finally determined
                (the "Decision Period"). The Terminating Party shall notify the
                Nonterminating Party of the date of termination, which date
                shall not be earlier than sixty (60) days after the Terminating
                Party has notified the Nonterminating Party of its election to
                terminate, nor later than the Date of Taking. If such notice of
                termination is not given within the Decision Period, this Lease
                shall continue in full force and effect except that the Gross
                Rent shall be reduced by subtracting therefrom an amount
                calculated by multiplying the Gross Rent in effect prior to the
                Taking by a fraction the numerator of which is the square
                footage taken from the Premises and the denominator of which is
                the square footage in the Premises prior to the Taking.

                24.2.4 Restoration. If there is a partial Taking of the Premises
                and this Lease remains in full force and effect pursuant to this
                Section 24, Landlord, at its cost, shall accomplish all
                necessary restoration so that the Premises are returned as near
                as practical to their condition immediately prior to the Date of
                Taking, but in no event shall Landlord be obligated to expend
                more for such restoration than the extent of funds actually paid
                to Landlord by the Condemnor.

                24.2.5 Award. Any Award arising from the Condemnation or the
                settlement thereof shall belong to and be paid to Landlord and
                Tenant hereby assigns to Landlord any right of Tenant thereto,
                except that Tenant shall receive from the Award compensation for
                the following, if specified by amount in the Award by the
                Condemnor, so long as it does not reduce Landlord's Award in
                respect of the real property: Tenant's trade fixtures, tangible
                personal property, goodwill, loss of business, and relocation
                expenses. Tenant shall have the right to participate in
                condemnation proceedings for the purposes permitted under this
                Section 24 and to complain against the Condemnor authority for a
                separate award for such losses. At all events, Landlord shall be
                solely entitled to all Awards in respect of the real property,
                including the bonus value of the leasehold. Tenant shall not be
                entitled to any Award until Landlord has received the total
                amount to which Landlord is entitled hereunder.

       24.3 Temporary Taking. No temporary taking of the Premises or any part of
       the Premises and/or of Tenant's rights to the Premises or under this
       Lease shall terminate this Lease or give Tenant any right to any
       abatement of any rents owed to Landlord pursuant to this Lease. Any award
       made to Tenant by reason of such temporary taking shall belong entirely
       to Tenant.

                                                                  Page 30 of 38.
<PAGE>
 
25. SALE BY LANDLORD:
In the event Landlord shall sell, assign, convey, or transfer all or a part of
its interest in the Facility or any part of the Facility, Tenant agrees to
attorn to such transferee, assignee, or new owner. If all of Landlord's interest
in the Facility shall be sold, assigned, conveyed, or transferred, then upon
consummation of such sale, assignment, conveyance, or transfer, Landlord shall
automatically be freed and relieved from all liability and obligations accruing
or to be performed from and after the date of such sale, assignment, transfer,
or conveyance, and in such event Tenant agrees to look solely to the
responsibility of such transferee, assignee, or new owner. In the event of such
sale, assignment, transfer, or conveyance, Landlord shall transfer, or in lieu
thereof grant a credit at closing, to such transferee, assignee, or new owner of
the Facility the balance of the Deposit, if any, remaining after lawful
deductions and in accordance with applicable Law, after notice to Tenant, and
Landlord shall thereupon be relieved of all liability with respect to the
Deposit.

26. ESTOPPEL CERTIFICATES:
Upon either party's prior request from time to time, the other party shall
execute, acknowledge, and deliver to the requesting party, not later than ten
(10) days after such request, a statement (i) certifying the date of
commencement of this Lease, (ii) stating that this Lease is unmodified and in
full force and effect (or if there have been modifications, that this Lease is
in full force and effect as modified and the date and nature of such
modifications), (iii) stating the dates to which rent has been paid, (iv)
acknowledging that there are not, to the certifying party's knowledge, any
uncured defaults on the part of the other party, or specifying each such default
if any are claimed, and (v) setting forth such other matters as may reasonably
be requested. Landlord and Tenant intend that any such statement delivered
pursuant to this Section may be relied upon by any permitted subtenant,
assignee, or lender of Tenant, by the mortgagee or the beneficiary of any deed
of trust, or by any purchaser or prospective purchaser of the Real Property. If
Tenant's failure to deliver such statement within the required time is not cured
within three (3) days after Landlord's delivery of written notice of such
default, such failure to deliver the statement shall, at Landlord's option, be
an Event of Default under this Lease by Tenant, or it shall be conclusive upon
Tenant that (a) this Lease is then in full force and effect, without
modification except as may be represented by Landlord, (b) there are no uncured
defaults in Landlord's performance, and (c) not more than one month's rent has
been paid in advance. Tenant further agrees, from time to time upon Landlord's
request, promptly to furnish to Landlord financial statements reflecting
Tenant's then current financial condition and, if rendered in the ordinary
course of conducting Tenant's business, a copy of Tenant's then most current
certified financial statements.

27. REQUIREMENTS OF LANDLORD'S LENDERS:

       27.1 Financing Condition. Landlord may from time to time desire to
       mortgage all or a portion of the Facility for the purpose of securing
       financing from an institutional lender. In the event such institutional
       lender requires, as a condition of granting Landlord such financing, that
       this Lease be amended or modified, then Tenant shall, within ten (10)
       days after Landlord's request, consent to and execute any such reasonable
       amendment or modification of this Lease; provided, however, that such
       modification or amendment only concerns (a) the lender's right to
       notification, (b) the lender's right to cure defaults by Landlord, (c)
       requirements for the lender's consent or approval when Landlord's consent
       or approval is required hereunder, (d) requirements for the lender's
       prior consent or approval for any amendment, modification, or early
       termination of the Lease, for any waiver of any of the terms or
       conditions of the Lease to be performed or observed by Tenant, or for any
       estoppel certificate to be provided by Landlord, (e) restrictions on
       prepayments of rent, (f) the lender's right to require that rents be paid
       directly to the lender, (g) the resolution of ambiguities or correction
       or errors or omissions contained in this Lease, and/or (h) such other
       matters as Tenant may consent to, which consent shall not be unreasonably
       withheld. At Landlord's option, Tenant's failure to execute and deliver
       such a Lease modification or amendment within the required time shall be
       an Event of Default under this Lease by Tenant, without any further
       notice to Tenant.

       27.2 Mortgagee Protection. Tenant agrees to give any present or future
       mortgagee and/or trust deed holders, by registered mail, a copy of any
       notice of default served upon Landlord, provided that prior to such
       notice Tenant has been notified, in writing (by way of notice of
       assignment of rents and leases, or otherwise), of the address of such
       mortgagee and/or trust deed holder. Tenant further agrees that if
       Landlord shall have failed to cure such default within the time provided
       for in this Lease (if any), then the mortgagees and/or trust deed 

                                                                  Page 31 of 38.
<PAGE>
 
       holders shall have an additional thirty (30) days within which to cure
       such default or if such default cannot be cured within that time, then
       such additional time as may be necessary if, within such thirty (30)
       days, any mortgagee and/or trust deed holder has commenced and is
       diligently pursuing the remedies necessary to cure such default
       (including but not limited to commencement of foreclosure proceedings, if
       necessary to effect such cure), in which event this Lease shall not be
       terminated while such remedies are being diligently pursued.

