<PAGE>   1
                                                             EXHIBIT 10.01




                                      LEASE
               (SINGLE-TENANT BUILDING ON MULTI-BUILDING PROJECT)

                                 by and between

                         MARTIN/CAMPUS ASSOCIATES, L.P.
                                   "Landlord"

                                       and

                                  EXCITE, INC.
                                    "Tenant"









                   For the approximately 88,221 SF Premises at
                               525 - 555 Broadway,
                             Redwood City, CA 94063
<PAGE>   2
                                  LEASE SUMMARY
<TABLE>

<S>                               <C>
Lease Date:                       As of August 9, 1996


Landlord:                         Martin/Campus Associates, L.P.


Address of Landlord:              100 Bush Street, 26th Floor
                                  San Francisco, CA 94104


Tenant:                           Excite, Inc.


Address of Tenant:                1091 North Shoreline Blvd.
                                  Mountain View, CA 94043

Contact:                          Rick Redding


Telephone:                        (415) 943-1200


Building Addresses:               525-555 Broadway (Building 1)
                                  Redwood City, California 94063


Total Building Square Footage:    88,221 square feet


Commencement Date:                Seven (7) days after
                                  substantial completion of the
                                  Improvements to the ground
                                  floor of the Building


Term:                             Ten (10) years


Monthly Rent:                     $1.45/square foot/month,
                                  subject to adjustments


Security Deposit:                 $767,522.70,
                                  subject to adjustments
</TABLE>


Exhibit A:        Floor Plan of Premises

Exhibit B:        Site Plan of Project

Exhibit C:        Work Letter Agreement

Exhibit D:        Subordination, Non-Disturbance and Attornment
                  Agreement
<PAGE>   3
                                TABLE OF CONTENTS

<TABLE>
                                                                                                          Page
                                                                                                          ----
<S>                                                                                                              <C>
1.  Parties.....................................................................................................  1

2.  Premises....................................................................................................  1

3.  Definitions.................................................................................................  2
         A.  Alterations........................................................................................  2
         B.  Capital Improvements...............................................................................  2
         C.  Commencement Date..................................................................................  2
         D.  Common Area........................................................................................  2
         E.  Common Area Maintenance Costs......................................................................  2
         F.  HVAC ..............................................................................................  4
         G.  Impositions........................................................................................  4
         H.  Improvements.......................................................................................  5
         I.  Index..............................................................................................  5
         J.  Interest Rate......................................................................................  5
         K.  Landlord's Agents..................................................................................  6
         L.  Monthly Rent.......................................................................................  6
         M.  Parking Area.......................................................................................  6
         N.  Project............................................................................................  6
         O.  Real Property Taxes................................................................................  6
         P.  Rent ..............................................................................................  7
         Q.  Rentable Area......................................................................................  7
         R.  Security Deposit...................................................................................  7
         S.  Sublet.............................................................................................  7
         T.  Subrent............................................................................................  7
         U.  Subtenant..........................................................................................  8
         V.  Tenant Improvements................................................................................  8
         W.  Tenant's Percentage Share..........................................................................  8
         X.  Tenant's Personal Property.........................................................................  9
         Y.  Term ..............................................................................................  9

4.  Lease Term..................................................................................................  9
         A.  Term ..............................................................................................  9
         B.  Delays in Completion...............................................................................  9
         C.  Delay in Substantial Completion.................................................................... 10
         D.  Option to Extend................................................................................... 11

5.  Rent and Additional Charges................................................................................. 14
         A.  Monthly Rent....................................................................................... 14
         B.  Index Adjustments to Monthly Rent.................................................................. 15
         C.  Additional Adjustments to Monthly Rent............................................................. 15
         D.  Management Fee..................................................................................... 15
         E.  Common Area Maintenance Costs...................................................................... 15
         F.  Additional Rent.................................................................................... 17
         G.  Prorations......................................................................................... 17
         H.  Interest........................................................................................... 17

6.  Late Payment Charges........................................................................................ 17
</TABLE>

<PAGE>   4
<TABLE>
<S>                                                                                                              <C>
7.  Security Deposit............................................................................................ 18

8.  Holding Over................................................................................................ 20

9.  Tenant Improvements......................................................................................... 20

10.  Condition of Premises...................................................................................... 20
         A.  Capital Improvements............................................................................... 20
         B.  Acceptance of Premises............................................................................. 20

11.  Use of the Premises and Common Area........................................................................ 21
         A.  Tenant's Use....................................................................................... 21
         B.  Hazardous Materials................................................................................ 21
         C.  Special Provisions Relating to The Americans With
                  Disabilities Act of 1990...................................................................... 27
         D.  Use and Maintenance of Common Area................................................................. 28

12.  Quiet Enjoyment............................................................................................ 29

13.  Alterations................................................................................................ 29

14.  Surrender of the Premises.................................................................................. 30

15.  Impositions and Real Property Taxes........................................................................ 31
         A.  Payment by Tenant.................................................................................. 31
         B.  Taxes on Tenant Improvements and Personal Property................................................. 32
         C.  Proration.......................................................................................... 32

16.  Utilities and Services..................................................................................... 32

17.  Repair and Maintenance..................................................................................... 33
         A.  Landlord's Obligations............................................................................. 33
         B.  Tenant's Obligations............................................................................... 35
         C.  Conditions Applicable to Repairs................................................................... 35
         D.  Landlord's Rights.................................................................................. 35
         E.  Compliance with Governmental Regulations........................................................... 36

18.  Liens...................................................................................................... 36

19.  Landlord's Right to Enter the Premises..................................................................... 37

20.  Signs...................................................................................................... 37

21.  Insurance.................................................................................................. 37
         A.  Indemnification.................................................................................... 37
         B.  Tenant's Insurance................................................................................. 39
         C.  Premises Insurance................................................................................. 40
         D.  Increased Coverage................................................................................. 40
         E.  Failure to Maintain................................................................................ 41
         F.  Insurance Requirements............................................................................. 41
         G.  Landlord's Disclaimer.............................................................................. 41

22.  Waiver of Subrogation...................................................................................... 42
</TABLE>

<PAGE>   5
<TABLE>

<S>                                                                                                              <C>
23.  Damage or Destruction...................................................................................... 42
         A.  Landlord's Obligation to Rebuild................................................................... 42
         B.  Right to Terminate................................................................................. 42
         C.  Limited Obligation to Repair....................................................................... 43
         D.  Abatement of Rent.................................................................................. 43
         E.  Damage Near End of Term............................................................................ 44

24.  Condemnation............................................................................................... 44

25.  Assignment and Subletting.................................................................................. 45
         A.  Landlord's Consent................................................................................. 45
         B.  Tenant's Notice.................................................................................... 45
         C.  Information to be Furnished........................................................................ 46
         D.  Landlord's Alternatives............................................................................ 46
         E.  Proration.......................................................................................... 46
         F.  Parameters of Landlord's Consent................................................................... 46
         G.  Permitted Transfers................................................................................ 47

26.  Default.................................................................................................... 47
         A.  Tenant's Default................................................................................... 47
         B.  Remedies........................................................................................... 48
         C.  Landlord's Default................................................................................. 50

27.  Subordination.............................................................................................. 50

28.  Notices.................................................................................................... 51

29.  Attorneys' Fees............................................................................................ 51

30.  Estoppel Certificates...................................................................................... 52

31.  Transfer of the Premises by Landlord....................................................................... 52

32.  Landlord's Right to Perform Tenant's Covenants............................................................. 53

33.  Tenant's Remedy............................................................................................ 53

34.  Mortgagee Protection....................................................................................... 53

35.  Brokers.................................................................................................... 53

36.  Acceptance................................................................................................. 54

37.  Parking.................................................................................................... 54

38.  General.................................................................................................... 54
         A.  Captions........................................................................................... 54
         B.  Executed Copy...................................................................................... 54
         C.  Time .............................................................................................. 54
         D.  Separability....................................................................................... 54
         E.  Choice of Law...................................................................................... 54
         F.  Gender; Singular, Plural........................................................................... 55
         G.  Binding Effect..................................................................................... 55
         H.  Waiver............................................................................................. 55
</TABLE>

<PAGE>   6
<TABLE>
<S>                                                                                                              <C>
         I.  Entire Agreement................................................................................... 55
         J.  Authority.......................................................................................... 55
         K.  Exhibits........................................................................................... 55
         L.  Lease Summary...................................................................................... 55
         M.  Nondisturbance..................................................................................... 56
         N.  Consent............................................................................................ 56
</TABLE>
<PAGE>   7
                                      LEASE

               (SINGLE-TENANT BUILDING ON MULTI-BUILDING PROJECT)


         1.  Parties.

             THIS LEASE (the "Lease"), dated as of August 9, 1996, is entered
into by and between MARTIN/CAMPUS ASSOCIATES, L.P., a Delaware limited
partnership ("Landlord"), whose address is 100 Bush Street, San Francisco, CA
94104, and EXCITE, INC., a California corporation ("Tenant"), whose address is
1091 North Shoreline Boulevard, Mountain View, CA 94043.

         2.  Premises.

             Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord those certain premises consisting of a total area of up to
approximately Eighty-Eight Thousand Two Hundred Twenty-One (88,221) square feet
in that certain building, commonly known as 525-555 Broadway (the "Building"),
in the City of Redwood City, County of San Mateo, State of California, as more
particularly shown on Exhibit A, which shall be delivered by Landlord to Tenant
as follows: (i) on or before the Commencement Date (as defined below) Landlord
shall deliver to Tenant the entire ground floor of the Building, consisting of
approximately Sixty Thousand (60,000) square feet of Rentable Area, in
accordance with Paragraph 4 below; and (ii) within twelve (12) months after the
Commencement Date, Landlord shall deliver to Tenant the entire second floor of
the Building, consisting of approximately Twenty-Eight Thousand Two Hundred
Twenty-One (28,221) square feet of Rentable Area, in accordance with Paragraph 4
below. Notwithstanding the foregoing, if Tenant requests that the entire second
floor of the Building be delivered prior to the expiration of such twelve (12)
month period, Landlord shall use reasonable efforts to deliver the second floor
of the Building to Tenant as soon as reasonably possible. During the period of
time between the date of this Lease and the Commencement Date, no portion of the
Building shall be occupied by any person or entity (other than Tenant, Ampex
Corporation, and affiliates of Ampex Corporation). That portion of the Rentable
Area of the Building that Landlord has delivered to Tenant as of the date in
question shall be collectively referred to as the "Premises". The Premises also
includes the appurtenant right to use in common with other tenants of the
Project (as defined below) the Common Area (as defined below) of the Project.




                                        1
<PAGE>   8
         3.  Definitions.

             The following terms shall have the following meanings in this
Lease:

             A. Alterations. Any alterations, additions or improvements made in,
on or about the Premises after the Commencement Date, including, but not limited
to, lighting, heating, ventilating, air conditioning, electrical, partitioning,
drapery and carpentry installations.

             B. Capital Improvements. Those certain improvements to the Building
to be constructed by Landlord pursuant to Paragraph 10.A and the Work Letter
Agreement attached to this Lease as Exhibit C (the "Work Letter"). To the extent
that Landlord delivers the Premises to Tenant in phases, the Work Letter shall
apply to each phase of the Premises then being delivered to Tenant.

             C. Commencement Date. The Commencement Date of this Lease shall be
the first day of the Term determined in accordance with Paragraph 4.A.

             D. Common Area. All areas and facilities within the Project not
appropriated to the exclusive occupancy of tenants, including the Parking Area,
sidewalks, pedestrian ways, driveways, signs, service delivery facilities,
common storage areas, common utility facilities and all other areas in the
Project established by Landlord for non-exclusive use. The Common Area may
increase and/or decrease from time to time during the Term, since Landlord may
elect in its sole discretion to make changes to the buildings situated in the
Project, and/or to subdivide, sell, exchange, dispose of, transfer, or change
the configuration of all or any portion of the Common Area from time to time, so
long as Landlord neither unreasonably interferes with ingress to or egress from
the Building, nor reduces the number of parking spaces available for Tenant's
use below the minimum requirements set forth in Paragraph 37.

             E. Common Area Maintenance Costs. The total of all costs and
expenses paid or incurred by Landlord in connection with the operation,
maintenance, ownership and repair of the Common Area, the Building, and the
performance of Landlord's obligations under Paragraph 17.A. Without limiting the
generality of the foregoing, Common Area Maintenance Costs include all costs of
and expenses for: (i) maintenance and repairs of the Common Area; (ii)
resurfacing, resealing, remarking, painting, repainting, striping or restriping
the Parking Area; (iii) maintenance and repair of all public or common
facilities; (iv) maintenance, repair and replacement of sidewalks, curbs,
paving, walkways, Parking Area, Project signs,

                                        2
<PAGE>   9
landscaping, planting and irrigation systems, trash facilities, loading and
delivery areas, lighting, drainage and common utility facilities, directional or
other signs, markers and bumpers, and any fixtures, equipment and personal
property located on the Common Area; (v) wages, salaries, benefits, payroll
burden fees and charges of personnel employed by Landlord and the charges of all
independent contractors retained by Landlord (to the extent that such personnel
and contractors are utilized by Landlord) for the maintenance, repair,
management and/or supervision of the Project, and of any security personnel
retained by Landlord in connection with the operation and maintenance of the
Common Area (although Landlord shall not be required to obtain security
services); (vi) maintenance, repair and replacement of security systems and
alarms; (vii) premiums for Comprehensive General Liability Insurance or
Commercial General Liability Insurance, casualty insurance, workers compensation
insurance or other insurance on the Common Area, the Project, the buildings
located at the Project, or any portion thereof or interest therein; (viii) all
personal property or real property taxes and assessments levied or assessed on
the Project, or any portion thereof or interest therein, including without
limitation Tenant's Percentage Share of the Real Property Taxes for the Project,
if applicable under Paragraph 15.A; (ix) cleaning, collection, storage and
removal of trash, rubbish, dirt and debris, and sweeping and cleaning the Common
Area; (x) any alterations, additions or improvements required to be made to the
Common Area in order to comply with applicable governmental laws, ordinances,
rules, regulations and orders that become effective after the date of this
Lease; (xi) legal, accounting and other professional services for the Project,
including costs, fees and expenses of contesting the validity or applicability
of any law, ordinance, rule, regulation or order relating to the Building, and
of contesting, appealing or otherwise attempting to reduce any Real Property
Taxes assessed against the Project; (xii) all costs and expenses incurred by
Landlord in performing its obligations under Paragraph 17.A, including without
limitation all costs and expenses incurred in performing any alterations,
additions or improvements required to be made to the Building in order to comply
with applicable laws, ordinances, rules, regulations and orders that become
effective after the date of this Lease, and all capital improvements required to
made in connection with the operation, maintenance and repair of the Building,
provided that the cost of any such alterations, additions, improvements or
capital improvements, together with interest at the Interest Rate, shall be
amortized over the useful life of the alteration, addition, improvement or
capital improvement in question and included in Common Area Maintenance Costs
for each year over which such costs are amortized; (xiii) any other cost or
expense which this Lease expressly characterizes as a Common Area Maintenance
Cost; and (xiv) any and all payments due and owing on behalf of the Project or
any

                                        3
<PAGE>   10
portion thereof with respect to any covenants, conditions, and restrictions
encumbering the Project, including without limitation any and all assessments
and association dues. In addition, if Tenant approves any proposal submitted by
Landlord for the creation of an amenities center in the Project (which approval
shall not be unreasonably withheld or delayed), Common Maintenance Costs shall
also include all costs and expenses of providing, creating, maintaining,
repairing, managing, operating, and supervising such amenity center for the
Project, which may include without limitation a dining facility, which costs and
expenses may include without limitation fair market rent subsidies granted and
fair market rent charged by Landlord for the space occupied by such amenity
center; provided, however, that Landlord shall not under any circumstances be
required to provide or create such an amenity center. However, notwithstanding
the foregoing, Common Area Maintenance Costs shall not include the cost of or
expenses for the following: (A) leasing commissions, attorneys' fees or other
costs or expenses incurred in connection with negotiations or disputes with
other tenants of the Project; (B) depreciation of buildings in the Project; (C)
payments of principal, interest, late fees, prepayment fees or other charges on
any debt secured by a mortgage covering the Project, or rental payments under
any ground lease or underlying lease; (D) any penalties incurred due to
Landlord's violation of any governmental rule or authority (but not excluding
the cost of compliance therewith, if such cost is chargeable to Tenant pursuant
to this Lease); (E) any Real Property Taxes or costs for which Landlord is
separately and directly reimbursed by Tenant or any other tenant of the Project
which are assessed against the Premises or the premises leased by such other
tenant; (F) items for which Landlord is reimbursed by insurance; (G) any Common
Area Maintenance Costs representing an amount paid to a related or affiliated
person or entity of Landlord which is in excess of the amount which would be
paid in the absence of such relationship; (H) costs and expenses incurred by
Landlord in performing its obligations under Paragraph 17.A, to the extent but
only to the extent that such costs and expenses are incurred in performing any
alterations, additions or improvements required to be made to the Building in
order to comply with applicable laws, ordinances, rules, regulations and orders
that are in effect as of the date of this Lease; and (I) costs and expenses
arising from any refinancing of the Project. In addition, Common Area
Maintenance Costs allocable to the Parking Area shall be reduced (but not below
zero (0)) by any and all net income received by Landlord during the applicable
year from the ownership or operation of the Parking Area.

             F. HVAC. Heating, ventilating and air conditioning.

             G. Impositions. Taxes, assessments, charges, excises and levies,
business taxes, license, permit, inspection and other

                                        4
<PAGE>   11
authorization fees, transit development fees, assessments or charges for housing
funds, service payments in lieu of taxes and any other fees or charges of any
kind at any time levied, assessed, charged or imposed by any federal, state or
local entity, (i) upon, measured by or reasonably attributable to the cost or
value of Tenant's equipment, furniture, fixtures or other personal property
located in the Premises, or the cost or value of any Alterations; (ii) upon, or
measured by, any Rent payable hereunder, including any gross receipts tax; (iii)
upon, with respect to or by reason of the development, possession, leasing,
operation, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises, or any portion thereof; or (iv) upon this Lease
transaction, or any document to which Tenant is a party creating or transferring
any interest or estate in the Premises. Impositions do not include franchise,
transfer, inheritance or capital stock taxes, or income taxes measured by the
net income of Landlord from all sources, unless any such taxes are levied or
assessed against Landlord as a substitute for, in whole or in part, any
Imposition.

             H. Improvements. Collectively, the Tenant Improvements and the
Capital Improvements.

             I. Index. The Consumer Price Index, All Urban Consumers, All Items,
published by the U.S. Department of Labor, Bureau of Labor Statistics for the
San Francisco-Oakland-San Jose Metropolitan Area (1982-84=100). If the Base Year
of the Index is changed, then all calculations pursuant to this Lease which
require the use of the Index shall be made by using the appropriate conversion
factor published by the Bureau of Labor Statistics (or successor agency) to
correlate to the Base Year of the Index herein specified. If no such conversion
factor is published, then Landlord shall, if possible, make the necessary
calculation to achieve such conversion. If such conversion is not in Landlord's
judgment possible, or if publication of the Index is discontinued, or if the
basis of calculating the Index is materially changed, then the term "Index"
shall mean comparable statistics on the cost of living, as computed either (i)
by an agency of the United States Government performing a function similar to
the Bureau of Labor Statistics, or (ii) if no such agency performs such
function, by a substantial and responsible periodical or publication of
recognized authority most closely approximating the result which would have been
achieved by the Index, as may be determined by Landlord in the exercise of its
reasonable good faith business judgment.

             J. Interest Rate. The lesser of (i) the reference rate, or
succeeding similar index, announced from time to time by the Bank of America's
main San Francisco office, plus two percent (2%) per annum, or (ii) the maximum
rate of interest permitted by law.

                                        5
<PAGE>   12
             K. Landlord's Agents. Landlord's authorized agents, partners,
subsidiaries, directors, officers, and employees.

             L. Monthly Rent. The rent payable pursuant to Paragraph 5.A., as
adjusted from time to time pursuant to the terms of this Lease.

             M. Parking Area. All Common Area (except sidewalks and service
delivery facilities) now or hereafter designated by Landlord for the parking or
access of motor vehicles, including roads, traffic lanes, vehicular parking
spaces, landscaped areas and walkways. The Parking Area may increase and/or
decrease from time to time during the Term, since Landlord may elect in its sole
discretion to make changes to the buildings situated in the Project, and/or to
subdivide, sell, exchange, dispose of, transfer, or change the configuration of
all or any portion of the Parking Area from time to time; provided, however,
that Landlord shall not reduce the number of parking spaces available for
Tenant's use below the minimum requirements set forth in Paragraph 37.

             N. Project. That certain real property described in Exhibit B
consisting of approximately 23.55 acres, upon which are located the Building and
five (5) other buildings, consisting of a total building square footage of
approximately Four Hundred Three Thousand Five Hundred Eight (403,508) square
feet.

             O. Real Property Taxes. Any form of assessment, license, fee, rent
tax, levy, penalty (if a result of Tenant's delinquency), or tax (other than net
income, estate, succession, inheritance, transfer or franchise taxes), imposed
by any authority having the direct or indirect power to tax, or by any city,
county, state or federal government or any improvement or other district or
division thereof, whether such tax is: (i) determined by the area of the
Premises or any part thereof or the rent and other sums payable hereunder by
Tenant or by other tenants, including, but not limited to, any gross income or
excise tax levied by any of the foregoing authorities with respect to receipt of
such rent or other sums due under this Lease; (ii) upon any legal or equitable
interest of Landlord in the Premises or any part thereof; (iii) upon this
transaction or any document to which Tenant is a party creating or transferring
any interest in the Premises; (iv) levied or assessed in lieu of, in
substitution for, or in addition to, existing or additional taxes against the
Premises whether or not now customary or within the contemplation of the
parties; or (v) surcharged against the Parking Area. To the extent that Landlord
receives during any calendar year any rebate or refund of Real Property Taxes
assessed against the Project, the Real Property Taxes for such year shall be
reduced by the amount of such rebate or refund received by Landlord.

                                        6
<PAGE>   13
             P. Rent. Monthly Rent plus the Additional Rent defined in Paragraph
5.F.

             Q. Rentable Area. The aggregate square footage in any one or more
buildings in the Project, as appropriate, as reasonably determined by Landlord
from time to time.

             R. Security Deposit. That amount paid by Tenant pursuant to
Paragraph 7.

             S. Sublet. Any transfer, sublet, assignment, license or concession
agreement, change of ownership, mortgage, or hypothecation of this Lease or the
Tenant's interest in the Lease or in and to all or a portion of the Premises. As
used herein, a Sublet includes the following: (i) if Tenant is a partnership or
a limited liability company, a transfer, voluntary or involuntary, of all or any
part of any interest in such partnership or limited liability company, or the
dissolution of the partnership or limited liability company, whether voluntary
or involuntary; (ii) if Tenant is a corporation, any dissolution, merger,
consolidation or other reorganization of Tenant, or the transfer, either by a
single transaction or in a series of transactions, of a controlling percentage
of the stock of Tenant, or the sale, by a single transaction of or series of
transaction, within any one (1) year period, of corporate assets equaling or
exceeding twenty percent (20%) of the total value of Tenant's assets, unless any
such corporate change results from the trading of shares listed on a recognized
public stock exchange and such trading is not for the purposes of acquiring
effective control of Tenant; (iii) if Tenant is a trust, the transfer,
voluntarily or involuntarily, of all or any part of the controlling interest in
such trust; and (iv) if Tenant is any other form of entity, a transfer,
voluntary or involuntary, of all or any part of any interest in such entity. As
used herein, the phrases "controlling percentage" and "controlling interest"
means the ownership of, and/or the right to vote, stock, partnership interests,
membership interests, or other indicia of ownership possessing at least
fifty-one percent (51%) of either the total combined interests in Tenant, or the
voting power of all classes of Tenant's capital stock, partnership interests,
membership interests, or other indicia of ownership, that have been issued,
outstanding, and (if applicable) are entitled to vote.

             T. Subrent. Any consideration of any kind received, or to be
received, by Tenant from a subtenant if such sums are related to Tenant's
interest in this Lease or in the Premises, including without limitation bonus
money and payments (in excess of book value) for Tenant's assets, including
without limitation its trade fixtures, equipment and other personal property,
goodwill, general intangibles, and any capital stock or other equity ownership
of Tenant.

                                        7

<PAGE>   14
             U. Subtenant. The person or entity with whom a Sublet agreement is
proposed to be or is made.

             V. Tenant Improvements. Those certain improvements to the Premises
to be constructed by Landlord pursuant to Exhibit C, other than the Capital
Improvements.

             W. Tenant's Percentage Share. The ratio (expressed as a percentage)
of the total "Occupied Area" (as defined below) of the Premises to the total
Rentable Area of all of the buildings at the Project, each as of the first (1st)
day of the calendar month in question, as reasonably determined by Landlord;
provided, however, that if in Landlord's reasonable judgment the amount of
Occupied Area as of the first (1st) day of such calendar month does not
accurately reflect that portion of the Premises being occupied by Tenant during
the balance of such calendar month, the Occupied Area shall equal the average
amount of Rentable Area of the Premises occupied by Tenant during the calendar
month in question, as reasonably determined by Landlord. The "Occupied Area" of
the Premises shall equal the following: (i) commencing on the Commencement Date,
and continuing until the last day of the sixth (6th) calendar month immediately
following the Commencement Date, the Occupied Area shall equal the greater of
(a) Forty-Four Thousand (44,000) square feet, or (b) the total amount of
Rentable Area of the Premises occupied by Tenant (as reasonably determined by
Landlord in the manner set forth above); (ii) commencing on the first (1st) day
of the seventh (7th) calendar month immediately following the Commencement Date,
and continuing until the last day of the twelfth (12th) calendar month
immediately following the Commencement Date, the Occupied Area shall equal the
greater of (a) Sixty Thousand (60,000) square feet, or (b) the total amount of
Rentable Area of the Premises occupied by Tenant (as reasonably determined by
Landlord in the manner set forth above); and (iii) commencing on the first (1st)
day of the thirteenth (13th) calendar month immediately following the
Commencement Date, and continuing throughout the Term, the Occupied Area shall
equal the total amount of Rentable Area of the Premises. The parties acknowledge
and agree that the total Rentable Area of all of the buildings in the Project
may increase and/or decrease from time to time during the Term, since Landlord
may elect in its sole discretion to make changes to the buildings situated in
the Project (so long as Landlord neither unreasonably interferes with ingress to
or egress from the Building, nor reduces the number of parking spaces available
for Tenant's use below the minimum requirements set forth in Paragraph 37), and
that the total Rentable Area of the Premises is intended to increase from time
to time during the Term as described in Paragraph 2. Tenant's Percentage Share
shall be recalculated each and every time Landlord delivers additional areas of
the Building to Tenant pursuant to Paragraph 2. For the purposes of example only
and not by way of limitation, if as of

                                        8
<PAGE>   15
the Commencement Date (x) Tenant occupies Sixty Thousand (60,000) square feet of
Rentable Area in the Building, and (y) the total Rentable Area of all of the
buildings in the Project equals Four Hundred Three Thousand Four Hundred Eight
(403,408) square feet of Rentable Area, then Tenant's Percentage Share as of the
Commencement Date shall equal Fourteen and 873/1000ths percent (14.873%).

             X. Tenant's Personal Property. Tenant's trade fixtures, furniture,
equipment and other personal property in the Premises.

             Y. Term. The term of this Lease set forth in Paragraph 4.A., as it
may be extended hereunder pursuant to any options to extend granted herein.

         4.  Lease Term.

             A. Term. The Term shall commence on the date (the "Commencement
Date") that is seven (7) days after substantial completion of the Improvements
to the ground floor of the Building, and terminate on the date that is ten (10)
years from the Commencement Date. For the purposes of this Lease, "substantial
completion" shall mean that the Improvements to the ground floor of the Building
have been completed in accordance with the Final Plans and Specifications
approved by Landlord and Tenant, subject only to minor punch-list items, and the
City of Redwood City has issued a final building inspection approval for such
Improvements. Notwithstanding the foregoing, if any Tenant Delay (as defined
below) occurs before the substantial completion of the Improvements to the
ground floor of the Building, then the Commencement Date shall be the date that
is seven (7) days after the date on which, in Landlord's reasonable judgment,
substantial completion of the Improvements to the ground floor of the Building
would have occurred if the Tenant Delay had not occurred.

             B. Delays in Completion. Tenant agrees that if Landlord, for any
reason whatsoever, is unable to substantially complete the Improvements to the
ground floor of the Building on or before the Commencement Date, Landlord shall
not be liable to Tenant for any loss or damage therefrom, nor shall this Lease
be void or voidable. In such event, the Commencement Date, the Rent Commencement
Date (as defined below), the termination date and all other dates of this Lease
shall be extended to conform to the time of Landlord's tender of possession of
the ground floor of the Building to Tenant (subject to the provisions of the
following sentence), and Tenant shall not be obligated to pay Monthly Rent or
any other sums allocable to the Premises and due to Landlord hereunder until
possession of the ground floor of the Building is tendered to Tenant.
Notwithstanding the foregoing,

                                        9
<PAGE>   16
if substantial completion of the Improvements to the ground floor of the
Building is delayed beyond May 1, 1997 for any reason other than a Tenant Delay,
force majeure such as fire, earthquake or other casualty, or other event beyond
the reasonable control of Landlord, then either party shall have the right to
terminate this Lease by giving written notice of such election to the other
party on or before May 15, 1997.

             Notwithstanding any provision of this Lease to the contrary, if at
any time after the date of this Lease a Tenant Delay occurs, then the
Commencement Date shall be moved earlier one (1) day for each one (1) day of
Tenant Delay that delays the substantial completion of the Improvements to the
ground floor of the Building. The term "Tenant Delay" shall mean any delay that
Landlord may encounter in the performance of Landlord's obligations under the
Lease because of any act or omission of any nature by Tenant or its agents or
contractors, including any: (i) delay attributable to the postponement of any
Improvements at the request of Tenant; (ii) delay by Tenant in the submission of
information or the giving of authorizations or approvals within the time limits
set forth in the Lease or the Work Letter; (iii) delay attributable to the
failure of Tenant to pay, when due, any amounts required to be paid by Tenant
pursuant to the Lease or the Work Letter; and (iv) delay resulting from any
change order request initiated or requested by Tenant. Tenant shall pay all
actual costs and expenses incurred by Landlord which result from any Tenant
Delay, including, without limitation, any actual costs and expenses attributable
to increases in the cost of labor or materials.

             In addition, Tenant agrees that if Landlord, for any reason
whatsoever, is unable to substantially complete the Improvements to the second
floor of the Building within twelve (12) months after the Commencement Date,
Landlord shall not be liable to Tenant for any loss or damage therefrom, nor
shall this Lease be void or voidable. Notwithstanding the foregoing, Landlord
shall use reasonable efforts to complete the Improvements to the second floor of
the Building within twelve (12) months after the Commencement Date. In such
event, Tenant shall not be obligated to pay Monthly Rent or any other sums
allocable to the second floor of the Building and due to Landlord hereunder
until possession of the second floor of the Building is tendered to Tenant.

             C. Delay in Substantial Completion. Landlord shall use reasonable
efforts to substantially complete the Improvements to the ground floor of the
Building and to deliver possession of the ground floor of the Building to Tenant
by March 1, 1997. If substantial completion of the Improvements to the ground
floor of the Building has not occurred on or before March 1, 1997 for reasons
other than Tenant Delay, Tenant shall be entitled to one

                                       10
<PAGE>   17
(1) day of "free rent" (i.e., Tenant shall not be required to pay Rent for such
day) for each two (2) days occurring after March 1, 1997, until substantial
completion of the Improvements to the ground floor of the Building occurs, and
the Premises are delivered to Tenant as provided herein.

                  D.  Option to Extend.

                           (i)  Grant of Option.  Landlord hereby grants to
Tenant one (1) option (the "Option") to extend the Term of this Lease, for an
additional term of five (5) years, which shall commence upon the expiration of
the Term. The Option is expressly conditioned upon Tenant's not being in default
under any term or condition of this Lease after the expiration of any applicable
cure period granted by this Lease, either at the time the Option is exercised or
at the time the Option term would commence. The Option shall be personal to the
Tenant originally named in this Lease, and shall not be assigned, sold, conveyed
or otherwise transferred to any other party (including without limitation any
assignee or sublessee of such Tenant) without the prior written consent of
Landlord, which consent may be withheld in Landlord's sole discretion. Under no
circumstances shall Landlord be required to pay any real estate commission to
any party with respect to Tenant's exercise of the Option.

                           (ii)  Manner of Exercise.  Tenant may exercise the
Option only by giving Landlord written notice not less than two hundred seventy
(270) days prior to the expiration of the Term. If Tenant fails to exercise its
Option prior to such 270-day period, then the Option automatically shall lapse
and thereafter Tenant shall have no right to exercise the Option.

                           (iii)  Terms and Rent.  If the Option is
exercised, then the Monthly Rent for the Premises for the Option term shall be
equal to one hundred percent (100%) of the fair market rent, as determined
below, for the Premises as of the commencement of the Option term, but in no
event shall the Monthly Rent ever be reduced below the amount payable
immediately preceding the Option term. The fair market rent for the Premises
shall be determined by taking into account all relevant factors. All other terms
and conditions of the Lease, as amended from time to time by the parties in
accordance with the provisions of the Lease, shall remain in full force and
effect and shall apply during the Option term; provided, however, that
notwithstanding the foregoing, neither the Option, nor Landlord's obligation to
provide the Tenant Improvement Allowance described in Exhibit C, nor Landlord's
obligations under the Work Letter Agreement attached hereto as Exhibit C shall
be of any force or effect during the Option term.