28. SUBSTITUTION OF PREMISES:
Landlord hereby reserves the right, from time to time prior to the Commencement
Date or during the Term, to relocate Tenant to other premises in the Facility on
the following terms and conditions: (a) the new premises shall be substantially
the same in size, dimensions, configuration, decor, and quality as the Premises
described in this Lease, and shall be placed in that condition by Landlord at
its cost; (b) the physical relocation of the Premises shall be accomplished by
Landlord at its cost; (c) Landlord shall give Tenant at least sixty (60) days'
notice of Landlord's intention to relocate the Premises; (d) the physical
relocation of the Premises shall take place on a weekend, if practicable, and
shall be accomplished as quickly as reasonably practicable; (e) all reasonable
actual out-of-pocket costs incurred by Tenant as a result of the relocation,
including, without limitation, costs incurred in changing addresses on
stationery, business cards, directories, advertising, and other such items, but
excluding any lost revenues or any intangible costs, shall be paid by Landlord;
(f) if the relocated premises are smaller than the Premises as they existed
before the relocation, Gross Rent shall be reduced to a sum computed by
multiplying the Gross Rent specified in Sections 4 and 5 by a fraction, the
numerator of which shall be the total number of rentable square feet in the
relocated premises, and the denominator of which shall be the total number of
rentable square feet in the Premises before relocation; and (g) from and after
the date of such relocation and substitution, the term "Premises" as used in
this Section shall mean the substituted premises in the Facility, and Landlord
and Tenant shall execute an amendment to this Lease stating the relocation of
the Premises and the reduction of Gross Rent, if any.

29. ATTORNEYS' FEES:
In the event either party requires the services of an attorney in connection
with enforcing the terms of this Lease (including an action or proceeding
between one party and the trustee or debtor in possession while the other party
is a debtor in a proceeding under the Bankruptcy Code (Title 11 of the United
States Code or any successor statute to such Code)), or in the event suit is
brought for the recovery of any amount due and owing under this Lease, the
prevailing party shall be entitled to recover all its costs and expenses in
connection therewith (including court costs and reasonable attorneys' fees,
costs and disbursements) from the unsuccessful party, whether or not such
action, proceeding or appeal is prosecuted to judgment or other final
determination. The term "prevailing party" shall include, without limitation, a
party who obtains legal counsel or brings an action against the other party by
reason of the other party's breach or default and obtains substantially the
relief sought, whether by compromise, settlement, or judgment. If such
prevailing party shall recover in any such action, proceeding, or appeal, such
costs and expenses (including court costs and reasonable attorneys' fees, costs
and disbursements) shall be included in and as a part of such judgment.

30. NON-WAIVER:
The waiver by Landlord or Tenant of any term, covenant, agreement or condition
contained in this Lease shall not be deemed to be a waiver of any subsequent
breach of the same or of any other term, covenant, agreement, condition or
provision of this Lease. Nor shall any consent by Landlord or Tenant in any one
instance dispense with necessity of consent in any subsequent or other instance.
Nor shall any custom or practice that may develop between the parties in the
administration of this Lease be construed to waive or lessen the right of
Landlord or Tenant to insist upon performance by the other in strict accordance
with all of the terms, covenants, agreements, conditions, and provisions of this
Lease. The subsequent acceptance by Landlord of any payment owed by Tenant to
Landlord under this Lease, or the payment of rent by Tenant, shall not be deemed
to be a waiver of any preceding breach by Tenant of any term, covenant,
agreement, condition, or provision of this Lease, other than the failure of
Tenant to make the specific payment so accepted by Landlord, regardless of
Landlord's or Tenant's knowledge of such preceding breach at the time of the
making or acceptance of such payment.

31. NOTICES:
All notices, notifications, demands, requests, consents, approvals,
designations, elections, and waivers that may or are required to be given by
either party to the other hereunder shall be in writing and shall be deemed to
have been duly given when delivered personally, or one business day after such
notice or demand is sent by a reliable overnight courier service, or three (3)
business days after it is sent by United 

                                                                  Page 32 of 38.
<PAGE>
 
States certified or registered mail, in each case with postage prepaid and the
notice or demand addressed to the other party at its address set forth in
Subsection 1.1(b) of this Lease, or to such other place as such party may from
time to time by like notice designate. Written notice given in any other manner
shall have been duly given when actually received by Landlord's manager of the
Facility (in the case of notice to Landlord) or by any of the undersigned
representatives of Tenant or any other executive level employee or officer of
Tenant. If there is more than one tenant under this Lease, then notice to any
one of them shall constitute notice to all and notice from any one of them shall
constitute notice from all.

32. JOINT AND SEVERAL LIABILITY:
If Tenant consists of more than one person or other entity, Tenant's obligations
hereunder shall be joint and several as between such persons and/or entities.

33. TIME:
Subject to provisions of Section 17 (Force Majeure), time is of the essence of
this Lease and each and all of its provisions.

34. SUCCESSORS:
Subject to the provisions of Section 13 (Assignment and Subletting) and Section
25 (Sale by Landlord), and except as otherwise provided to the contrary in this
Lease, the terms, covenants, and conditions herein contained shall apply to,
bind, and inure to the benefits of the heirs, successors, executors,
administrators, and permitted assigns of the respective parties hereto.

35. ENTIRE AGREEMENT:
This Lease (including the exhibits, riders, addenda, and schedules referred to
herein and made a part hereof) embodies the entire agreement between, and
understanding of, the parties and supersedes all prior agreements and
understandings (oral or written) between the parties with respect to the subject
matter hereof. This Lease shall not be modified by any oral agreement, either
express or implied, and all modifications hereof shall be in writing and signed
by both Landlord and Tenant.

36. RESTRICTIONS ON OPTIONS:

       36.1 Definition. As used in this Section 36, the word "Option" shall mean
       any of the following rights or options of Tenant, if any such rights or
       options are granted pursuant to an addendum or other modification to this
       standard lease form: (1) any right or option to extend the term of this
       Lease, (2) any option or any right of first refusal or first offer to
       lease the Premises or any other space within the Facility or other
       property of Landlord or its affiliates, and (3) any right or option of
       Tenant to terminate or cancel this Lease prior to the last day of the
       initial Term contemplated by Subsection 1.2(d).

       36.2 Options Personal. Each Option, if any, granted to Tenant in this
       Lease is personal to the original Tenant and may be exercised only by the
       original Tenant while directly (and not through subleases) occupying more
       than sixty percent (60%) of the Premises, and may not be exercised or
       assigned, voluntarily or involuntarily, by or to any person or entity
       other than the original Tenant. If the original Tenant consists of more
       than one person or other entity, each such person or entity must join in
       the exercise of the Option in order for it to be effective. The Options,
       if any, herein granted to Tenant are not assignable separate and apart
       from this Lease, nor may any Option be separated from this Lease in any
       manner, by reservation or otherwise.

       36.3 Multiple Options. In the event that Tenant has multiple Options to
       extend or renew the term of this Lease, a later Option cannot be
       exercised unless the prior Option to extend or renew this Lease has been
       so exercised.

       36.4 Strict Enforcement of Conditions and Limitations Upon Options

       36.4.1 Tenant hereby specifically acknowledges and agrees that the time
       limitations upon the exercise of any Option will be strictly enforced,
       that any attempt to exercise such Option at any other time shall be void
       and of no force or effect, and that if any such Option is not exercised
       within the applicable time period, Landlord intends immediately
       thereafter to undertake appropriate efforts relating to the marketing or
       management of the space affected 

                                                                  Page 33 of 38.
<PAGE>
 
       by the Option. The period of time within which an Option may be exercised
       shall not be extended or enlarged by reason of Tenant's inability to
       exercise such Option because of the provisions of this Subsection or for
       any other reason whatsoever.

       36.4.2 Tenant further agrees that if Tenant is in default hereunder on
       the date of giving the required notice of exercise of such Option, such
       notice shall be totally ineffective, and if Tenant is in default
       hereunder on the date any extension or renewal of the term of this Lease
       was to commence, such extension or renewal of the term shall not
       commence, and this Lease shall expire at the end of the Term as
       theretofore in effect. Notwithstanding any provision of this Lease to the
       contrary, all Options shall automatically be void, and shall have no
       further effect, upon the commencement of any holdover by Tenant after the
       expiration or earlier termination of the Term.

       36.4.3 Tenant further agrees that if (a) more than once during the twelve
       (12) month period immediately preceding delivery of a notice of exercise
       of Option Tenant shall have failed to make timely payment of any rent or
       any Event of Default shall have occurred, or (b) more than three (3)
       times during the twenty-four (24) month period immediately preceding
       delivery of such notice Tenant shall have failed to make timely payment
       of rent or any Events of Defaults shall have occurred, then such Option
       of Tenant shall at once be void and of no further effect, notwithstanding
       Tenant's timely exercise of such Option.

       36.5 Events of Bankruptcy. In addition to those events and occurrences
       constituting defaults or Events of Default under other provisions of this
       Lease, the occurrence of any of the following events shall also
       constitute a default and Event of Default for purposes of Subsection
       36.4:

       36.5.1. Filing by Tenant of a voluntary petition under any applicable
       bankruptcy Law, or the issuance of an order for relief entered under any
       applicable bankruptcy Law, or the filing by Tenant of any petition or
       answer seeking any reorganization, arrangement, composition,
       readjustment, liquidation, dissolution, or similar relief for Tenant
       under the present or any future applicable Law relative to bankruptcy,
       insolvency, or other relief for debtors, or Tenant's consent to or
       acquiescence in the appointment of any trustee, receiver, conservator, or
       liquidator of Tenant or of all or any substantial part of its properties
       or its interest in the Premises (the term "acquiesce," as used in this
       clause, includes but is not limited to the failure to file a petition or
       motion to vacate, appeal, or discharge any order, judgment, or decree
       within ten (10) days after entry of such order, judgment, or decree);

       36.5.2. Issuance or entry, by a court of competent jurisdiction, of any
       order, judgment, or decree approving a petition filed against Tenant
       seeking any reorganization, arrangement, composition, readjustment,
       liquidation, dissolution, or similar relief under any present or future
       applicable Law relating to bankruptcy, insolvency, or other relief for
       debtors, and acquiescence by Tenant in the entry of such order, judgment,
       or decree; or the failure of such order, judgment, or decree to be
       vacated or stayed within an aggregate of thirty (30) days (whether or not
       consecutive) after the date of entry thereof; or the appointment, without
       the consent or acquiescence of Tenant, of any trustee, receiver,
       conservator, or liquidator of Tenant or of all or any substantial part of
       its properties or its interest in the Premises and the failure of such
       appointment to be vacated or stayed within an aggregate of thirty (30)
       days (whether or not consecutive);

       36.5.3. The inability of Tenant, or Tenant's admitting in writing its
       inability, to pay its debts as they mature;

       36.5.4. Tenant's giving notice to any governmental body of Tenant's
       insolvency or pending insolvency, or suspension or pending suspension of
       operations; or

       36.5.5. Tenant's making a general arrangement or general assignment for
       the benefit of creditors or taking any other similar action for the
       protection or benefit of creditors.

                                                                  Page 34 of 38.
<PAGE>
 
37. RECORDING:
Tenant shall not record this Lease or any memorandum hereof without Landlord's
prior consent.

38. AUTHORIZATION TO SIGN LEASE:
If Tenant is a corporation, each individual executing this Lease on behalf of
Tenant represents and warrants that he/she is duly authorized to execute and
deliver this Lease on behalf of Tenant in accordance with a duly adopted
resolution of Tenant's Board of Directors, and that this Lease is binding upon
Tenant in accordance with its terms, and Tenant shall, concurrently with its
execution of this Lease, deliver to Landlord upon its request a certified copy
of a resolution of its Board of Directors authorizing the execution of this
Lease. If Tenant is a partnership or trust, each individual executing this Lease
on behalf of Tenant represents and warrants that he/she is duly authorized to
execute and deliver this Lease on behalf of Tenant in accordance with the terms
of such entity's partnership agreement or trust agreement, respectively, and
that this Lease is binding upon Tenant in accordance with its terms, and Tenant
shall, concurrently with its execution of this Lease, deliver to Landlord upon
its request such certificates or written assurances from the partnership or
trust as Landlord may request authorizing the execution of this Lease. If Tenant
consists of more than one legal entity, the foregoing representations,
warranties, and covenants shall apply to any such entity that is a corporation
or partnership, as the case may be. Each individual signing this Lease on behalf
of Tenant shall personally indemnify, defend, and hold harmless Landlord from
and against any claim arising out of any actual or alleged breach or inaccuracy
of any of the foregoing representations and warranties or any loss suffered by
reason thereof.

39. BROKER PARTICIPATION:
In consideration for brokerage services rendered to Landlord in this
transaction, Landlord shall pay its licensed real estate broker named in
Subsection 1.1(j) a commission as set forth in a separate agreement between
Landlord and said broker. Tenant's broker, if any is named in Subsection 1.1(j),
will be paid its commission from a portion of the commission paid to Landlord's
Broker, as set forth in a separate agreement between Landlord's Broker and
Tenant's Broker. Except as otherwise set forth in the preceding sentence, each
party agrees to indemnify, defend, and hold harmless the other party from any
claim or loss arising out of any actual or alleged dealings of the indemnifying
party with any real estate broker, agents or finder in connection with this
transaction.

40. SURVIVAL OF CERTAIN RIGHTS AND OBLIGATIONS:
The respective parties' remedies, payment obligations, indemnities, waivers and
releases under this Lease, with respect to Tenant's use or possession of the
Premises during the Term and any holdover period, and with respect any cost or
expense incurred during or with respect to the Term or any holdover period,
shall survive the termination of this Lease.

41. PARKING:
Landlord shall have the right, by written notice to Tenant, to designate
specific areas of the Facility for employee parking. If Landlord designates an
employee parking area, then automobiles of Tenant, its employees, and agents
shall not park within the parking area except in areas delineated by Landlord as
"employee parking." Subject to the foregoing, Tenant shall be entitled to use,
in common with other tenants and Landlord, the number of undesignated vehicle
parking spaces allocated to Tenant in Subsection 1.1(k). Tenant's use of such
parking spaces shall be subject to payment by Tenant of such standard monthly
parking rates, if any, as may be charged from time to time to persons other than
the officers and employees of Landlord and its affiliates, and subject to such
rules and regulations as may be established or altered from time to time by
Landlord or its manager of such parking facilities. At Landlord's request,
Tenant (or its designated employees with parking privileges) shall enter into
parking licenses or lease agreements or other arrangements then in use by
Landlord (or Landlord's operator of the parking facilities) with respect to such
monthly parking. Tenant agrees not to overburden the parking facilities and
agrees to cooperate with Landlord and other tenants in the use of parking
facilities. Landlord reserves the right, in its absolute discretion, to
determine whether parking facilities are becoming crowded and, in such event, to
allocate and assign parking spaces among Tenant and other tenants. Upon request,
Tenant shall provide Landlord with the license plate numbers of all vehicles
used at the Facility by Tenant's employees. In the event that, pursuant to any
modification or amendment to this standard form lease, Tenant is at any time
given any right to the exclusive use of any designated parking stalls or
facilities, Landlord shall nevertheless have the right from time to time to
substitute other designated parking stalls or facilities therefor, so long as
such substitute stalls or facilities are, in Landlord's judgment, reasonably
comparable. If Tenant parks more vehicles in the Facility's parking area than
are permitted under this Section, Landlord shall have the right, without
limitation to Landlord's 

                                                                  Page 35 of 38.
<PAGE>
 
other remedies under this Lease, to collect from Tenant a daily charge, to be
determined by Landlord, for each such additional vehicle.