                                       11
<PAGE>   18
                           (iv)  Determination of Rent.  The fair market rent
for the purposes of calculating the Monthly Rent for the Option term shall be
determined by mutual agreement of the parties or, if the parties are unable to
agree within thirty (30) days after Tenant's exercise of the Option, then fair
market rent shall be determined pursuant to the procedure set forth in
Paragraphs 4.D.(v) and 4.D.(vi).

                           (v)  Landlord's Initial Determination.  If the
parties are unable mutually to agree upon the fair market rent pursuant to
Paragraph 4.D.(iv), then the fair market rent initially shall be determined by
Landlord by written notice ("Landlord's Notice") given to Tenant promptly
following the expiration of the 30-day period set forth in Paragraph 4.D.(iv).
If Tenant disputes the amount of fair market rent set forth in Landlord's
Notice, then, within thirty (30) days after the date of Landlord's Notice,
Tenant shall send Landlord a written notice ("Tenant's Notice") which
specifically (a) disputes the fair market rent set forth in Landlord's Notice,
(b) demands arbitration pursuant to Paragraph 4.D.(vi), and (c) states the name
and address of the person who shall act as arbitrator on Tenant's behalf.
Tenant's Notice shall be deemed defective, and not given to Landlord, if it
fails strictly to comply with the requirements and time period set forth above.
If Tenant does not send Tenant's Notice within thirty (30) days after the date
of Landlord's Notice, or if Tenant's Notice fails to contain all of the required
information, then the Monthly Rent for the Option term shall equal one hundred
percent (100%) of the fair market rent specified in Landlord's Notice. If the
arbitration is not concluded prior to the commencement of the Option term, then
Tenant shall pay Monthly Rent equal to one hundred twenty-five percent (125%) of
the Monthly Rent payable immediately prior to the commencement of the Option
term. If the fair market rent determined by arbitration differs from that paid
by Tenant pending the results of arbitration, then any adjustment required to
adjust the amount previously paid shall be made by payment by the appropriate
party within ten (10) days after the determination of fair market rent.

                           (vi)  Arbitration.   The arbitration shall be
conducted in the City of San Francisco in accordance with the then prevailing
rules of the American Arbitration Association (or its successor) for the
arbitration of commercial disputes, except that the procedures mandated by such
rules shall be modified as follows:

                    (a) Each arbitrator must be a real estate appraiser with at
least five (5) years of full-time commercial appraisal experience who is
familiar with the fair market rent of office and research and development
complexes located in the vicinity of the Premises. Within ten (10) business days
after

                                       12
<PAGE>   19
receipt of Tenant's Notice, Landlord shall notify Tenant of the name and address
of the person designated by Landlord to act as arbitrator on Landlord's behalf.

                   (b) The two arbitrators chosen pursuant to
Paragraph 4.D.(vi)(a) shall meet within ten (10) business days after the second
arbitrator is appointed and shall either agree upon the fair market rent or
appoint a third arbitrator possessing the qualifications set forth in Paragraph
4.D.(vi)(a). If the two arbitrators agree upon the fair market rent within such
ten (10) business day period, the Monthly Rent for the Option term shall equal
one hundred percent (100%) of such fair market rent. If the two arbitrators are
unable to agree upon the fair market rent and are unable to agree upon the third
arbitrator within five (5) business days after the expiration of such ten (10)
business day period, the third arbitrator shall be selected by the parties
themselves. If the parties do not agree on the third arbitrator within five (5)
business days after the expiration of such five (5) business day period, then
either party, on behalf of both, may request appointment of the third arbitrator
by the Association of South Bay Brokers. The three arbitrators shall decide the
dispute, if it has not been previously resolved, by following the procedures set
forth in Paragraph 4.D.(vi)(c). Each party shall pay the fees and expenses of
its respective arbitrator and both shall share the fees and expenses of the
third arbitrator. Each party shall pay its own attorneys' fees and costs of
witnesses.

                    (c) The three arbitrators shall determine the fair market
rent in accordance with the following procedures. Each of Landlord's arbitrator
and Tenant's arbitrator shall state, in writing, his or her determination of the
fair market rent, supported by the reasons therefor, and shall make counterpart
copies for the other arbitrators. All of the arbitrators shall arrange for a
simultaneous exchange of the proposed resolutions within ten (10) business days
after appointment of the third arbitrator. If any arbitrator fails to deliver
his or her own determination to the other arbitrators within such ten (10)
business day period, then the fair market rent shall equal the average of the
resolutions submitted by the other arbitrators. If all three (3) arbitrators
deliver their determinations to the other arbitrators within such ten (10)
business day period, then the two (2) closest determinations of the arbitrators
shall be averaged, and the resulting quotient shall be the fair market rent, and
the Monthly Rent for the Option term shall equal one hundred percent (100%) of
such fair market rent; provided, however, that if the determination of one (1)
of the arbitrators (the "Average Determination") is equal to the average of the
determinations of the other two (2) arbitrators, then the Average Determination
shall be the fair market rent. However, the arbitrators shall not attempt to
reach

                                       13

<PAGE>   20
a mutual agreement of the fair market rent; each arbitrator shall independently
arrive at his or her proposed resolution.

                    (d) The arbitrators shall have the right to consult experts
and competent authorities for factual information or evidence pertaining to a
determination of fair market rent, but any such consultation shall be made in
the presence of both parties with full right on their part to cross-examine. The
arbitrators shall render the decision and award in writing with counterpart
copies to each party. The arbitrators shall have no power to modify the
provisions of this Lease. In the event of a failure, refusal or inability of any
arbitrator to act, his or her successor shall be appointed by him or her, but in
the case of the third arbitrator, his or her successor shall be appointed in the
same manner as that set forth herein with respect to the appointment of the
original third arbitrator.

         5.  Rent and Additional Charges.

             A. Monthly Rent. Tenant shall pay to Landlord, in lawful money of
the United States, Monthly Rent as follows: (i) commencing on the Commencement
Date, and continuing until the last day of the sixth (6th) calendar month
immediately following the Commencement Date, the Monthly Rent shall equal
Sixty-Three Thousand Eight Hundred and 00/100ths Dollars ($63,800.00) (i.e., One
and 45/100ths Dollars ($1.45) multiplied by Forty-Four Thousand (44,000)); and
(ii) commencing on the first (1st) day of the seventh (7th) calendar month
immediately following the Commencement Date, and continuing throughout the Term,
the Monthly Rent shall equal One and 45/100ths Dollars ($1.45) multiplied by the
Occupied Area (as determined in accordance with Paragraph 3.W). The Monthly Rent
shall be recalculated each and every time the Occupied Area is recalculated
pursuant to Paragraph 3.W. The Monthly Rent is subject to adjustment as provided
in Paragraphs 5.B and 5.C below. The actual commencement date for the payment of
Monthly Rent (the "Rent Commencement Date") shall be the Commencement Date.

             Monthly Rent shall be paid in advance, on the first day of each
calendar month, without abatement, deduction, claim, offset, prior notice or
demand. The sum of Sixty-Three Thousand Eight Hundred and 00/100ths Dollars
($63,800.00), representing the first installment of Monthly Rent for the
Premises, shall be paid by Tenant to Landlord upon the execution of this Lease
by Landlord and Tenant. Additionally, Tenant shall pay, as and with the Monthly
Rent, the management fee described in Paragraph 5.D., Tenant's Percentage Share
of Common Area Maintenance Costs pursuant to Paragraph 5.E, and the monthly cost
of insurance premiums required pursuant to Paragraph 21.C.



                                       14

<PAGE>   21
             B. Index Adjustments to Monthly Rent. The Monthly Rent shall be
increased as of the first (1st) day of the thirteenth (13th) calendar month
immediately following the Commencement Date, and on each ensuing anniversary of
such date occurring during the Term and any extension thereof (each, an
"Adjustment Date") by the greater of (i) the percentage increase in the Index
from the previous Adjustment Date (or, for the first Adjustment Date, from the
Commencement Date) up to a maximum of nine percent (9%), or (ii) three percent
(3%). On each Adjustment Date, the total aggregate amount of Monthly Rent then
in effect shall be multiplied by the greater of (x) the lesser of (A) a
fraction, the numerator of which is the Index published most recently before the
applicable Adjustment Date, and the denominator of which is the Index published
most recently before the prior Adjustment Date (or, in the case of the first
Adjustment Date, the Index published most recently before the Commencement
Date), and (B) one hundred nine percent (109%), or (y) one hundred three percent
(103%); and the corresponding product shall be the Monthly Rent in effect until
the next Adjustment Date. In no event shall the Monthly Rent in effect after an
Adjustment Date be less than one hundred three percent (103%), nor more than one
hundred nine percent (109%), of the Monthly Rent in effect immediately prior to
such Adjustment Date. If no Index is published for either of the months set
forth above, the Index for the next preceding month shall be used.

             C. Additional Adjustments to Monthly Rent. In the event that
Landlord is required to pay any amounts towards Landlord's Additional Share or
Landlord's Final Share of tenant improvement costs pursuant to Paragraph 5 of
Exhibit C (collectively, the "Amortizable Tenant Improvement Costs"), then the
entire amount of Amortizable Tenant Improvement Costs, together with interest at
the rate of twelve percent (12%) per annum, shall be amortized on a
straight-line basis over the initial Term, and the resulting amortization shall
be added to and increase the Monthly Rent for the entire initial Term.

             D. Management Fee. Tenant shall pay to Landlord monthly, as
Additional Rent, a management fee equal to three percent (3%) of the Monthly
Rent.

             E. Common Area Maintenance Costs.

                           (i)  Estimated Payments.  Commencing on the
Commencement Date and continuing throughout the entire Term, Tenant shall pay
Tenant's Percentage Share of all other Common Area Maintenance Costs paid or
payable by Landlord in each year; provided, however, that Tenant shall pay the
entire amount (not Tenant's Percentage Share) of those Common Area Maintenance
Costs arising from Landlord's performance of its obligations under Paragraph
17.A. Before commencement of the Term and during

                                       15

<PAGE>   22
December of each calendar year or as soon thereafter as practicable, Landlord
shall give Tenant notice of its estimate of amounts payable under this Paragraph
5.E.(i) for the ensuing calendar year. Such notice shall show in reasonable
detail the basis on which the estimate was determined. On or before the first
day of each month during the ensuing calendar year, Tenant shall pay to Landlord
one-twelfth (1/12th) of such estimated amounts, provided that if such notice is
not given in December, Tenant shall continue to pay on the basis of the prior
year's estimate until the month after such notice is given. If at any time or
times it appears to Landlord, in its reasonable judgment, that the amounts
payable under this Paragraph 5.E.(i) for the current calendar year will vary
from its then-current estimate by more than five percent (5%), Landlord shall by
notice to Tenant, showing in reasonable detail the basis for such variance,
revise its estimate for such year, in which case subsequent payments by Tenant
for such year shall be based upon such revised estimate.

                           (ii)  Adjustment.  Within ninety (90) days after
the close of each calendar year or as soon after such 90-day period as
reasonably practicable, Landlord shall deliver to Tenant a reasonably detailed
statement of Common Area Maintenance Costs for such calendar year, certified by
Landlord or its property manager, subject to Tenant's right to audit as
hereinafter provided. At that time, Landlord shall also deliver to Tenant a
statement, certified as correct by Landlord, of the adjustments to be made
pursuant to Paragraph 5.E.(i) above. If Landlord's statement shows that Tenant
owes an amount that is less than the estimated payments for such calendar year
previously made by Tenant, Tenant may offset such overpayment against rent due
or remaining due under this Lease, or if no rent remains due, Landlord shall
refund such excess to Tenant within thirty (30) days after delivery of the
statement. If such statement shows that Tenant owes an amount that is more than
the estimated payments for such calendar year previously made by Tenant, Tenant
shall pay the deficiency to Landlord within thirty (30) days after delivery of
the statement.

                           (iii)  Last Year.  If this Lease shall terminate
on a day other than the last day of a calendar year, the adjustment in rent
applicable to the calendar year in which such termination shall occur shall be
prorated on the basis which the number of days from the commencement of such
calendar year to and including such termination date bears to three hundred
sixty (360). The termination of this Lease shall not affect the obligations of
Landlord and Tenant pursuant to Paragraph 5.E.(ii) to be performed after such
termination.

                           (iv)  Audit.  Within one hundred eighty (180) days
after receipt of Landlord's statement of Common Area Maintenance
Costs as provided in Paragraph 5.E.(ii), Tenant or its designee,

                                       16

<PAGE>   23
on not less than five (5) days' prior written notice to Landlord, shall have the
right to, at Tenant's sole cost and expense, audit, examine and copy Landlord's
books and records with respect to the Common Area Maintenance Costs for the
calendar year pertaining to the year for which the Landlord's statement
pertains. Landlord shall cooperate with Tenant in any such examination of its
books and records.

             F. Additional Rent. All monies required to be paid by Tenant under
this Lease, including, without limitation, excess Tenant Improvement costs
pursuant to Exhibit C, the management fee described in Paragraph 5.D, Tenant's
Percentage Share of Common Area Maintenance Costs pursuant to Paragraph 5.E,
Real Property Taxes pursuant to Paragraph 15, and the monthly cost of insurance
premiums required pursuant to Paragraph 21.C shall be deemed Additional Rent.

             G. Prorations. If the Rent Commencement Date is not the first (1st)
day of a month, or if the termination date of this Lease is not the last day of
a month, a prorated installment of Monthly Rent based on a 30-day month shall be
paid for the fractional month during which such date occurs or the Lease
terminates.

             H. Interest. Any amount of Rent or other charges provided for under
this Lease due and payable to Landlord which is not paid when due shall bear
interest at the Interest Rate from the date that is (i) five (5) days after the
date such Rent is due until such Rent is paid, or (ii) ten (10) days after
Tenant receives written notice from Landlord that any other charge provided for
under this Lease (other than Rent) is due and payable, until such other charge
is paid.

         6.  Late Payment Charges.

             Tenant acknowledges that late payment by Tenant to Landlord of Rent
and other charges provided for under this Lease will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of such costs being
extremely difficult or impracticable to fix. Therefore, if any installment of
Rent or any other charge due from Tenant is not received by Landlord within five
(5) days after the date such Rent or other charge is due, Tenant shall pay to
Landlord an additional sum equal to five percent (5%) of the amount overdue as a
late charge for every month or portion thereof that the Rent or other charges
remain unpaid. The parties agree that this late charge represents a fair and
reasonable estimate of the costs that Landlord will incur by reason of the late
payment by Tenant.




                                       17

<PAGE>   24
Initials:

/s/ Micheal Covarrubias                     /s/ Richard B. Redding
------------------------                    -------------------------
Landlord                                    Tenant


         7.  Security Deposit.

             Tenant shall deposit with Landlord upon the execution of this Lease
by Landlord and Tenant, the sum of Seven Hundred Sixty-Seven Thousand Five
Hundred Twenty-Two and 70/100ths Dollars ($767,522.70) as the "Security Deposit"
for the full and faithful performance of every provision of this Lease to be
performed by Tenant. At Tenant's option, the Security Deposit may be in the form
of an irrevocable standby letter of credit ("L-C").

             So long as Tenant has not committed any default under this Lease,
then (i) if Tenant is "profitable" (as defined below) for a period of one (1)
full fiscal year commencing after the Commencement Date, then Tenant may elect
to reduce the Security Deposit to the sum of Six Hundred Thirty-Nine Thousand
Six Hundred Two and 25/100ths Dollars ($639,602.25); (ii) if Tenant is
profitable for a period of two (2) consecutive full fiscal years commencing
after the Commencement Date, then Tenant may elect to reduce the Security
Deposit to the sum of Five Hundred Eleven Thousand Six Hundred Eighty-One and
80/100ths Dollars ($511,681.80); and (iii) if Tenant is profitable for a period
of three (3) consecutive full fiscal years commencing after the Commencement
Date, then Tenant may elect to reduce the Security Deposit to the sum of Two
Hundred Fifty-Five Thousand Eight Hundred Forty and 90/100ths Dollars
($255,840.90); provided, however, that in no event shall the Security Deposit be
reduced below Two Hundred Fifty-Five Thousand Eight Hundred Forty and 90/100ths
Dollars ($255,840.90). For the purposes of this Paragraph 7, Tenant shall be
deemed to be profitable for the fiscal year or years in question if it delivers
to Landlord an audited financial statement of Tenant, showing that Tenant has
earned a net profit for the fiscal year or years in question.

             If Tenant is entitled to and does elect to reduce the amount of the
Security Deposit pursuant to the preceding paragraph, and Tenant delivers to
Landlord written notice of its election to so reduce the amount of the Security
Deposit and the financial statement described in the foregoing paragraph, then
either (x) if the Security Deposit is in the form of cash, Landlord shall pay to
Tenant the excess amount of the Security Deposit, without interest, within
thirty (30) days after Landlord's receipt of such notice and statement; or (y)
if the Security Deposit is in the form of an L-C, then Tenant may, not

                                       18

<PAGE>   25
less than ten (10) days after Landlord's receipt of such notice and statement,
replace the L-C with an L-C in an amount equal to the reduced amount of the
Security Deposit.