42. SEVERABILITY:
Should any provision of this Lease be illegal, void, invalid, inoperative, or
unenforceable, no other provision of this Lease shall be affected thereby, and
the remainder of this Lease shall be effective as though such illegal, void,
invalid, inoperative, or unenforceable provision had not been included herein.

43. CERTAIN RIGHTS RESERVED BY LANDLORD:
Landlord hereby expressly reserves the rights set forth in the Subsections of
this Section 43. Such rights shall be exercisable (a) without notice, (b)
without liability to Tenant for damage or injury to property, persons, or
business, (c) without effecting a constructive or actual eviction of Tenant or
disturbance of Tenant's use, possession, or enjoyment of its Premises, and (d)
without giving rise to any claim for setoff or abatement of rent. The
enumeration of such rights of Landlord in the following Subsections is not
intended to limit any other rights of Landlord, whether expressed or implied, at
law or under other provisions of this Lease.

       43.1 Landlord shall have the right to decorate and make repairs,
       alterations, additions, changes, and/or improvements, whether structural
       or otherwise, in and about the Building and elsewhere in the Facility,
       including, without limitation, construction of additional buildings or
       other new improvements and changes in the location, size, shape, and
       number of driveways, entrances, parking spaces, parking areas, loading
       and unloading areas, ingress, egress, direction of traffic, landscaped
       areas, sidewalks, and walkways. For such purposes Landlord may enter upon
       the Premises and, during the continuance of any such work, temporarily
       close doors, entryways, public space and corridors in the Building or
       elsewhere in the Facility, to interrupt or temporarily suspend building
       services and facilities and to change the arrangement and location of
       entrances, or passageways, doors and doorways, corridors, elevators,
       stairs, toilets, or other public parts of the Building or Facility, all
       without abatement of rent and without affecting any of Tenant's
       obligations hereunder, except as otherwise expressly provided in this
       Lease (e.g., Subsections 21.2 and 23.6).

       43.2 Landlord shall have the right to designate additional land outside
       the current boundaries of the Facility to be a part of the Common Areas.

       43.3 Landlord shall have the right to take all such reasonable measures
       as Landlord may deem advisable for the security of the Building or the
       Facility and their occupants, including, without limitation, the search
       or any person entering or leaving the Building, the evacuation of the
       Building (or any part thereof) for cause, suspected cause, or for drill
       purposes, the temporary denial of access to the Building (or any part
       thereof), and the closing of the Building after normal business hours and
       on Sundays and holidays, subject, however, to Tenant's right to
       admittance, when the Building is so closed, under such reasonable
       regulations as Landlord may prescribe from time to time.

44. WAIVER OF JURY TRIAL:
EACH PARTY HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS LEASE. THIS
WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY TENANT AND TENANT
ACKNOWLEDGES THAT NEITHER LANDLORD NOR ANY PERSON ACTING ON BEHALF OF LANDLORD
HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR
IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. TENANT FURTHER ACKNOWLEDGES THAT IT
HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE
SIGNING OF THIS LEASE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL. TENANT FURTHER ACKNOWLEDGES THAT IT HAS READ
AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER PROVISION AND AS
EVIDENCE OF THIS FACT SIGNS ITS INITIALS.

________________ TENANT'S INITIALS

45. INTERPRETATION:
The words "Landlord" and "Tenant" as used herein shall include the plural as
well as the singular and, when appropriate, shall refer to action taken by or on
behalf of Landlord or Tenant by their respective 

                                                                  Page 36 of 38.
<PAGE>
 
employees, agents, or authorized representatives. Words in masculine gender
include the feminine and neuter. The titles of the Sections, Subsections, and
other provisions of this Lease are for convenience only and they shall not in
any way limit or amplify the terms or provisions of this Lease. All provisions,
whether covenants or conditions, on the part of Tenant shall be deemed to be
both covenants and conditions. In the event of variation or discrepancy, the
duplicate original of this Lease (including Exhibits, if any) held by Landlord
shall control. This Lease shall in all respects be governed by and construed and
enforced in accordance with the Laws of the State where the Facility is located,
and any litigation concerning this Lease between the parties hereto shall be
initiated in the county where the Facility is located.

46. COOPERATION WITH GOVERNMENT SPONSORED PROGRAMS:
Tenant hereby covenants and agrees, at its sole cost and expense, to participate
in and cooperate with the requirements of any and all government promulgated or
sponsored programs adopted for the Building or the Facility concerning
transportation system management, child care facilities, recycling, energy or
water conservation, safety, or the like.

47. PARTIES TO ACT REASONABLY AND IN GOOD FAITH:
Except in those instances where this Lease provides for a contrary standard,
whenever in this Lease the consent or approval of the Landlord or Tenant is
required, such consent or approval shall not be unreasonably withheld or delayed
(except, however, with respect to any Landlord consent, for matters which could
possibly have an adverse effect on the Building's plumbing, heating, mechanical,
life safety, ventilation, air conditioning, or electrical systems, which could
affect the structural integrity of the Building, or which could affect the
exterior appearance of the Building, Landlord may withhold such consent or
approval in its sole discretion but shall act in good faith). Except in those
instances where a contrary standard or right is set forth in this Lease,
whenever the Landlord or Tenant is granted a right to take action, exercise
discretion, or make an allocation, judgment, or other determination, such party
shall act reasonably and in good faith and take no action that might result in
the frustration of the reasonable expectations of a sophisticated tenant and a
sophisticated landlord concerning the benefits to be enjoyed under this Lease.

48. OFFER:
Preparation of this Lease by Landlord or Landlord's agent and submission of same
to Tenant shall not be deemed an offer to lease and neither party shall act in
reliance on said Lease being thereafter signed. This Lease shall become binding
upon Landlord and Tenant only when fully executed by both Landlord and Tenant;
provided, however, that in the event Landlord or Landlord's agent permits Tenant
to take occupancy of all or any portion of the Premises without Landlord first
having executed this Lease, then in the event that Landlord elects not to
execute this Lease, Tenant's occupancy of the Premises shall automatically be
deemed to be a tenancy-at-will, subject to all the terms, provisions, and
conditions of this Lease, except those terms, provisions, and conditions
pertaining to the Term. Any such tenancy-at-will may be terminated by Landlord
or Tenant upon five (5) days' prior notice to the other party.

49. DUAL REPRESENTATION:
Lessor and Lessee acknowledge that Cornish & Carey Commercial represents both
Lessor and Lessee, and Lessor and Lessee consent thereto.