             If Tenant defaults with respect to any provision of this Lease,
after the expiration of any applicable cure or grace periods expressly provided
for in this Lease, Landlord may apply all or any part of the Security Deposit
for the payment of any rent or other sum in default, the repair of such damage
to the Premises or the payment of any other amount which Landlord may spend or
become obligated to spend by reason of Tenant's default or to compensate
Landlord for any other loss or damage which Landlord may suffer by reason of
Tenant's default to the full extent permitted by law. If any portion of a cash
Security Deposit is so applied, or any portion of an L-C posted as the Security
Deposit, if applicable, is drawn upon, by Landlord for such purposes, Tenant
shall either, within ten (10) days after written demand therefor, deposit cash
with Landlord in an amount sufficient to restore the Security Deposit to its
original amount or deposit a replacement L-C with Landlord in the amount of the
original L-C. If Tenant is not otherwise in default, the Security Deposit or any
balance thereof shall be returned to Tenant within thirty (30) days of
termination of the Lease.

             If at any time Tenant elects to deposit an L-C as the Security
Deposit, the L-C shall be issued by a bank reasonably acceptable to Landlord,
shall be issued for a term of at least twelve (12) months and shall be in a form
and with such content reasonably acceptable to Landlord. Tenant shall either
replace the expiring L-C with an L-C in an amount equal to the original L-C or
renew the expiring L-C, in any event no later than thirty (30) days prior to the
expiration of the term of the L-C then in effect. If Tenant fails to deposit a
replacement L-C or renew the expiring L-C, Landlord shall have the right to draw
upon the expiring L-C for the full amount thereof. Drawing upon the L-C shall be
conditioned upon the presentation to the issuer of the L-C of a certified
statement executed by a general partner of Landlord that (i) Tenant is in
default under the Lease and Landlord is exercising its right to draw upon so
much of the L-C as is necessary to cure Tenant's default, or (ii) Tenant has not
renewed or replaced an expiring L-C as required by this Lease and Landlord is
authorized to draw upon the L-C prior to its expiration. The L-C shall not be
mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the
prior written consent of Landlord. The use, application or retention of the L-C,
or any portion thereof, by Landlord shall not prevent Landlord from exercising
any other right or remedy provided by this Lease or by law, it being intended
that Landlord shall not first be required to proceed against the L-C , and such
use, application or retention shall not operate as a limitation on any recovery
to which Landlord may otherwise be entitled.

                                       19

<PAGE>   26
         8.  Holding Over.

             If Tenant remains in possession of all or any part of the Premises
after the expiration of the Term, with the express or implied consent of
Landlord, such tenancy shall be month-to-month only and shall not constitute a
renewal or extension for any further term. If Tenant remains in possession
either with or without Landlord's consent, Monthly Rent shall be increased to an
amount equal to one hundred fifty percent (150%) of the Monthly Rent payable
during the last month of the Term, and any other sums due under this Lease shall
be payable in the amount and at the times specified in this Lease. Such
month-to-month tenancy shall be subject to every other term, condition, and
covenant contained herein.

         9.  Tenant Improvements.

             Landlord agrees to construct the Tenant Improvements pursuant to
the terms of Exhibit C.

         10.  Condition of Premises.

             A. Capital Improvements. Prior to the Commencement Date, Landlord
shall complete the Capital Improvements in accordance with the terms of Exhibit
C. Landlord represents to Tenant that all Building systems, including HVAC,
plumbing, and electrical, and the Building's roof, shall be in good operating
condition upon the Commencement Date.

             B. Acceptance of Premises. By taking possession of the Premises,
Tenant shall be deemed to have accepted the Premises in good, clean and
completed condition and repair, subject to all applicable laws, codes and
ordinances. Any damage to the Premises caused by Tenant's move-in shall be
repaired or corrected by Tenant, at its sole cost and expense, which repair or
corrective work shall not be paid for out of the Tenant Improvements Allowance.
Tenant acknowledges that neither Landlord nor Landlord's Agents have made any
representations or warranties as to the suitability or fitness of the Premises
for the conduct of Tenant's business or for any other purpose, nor has Landlord
or Landlord's Agents agreed to undertake any Alterations or construct any
Improvements to the Premises except as expressly provided in this Lease. If
Tenant fails to submit a punch-list to Landlord within such 10-day period, it
shall be deemed that there are no Improvement items needing additional work or
repair. Landlord's contractor shall complete all reasonable punch-list items
within thirty (30) days after the walk-through inspection or as soon as
practicable thereafter. Upon completion of such punch-list items, Tenant shall
approve such completed items in writing to Landlord. If Tenant fails to approve
such items within fourteen (14) days of completion, such

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<PAGE>   27
items shall be deemed approved by Tenant.

         11. Use of the Premises and Common Area.

             A. Tenant's Use. Tenant shall use the Premises only for general
office, research and development, and storage purposes, and such other purposes
as shall be specifically and formally approved by the City of Redwood City.
Tenant shall not use the Premises or suffer or permit anything to be done in or
about the Premises which will in any way conflict with any law, statute, zoning
restriction, ordinance or governmental law, rule, regulation or requirement of
public authorities now in force or which may hereafter be in force, relating to
or affecting the condition, use or occupancy of the Premises. Tenant shall not
commit any public or private nuisance or any other act or thing which might or
would disturb the quiet enjoyment of any other tenant of Landlord or any
occupant of nearby property. Tenant shall place no loads upon the floors, walls
or ceilings in excess of the maximum designed load determined by a licensed
structural engineer or which endanger the structure; nor place any harmful
liquids in the drainage systems; nor dump or store waste materials or refuse or
allow waste materials or refuse to remain outside the Building proper, except in
the enclosed trash areas provided. Tenant shall not store or permit to be stored
or otherwise placed any other material of any nature whatsoever outside the
Building, except on a temporary basis.

             B.  Hazardous Materials.

                           (i)  Hazardous Materials Defined.  As used herein,
the term "Hazardous Materials" shall mean any wastes, materials or substances
(whether in the form of liquids, solids or gases, and whether or not air-borne),
which are or are deemed to be (a) pollutants or contaminants, or which are or
are deemed to be hazardous, toxic, ignitable, reactive, corrosive, dangerous,
harmful or injurious, or which present a risk to public health or to the
environment, or which are or may become regulated by or under the authority of
any applicable local, state or federal laws, judgments, ordinances, orders,
rules, regulations, codes or other governmental restrictions, guidelines or
requirements, any amendments or successor(s) thereto, replacements thereof or
publications promulgated pursuant thereto, including, without limitation, any
such items or substances which are or may become regulated by any of the
Environmental Laws (as hereinafter defined); (b) listed as a chemical known to
the State of California to cause cancer or reproductive toxicity pursuant to
Section 25249.8 of the California Health and Safety Code, Division 20, Chapter
6.6 (Safe Drinking Water and Toxic Enforcement Act of 1986); or (c) a pesticide,
petroleum, including crude oil or any fraction thereof, asbestos or any
asbestos-containing material, a polychlorinated biphenyl,

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<PAGE>   28
radioactive material, or urea formaldehyde.

                           (ii)  Environmental Laws Defined.  In addition to
the laws referred to in Paragraph 11.B.(i) above, the term "Environmental Laws"
shall be deemed to include, without limitation, 33 U.S.C. Section 1251 et seq.,
42 U.S.C. Section 6901 et seq., 42 U.S.C. Section 7401 et seq., 42 U.S.C.
Section 9601 et seq., and California Health and Safety Code Section 25100 et
seq., and 25300 et seq., California Water Code, Section 13020 et seq., or any
successor(s) thereto, all local, state and federal laws, judgments, ordinances,
orders, rules, regulations, codes and other governmental restrictions,
guidelines and requirements, any amendments and successors thereto, replacements
thereof and publications promulgated pursuant thereto, which deal with or
otherwise in any manner relate to, air or water quality, air emissions, soil or
ground conditions or other environmental matters of any kind.

                           (iii)  Use of Hazardous Materials.  Tenant agrees
that during the Term of this Lease, Tenant shall not use, or permit the use of,
nor store, generate, treat, manufacture or dispose of Hazardous Materials on,
from or under the Premises (individually and collectively, "Hazardous Use")
except to the extent that, and in accordance with such conditions as, Landlord
may have previously approved in writing in its sole and absolute discretion.
Notwithstanding the foregoing, Tenant shall be entitled to use and store only
those Hazardous Materials which are (a) set forth in a list prepared by Tenant
and approved in writing by Landlord, which shall be deemed given with respect to
the Approved Hazardous Materials (hereinafter defined), (b) necessary for
Tenant's business, but then only in the amounts and for the purposes previously
disclosed in writing to and approved in writing by Landlord, and (c) in full
compliance with Environmental Laws, and all judicial and administrative
decisions pertaining thereto. All Hazardous Materials approved in writing by
Landlord as provided in the preceding sentence shall collectively be referred to
as the "Approved Hazardous Materials". Within thirty (30) days after request by
Landlord, Tenant shall deliver to Landlord a list of the Approved Hazardous
Materials. Tenant shall not be entitled to install any tanks under, on or about
the Premises for the storage of Hazardous Materials without the express written
consent of Landlord, which may be given or withheld in Landlord's sole
discretion. For the purposes of this Paragraph 11.B.(iii), the term Hazardous
Use shall include Hazardous Use(s) on, from or under the Premises by Tenant, any
Subtenant occupying all or any portion of the Premises during the Term, or any
of their directors, officers, employees, shareholders, partners, invitees,
agents, contractors or occupants (collectively, "Tenant's Parties"; provided,
however, that if Tenant's stock is publicly traded, the term "Tenant's Parties"
shall not include any shareholder of Tenant

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<PAGE>   29
who owns less than ten percent (10%) of Tenant's common stock), whether known or
unknown to Tenant, occurring during the Term of this Lease. The term "Tenant's
Parties" shall not include any tenants of the Project other than Tenant, except
that the term "Tenant's Parties" shall include any Subtenant occupying all or
any portion of the Premises during the Term.

         (iv) Hazardous Materials Report; When Required. Tenant shall submit to
Landlord a written report with respect to Hazardous Materials ("Report") in the
form prescribed in Paragraph 11.B.(v) below on the following dates:

             (a) At any time within ten (10) days after written request by
Landlord, and

             (b) At any time when there has been a violation of any
Environmental Law, or in connection with any proposed request for Landlord's
consent to any change in the list of Approved Hazardous Materials or for an
increase in the intensity of usage or storage of such Approved Hazardous
Materials.

         (v) Hazardous Materials Report; Contents. The Report shall contain,
without limitation, the following information:

             (a) Whether on the date of the Report and (if applicable) during
the period since the last Report there has been any Hazardous Use on, from or
under the Premises, other than the use of Approved Hazardous Materials.

             (b) If there was such Hazardous Use, the exact identity of the
Hazardous Materials (other than the Approved Hazardous Materials), the dates
upon which such materials were brought upon the Premises, the dates upon which
such Hazardous Materials were removed therefrom, and the quantity, location, use
and purpose thereof.

             (c) If there was such Hazardous Use, any governmental permits
maintained by Tenant with respect to such Hazardous Materials, the issuing
agency, original date of issue, renewal dates (if any) and expiration date.
Copies of any such permits and applications therefor shall be attached.

             (d) If there was such Hazardous Use, any governmental reporting or
inspection requirements with respect to such Hazardous Materials, the
governmental agency to which reports are made and/or which conducts inspections,
and the dates of all such reports and/or inspections (if applicable) since the
last Report. Copies of any such Reports shall be attached.


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<PAGE>   30
             (e) If there was such Hazardous Use, identification of any
operation or business plan prepared for any government agency with respect to
Hazardous Use.

             (f) Any liability insurance carried by Tenant with respect to
Hazardous Materials, if any, the insurer, policy number, date of issue, coverage
amounts, and date of expiration. Copies of any such policies or certificates of
coverage shall be attached.

             (g) Any notices of violation of Environmental Laws, written or
oral, received by Tenant from any governmental agency since the last Report, the
date, name of agency, and description of violation. Copies of any such written
notices shall be attached.

             (h) Any knowledge, information or communication which Tenant has
acquired or received relating to (x) any enforcement, cleanup, removal or other
governmental or regulatory action threatened or commenced against Tenant or with
respect to the Premises pursuant to any Environmental Laws; (y) any claim made
or threatened by any person or entity against Tenant or the Premises on account
of any alleged loss or injury claimed to result from any alleged Hazardous Use
on or about the Premises; or (z) any report, notice or complaint made to or
filed with any governmental agency concerning any Hazardous Use on or about the
Premises. The Report shall be accompanied by copies of any such claim, report,
complaint, notice, warning or other communication that is in the possession of
or is available to Tenant.

             (i) Such other pertinent information or documents as are reasonably
requested by Landlord in writing.

         (vi) Release of Hazardous Materials; Notification and Cleanup.

             (a) At any time during the Term, if Tenant knows or believes that
any release of any Hazardous Materials has come or will come to be located upon,
about or beneath the Premises, then Tenant shall immediately, either prior to
the release or following the discovery thereof by Tenant, give verbal and
follow-up written notice of that condition to Landlord.

             (b) At its sole cost and expense, Tenant covenants to investigate,
clean up and otherwise remediate any release of Hazardous Materials which has
occurred during the Term and arose from any act or failure to act of Tenant or
any of Tenant's Parties. Such investigation, clean-up and remediation shall be
performed only after Tenant has obtained, if practicable, Landlord's written
consent, which shall not be

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<PAGE>   31
unreasonably withheld; provided, however, that Tenant shall be entitled to
respond immediately to an emergency without first obtaining Landlord's written
consent. All clean-up and remediation shall be done in compliance with
Environmental Laws and to the reasonable satisfaction of Landlord.

             (c) Notwithstanding the foregoing, Landlord shall have the right,
but not the obligation, in Landlord's sole and absolute discretion, exercisable
by written notice to Tenant, to undertake within or outside the Premises all or
any portion of any reasonable investigation, clean-up or remediation with
respect to any Hazardous Use of such Hazardous Materials by Tenant or any of
Tenant's Parties (or, once having undertaken any of such work, to cease same, in
which case Tenant shall perform the work), all at Tenant's sole cost and
expense, which shall be paid by Tenant as Additional Rent within ten (10) days
after receipt of written request therefor by Landlord (and which Landlord may
require to be paid prior to commencement of any work by Landlord); provided,
however, that Tenant's obligation to pay for such work shall only be applicable
if Tenant fails to perform its obligations under this Paragraph 11 (including
without limitation the obligations described in Paragraph 11.B.(vi)(b)). No such
work by Landlord shall create any liability on the part of Landlord to Tenant or
any other party in connection with such Hazardous Materials by Tenant or any of
Tenant's Parties or constitute an admission by Landlord of any responsibility
with respect to such Hazardous Materials.

             (d) It is the express intention of the parties hereto that Tenant
shall be liable under this Paragraph 11.B.(vi) for any and all conditions
covered hereby which were or are caused or created by Tenant or any of Tenant's
Parties, whether occurring prior to, on, or after the Commencement Date. Tenant
shall not enter into any settlement agreement, consent decree or other
compromise with respect to any claims relating to any Hazardous Materials in any
way connected to the Premises without first (x) notifying Landlord of Tenant's
intention to do so and affording Landlord the opportunity to participate in any
such proceedings, and (y) obtaining Landlord's written consent, which shall not
be unreasonably withheld.

         (vii) Inspection and Testing by Landlord. Landlord shall have the right
at all times during the Term of this Lease to (a) inspect the Premises, as well
as such of Tenant's books and records pertaining to the Premises and the conduct
of Tenant's business therein, and to (b) conduct tests and investigations to
determine whether Tenant is in compliance with the provisions of this Paragraph
11.B. Except in case of emergency, Landlord shall give reasonable notice to
Tenant before conducting any inspections, tests, or investigations in accordance
with Paragraph 19, shall provide Tenant with a work

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<PAGE>   32
plan describing any testing that shall be performed at the Premises, and shall
use reasonable efforts to minimize interference with the conduct of Tenant's
business at the Premises caused by any such inspections, tests, or
investigations. The cost of all such inspections, tests and investigations shall
be borne by Tenant. Neither any action nor inaction on the part of Landlord
pursuant to this Paragraph 11.B.(vii) shall be deemed in any way to release
Tenant from, or in any way modify or alter, Tenant's responsibilities,
obligations, and liabilities incurred pursuant to Paragraph 11.B hereof.