50. CONTINGENCY AND OPTION TO RELOCATE

       50.1 Notwithstanding anything contained in this Lease, this Lease and
       each of Landlord's and Tenant's obligations, liabilities and duties is
       conditioned and contingent upon agreement by (PruCare) no later than June
       1, 1997 that (PruCare) will release and relinquish that portion of
       (PruCare's) premises at the Facility which are to become a part of the
       Premises. Unless Landlord notifies Tenant that (PruCare) has released and
       relinquished (or shall release and relinquish) such space on or before
       August 1, 1997, then this Lease shall have no force or effect. If,
       however, Landlord timely provides notice that (PruCare) has timely
       released and relinquished (or shall release and relinquish) the required
       space, then this Lease shall continue in full force and effect. Tenant
       agrees to acknowledge receipt of Landlord's notice under this Section
       50(a) by return notice to Landlord given by Tenant within five days of
       Tenant's receipt of Landlord's notice hereunder. However, any failure of
       Tenant to acknowledge such receipt shall not affect Tenant's obligations
       and liabilities under this Lease in the event that Landlord timely gives
       the notice contemplated hereby. In the event that Landlord timely gives
       the required notice and Tenant does not timely acknowledge receipt

                                                                  Page 37 of 38.
<PAGE>
 
       thereof, Tenant acknowledges and agrees that Landlord may delay any
       obligation or liability hereunder one day for each day that Tenant's
       acknowledgment is delayed, including without limitation any obligation or
       liability of Landlord to perform or complete tenant improvements or
       deliver the Premises.

       50.2 In the event that (PruCare) releases and relinquishes space on the
       first (i.e., ground) and third or fourth floors of the Building, rather
       than a ground and second floors of the Building prior to the commencement
       of the tenant improvement construction contemplated by this Lease, then
       the Premises and Subsection 1.1.c, at provisions 3 and 4, shall be
       modified to be as follows:

          Suite Nos. of Premises:

                Suite 300 (or Suite 400), located on the third or fourth floor
                of the Building and Suites 110 and 150 on the ground floor.

          Approximate No. of Net Rentable Square Feet:

                (i)  The Premises: 18,886; and

                (ii) The Building: 92,099.

Landlord shall advise Tenant of whether the Premises shall be as set forth in
Subsection 1.1.c or this Section 50(b) as soon as reasonably possible (but in
any event on or before June 1, 1997).

IN WITNESS WHEREOF, the parties have executed this Lease as of the date first
set forth above, acknowledging that each party has carefully read each and every
provision of this Lease, that each party has freely entered into this Lease of
its own free will and volition, and that the terms, conditions, and provisions
of this Lease are commercially reasonable as of said date.

LANDLORD: CASIOPEA VENTURE CORPORATION

BY: BIRTCHER PROPERTY SERVICES, its authorized agent

By: _____________________________  Date:________________________________________

 

TENANT: QUALIX GROUP, INC.


By: _____________________________  Date:________________________________________
    Rick Thau
    ---------

                                                                  Page 38 of 38.
<PAGE>
 
ADDENDUM A

ATTACHED TO AND MADE A PART OF THIS LEASE

       a. Unlawful Detainer Notice. Tenant hereby specifically agrees that any
       notice of default provided for in Subsection 22.1 of the Lease shall be
       in lieu of, and not in addition to, any notice required under  Section
       1161 of the California Code of Civil Procedure.

       b. Additional Remedies of Landlord. Upon the occurrence of any Event of
       Default described in Subsection 22.1 of this Lease, Landlord may exercise
       any one or more of the following remedies, in addition to all other
       rights and remedies provided elsewhere in this Lease or now or hereafter
       provided at law or in equity:

          (i) Right To Terminate. Landlord shall have the right, in addition to
          all other rights available to Landlord under this Lease or now or
          later permitted by law or equity, to terminate this Lease by providing
          Tenant with a notice or termination. Upon termination, Landlord may
          recover any damages proximately caused by Tenant's failure to perform
          under the Lease, including, without limitation, any amount expended or
          to be expended by Landlord in an effort to mitigate damages
          (including, without limitation, any amount expended or to be expended
          by Landlord in an effort to mitigate damages (including, without
          limitation, advertising costs, brokerage fees, attorneys' fees, and
          costs for maintaining the Premises and putting them into good order,
          condition, and repair, and performing such remodeling, renovations, or
          alterations as may be desirable to prepare the Premises for
          reletting), as well as any other damages to which Landlord is entitled
          to recover under any Law now or hereafter in effect.

          (ii) Right to Recover Rent as it Becomes Due. Landlord may exercise
          the remedy described in California Civil Code Section 1951.2 (Landlord
          may continue lease in effect after tenant's breach and abandonment,
          and recover rent as it becomes due, if tenant has right to sublet or
          assign, subject only to reasonable limitations). Tenant hereby
          specifically acknowledges and agrees that the limitations on its right
          to sublet or assign, as set forth in Section 13 of the Lease, are
          reasonable.

          (iii) Right to Remove Personal Property. Upon any reentry by Landlord
          into the Premises under this Section, Landlord shall have the right to
          cause any movable furniture, equipment, trade fixtures, or other
          personal property left on the Premises to be removed and stored in a
          public warehouse or elsewhere at Tenant's sole cost and expense,
          and/or to dispose of or sell such property and apply the proceeds
          therefrom pursuant to applicable Law. In the event Landlord stores
          such property at premises owned or leased by Landlord, Landlord may
          charge Tenant for such storage at such reasonable rates as Landlord
          shall from time to time determine. The foregoing notwithstanding,
          nothing set forth in this paragraph or elsewhere in this Lease shall
          impose on Landlord any obligation for the care or preservation of such
          property so left upon the Premises, except to the extent otherwise
          expressly provided by applicable Laws.

       c. Waiver Of Certain California Code Sections. The parties understand and
       agree that the provisions of this Lease shall govern the parties rights
       and obligations with respect to the matters addressed in the statutory
       provisions described below. Accordingly, and without limitation to the
       generality of the provisions of the Lease concerning the waiver of
       certain statutory provisions, Tenant hereby specifically waives its
       rights under the following provisions of California law:

          (i) Civil Code Sections 1932 and 1933(4), concerning the termination
          of a lease (whether prior to or after the commencement of the lease
          term) on account of the condition of the premises;

          (ii) Civil Code Sections 1941 and 1942, concerning the making of
          repairs at a landlord's expense;

                                       39
<PAGE>
 
          (iii) Code of Civil Procedure Section 1265.130, concerning the right
          to petition the Superior Court to terminate a lease in the event of a
          partial taking of the premises by condemnation; and

          (iv) Code of Civil Procedure Sections 473 and 1179 and Civil Code
          Section 3275, concerning rights of redemption or reinstatement of a
          tenant after being dispossessed from its premises.

       d. Landlord's Disclosure Regarding Hazardous Substances. By signing this
       Lease, Tenant represents that Tenant has read and understood the
       statutorily required disclosures, if any, of Landlord set forth in
       Schedule 1 attached to this Addendum, which disclosures relate to certain
       Hazardous Substances known or suspected to exist at the Premises,
       Building, or Facility.

                                       40
<PAGE>
 
LEASE RIDER NO. 1

This Lease Rider is attached to and made a part of that certain Standard Form
Lease dated April 24, 1997, by and between Casiopea Venture Corporation, as
("Landlord") and Qualix Group, Inc., as ("Tenant") for the Premises known as 177
Bovet Road, Suite 200, San Mateo, California.