         (viii) Tenant's Indemnity. Tenant shall indemnify, defend, protect,
hold harmless, and, at Landlord's option (with such attorneys as Landlord may
approve in advance and in writing), defend Landlord, Landlord's Agents, and
Landlord's officers, directors, shareholders, partners, employees, contractors,
property managers, agents and mortgagees and other lien holders, from and
against any and all Losses (as defined below) whenever such Losses arise, from
or related to: (a) any violation or alleged violation by Tenant or any of
Tenant's Parties of any of the requirements, ordinances, statutes, regulations
or other laws referred to in this Paragraph 11.B, including, without limitation,
the Environmental Laws, whether such violation or alleged violation occurred
prior to, on, or after the Commencement Date; (b) any breach of the provisions
of this Paragraph 11.B by Tenant or any of Tenant's Parties; or (c) any
Hazardous Use on, about or from the Premises by Tenant or any of Tenant's
Parties of any Hazardous Materials (whether or not approved by Landlord under
this Lease), whether such Hazardous Use occurred prior to, on, or after the
Commencement Date. The term "Losses" shall mean all claims, demands, expenses,
actions, judgments, damages (whether consequential, direct or indirect, known or
unknown, foreseen or unforeseen), penalties, fines, liabilities, losses of every
kind and nature (including, without limitation, property damage, diminution in
value of Landlord's interest in the Premises, damages for the loss of
restriction on use of any space or amenity within the Premises, damages arising
from any adverse impact on marketing space in the Premises, sums paid in
settlement of claims and any costs and expenses associated with injury, illness
or death to or of any person), suits, administrative proceedings, costs and
fees, including, but not limited to, attorneys' and consultants' fees and
expenses, and the costs of cleanup, remediation, removal and restoration, that
are in any way related to any matter covered by the foregoing indemnity.

         (ix) Landlord's Indemnity. Landlord shall indemnify, defend, protect,
hold harmless, and, at Tenant's option (with such attorneys as Tenant may
approve in advance and

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<PAGE>   33
in writing), defend Tenant, Tenant's agents, and Tenant's officers, directors,
shareholders, partners, employees, contractors, property managers, agents and
mortgagees and other lien holders, from and against any and all Tenant Losses
(as defined below) arising during the Term from or related to the presence of
Hazardous Materials brought onto the Project by Landlord or Landlord's Agents.
The term "Tenant Losses" shall mean all claims, demands, expenses, actions,
judgments, damages (whether consequential, direct or indirect, known or unknown,
foreseen or unforeseen), penalties, fines, liabilities, losses of every kind and
nature (including, without limitation, property damage, sums paid in settlement
of claims and any costs and expenses associated with injury, illness or death to
or of any person), suits, administrative proceedings, costs and fees, including,
but not limited to, attorneys' and consultants' fees and expenses, and the costs
of cleanup, remediation, removal and restoration, that are in any way related to
any matter covered by the foregoing indemnity.

             (x) Survival. The provisions of this Paragraph 11.B shall survive
the expiration or earlier termination of this Lease.

         C.  Special Provisions Relating to The Americans With Disabilities Act
of 1990.

                           (i)  Allocation of Responsibility to Landlord. As
between Landlord and Tenant, Landlord shall be responsible that the Common Area
complies with the requirements of Title III of the Americans with Disabilities
Act of 1990 (42 U.S.C. 12181, et seq., The Provisions Governing Public
Accommodations and Services Operated by Private Entities), and all regulations
promulgated thereunder, and all amendments, revisions or modifications thereto
now or hereafter adopted or in effect in connection therewith (hereinafter
collectively referred to as the "ADA"), and to take such actions and make such
alterations and improvements as are necessary for such compliance; provided,
however, that to the extent such requirements arise from the construction of the
Tenant Improvements or any Alterations to the Premises made by or on behalf of
Tenant, then as between Landlord and Tenant, Tenant shall be responsible that
the Common Area complies with the requirements of the ADA, and to take such
actions and make such alterations and improvements as are necessary for such
compliance.

                           (ii)  Allocation of Responsibility to Tenant.  As
between Landlord and Tenant, Tenant, at its sole cost and expense, shall be
responsible that the Premises (and all modifications made by Tenant of access to
the Premises from the street), and all alterations and improvements in the
Premises (including without limitation the Tenant Improvements), and

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<PAGE>   34
Tenant's use and occupancy of the Premises, and Tenant's performance of its
obligations under this Lease, comply with the requirements of the ADA, and to
take such actions and make such alterations and improvements as are necessary
for such compliance, to the extent such requirements arise from Tenant's
specific use of the Premises, or the construction and use of the Tenant
Improvements or any Alterations to the Premises made by or on behalf of Tenant;
provided, however, that Tenant shall not make any such alterations or
improvements except upon Landlord's prior written consent (which shall not be
unreasonably withheld) pursuant to the terms and conditions of this Lease. If
Tenant fails diligently to take such actions or make such alterations or
improvements as are necessary for such compliance, Landlord may, but shall not
be obligated to, take such actions and make such alterations and improvements
and may recover all of the costs and expenses of such actions, alterations and
improvements from Tenant as Additional Rent. Tenant shall be entitled to utilize
the Tenant Improvements Allowance to pay for the cost of any improvements
required by ADA that are triggered by the construction of the Tenant
Improvements.

                           (iii)  General.  Notwithstanding anything in this
Lease contained to the contrary, no act or omission of either party, including
any approval, consent or acceptance by it or its agents, employees or other
representatives, shall be deemed an agreement, acknowledgment, warranty, or
other representation by it that the other party has complied with the ADA as
provided under Paragraphs 11.C.(i) or 11.C.(ii) or that any action, alteration
or improvement by it complies or will comply with the ADA as provided under
Paragraphs 11.C.(i) or 11.C.(ii) or constitutes a waiver by it of the other
party's obligations to comply with the ADA under Paragraphs 11.C.(i) or
11.C.(ii) of this Lease or otherwise. Any failure of either party to comply with
its obligations of the ADA under Paragraphs 11.C.(i) or 11.C.(ii) shall not
relieve such party from any obligations under this Lease or in the case of
Landlord's failure to comply under Paragraph 11.C.(i), constitute or be
construed as a constructive or other eviction of Tenant or disturbance of
Tenant's use and possession of the Premises.

         D.  Use and Maintenance of Common Area. Tenant and its employees and
invitees shall have the non-exclusive right to use the Common Area in common
with other persons during the Term of this Lease, subject to such reasonable
rules and regulations as may from time to time be deemed necessary or advisable
in Landlord's reasonable discretion for the proper and efficient operation and
maintenance of the Common Area. Such rules and regulations may include, among
other things, the hours during which the Common Area shall be open for use.
Landlord shall maintain and operate the Common Area in good condition, provided
that any damage thereto, other than normal wear and tear,

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<PAGE>   35
occasioned by the act of Tenant or its employees or invitees shall be paid by
Tenant upon demand by Landlord.

         12. Quiet Enjoyment.

             Landlord covenants that Tenant, upon performing the terms,
conditions and covenants of this Lease, shall have quiet and peaceful possession
of the Premises as against any person claiming the same by, through or under
Landlord.

         13.  Alterations.

             After the Commencement Date, Tenant shall not make or permit any
Alterations in, on or about the Premises, except for nonstructural Alterations
(which shall not include any modifications to the mechanical or electrical
systems of the Building, nor any penetration of the Building's roof) not
exceeding Twenty-Five Thousand Dollars ($25,000.00) in cost during any period of
twelve (12) consecutive months, without the prior written consent of Landlord,
and according to plans and specifications approved in writing by Landlord, which
consent shall not be unreasonably withheld. Notwithstanding the foregoing Tenant
shall not, without the prior written consent of Landlord, make any:

                  (i)  Alterations to the exterior of the Building;

                  (ii)  Alterations to the roof of the Building; and

                  (iii) Alterations visible from outside the Building, to which
Landlord may withhold Landlord's consent on wholly aesthetic grounds.

All Alterations shall be installed at Tenant's sole expense, in compliance with
all applicable laws, by a licensed contractor, shall be done in a good and
workmanlike manner conforming in quality and design with the Premises existing
as of the Commencement Date, and shall not diminish the value of either the
Building or the Premises. All Alterations made by Tenant shall be and become the
property of Landlord upon installation and shall not be deemed Tenant's Personal
Property; provided, however, that Landlord shall notify Tenant upon Landlord's
consent to such Alterations by Landlord (or if Landlord's consent is not
required, upon written request by Tenant) whether Tenant will be required to
remove, at Tenant's expense, such Alterations from the Premises at the
expiration or sooner termination of this Lease and to return the Premises to
their condition as of the Commencement Date of this Lease, normal wear and tear
excepted and subject to the provisions of Paragraph 23. With respect to any
Alterations as to which Landlord's consent is not required, Landlord may require
Tenant to remove, at Tenant's expense, such

                                       29

<PAGE>   36
Alterations from the Premises at the expiration or earlier termination of this
Lease; provided, that upon Tenant's written request prior to making such
Alterations, Landlord shall notify Tenant whether Tenant will be so required to
remove such Alterations from the Premises. Notwithstanding any other provision
of this Lease, Tenant shall be solely responsible for the maintenance and repair
of any and all Alterations made by it to the Premises. Tenant shall give
Landlord written notice of Tenant's intention to perform work on the Premises at
least ten (10) days prior to the commencement of such work to enable Landlord to
post and record a Notice of Nonresponsibility or other notice deemed proper
before the commencement of any such work.

         14. Surrender of the Premises.

             Upon the expiration or earlier termination of the Term, Tenant
shall surrender the Premises to Landlord in its condition existing as of the
Commencement Date, normal wear and tear and fire or other casualty excepted,
with all interior walls repaired if damaged, all broken, marred or nonconforming
acoustical ceiling tiles replaced, all windows washed, the plumbing and
electrical systems and lighting in good order and repair, including replacement
of any burned out or broken light bulbs or ballasts, the HVAC equipment serviced
and repaired by a reputable and licensed service firm, and all floors cleaned,
all to the reasonable satisfaction of Landlord; provided, however, that if
Landlord elects to demolish the Building at the expiration of the Term, Tenant
shall not be required to repair or restore the Building as otherwise provided
herein. Tenant shall remove from the Premises all of Tenant's Alterations
required to be removed pursuant to Paragraph 13, and all Tenant's Personal
Property, and repair any damage and perform any restoration work caused by such
removal. If Tenant fails to remove such Alterations and Tenant's Personal
Property, and such failure continues after the expiration or earlier termination
of this Lease, Landlord may retain such Alterations and Tenant's Property and
all rights of Tenant with respect to it shall cease, or Landlord may place all
or any portion of such Alterations and Tenant's Property in public storage for
Tenant's account. Tenant shall be liable to Landlord for costs of removal of any
such Alterations and Tenant's Personal Property and storage and transportation
costs of same, and the cost of repairing and restoring the Premises, together
with interest at the Interest Rate from the date of expenditure by Landlord. If
the Premises are not so surrendered at the expiration or earlier termination of
this Lease, Tenant shall indemnify Landlord and Landlord's Agents against all
loss or liability, including reasonable attorneys' fees and costs, resulting
from delay by Tenant in so surrendering the Premises.



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<PAGE>   37
             Normal wear and tear, for the purposes of this Lease, shall be
construed to mean wear and tear caused to the Premises by a natural aging
process which occurs in spite of prudent application of reasonable standards for
maintenance, repair and janitorial practices. It is not intended, nor shall it
be construed, to include items of neglected or deferred maintenance which would
have or should have been attended to during the Term of the Lease if reasonable
standards had been applied to properly maintain and keep the Premises at all
times in good condition and repair.

         15. Impositions and Real Property Taxes.

             A. Payment by Tenant. Tenant shall pay all Impositions prior to
delinquency. If billed directly, Tenant shall pay such Impositions and
concurrently present to Landlord satisfactory evidence of such payments. If any
Impositions are billed to Landlord or included in bills to Landlord for Real
Property Taxes, then Tenant shall pay to Landlord all such amounts within
fifteen (15) days after receipt of Landlord's invoice therefor. If applicable
law prohibits Tenant from reimbursing Landlord for an Imposition, but Landlord
may lawfully increase the Monthly Rent to account for Landlord's payment of such
Imposition, the Monthly Rent payable to Landlord shall be increased so that the
amount of such increased Monthly Rent, together with any accompanying increases
in the Real Property Taxes payable by Tenant with respect to such Imposition,
are sufficient to net to Landlord the same return without reimbursement of such
Imposition as would have been received by Landlord with reimbursement of such
Imposition. In addition, on or before April 10 and December 10 of each year of
the Term, Tenant shall pay directly to the San Mateo County assessor the Real
Property Taxes for the Premises as set forth on the assessor's tax bill for the
Premises. If, however, the Premises are not a separate parcel for tax purposes
but constitute a portion of a larger tax parcel or parcels, the Real Property
Taxes payable by Tenant under this Lease shall be a percentage of the Real
Property Taxes payable for such parcel or parcels, which percentage shall be
determined by dividing the Rentable Area of the Building by the total Rentable
Area of all buildings on such parcel or parcels and multiplying the result by
100, which Real Property Taxes shall be payable by Tenant to Landlord monthly as
part of the Common Area Maintenance Costs. Promptly following payment of the
Real Property Taxes, Tenant shall provide Landlord with copies of paid receipts
or other documentary evidence that the Real Property Taxes have been paid by
Tenant. If Tenant fails to pay the Real Property Taxes on or before April 10 and
December 10, respectively, or if Tenant fails to pay its share of Real Property
Taxes as part of the Common Area Maintenance Costs, Tenant shall pay to Landlord
any penalty incurred by such late payment. In addition, Tenant shall pay any
Real Property Tax not

                                       31

<PAGE>   38
included within the county tax assessor's tax bill within ten (10) days after
being billed for same by Landlord. The foregoing dates are based on the dates
established by the county as the dates on which Real Property Taxes become
delinquent if not paid. If such delinquency dates change, the dates on which
Tenant must pay the Real Property Taxes for the Premises shall be at least ten
(10) days prior to the new delinquency dates. Assessments, taxes, fees, levies
and charges may be imposed by governmental agencies for such purposes as fire
protection, street, sidewalk, road, utility construction and maintenance, refuse
removal and for other governmental services which may formerly have been
provided without charge to property owners or occupants. It is the intention of
the parties that all new and increased assessments, taxes, fees, levies and
charges are to be included within the definition of Real Property Taxes for the
purposes of this Lease.

             B. Taxes on Tenant Improvements and Personal Property. Tenant shall
pay any increase in Real Property Taxes resulting from any and all Alterations
and Tenant Improvements of any kind whatsoever placed in, on or about the
Premises for the benefit of, at the request of, or by Tenant. Tenant shall pay
prior to delinquency all taxes assessed or levied against Tenant's Personal
Property in, on or about the Premises or elsewhere. When possible, Tenant shall
cause its Personal Property to be assessed and billed separately from the
Premises and the real property or Personal Property of Landlord.

             C. Proration. Tenant's liability to pay Real Property Taxes shall
be prorated on the basis of a 360-day year to account for any fractional portion
of a fiscal tax year included at the commencement or expiration of the Term.
With respect to any assessments which may be levied against or upon the Premises
on all or any portion of the Project, or which under the laws then in force may
be evidenced by improvements or other bonds or may be paid in annual
installments, only the amount of such annual installment (with appropriate
proration for any partial year) and interest due thereon shall be included
within the computation of the annual Real Property Taxes levied against the
Premises or such portion of the Project, as applicable.

         16.  Utilities and Services.

             Tenant shall be responsible for and shall pay promptly all charges
for water, gas, electricity, telephone, refuse pick-up, janitorial service and
all other utilities, materials and services furnished directly to or used by
Tenant in, on or about the Premises during the Term, together with any taxes
thereon. If any utility, material or service is not separately charged or
metered to any portion of the Premises, Tenant shall pay to Landlord, within ten
(10) days after written demand

                                       32

<PAGE>   39
therefor, Tenant's pro rata share of the total cost thereof as may be determined
by Landlord. Landlord shall not be liable in damages or otherwise for any
failure or interruption of any utility service or other service furnished to the
Premises, except that resulting from the gross negligence or willful misconduct
of Landlord.

         17.  Repair and Maintenance.

             A. Landlord's Obligations. Landlord shall keep in good order,
condition and repair the structural parts of the Building, which structural
parts include only the foundation, subflooring, exterior walls (excluding the
interior of all walls and the exterior and interior of all windows, doors,
ceilings, and plate glass), and the roof structure of the Building (but not the
roof membrane), all unexposed plumbing and electrical facilities, and all
gutters and downspouts, except for any damage thereto caused by the negligence
or willful acts or omissions of Tenant or of Tenant's agents, employees or
invitees, or by reason of the failure of Tenant to perform or comply with any
terms of this Lease, or caused by Alterations made by Tenant or by Tenant's
agents, employees or contractors. In addition, Landlord shall perform any
alterations, additions or improvements required to be made to the Building in
order to comply with applicable laws, ordinances, rules, regulations and orders
that become effective after the date of this Lease, and all capital improvements
required to be made in connection with the operation, maintenance and repair of
the Building; provided, however, in accordance with Paragraph 5.E, any and all
costs and expenses incurred by Landlord in performing any such alterations,
additions, improvements or capital improvements, together with interest at the
Interest Rate, shall be amortized over the useful life of the alteration,
addition, improvement or capital improvement in question and included in Common
Area Maintenance Costs for each year over which such costs are amortized. It is
an express condition precedent to all obligations of Landlord to repair and
maintain that Tenant shall have notified Landlord of the need for such repairs
or maintenance. Tenant waives the provisions of Sections 1941 and 1942 of the
California Civil Code and any similar or successor law regarding Tenant's right
to make repairs and deduct the expenses of such repairs from the Rent due under
this Lease.