The capitalized terms used and not otherwise defined herein shall have the same
definitions as set forth in the Lease. The provisions of this Lease Rider shall
supersede any inconsistent or conflicting provisions of the Lease.

1. Option To Extend Term:

       a. Grant of Option. Landlord hereby grants to Tenant the option (the
       "Option") to extend the Term of the Lease for an additional consecutive
       term of five (5) years ( the "Extension"), on the same terms and
       conditions as set forth in the Lease, except the Monthly Rent shall be
       the amount determined as set forth below. The Option shall be exercised
       only by written notice delivered to Landlord at least 180 days before the
       expiration of the initial Term of the Lease. If Tenant fails to deliver
       to Landlord written notice of the exercise of the Option within the time
       period prescribed above, the Option shall be exercisable by Tenant on the
       express conditions that (i) at the time of the exercise of the Option,
       and thereafter at all times prior to the commencement of the Extension,
       an Event of Default shall not have occurred and be continuing under the
       Lease, and (ii) Tenant has not been 10 or more days late in the payment
       of Rent more than a total of three times during the Term of the Lease. If
       Tenant properly exercises to Option, "Term," as used herein and in the
       Lease, shall be deemed  to include the Extension, unless specified
       otherwise herein or in the Lease.

       The parties shall have 30 days after Landlord receives the option notice
       in which to agree on minimum monthly rent during the extended term. If
       the parties agree on the minimum monthly rent for the extended term
       during that period, they shall immediately execute an amendment to this
       Lease stating the minimum monthly rent for the extended term.

       If the parties are unable to agree on the minimum monthly rent for the
       extended period within that period, the option notice shall be of no
       effect and this Lease shall expire at the end of the term. Neither party
       to this Lease shall have the right to have a court or other third party
       set the minimum monthly rent.

       Tenant shall have no other right to extend the term beyond the extended
       term.

       b. Personal Option. The Option is personal to Tenant. If Tenant subleases
       or assigns or otherwise transfers any interest under the Lease prior to
       the exercise of the Option, the Option shall lapse. If Tenant subleases
       or assigns or otherwise transfers any interest of Tenant under the Lease
       after the exercise of the Option but prior to the commencement of the
       Extension, the Option shall lapse and the Term of the Lease shall expire
       as if the Option were not exercised.

                                       41
<PAGE>
 
LEASE RIDER NO. 2

This Lease Rider is attached to and made a part of that certain Standard Form
Lease dated April 24, 1997, by and between Casiopea Venture Corporation, as
("Landlord,") and Qualix Group, Inc., as ("Tenant,") for the Premises known as
177 Bovet Road, Suite 200, San Mateo, California.

The capitalized terms used and not otherwise defined herein shall have the same
definitions as set forth in the Lease. The provisions of this Lease Rider shall
supersede any inconsistent or conflicting provisions of the Lease.

       1. First Opportunity To Lease Additional Space.

       Provided Tenant is not in default and has performed all of its
       obligations hereunder and subject to, but only to, existing rights held
       by existing tenants Tenant shall have a one-time first right to lease
       contiguous space to the Premises on the third floor of the building
       provided such contiguous space becomes available for leasing during the
       Lease Term ("First Opportunity") at the then prevailing fair market
       rental rates and upon such other terms and conditions as are then being
       offered by Landlord to the general public for such space. Upon
       notification in writing by Landlord that such space is available, Tenant
       shall have ten (10) business days in which to elect in writing so to
       lease such space, in which event negotiations will the lease for same
       shall commence not more than thirty (30) days from Tenant's notification
       of its intent to lease such space. In the event Tenant declines or fails
       to elect so to lease such space, then the First Opportunity hereby
       granted shall automatically terminate and shall thereafter be null and
       void as to such space. It is understood that this First Opportunity shall
       not be construed to prevent any tenant in the Building from extending or
       renewing its lease.

                                       42
<PAGE>
 
LEASE RIDER NO. 3

This Lease Rider is attached to and made a part of that certain Standard Form
Lease dated _____________, by and between Casiopea Venture Corporation, as
("Landlord,") and _____________________, as ("Tenant,") for the Premises known
as _____ Bovet Road, Suite _____, San Mateo, California. Except as otherwise set
forth in this Rider, all terms used in this Rider shall have the same meaning as
when used in the foregoing portion of the Lease. To the extent of any
inconsistencies between the foregoing provisions of the Lease and the provisions
of this Rider, the former are hereby amended.

ARTICLE I:  LETTER OF CREDIT

1. Landlord Costs.

Landlord and Tenant acknowledge and agree that the Landlord is investing at
least _____________________ ( $_________________ ) towards constructing
improvements to the Premises and broker's commissions ("Landlord Costs").

2. Obligation To Pay For Landlord's Costs.

In the event of a termination of this Lease prior to the expiration of its Term,
due to default by Tenant, Tenant shall pay to Landlord, within five (5) days
after the effective date of such termination (the "Termination Date"),
_____________________ ( $_________________ ) paid by Landlord for Landlord's
Costs, prorated by the remaining term of the Lease.

3. Security Of Payment Of Landlord's Costs.

       a. Contemporaneously with the execution of this Lease, Tenant shall cause
       to be delivered to Landlord, as security for Tenant's obligation to pay
       Landlord's Costs as set forth in Section 1 of this Rider, in addition to
       Monthly Rent for Month 1 and Month 24 and funds otherwise deposited with
       the Landlord as Tenant's Security Deposit pursuant to the terms of this
       Lease, an irrevocable straight Letter of Credit issued by Borel Bank in
       the amount of _____________________ ( $_________________ ). Said Letter
       of Credit shall include the following language:

          (i) Upon Landlord's written certification to Issuer:

              (a) Stating that the Lease has been terminated by reason of events
              other than Landlord's default, and the effective date of such
              termination ("Termination Date"); and

              (b) stating that there is due and owning from Tenant to Landlord,
              that amount which is equal to Landlord's Costs'.

       Issuer shall thereupon pay to Landlord an amount equal to the entire
       Unpaid Balance of Landlord's Costs thereon from the Termination Date, as
       certified to the Issuer by Landlord.

       b. Provided tenant has not defaulted in the performance of any of it
       obligations under the Lease; at any time during the second year of the
       Term, Tenant may reduce the face amount of the Letter of Credit to
       _____________________ ( $_________________ ); and at any time during the
       third year of the Term, Tenant may reduce the face amount of the Letter
       of Credit to _____________________ ( $_________________ ). After the
       third lease year the Letter of Credit requirement will be waived by the
       Landlord if:

              (a) Tenant has not been in default anytime during the previous
              three years; and

              (b) Tenant has successfully sold its initial public offering of
              common stock.

       If any letter of credit issued by reason of the provisions of this Rider
       should expire sooner than the Expiration Date of the Lease, then in such
       case, not later than fifteen (15) days prior to the expiration date of
       the then-existing Letter of Credit, Tenant shall replace said Letter of
       Credit with anew Letter of Credit meeting the requirements specified this
       Rider.

TENANT: ____________________________

By: __________________________________________  Date: __________________________

                                       43
<PAGE>
 
LANDLORD: CASIOPEA VENTURE CORPORATION

By: __________________________________________  Date: __________________________

                                       44
<PAGE>
 
EXHIBIT A-1

Site Plan or Legal Description of the Facility

                                       45
<PAGE>
 
EXHIBIT A-2

Floor Plan of the Premises

                                       46
<PAGE>
 
EXHIBIT B

WORK LETTER

This Exhibit "B" is attached to and made a part of that certain Lease dated
March 15, 1997, by and between Casiopea Venture Corporation, ("Landlord"), and
Qualix Group, Inc., ("Tenant") for the Premises known as Bovet Office Centre,
177 Bovet Road, Suite 200, San Mateo, California  94404

1.   APPLICATION OF EXHIBIT

     Capitalized terms used and not otherwise defined herein shall have the same
definitions as set forth in the Lease. The provisions of this Work Letter shall
apply to the planning and completion of leasehold improvements requested by
Tenant (the "Tenant Improvements") for the fitting out of the initial Premises,
as more fully set forth herein.

2.   LANDLORD AND TENANT PRE-CONSTRUCTION OBLIGATIONS

     a)   Preliminary Space Plans. Attached to this Work Letter as Schedule "1"
          -----------------------                                              
are preliminary space plans for the Tenant Improvements ("the Preliminary Space
Plans"), which include without limitation, sketches and/or drawings showing
locations of doors, partitioning, electrical fixtures, outlets and switches,
plumbing fixtures and other requirements, mutually agreed upon by Landlord and
Tenant and determined by Tenant as required for its use of the Premises.
Landlord acknowledges that the Preliminary Space Plans have been prepared by
Tenant's Architect after consultation and cooperation between Tenant and
Tenant's Architect regarding the proposed Tenant Improvements and Tenant's
requirements and that the Preliminary Space Plans are complete with respect
thereto. Landlord and Tenant's Architect shall be entitled, in all respects, to
rely upon all information supplied by Tenant to the best of their knowledge
regarding the Tenant Improvements.

     b)   Working Drawings. Within twenty-one (21) days following full execution
          ----------------                                                      
of this Lease by both Landlord and Tenant and removal of contingency by existing
Tenant, Tenant's Architect shall prepare working drawings ("the Working
Drawings") for the Tenant Improvements based upon the approved Preliminary Space
Plans. The Working Drawings shall include architectural drawings for the Tenant
Improvements based on the Preliminary Space Plans. Notwithstanding the
Preliminary Space Plans, in all cases the Working Drawings (i) shall be subject
to Landlord's final approval, which approval shall not be unreasonably withheld,
(ii) shall not be in conflict with building codes for the City or County or with
insurance requirements for a fire resistive Class A office building, and (iii)
shall be in a form satisfactory to appropriate governmental authorities
responsible for issuing permits and licenses required for construction.

     c)   Approval of Working Drawings. Tenant or Tenant's Architect shall
          ----------------------------                                    
submit the Working Drawings to Tenant and Landlord for Landlord's review and to
confirm compliance with the Preliminary Space Plan. Tenant and Landlord shall
notify Tenant's Architect within five (5) business days, after delivery thereof
of any requested revisions. Within five (5) days after receipt of Tenant's
notice, Tenant's Architect shall make all approved revisions to the Working
Drawings and submit two copies thereof to Tenant for its final review and
approval, which approval shall be given within three (3) business days
thereafter. Concurrently with the above review and approval process, Landlord
may submit all plans and specifications to City or other governmental agencies
in an attempt to expedite City approval and issuance of all necessary permits
and Licenses to construct the Tenant Improvements as shown on the Working
Drawings. Any changes which are required by City or other governmental agencies
shall be immediately submitted to Tenant and Landlord for their review and
reasonable approval, and Landlord shall promptly notify Tenant of such changes.

          d)  Schedule of Critical Dates. Set forth below is a schedule of
              --------------------------                                  
certain critical dates relating to Landlord's and Tenant's respective
obligations for the design and construction of the Tenant Improvements. Such
dates and the respective obligations of Landlord and Tenant are more fully
described elsewhere in the Work Letter. The purpose of the following schedule is
to provide a reference for Landlord and Tenant and to make certain the Final
Approval Date occurs as set forth herein. Following the Final Approval Date,
Tenant shall be deemed to have released Landlord to commence construction of the
Tenant Improvements as set forth in Section 4 below.

                                       47
<PAGE>
 
<TABLE>
<CAPTION>
Reference                                 Date Due                                Responsible Party
---------                                 --------                                ------------------                
<C>     <S>                               <C>                                     <C>
A.      "Preliminary Space Plan           Contemporaneously with Lease execution  Tenant & Landlord
        Approval"

B.      "Working Drawings Completion"     Twenty-one (21) days after full         Tenant
                                          execution of the Lease and removal of
                                          contingency by existing Tenant

C.      "Working Drawing Review"          Five (5) business days after            Tenant & Landlord
                                          Architect submits Working Drawings to
                                          Tenant and Landlord

D.      "Working Drawing Revisions"       Five (5) business days after Tenant     Tenant
                                          returns Working Drawings to Landlord

E.      "Final Approval Date"             Three (3) business days after           Tenant & Landlord
                                          Architect submits revised Working
                                          Drawings to Tenant and Landlord

F.      "Cost Proposal Date"              10 business days after Final Approval   Landlord
                                          Date
</TABLE>

3.  BUILDING PERMIT

    After the Final Approval Date has occurred, Landlord shall, if Landlord has
not already done so, submit the Working Drawings to the appropriate governmental
body or bodies for final plan checking and a building permit. Landlord, with
Tenant's cooperation, shall cause to be made any change in the Working Drawings
necessary to obtain the building permit; provided, however, after the Final
Approval Date, no changes shall be made to the Working Drawings without the
prior written approval of both Landlord and Tenant, and then only after
agreement by Tenant to pay any excess costs resulting from changes required by
either Tenant and Landlord.

4.   COST PROPOSAL

     After the Approved Working Drawings are signed by Landlord and Tenant,
Landlord shall solicit bids from the Bidding Contractors for the construction of
the Tenant Improvements and on the Cost Proposal Date shall provide Tenant with
a cost proposal from each Bidding Contractor in accordance with the Approved
Working Drawings, which cost proposals shall include, as nearly as possible, the
cost of all Tenant Improvements to be incurred in connection with the design and
construction of the Tenant Improvements. Landlord shall approve and select the
cost proposal ("Cost Proposal") of the Bidding Contractor whom Landlord elects
for Landlord to retain to construct the Tenant Improvements ("Contractor") and
Landlord shall deliver the selected Cost Proposal and notice of its selection of
Contractor to Tenant within five business days of the receipt of the cost
proposals. Upon receipt of the same by Landlord, Landlord shall be released by
Tenant to purchase the items set forth in the Cost Proposal and to commence the
construction relating to such items. The date by which Tenant must approve and
deliver the Cost Proposal to Landlord shall be known hereafter as the "Cost
Proposal Delivery Date".

5.   CONSTRUCTION OF TENANT IMPROVEMENTS

     After the Final Approval Date has occurred and a building permit for the
work has been issued, Landlord shall, through a construction contract
("Construction Contract") with a qualified licensed contractor selected by
Landlord, cause the construction of the Tenant Improvements to be carried out in
substantial conformance with the Working Drawings in a good and workmanlike
manner using first-class 

                                       48
<PAGE>
 
materials. The costs associated with the construction of the Tenant Improvements
shall be paid as set forth in Section 6 of this Work Letter. Landlord shall see
that the construction complies with all applicable building, fire, health, and
sanitary codes and regulations, the satisfaction of which shall be evidenced by
a certificate of occupancy for the Premises. Landlord or Contractor shall
maintain a comprehensive general liability insurance policy with a limit of not
less than One Million Dollars ($1,000,000.00) to insure against bodily injury
and property damage during the construction work prior to the Lease Commencement
Date.