             Landlord shall keep in good order, condition, repair and
maintenance the Building's HVAC system and roof, and shall maintain an HVAC
system preventive maintenance service contract from a qualified vendor for the
purpose of maintaining the Building's HVAC system, and a roof maintenance
service contract from a qualified vendor for the purpose of maintaining the
Building's roof. Landlord shall determine in its sole discretion whether any
such vendor is qualified. Any and all costs of any

                                       33

<PAGE>   40
maintenance or minor repair of the HVAC system or the roof (including without
limitation the cost of maintaining HVAC system preventative maintenance
contracts and roof maintenance service contracts) shall be included in the
Common Area Maintenance Costs payable solely by Tenant for the year in which
such cost is incurred. Any and all costs of any replacement or major repair of
the HVAC system or the roof, together with interest at the Interest Rate, shall
be amortized on a straight-line basis over the useful life of the item replaced
or repaired (as determined by Landlord in its sole discretion) (collectively,
the "Useful Life"), and the entire amount of such amortized costs and interest
shall be included in the monthly Common Area Maintenance Costs payable solely by
Tenant during the entire period over which such costs are amortized, until
Tenant has paid to Landlord that proportion of the total amount of such
amortized costs equal to (a) the number of months remaining during the Term as
of the date such replacement or major repair was completed, divided by (b) the
number of months of the Useful Life; provided that in no event shall such
proportion exceed one hundred percent (100%). Repairs to the HVAC system or the
roof shall be deemed to be "minor" if the total aggregate cost of such repairs
is less than or equal to Ten Thousand Dollars ($10,000.00), and shall be deemed
to be "major" if the total aggregate cost of such repairs exceeds Ten Thousand
Dollars ($10,000.00). For the purposes of example only and not by way of
limitation, if a replacement of part of the HVAC system is completed twenty-five
(25) months before the end of the Term, at a cost of Twenty Thousand Dollars
($20,000.00), and the Useful Life of such replaced part of the HVAC system is
fifty (50) months, then (a) the cost of such replacement shall be amortized at
the rate of Four Hundred Dollars ($400.00) per month, with interest at the
Interest Rate, and (b) the amount to be included in the monthly Common Area
Maintenance Costs payable solely by Tenant for the balance of the Term shall
equal Four Hundred Dollars ($400.00), with interest at the Interest Rate, until
Tenant has paid to Landlord a total aggregate amount of Ten Thousand Dollars
($10,000.00), together with interest at the Interest Rate, towards such
amortized costs (i.e., Twenty Thousand Dollars ($20,000.00) multiplied by
[Twenty-Five (25) Months divided by Fifty (50) Months]). If Tenant exercises the
Option, the provisions of this Paragraph 17.A shall continue to apply during the
extended Term, and the total length of the Term (i.e., the initial Term and the
extended Term) shall be utilized to calculate the maximum amount of such
amortized costs that shall be includable in the monthly Common Area Maintenance
Costs payable solely by Tenant pursuant to this Paragraph 17.A.

             It is the express intent of the parties that except as specifically
set forth in this Paragraph 17.A, Landlord shall have no obligation whatsoever
to incur any costs or expenses whatsoever with respect to the repair, operation,
and maintenance

                                       34

<PAGE>   41
of the Building, and that Tenant shall be responsible for all costs and expenses
arising from the repair, operation, and maintenance of the Building except those
costs and expenses specifically described in this Paragraph 17.A.

             B. Tenant's Obligations. Tenant shall at all times and at its sole
cost and expense clean, keep and maintain in good order, condition and repair
(and replace, if necessary) every part of the Premises which is not within
Landlord's obligation pursuant to Paragraph 17.A. Tenant's repair and
maintenance obligations shall include without limitation all exposed plumbing
and electrical facilities within the Premises, fixtures, interior walls and
ceiling, floors, windows, window frames, doors, entrances, plate glass,
showcases, skylights, all lighting fixtures, lamps, fans and any exhaust
equipment and systems, all mechanical systems (but not the HVAC system), any
automatic fire extinguisher equipment within the Building, all security systems
and alarms, all electrical motors and all other appliances and equipment of
every kind and nature located in, upon or about the Building or the Premises.
Tenant shall also be responsible for all pest control within the Premises.

             C. Conditions Applicable to Repairs. All repairs, replacements and
reconstruction made by or on behalf of Tenant or any person claiming through or
under Tenant shall be made and performed (i) at Tenant's sole cost and expense,
in a good and workmanlike manner and at such time and in such manner as Landlord
may reasonably designate, (ii) by contractors approved in advance by Landlord,
(iii) so that the repairs, replacements or reconstruction shall be at least
equal in quality, value and utility to the original work or installation, (iv)
in accordance with such reasonable requirements as Landlord may impose with
respect to insurance and bonds to be obtained by Tenant in connection with the
proposed work, and (v) in accordance with any rules and regulations for the
Building as may be adopted by Landlord from time to time and in accordance with
all applicable laws and regulations of governmental authorities having
jurisdiction over the Premises.

             D. Landlord's Rights. If Tenant fails to perform Tenant's
obligations under Paragraph 17.B, Landlord may in its sole discretion give
Tenant notice of such work as is reasonably required to fulfill such
obligations. If Tenant fails to commence the work within thirty (30) days after
receipt of such notice and diligently prosecute the work to completion, then
Landlord shall have the right (but not the obligation) to do such acts or expend
such funds at the expense of Tenant as are reasonably required to perform such
work. Any amount so expended by Landlord shall be paid by Tenant to Landlord
promptly after demand with interest at the Interest Rate. Landlord shall have no
liability to Tenant for any damage to, or interference with

                                       35

<PAGE>   42
Tenant's use of, the Premises, or inconvenience to Tenant as a result of
performing any such work.

             E. Compliance with Governmental Regulations. Tenant shall, at its
sole cost and expense, comply with, including the making by Tenant of any
Alteration to the Premises, all present and future regulations, rules, laws,
ordinances, and requirements of all governmental authorities (including, without
limitation state, municipal, county and federal governments and their
departments, bureaus, boards and officials) arising from Tenant's use or
occupancy of, or applicable to, the Premises, or in connection with Tenant's
enjoyment of the Premises, or the construction and use of the Tenant
Improvements or any Alterations to the Premises made by or on behalf of Tenant.
Notwithstanding the foregoing, Landlord, and not Tenant, shall be obligated to
make any Alterations to the structural parts of the Building maintained by
Landlord pursuant to Paragraph 17.A. that are required to comply with any
present and future regulations, rules, laws, ordinances, and governmental
requirements unless such Alterations to the structural parts of the Building are
required solely as a result of any other Alterations to the Building made by
Tenant during the Term of this Lease, in which case Tenant shall reimburse
Landlord for the cost of any such Alterations to the structural parts of the
Building that are required to comply with regulations, rules, laws, ordinances
and governmental requirements.

         18. Liens.

             Tenant shall keep the Building and the Premises free from any liens
arising out of any work performed, materials furnished or obligations incurred
by or on behalf of Tenant and hereby agrees to indemnify, defend, protect and
hold Landlord and Landlord's Agents harmless from and against any and all loss,
claim, damage, liability, cost and expense, including attorneys' fees and costs,
in connection with or arising out of any such lien or claim of lien. Tenant
shall cause any such lien imposed to be released of record by payment or posting
of a proper bond acceptable to Landlord within ten (10) days after written
request by Landlord. Tenant shall give Landlord written notice of Tenant's
intention to perform work on the Premises which might result in any claim of
lien at least ten (10) days prior to the commencement of such work to enable
Landlord to post and record a Notice of Nonresponsibility or any such other
notice(s) as Landlord may deem appropriate. If Tenant fails to so remove any
such lien within the prescribed ten 10-day period, then Landlord may do so at
Tenant's expense and Tenant shall reimburse Landlord for such amounts upon
demand. Such reimbursement shall include all costs incurred by Landlord
including Landlord's reasonable attorneys' fees with interest thereon at the
Interest Rate.


                                       36

<PAGE>   43
         19. Landlord's Right to Enter the Premises.

             Tenant shall permit Landlord and Landlord's Agents to enter the
Premises at all reasonable times with reasonable notice, except for emergencies
in which case no notice shall be required, to inspect the same, to post Notices
of Nonresponsibility and similar notices, and real estate "For Sale" signs, to
show the Premises to interested parties such as prospective lenders and
purchasers, to make necessary repairs, to discharge Tenant's obligations
hereunder when Tenant has failed to do so within a reasonable time after written
notice from Landlord, and at any reasonable time within one hundred and eighty
(180) days prior to the expiration of the Term, to place upon the Building
ordinary "For Lease" signs and to show the Premises to prospective tenants. The
above rights are subject to reasonable security regulations of Tenant, and to
the requirement that Landlord shall at all times act in a manner to cause the
least possible interference with Tenant's business.

         20. Signs.

             Subject to Tenant obtaining all necessary approvals from the City
of Redwood City and subject to Landlord's review and approval of plans and
specifications for any proposed signage, which approval may be withheld in
Landlord's sole discretion, Tenant shall have the exclusive right to install
identification signage on the exterior of the Building, so long as such signage
complies with Landlord's project sign program. Tenant shall have no right to
maintain any Tenant identification sign in any other location in, on or about
the Building or the Premises and shall not display or erect any other Tenant
identification sign, display or other advertising material that is visible from
the exterior of the Building. Any changes to the size, design, color or other
physical aspects of Tenant's identification sign(s) shall be subject to the
Landlord's prior written approval, which shall not be unreasonably withheld, and
any appropriate municipal or other governmental approvals. The cost of Tenant's
sign(s) and their installation, maintenance and removal shall be Tenant's sole
cost and expense. If Tenant fails to maintain its sign(s), or, if Tenant fails
to remove its sign(s) upon termination of this Lease, Landlord may do so at
Tenant's expense and the amounts expended by Landlord in doing so shall be
payable by Tenant to Landlord as Additional Rent within ten (10) days after
Landlord has delivered written notice to Tenant demanding payment of such
amount.

         21. Insurance.

             A. Indemnification.

                           (i)  Tenant hereby agrees to defend, indemnify,

                                       37

<PAGE>   44
protect and hold harmless Landlord and Landlord's Agents from and against any
and all damage, loss, cost, claim, liability or expense including reasonable
attorneys' fees and legal costs, suffered directly or by reason of any claim,
suit or judgment brought by or in favor of any person or persons for damage,
loss or expense due to, but not limited to, bodily injury and property damage
sustained by such person or persons which arises out of, is occasioned by or is
in any way attributable to the use or occupancy of the Premises or any part
thereof and adjacent areas by Tenant, the acts or omissions of the Tenant, its
agents, employees or any contractors brought onto the Premises by Tenant, except
to the extent caused by the gross negligence or willful misconduct of Landlord
or Landlord's Agents. Tenant agrees that the obligations assumed herein shall
survive this Lease. Tenant's obligations under this Paragraph 21.A.(i) are
subject to the following conditions: (i) Tenant is promptly notified in writing
of any such claim(s); (ii) Tenant shall have the right to control the defense of
such claim(s) and any settlement negotiations, provided, however, that no action
may be taken by Tenant which may materially and adversely affect Landlord's
rights or obligations without Landlord's consent; and (iii) Landlord shall
cooperate with Tenant in the defense and/or settlement of such claim(s).
Notwithstanding the foregoing, Landlord shall have the right, in its sole
discretion, but without being required to do so, to defend, adjust, settle or
compromise any claim, obligation, debt, demand, suit or judgment against
Landlord arising out of or in connection with the matters covered by the
foregoing indemnity and, in such event, Tenant shall reimburse Landlord for all
reasonable charges and expenses incurred by Landlord in connection therewith,
including reasonable attorneys' fees; provided, however, that Landlord shall not
undertake any unilateral action or settlement so long as Tenant or an insurance
company, at its or their sole expense, is contesting in good faith, diligently
and with continuity such claim, action, obligation, demand or suit, and so long
as such claim, action, obligation, demand or suit does not have or threaten to
have a material adverse impact on Landlord's assets, reputation or business
affairs.

                           (ii)  Landlord hereby agrees to defend, indemnify,
protect and hold harmless Tenant from and against any and all damage, loss,
cost, claim, liability or expense, including reasonable attorneys' fees and
legal costs, suffered directly or by reason of any claim, suit or judgment
brought by or in favor of any person or persons for damage, loss or expense due
to, but not limited to, bodily injury and property damage sustained by such
person or persons which arises out of, is occasioned by or is in any way
attributable to the acts or omissions of Landlord, Landlord's Agents, or any
contractors brought onto the Premises by Landlord, except to the extent caused
by the gross negligence or willful misconduct of Tenant, its agents, employees
or

                                       38

<PAGE>   45
contractors. Landlord agrees that the obligations assumed herein shall survive
this Lease. Landlord's obligations under this Paragraph 21.A.(ii) are subject to
the following conditions: (i) Landlord is promptly notified in writing of any
such claim(s); (ii) Landlord shall have the right to control the defense of such
claim(s) and any settlement negotiations, provided, however, that no action may
be taken by Landlord which may materially and adversely affect Tenant's rights
or obligations without Tenant's consent; and (iii) Tenant shall cooperate with
Landlord in the defense and/or settlement of such claim(s). Notwithstanding the
foregoing, Tenant shall have the right, in its sole discretion, but without
being required to do so, to defend, adjust, settle or compromise any claim,
obligation, debt, demand, suit or judgment against Tenant arising out of or in
connection with the matters covered by the foregoing indemnity and, in such
event, Landlord shall reimburse Tenant for all reasonable charges and expenses
incurred by Tenant in connection therewith, including reasonable attorneys'
fees; provided, however, that Tenant shall not undertake any unilateral action
or settlement so long as Landlord or an insurance company, at its or their sole
expense, is contesting in good faith, diligently and with continuity such claim,
action, obligation, demand or suit, and so long as such claim, action,
obligation, demand or suit does not have or threaten to have a material adverse
impact on Tenant's assets, reputation or business affairs.

             B. Tenant's Insurance. Tenant agrees to maintain in full force and
effect at all times during the Term, at its sole cost and expense, for the
protection of Tenant and Landlord, as their interests may appear, policies of
insurance issued by a responsible carrier or carriers acceptable to Landlord
which afford the following coverages:

                           (i)  Commercial general liability insurance in an
amount not less than Three Million and no/100ths Dollars ($3,000,000.00)
combined single limit for both bodily injury and property damage which includes
blanket contractual liability broad form property damage, personal injury,
completed operations, and products liability, which policy shall name Landlord
and Landlord's Agents as additional insureds and shall contain a provision that
"the insurance provided Landlord hereunder shall be primary and non-contributing
with any other insurance available to Landlord with respect to any damage, loss,
liability or expense covered by Tenant's indemnity obligations under Paragraph
21.A.(i) of the Lease."

                           (ii)  Causes of loss-special form property
insurance (including, without limitation, vandalism, malicious mischief,
inflation endorsement, and sprinkler leakage endorsement) on Tenant's Personal
Property located on or in the Premises. Such insurance shall be in the full
amount of the

                                       39

<PAGE>   46
replacement cost, as the same may from time to time increase as a result of
inflation or otherwise. As long as this Lease is in effect, the proceeds of such
policy shall be used for the repair and replacement of such items so insured.
Landlord shall have no interest in the insurance proceeds on Tenant's Personal
Property. Notwithstanding the foregoing, Tenant shall have the right, at its
election, to self-insure with respect to any loss or damage to Tenant's Personal
Property.

                           (iii)   Boiler and machinery insurance, including
steam pipes, pressure pipes, condensation return pipes and other pressure
vessels and HVAC equipment, including miscellaneous electrical apparatus, in an
amount satisfactory to Landlord.

             C. Premises Insurance. During the Term Landlord shall maintain
causes of loss-special form property insurance (including inflation endorsement,
sprinkler leakage endorsement, and, at Landlord's option, earthquake and flood
coverage) on the Building, excluding coverage of all Tenant's Personal Property
located on or in the Premises, but including the Tenant Improvements. Such
insurance shall also include insurance against loss of rents, including, at
Landlord's option, coverage for earthquake and flood, in an amount equal to the
Monthly Rent and Additional Rent, and any other sums payable under the Lease,
for a period of at least twelve (12) months commencing on the date of loss. Such
insurance shall name Landlord and Landlord's Agents as named insureds and
include a lender's loss payable endorsement in favor of Landlord's lender (Form
438 BFU Endorsement). Tenant shall reimburse Landlord monthly, as Additional
Rent, for one-twelfth (12th) of the annual cost of such insurance on the first
day of each calendar month of the Term, prorated for any partial month, or on
such other periodic basis as Landlord shall elect. If the insurance premiums are
increased after the Commencement Date for any reason, including without
limitation due to an increase in the value of the Building or its replacement
cost, or due to Tenant's use of the Premises or any improvements installed by
Tenant, Tenant shall pay such increase within ten (10) days of notice of such
increase. Landlord may, in its sole discretion, maintain the insurance coverage
described in this Paragraph 21.C as part of an umbrella insurance policy
covering other properties owned by Landlord.

             D. Increased Coverage. Upon demand, Tenant shall provide Landlord,
at Tenant's expense, with such reasonable increased amount of existing
insurance, and such other insurance as Landlord or Landlord's lender may
reasonably require to afford Landlord and Landlord's lender adequate protection;
provided, however, that Tenant shall not be required under this Paragraph 21.D
to increase the amount of its existing insurance more frequently than once
during each calendar year, and shall not be

                                       40

<PAGE>   47
required under this Paragraph 21.D to provide additional insurance coverage more
frequently than once during each calendar year.

             E. Failure to Maintain. If Tenant fails to maintain any insurance
coverage that Tenant is required to maintain under this Paragraph 21, and
Landlord incurs any liability to its insurance carrier arising out of Tenant's
failure to so maintain such insurance coverage, then any and all loss or damage
Landlord shall sustain by reason thereof, including attorneys' fees and costs,
shall be borne by Tenant and shall be immediately paid by Tenant upon its
receipt of a bill therefor and evidence of such loss. Nothing contained in this
Paragraph 21.E shall be deemed to limit or affect any other remedies or rights
available to Landlord under this Lease that arise from Tenant's failure to so
maintain such insurance coverage.

             F. Insurance Requirements. All insurance shall be in a form
satisfactory to Landlord and shall be carried in companies that have a general
policy holder's rating of not less than "A" and a financial rating of not less
than Class "X" in the most current edition of Best's Insurance Reports; and
shall provide that such policies shall not be subject to material alteration or
cancellation except after at least thirty (30) days' prior written notice to
Landlord. The policy or policies, or duly executed certificates for them,
together with satisfactory evidence of payment of the premiums thereon shall be
deposited with Landlord prior to the Commencement Date, and upon renewal of such
policies, not less than thirty (30) days prior to the expiration of the term of
such coverage. If Tenant fails to procure and maintain the insurance it is
required to maintain under this Paragraph 21, Landlord may, but shall not be
required to, order such insurance at Tenant's expense and Tenant shall reimburse
Landlord therefor. Such reimbursement shall include all costs incurred by
Landlord in obtaining such insurance including Landlord's reasonable attorneys'
fees, with interest thereon at the Interest Rate.

             G. Landlord's Disclaimer. Landlord and Landlord's Agents shall not
be liable for any loss or damage to persons or property resulting from fire,
explosion, falling plaster, glass, tile or sheetrock, steam, gas, electricity,
water or rain which may leak from any part of the Building or from the pipes,
appliances or plumbing works therein or from the roof, street or subsurface, or
from any other cause whatsoever, including loss or reduction in utilities,
except to the extent caused by the gross negligence or willful misconduct of
Landlord. Landlord and Landlord's Agents shall not be liable for any latent
defect in the Premises; provided, however, that notwithstanding the foregoing,
Landlord warrants to Tenant that the Improvements shall be free from defects for
the first twelve (12) months of

                                       41

<PAGE>   48
the Term. Tenant shall give prompt written notice to Landlord in case of a
casualty or accident occurring, or any repair needed, in the Premises.

         22. Waiver of Subrogation.

             Landlord and Tenant each hereby waive all rights of recovery
against the other on account of loss or damage occasioned by such waiving party
to its property or the property of others under its control, to the extent that
such loss or damage would be covered by any causes of loss-special form policy
of insurance or its equivalent. Tenant and Landlord shall, upon obtaining
policies of insurance required hereunder, give notice to the insurance carrier
that the foregoing mutual waiver of subrogation is contained in this Lease and
Tenant and Landlord shall cause each insurance policy obtained by such party 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 such policy.

         23. Damage or Destruction.

             A. Landlord's Obligation to Rebuild. If all or any part of the
Building is damaged or destroyed, Landlord shall promptly and diligently repair
the same unless it has the right to terminate this Lease as provided herein and
it elects to so terminate.

             B. Right to Terminate. Landlord shall have the right to terminate
this Lease in the event any of the following events occur:

                           (i)  Insurance proceeds from the insurance
Landlord is required to carry pursuant to Paragraph 21.C are not available to
pay one hundred percent (100%) of the cost of such repair, excluding the
deductible for which Tenant shall be responsible;

                           (ii)  The Building cannot, with reasonable
diligence, be fully repaired by Landlord within one hundred
eighty (180) days after the date of the damage or destruction; or

                           (iii)  The Building cannot be safely repaired
because of the presence of hazardous factors, including, but not limited to,
earthquake faults, radiation, Hazardous Materials and other similar dangers.

             If Landlord elects to terminate this Lease, Landlord may give
Tenant written notice of its election to terminate within thirty (30) days after
such damage or destruction, and this Lease shall terminate fifteen (15) days
after the date

                                       42

<PAGE>   49
Tenant receives such notice and both Landlord and Tenant shall be released of
all further liability under this Lease (except to the extent any provision of
this Lease expressly survives termination). If Landlord elects not to terminate
the Lease, subject to Tenant's termination right set forth below, Landlord shall
promptly commence the process of obtaining necessary permits and approvals and
repair of the Building as soon as practicable, and this Lease will continue in
full force and affect. All insurance proceeds from insurance under Paragraph 21,
excluding proceeds for Tenant's Personal Property, shall be disbursed and paid
to Landlord. Tenant shall be required to pay to Landlord the amount of any
deductibles payable in connection with any insured casualties, unless the
casualty was caused by the sole negligence or willful misconduct of Landlord.

             Tenant shall have the right to terminate this Lease if the Building
cannot, with reasonable diligence, be fully repaired within two hundred seventy
(270) days from the date of damage or destruction. The determination of the
estimated repair periods in this Paragraph 23 shall be made by an independent,
licensed contractor or engineer within thirty (30) days after such damage or
destruction. Landlord shall deliver written notice of the repair period to
Tenant after such determination has been made and Tenant shall exercise its
right to terminate this Lease, if at all, within ten (10) days of receipt of
such notice from Landlord. Upon such termination both Landlord and Tenant shall
be released of all further liability under this Lease (except to the extent any
provision of this Lease expressly survives termination).

             C. Limited Obligation to Repair. Landlord's obligation, should it
elect or be obligated to repair or rebuild, shall be limited to the basic
Building and the Tenant Improvements and shall not include any Alterations made
by Tenant.

             D. Abatement of Rent. Rent shall be temporarily abated
proportionately, during any period when, by reason of such damage or destruction
there is substantial interference with Tenant's use of the Premises, having
regard to the extent to which Tenant may be required to discontinue Tenant's use
of the Premises. Such abatement of Rent shall be proportional to the extent of
such interference with Tenant's use of the Premises reasonably attributable to
such damage or destruction (with the extent of such interference to be
reasonably determined by the mutual agreement of Landlord and Tenant), and shall
commence upon such damage or destruction and end upon substantial completion by
Landlord of the repair or reconstruction which Landlord is obligated or
undertakes to perform. Tenant shall not be entitled to any compensation or
damages from Landlord for loss of the use of the Premises, damage to Tenant's
Personal Property or any

                                       43

<PAGE>   50
inconvenience occasioned by such damage, repair or restoration. Tenant hereby
waives the provisions of Section 1932, Subdivision 2, and Section 1933,
Subdivision 4, of the California Civil Code, and the provisions of any similar
law hereinafter enacted.

             E. Damage Near End of Term. Anything herein to the contrary
notwithstanding, if the Building is destroyed or materially damaged during the
last twelve (12) months of the Term, then either Landlord or Tenant may, at its
option, cancel and terminate this Lease as of the date of the occurrence of such
damage, by delivery of written notice to the other party and, in such event,
upon such termination both Landlord and Tenant shall be released of all further
liability under this Lease (except to the extent any provision of this Lease
expressly survives termination). If neither Landlord nor Tenant elects to
terminate this Lease, the repair of such damage shall be governed by Paragraphs
23.A and 23.B.

         24. Condemnation.

             If title to all of the Premises is taken for any public or
quasi-public use under any statute or by right of eminent domain, or so much
thereof is so taken so that reconstruction of the Premises will not, in
Landlord's sole discretion, result in the Premises being reasonably suitable for
Tenant's continued occupancy for the uses and purposes permitted by this Lease,
this Lease shall terminate as of the date that possession of the Premises or
part thereof is taken, and upon such termination both Landlord and Tenant shall
be released of all further liability under this Lease (except to the extent any
provision of this Lease expressly survives termination). A sale by Landlord to
any authority having the power of eminent domain, either under threat of
condemnation or while condemnation proceedings are pending, shall be deemed a
taking under the power of eminent domain for all purposes of this Paragraph 24.

             If any part of the Premises is taken and the remaining part is
reasonably suitable for Tenant's continued occupancy for the purposes and uses
permitted by this Lease, this Lease shall, as to the part so taken, terminate as
of the date that possession of such part of the Premises is taken, and upon such
termination both Landlord and Tenant shall be released of all further liability
under this Lease with respect to that portion of the Premises that is taken
(except to the extent any provision of this Lease expressly survives
termination). The Rent and other sums payable hereunder shall be reduced in the
same proportion that Tenant's use and occupancy of the Premises is reduced. If
any portion of the Common Area is taken, Tenant's Rent shall be reduced only if
such taking materially interferes with Tenant's use of the Common Area and then
only to the extent that the fair market rental value of the Premises is
diminished by such partial

                                       44

<PAGE>   51
taking. If the parties disagree as to the amount of Rent reduction, the matter
shall be resolved by arbitration and such arbitration shall comply with and be
governed by the California Arbitration Act, Sections 1280 through 1294.2 of the
California Code of Civil Procedure. Each party hereby waives the provisions of
Section 1265.130 of the California Code of Civil Procedure allowing either party
to petition the Superior Court to terminate this Lease in the event of a partial
taking of the Premises.

             All compensation or damages awarded or paid for any taking
hereunder shall belong to and be the property of Landlord, whether such
compensation or damages are awarded or paid as compensation for diminution in
value of the leasehold, the fee or otherwise, except that Tenant shall be
entitled to any award allowed to Tenant for the taking of Tenant's Personal
Property, for the interruption of Tenant's business, for its moving costs, or
for the loss of its good will. Except for the foregoing allocation, no award for
any partial or entire taking of the Premises shall be apportioned between
Landlord and Tenant, and Tenant assigns to Landlord its interest in the balance
of any award which may be made for the taking or condemnation of the Premises,
together with any and all rights of Tenant arising in or to the same or any part
thereof.

         25. Assignment and Subletting.

             A. Landlord's Consent. Tenant shall not enter into a Sublet without
Landlord's prior written consent, which consent shall not be unreasonably
withheld. Any attempted or purported Sublet without Landlord's prior written
consent shall be void and confer no rights upon any third person and, at
Landlord's election, shall terminate this Lease. Each Subtenant shall agree in
writing, for the benefit of Landlord, to assume, to be bound by, and to perform
the terms, conditions and covenants of this Lease to be performed by Tenant, as
such terms, conditions and covenants apply to the Sublet premises.
Notwithstanding anything contained herein, Tenant shall not be released from
liability for the performance of each term, condition and covenant of this Lease
by reason of Landlord's consent to a Sublet unless Landlord specifically grants
such release in writing.

             B. Tenant's Notice. If Tenant desires at any time to Sublet all or
any portion of the Premises, Tenant shall first notify Landlord in writing of
its desire to do so. Within thirty (30) days after Landlord's receipt of
Tenant's notice, Landlord may elect to terminate this Lease with respect to that
portion of the Premises that Tenant proposes to Sublet. In such event, Landlord
and Tenant shall negotiate in good faith the effective date of such termination
and Tenant shall be released of all further liability under this Lease with
respect to the portion of the Premises for which this Lease is terminated
(except to the

                                       45

<PAGE>   52
extent any provision of this Lease expressly survives termination).

             C. Information to be Furnished. If Landlord elects not to terminate
this Lease with respect to the portion of the Premises that Tenant desires to
Sublet, then Tenant shall submit in writing to Landlord: (i) the name of the
proposed Subtenant; (ii) the nature of the proposed Subtenant's business to be
carried on in the Premises; (iii) the terms and provisions of the proposed
Sublet and a copy of the proposed form of Sublet agreement containing a
description of the subject premises; and (iv) such financial information,
including financial statements, as Landlord may reasonably request concerning
the proposed Subtenant.

             D. Landlord's Alternatives. At any time within ten (10) days after
Landlord's receipt of the information specified in Paragraph 25.D., Landlord
may, by written notice to Tenant, elect: (i) to consent to the Sublet by Tenant;
or (ii) to refuse its consent to the Sublet. If Landlord consents to the Sublet,
Tenant may thereafter enter into a valid Sublet of the Premises or applicable
portion thereof, upon the terms and conditions and with the proposed Subtenant
set forth in the information furnished by Tenant to Landlord, subject, however,
at Landlord's election, to the condition that fifty percent (50%) of any excess
of the Subrent over the Rent required to be paid by Tenant under this Lease (or,
if only a portion of the Premises is Sublet, the pro rata share of the Rent
attributable to the portion of the Premises being Sublet) less reasonable
attorneys' fees, leasing commissions, and other reasonable subletting costs (but
not including the cost of any interior improvements) paid by Tenant on the
Sublet, shall be paid to Landlord.

             E. Proration. If a portion of the Premises is Sublet, the pro rata
share of the Rent attributable to such partial area of the Premises shall be
determined by Landlord by dividing the Rent payable by Tenant hereunder by the
total square footage of the Premises and multiplying the resulting quotient (the
per square foot rent) by the number of square feet of the Premises which are
Sublet.

             F. Parameters of Landlord's Consent. Landlord shall have the right
to base its consent to any Sublet hereunder upon such factors and considerations
as Landlord reasonably deems relevant or material to the proposed Sublet and the
best interest of the Project's operations. Without limiting the generality of
the foregoing, Tenant acknowledges that it shall be reasonable for Landlord to
withhold its consent to any Sublet hereunder if Tenant has not demonstrated
that: (i) the proposed Subtenant is financially responsible, with sufficient net
worth and net current assets, properly and successfully to operate its business

                                       46

<PAGE>   53
in the Premises and meet the financial and other obligations of this Lease; (ii)
the proposed Subtenant possesses sound and good business judgment, reputation
and experience, and proven management skills in the operation of a business or
businesses substantially similar to the uses permitted in the Premises under
Paragraph 11.A; and (iii) the use of the Premises proposed by such Subtenant
conforms to the permitted uses specified under Paragraph 11.A, and involves
either no Hazardous Use or only such Hazardous Use as shall be acceptable to
Landlord in its sole discretion.

             G. Permitted Transfers. Notwithstanding the provisions of Paragraph
25.A above, Tenant shall have the right to assign its entire interest under this
Lease, and Landlord shall not withhold its consent thereto (provided that all of
the conditions set forth in clauses (A) and (B) below shall be met), if such
assignment is one of the following "Permitted Transfers": (i) an assignment to a
corporation that is controlled by, controls, or is under common control with
Tenant; or (ii) an assignment in connection with the non-bankruptcy
reorganization or merger of the corporate entity constituting the Tenant under
this Lease, where either (x) the shareholders of the Tenant originally named in
this Lease control (i.e., own fifty-one percent (51%) or more of the voting
stock of) the reorganized or surviving entity, or (y) as of the effective date
of such assignment, the reorganized or surviving entity has a net worth equal to
or greater than the net worth the Tenant originally named under this Lease had
as of the date of this Lease, and the reorganized or surviving entity devotes
all or a substantial portion of its business to activities involving the
Internet, computer hardware, or computer software. However, the foregoing
Permitted Transfers shall be exempt from the requirement of Landlord's consent
only if all of the following conditions shall be met: (A) there shall be no
change in the use or operation of the Premises; and (B) Tenant shall have
provided to Landlord all information to allow Landlord to determine, and
Landlord shall have determined, that the proposed transfer is a Permitted
Transfer which is exempt from the requirement of Landlord's consent. No transfer
of the type described in this Paragraph 25.G, or any other transfer, shall
release Tenant of its obligations under this Lease.

         26.  Default.

             A. Tenant's Default. A default under this Lease by Tenant shall
exist if any of the following occurs:

                           (i)  If Tenant fails to pay when due any Rent or
any other sum required to be paid hereunder within three (3) days from the date
of Landlord's written notice to Tenant (which notice shall constitute the notice
required under California Code

                                       47

<PAGE>   54
of Civil Procedure Section 1161) that such Rent or other sum is due, including,
without limitation, any Tenant Improvement costs payable by Tenant under Exhibit
C; or

                           (ii)  If Tenant fails to perform any term,
covenant or condition of this Lease except those requiring the payment of money,
and Tenant fails to cure such breach within thirty (30) days after written
notice from Landlord where such breach could reasonably be cured within such
30-day period; provided, however, that where such failure could not reasonably
be cured within the 30-day period, that Tenant shall not be in default if it
commences such performance within the 30-day period and diligently thereafter
prosecutes the same to completion; or

                           (iii)  If Tenant assigns its assets for the
benefit of its creditors; or

                           (iv)  If the sequestration or attachment of or
execution on any material part of Tenant's Personal Property essential to the
conduct of Tenant's business occurs, and Tenant fails to obtain a return or
release of such Tenant's Personal Property within thirty (30) days thereafter,
or prior to sale pursuant to such sequestration, attachment or levy, whichever
is earlier; or

                           (v)   If Tenant vacates or abandons the Premises;
or

                           (vi)  If a court makes or enters any decree or
order other than under the bankruptcy laws of the United States adjudging Tenant
to be insolvent; or approving as properly filed a petition seeking
reorganization of Tenant; or directing the winding up or liquidation of Tenant
and such decree or order shall have continued for a period of sixty (60) days.