6.   TENANT IMPROVEMENT ALLOWANCE

     Landlord shall provide Tenant with a Tenant Improvement Allowance of
$260,000.00 towards the cost of the design and construction of the Tenant
Improvements, including without limitation design, engineering, and consulting
fees exclusive of demolition costs to bring to shell condition which costs shall
be borne by Landlord (collectively, the "Tenant Improvement Costs"). Tenant and
Landlord acknowledge that Tenant Improvement Costs will exceed Landlord's
contribution. Prior to commencement of construction, Tenant shall deliver to
Landlord cash in an amount (the "Over-Allowance Amount") equal to the difference
between (i) the amount of the Cost Proposal and (ii) the amount of the Tenant
Improvement Allowance. The Over-Allowance Amount shall be disbursed by Landlord
pursuant to the same procedure as the Tenant Improvement Allowance. In the event
that, after the Cost Proposal Delivery Date, any revision, changes, or
substitutions shall be made to the Construction Drawings or the Tenant
Improvements, any additional costs which arise in connection with such
revisions, changes or substitutions or any other additional costs shall be paid
by Tenant to Landlord immediately upon Landlord's request as an addition to the
Over-Allowance Amount. The combination of Landlord and Tenant contribution shall
be used for payment of the following Tenant Improvement Costs:

     (i)   Preparation by Tenant's Architect of the Preliminary Space Plans and
the Working Drawings as provided in Section 2 of this Work Letter, including
without limitation all fees charged by City (including without limitation fees
for building permits and plan checks) in connection with the Tenant Improvements
work in the Premises;

     (ii)  Construction work for completion of the Tenant Improvements as
reflected in the Construction Contract;

     (iii) All contractor's charges, general conditions, performance bond
premiums and construction fees; and

     (iv)  Tenant Improvements as shown on the approved Preliminary Space Plans
attached hereto as Schedule "A-2".

     In the event that Tenant does request modifications, changes or alterations
of the Tenant Improvements from what is shown on said approved Preliminary Space
Plans, or causes any Tenant Delays as defined in Section 7 or this Work Letter,
then all associated costs shall be borne by Tenant. If Tenant does seek to
modify change or alter the Tenant Improvements from the approved Preliminary
Space Plans, or does cause a Tenant Delay, Tenant shall pay to Landlord any
excess costs resulting therefrom in accordance with Section 6 of this Work
Letter.

7.   CHANGE ORDERS

     Tenant may from time to time request and obtain change orders before or
during the course of construction provided that: (i) each such request shall be
reasonable, shall be in writing and signed by or on behalf of Tenant, and shall
not result in any structural change in the Building, as reasonably determined by
Landlord, (ii) all additional charges and costs, including without limitation
architectural and engineering costs, construction and material costs, and
processing costs of any governmental entity shall be the sole and exclusive
obligation of Tenant, and (iii) any resulting delay in the completion of the
Tenant Improvements shall be deemed a Tenant Delay and in no event shall extend
the Commencement Date of the Lease. Upon Tenant's request for a change order,
Landlord shall as soon as reasonably possible submit to Tenant a written
estimate of the increased or decreased cost and anticipated delay if any,
attributable to such requested change. Within three (3) business days of the
date such estimated cost adjustments and delays are delivered to Tenant, Tenant
shall advise Landlord whether it wishes to proceed with the change order, and if
Tenant elects to proceed with the change order, Tenant shall remit,

                                       49
<PAGE>
 
concurrently with Tenant's notice to proceed, the amount of the increased costs,
if any, attributable to such change order. Unless Tenant includes in its initial
change order request that the work in process at the time such request is made
be halted in whole or in part pending approval and execution of a change order,
Landlord shall not be obligated to stop construction of the Tenant Improvements,
whether or not the change order relates to the work then in process or about to
be started.

8.   TENANT DELAYS

     In no event shall the Commencement Date of the Lease be extended or delayed
due or attributable to delays due to the fault of Tenant ("Tenant Delays").
Tenant Delays shall include, but are not limited to, delays caused by or
resulting from any one or more of the following:

     a)   Tenant's failure to timely review and reasonably approve the Working
          Drawings;

     b)   Tenant's request for or use of special materials, finishes or
          installations which are not readily available, provided that Landlord
          shall notify Tenant in writing that the particular material, finish,
          or installation is not readily available promptly upon Landlord's
          discovery of same;

     c)   Change orders requested by Tenant;

     d)   Interference by Tenant or by Tenant's Agents with Landlord's
          construction activities;

     e)   Tenant's failure to approve any other item or perform any other
          obligation in accordance with and by the dates specified herein or in
          the Construction Contract;

     f)   Tenant's requested changes in the Preliminary Space Plans, Working
          Drawings or any other plans and specifications after the approval
          thereof by Tenant or submission thereof by Tenant to Landlord;

     g)   Tenant's failure to approve written estimates of costs in accordance
          with this Work Letter; and

     h)   Tenant's obtaining or failure to obtain any necessary governmental
          approvals or permits for Tenant's intended use of the Premises.

If the Commencement Date of the lease is delayed by any Tenant delays, whether
or not within the control of Tenant, then the Commencement Date of the Lease and
the payment of Rent shall be accelerated by the number of days of such delay.
Landlord shall give Tenant written notice within a reasonable time of any
circumstance that Landlord believes constitute a Tenant Delay.

9.   TRADE FIXTURES AND EQUIPMENT

     Tenant acknowledges and agrees that Tenant is solely responsible for
obtaining, delivering and installing in the Premises all necessary and desired
furniture, trade fixtures, equipment and other similar items, and that Landlord
shall have no responsibility whatsoever with regard thereto. Tenant further
acknowledges and agrees that neither the Commencement Date of the Lease nor the
payment of Rent shall be delayed for any period of time whatsoever due to any
delay in the furnishing of the Premises with such items.

10.  FAILURE OF TENANT TO COMPLY

          Any failure of Tenant to comply with any of the provisions contained
       in this Work Letter within the times for compliance herein set forth
       shall be deemed a default under the Lease. In addition to the remedies
       provided to Landlord in this Work Letter upon the occurrence of such a
       default by Tenant, Landlord shall have all remedies available at law or
       equity to a landlord against a defaulting tenant pursuant to a written
       lease, including but not limited to those set forth in the Lease.

                                       50
<PAGE>
 
EXHIBIT F

ADJUSTMENTS TO MONTHLY RENT

Fixed Adjustment

This Exhibit is attached to and made a part of that certain Standard Form Lease
dated April 24, 1997, by and between Casiopea Venture Corporation c/o Birtcher
Property Services as "Landlord", and Qualix Group, as "Tenant", for the Premises
known as Bovet Office Centre, 177 Bovet Road, Suite 200, San Mateo, California.

The capitalized terms used and not otherwise defined in this Exhibit shall have
the same definitions as set forth in the Lease. The provisions of this Exhibit
shall supersede any inconsistent or conflicting provisions of this Lease.

The Monthly Rent shall be adjusted, as of the commencement of the dates set
forth below, in accordance with the following schedule:

<TABLE>
<CAPTION>
Months From Commencement Date    Monthly Rent
<S>                              <C>
    1--12                          $46,270.70
   13--24                          $47,215.00
   25--36                          $48,159.30
   37--48                          $49,103.60
   49--60                          $50,047.90
</TABLE>

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