                  B.  Remedies.  Upon a default, Landlord shall have the
following remedies, in addition to all other rights and remedies
provided by law or otherwise provided in this Lease, to which
Landlord may resort cumulatively or in the alternative:

                           (i)  Landlord may continue this Lease in full
force and effect, and this Lease shall continue in full force and effect as long
as Landlord does not terminate this Lease, and Landlord shall have the right to
collect Rent when due.

                           (ii)  Landlord may terminate Tenant's right to
possession of the Premises at any time by giving written notice to that effect,
and relet the Premises or any part thereof. Tenant shall be liable immediately
to Landlord for all costs Landlord incurs in reletting the Premises or any part
thereof, including, without limitation, broker's commissions, expenses of

                                       48
<PAGE>   55
cleaning and redecorating the Premises required by the reletting and like costs.
Reletting may be for a period shorter or longer than the remaining term of this
Lease. No act by Landlord other than giving written notice of termination to
Tenant shall terminate this Lease. Neither acts of maintenance, nor efforts to
relet the Premises, nor the appointment of a receiver on Landlord's initiative
to protect Landlord's interest under this Lease shall not constitute a
termination of Tenant's right to possession. On termination, Landlord has the
right to remove all Tenant's Personal Property and store the same at Tenant's
sole cost and expense and to recover from Tenant as damages:

             (a) The worth at the time of award of the unpaid Rent and other
sums due and payable which had been earned at the time of termination; plus

             (b) The worth at the time of award of the amount by which the
unpaid Rent and other sums due and payable which would have been payable after
termination until the time of award exceeds the amount of such Rent loss that
Tenant proves could have been reasonably avoided; plus

             (c) The worth at the time of award of the amount by which the
unpaid rent and other sums due and payable for the balance of the Term after the
time of award exceeds the amount of such Rent loss that Tenant proves could be
reasonably avoided; plus

             (d) Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease, or which, in the ordinary course of things, would be likely to
result therefrom, including, without limitation, any costs or expenses incurred
by Landlord: (i) in retaking possession of the Premises; (ii) in maintaining,
repairing, preserving, restoring, replacing, cleaning, altering or
rehabilitating the Premises or any portion thereof, including such acts for
reletting to a new tenant or tenants; (iii) for leasing commissions; or (iv) for
any other costs necessary or appropriate to relet the Premises; plus

             (e) At Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by the laws of the
State of California.

             The "worth at the time of award" of the amounts referred to in
Paragraphs 26.B.(ii)(a) and 26.B.(ii)(b) is computed by allowing interest at the
Interest Rate on the unpaid rent and other sums due and payable from the
termination date through the date of award. The "worth at the time of award" of
the amount referred to in Paragraph 26.B.(ii)(c) is computed by

                                       49

<PAGE>   56
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%). Tenant waives redemption
or relief from forfeiture under California Code of Civil Procedure Sections 1174
and 1179, or under any other present or future law, in the event Tenant is
evicted or Landlord takes possession of the Premises by reason of any default of
Tenant hereunder.

                           (iii)  Landlord may, with or without terminating
this Lease, re-enter the Premises and remove all persons and property from the
Premises, so long as Landlord gives Tenant advance written notice of its intent
to so re-enter the Premises; such property may be removed and stored in a public
warehouse or elsewhere at the cost of and for the account of Tenant. No reentry
or taking possession of the Premises by Landlord pursuant to this Paragraph
26.B.(iii) shall be construed as an election to terminate this Lease unless a
written notice of such intention is given to Tenant.

             C. Landlord's Default. Landlord shall not be deemed to be in
default in the performance of any obligation required to be performed by it
hereunder unless and until it has failed to perform such obligation within
thirty (30) days after receipt of written notice by Tenant to Landlord
specifying the nature of such default; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days are required for
its performance, then Landlord shall not be deemed to be in default if it shall
commence such performance within such 30-day period and thereafter diligently
prosecute the same to completion.

         27. Subordination.

             This Lease is or may become subject and subordinate to underlying
leases, mortgages and deeds of trust (collectively, "Encumbrances") which may
now affect the Premises, and to all renewals, modifications, consolidations,
replacements and extensions thereof; provided, however, if the holder or holders
of any such Encumbrance (collectively, "Holder") shall require that this Lease
be prior and superior thereto, within fifteen (15) days of written request of
Landlord to Tenant, Tenant shall execute, have acknowledged and deliver any and
all documents or instruments, in the form presented to Tenant, which Landlord or
Holder deems necessary or desirable for such purposes. Landlord shall have the
right to cause this Lease to be and become and remain subject and subordinate to
any and all Encumbrances which are now or may hereafter be executed covering the
Premises or any renewals, modifications, consolidations, replacements or
extensions thereof, for the full amount of all advances made or to be made
thereunder and without regard to the time or character of such advances,
together with interest thereon and subject to

                                       50

<PAGE>   57
all the terms and provisions thereof; provided only, that in the event of
termination of any such lease or upon the foreclosure of any such mortgage or
deed of trust, so long as Tenant is not in default, Holder agrees to recognize
Tenant's rights under this Lease as long as Tenant shall pay the Rent and
observe and perform all the provisions of this Lease to be observed and
performed by Tenant. Within fifteen (15) days after Landlord's written request,
Tenant shall execute any and all documents required by Landlord or the Holder to
make this Lease subordinate to any lien of the Encumbrance, including without
limitation a Subordination, Non-Disturbance and Attornment Agreement in the form
attached hereto as Exhibit D. If Tenant fails to do so, it shall be deemed that
this Lease is subordinated to such Encumbrance.

             Notwithstanding anything to the contrary set forth in this
Paragraph 27, Tenant hereby attorns and agrees to attorn to any entity
purchasing or otherwise acquiring the Premises at any sale or other proceeding
or pursuant to the exercise of any other rights, powers or remedies under such
Encumbrance.

         28. Notices.

             Any notice or demand required or desired to be given under this
Lease shall be in writing and shall be personally served or in lieu of personal
service may be given by certified mail, facsimile, or overnight courier service.
All notices or demands under this Lease shall be deemed given, received, made or
communicated on the date personal delivery is effected; or, if sent by certified
mail, on the delivery date or attempted delivery date shown on the return
receipt; or, if sent by facsimile, on the date sent by the sender; or, if sent
by overnight courier service, on the delivery date or attempted delivery date
shown on such service's records. At the date of execution of this Lease, the
addresses of Landlord and Tenant are as set forth in Paragraph 1. After the
Commencement Date, the address of Tenant shall be the address of the Premises.
Either party may change its address by giving notice of same in accordance with
this Paragraph 28.

         29. Attorneys' Fees.

             If either party brings any action or legal proceeding for damages
for an alleged breach of any provision of this Lease, to recover Rent, or other
sums due, to terminate the tenancy of the Premises or to enforce, protect or
establish any term, condition or covenant of this Lease or right of either
party, the prevailing party shall be entitled to recover as a part of such
action or proceedings, or in a separate action brought for that purpose,
reasonable attorneys' fees and costs, including without limitation any and all
costs and expenses arising from (i)

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<PAGE>   58
collection efforts, (ii) any appellate proceedings, and (iii) any bankruptcy,
insolvency or arbitration proceedings.

         30. Estoppel Certificates.

             Tenant shall within fifteen (15) days following written request by
Landlord:

                  (i) Execute and deliver to Landlord any documents, including
estoppel certificates, in the form prepared by Landlord (a) certifying that this
Lease is unmodified and in full force and effect or, if modified, stating the
nature of such modification and certifying that this Lease, as so modified, is
in full force and effect and the date to which the Rent and other charges are
paid in advance, if any, and (b) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord, or, if there are
uncured defaults on the part of the Landlord, stating the nature of such uncured
defaults, (c) evidencing the status of the Lease as may be required either by a
lender making a loan to Landlord to be secured by deed of trust or mortgage
covering the Premises or a purchaser of the Premises from Landlord, and (d) such
other matters as may be reasonably requested by Landlord. Tenant's failure to
deliver an estoppel certificate within fifteen (15) days after delivery of
Landlord's written request therefor shall be conclusive upon Tenant (a) that
this Lease is in full force and effect, without modification except as may be
represented by Landlord, (b) that there are now no uncured defaults in
Landlord's performance, and (c) that no Rent has been paid in advance.

             If Tenant fails to so deliver a requested estoppel certificate
within the prescribed time it shall be conclusively presumed that this Lease is
unmodified and in full force and effect except as represented by Landlord.

                  (ii) Deliver to Landlord the current financial statements of
Tenant, and financial statements of the two (2) years prior to the current
financial statements year, with an opinion of a certified public accountant,
including a balance sheet and profit and loss statement for the most recent
prior year, all prepared in accordance with generally accepted accounting
principles consistently applied.

         31. Transfer of the Premises by Landlord.

             In the event of any conveyance of the Premises and assignment by
Landlord of this Lease, Landlord shall be and is hereby entirely released from
all liability under any and all of its covenants and obligations contained in or
derived from this Lease arising from events occurring after the date of such
conveyance and assignment, and Tenant agrees to attorn to such

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<PAGE>   59
transferee provided such transferee assumes Landlord's obligations under this
Lease.

         32. Landlord's Right to Perform Tenant's Covenants.

             If Tenant shall at any time fail to make any payment or perform any
other act on its part to be made or performed under this Lease, and such failure
shall continue after the expiration of any applicable grace or cure periods
provided in this Lease, Landlord may, but shall not be obligated to (and without
waiving or releasing Tenant from any obligation of Tenant under this Lease),
make such payment or perform such other act to the extent Landlord may deem
desirable, and in connection therewith, pay expenses and employ counsel. All
sums so paid by Landlord and all penalties, interest, expenses and costs in
connection therewith shall be due and payable by Tenant on the next day after
any such payment by Landlord, together with interest thereon at the Interest
Rate from such date to the date of payment by Tenant to Landlord, plus
collection costs and attorneys' fees. Landlord shall have the same rights and
remedies for the nonpayment thereof as in the case of default in the payment of
Rent.

         33. Tenant's Remedy.

             If, as a consequence of a default by Landlord under this Lease,
Tenant recovers a money judgment against Landlord, such judgment shall be
satisfied only against the right, title and interest of Landlord in the
Building, and neither Landlord nor Landlord's Agents shall be liable for any
deficiency.

         34. Mortgagee Protection.

             If Landlord defaults under this Lease, Tenant shall give written
notice of such default to any beneficiary of a deed of trust or mortgagee of a
mortgage covering the Premises, so long as Tenant has received notice of the
existence of such beneficiary or mortgagee, and offer such beneficiary or
mortgagee a reasonable opportunity to cure the default, including time to obtain
possession of the Premises by power of sale or a judicial foreclosure, if such
should prove necessary to effect a cure.

         35. Brokers.

             Landlord and Tenant acknowledge and agree that they have each
utilized the services of real estate brokers (with BT Commercial representing
Landlord and Cornish and Carey representing Tenant) with respect to the
transactions between Landlord and Tenant that are represented by this Lease.
Landlord shall pay commissions to such brokers pursuant to a separate agreement.
Tenant warrants and represents that it has had no

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<PAGE>   60
dealings with any other real estate broker or agent in connection with the
negotiation of this Lease, and that it knows of no other real estate broker or
agent who is or might be entitled to a commission in connection with this Lease.

         36. Acceptance.

             This Lease shall only become effective and binding upon full
execution hereof by Landlord and delivery of a signed copy to Tenant. Neither
party shall record this Lease nor a short form memorandum thereof.

         37. Parking.

             Tenant shall have the non-exclusive right, in common with any other
tenants or occupants of the Project, to use up to three (3) unassigned parking
spaces per each one thousand (1,000) square feet of Rentable Area in the
Premises, upon terms and conditions, as may from time to time be reasonably
established by Landlord. Should parking charges or surcharges of any kind be
imposed on the parking facilities by a governmental agency, Tenant shall
reimburse Landlord for such charges and/or surcharges or, if possible, shall pay
such charges and/or surcharges directly to the governmental agency and, in such
event, Tenant shall provide Landlord with proof that such charges and/or
surcharges have been paid by Tenant.

         38. General.

             A. Captions. The captions and headings used in this Lease are for
the purpose of convenience only and shall not be construed to limit or extend
the meaning of any part of this Lease.

             B. Executed Copy. Any fully executed copy of this Lease shall be
deemed an original for all purposes.

             C. Time. Time is of the essence for the performance of each term,
condition and covenant of this Lease.

             D. Separability. If one or more of the provisions contained herein,
except for the payment of Rent, is for any reason held invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision of this Lease, but this Lease shall be
construed as if such invalid, illegal or unenforceable provision had not been
contained herein.

             E. Choice of Law. This Lease shall be construed and enforced in
accordance with the laws of the State of California. The language in all parts
of this Lease shall in all cases be

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<PAGE>   61
construed as a whole according to its fair meaning and not strictly for or
against either Landlord or Tenant.

             F. Gender; Singular, Plural. When the context of this Lease
requires, the neuter gender includes the masculine, the feminine, a partnership
or corporation or joint venture, and the singular includes the plural.

             G. Binding Effect. The covenants and agreement contained in this
Lease shall be binding on the parties hereto and on their respective successors
and assigns to the extent this Lease is assignable.

             H. Waiver. The waiver by Landlord of any breach of any term,
condition or covenant, of this Lease shall not be deemed to be a waiver of such
provision or any subsequent breach of the same or any other term, condition or
covenant of this Lease. The subsequent acceptance of Rent hereunder by Landlord
shall not be deemed to be a waiver of any preceding breach at the time of
acceptance of such payment. No covenant, term or condition of this Lease shall
be deemed to have been waived by Landlord unless such waiver is in writing
signed by Landlord.

             I. Entire Agreement. This Lease is the entire agreement between the
parties, and there are no agreements or representations between the parties
except as expressed herein. Except as otherwise provided herein, no subsequent
change or addition to this Lease shall be binding unless in writing and signed
by the parties hereto.

             J. Authority. If Tenant is a corporation or a partnership, each
individual executing this Lease on behalf of said corporation or partnership, as
the case may be, represents and warrants that he is duly authorized to execute
and deliver this Lease on behalf of said entity in accordance with its corporate
bylaws, statement of partnership or certificate of limited partnership, as the
case may be, and that this Lease is binding upon said entity in accordance with
its terms. Landlord, at its option, may require a copy of such written
authorization to enter into this Lease.

             K. Exhibits. All exhibits, amendments, riders and addenda attached
hereto are hereby incorporated herein and made a part hereof.

             L. Lease Summary. The Lease Summary attached to this Lease is
intended to provide general information only. In the event of any inconsistency
between the Lease Summary and the specific provisions of this Lease, the
specific provisions of this Lease shall prevail.


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<PAGE>   62
             M. Nondisturbance. Within thirty (30) business days after this
Lease has been fully executed by Landlord and Tenant, Landlord shall provide
Tenant with a non-disturbance and attornment agreement in form reasonably
acceptable to Tenant.

             N. Consent. Unless otherwise provided in this Lease, whenever
Landlord's approval, consent or satisfaction (collectively, an "approval") is
required pursuant to this Lease or an Exhibit hereto, such approval may be
withheld in Landlord's sole and absolute discretion.

             THIS LEASE is effective as of the date the last signatory necessary
to execute the Lease shall have executed this Lease.

                                 TENANT:

Dated: ______________            EXCITE, INC.,
                                 a California corporation

                                 By:/s/ Richard B. Redding
                                    __________________________
                                 Its: Director of Finance
                                    __________________________


                                 By:__________________________
                                 Its:__________________________



                                 LANDLORD:

Dated:  8/15/96                  MARTIN/CAMPUS ASSOCIATES, L.P.,
      ______________             a Delaware limited partnership

                                 MARTIN/REDWOOD PARTNERS, L.P.,
                                 a California limited partnership
                                 General Partner

                                 By:   THE MARTIN GROUP OF COMPANIES, INC.,
                                       a California corporation
                                       General Partner


                                       By: /s/ Michael Covarrubias
                                           __________________________
                                       Name:   MICHAEL COVARRUBIAS
                                            _________________________
                                       Title:  PRESIDENT
                                             ________________________

                                       56

<PAGE>   63
                                    EXHIBIT C

                              WORK LETTER AGREEMENT

                  THIS WORK LETTER ("Agreement") is made and entered into by and
between Landlord and Tenant as of the date of the Lease. This Agreement shall be
deemed a part of the Lease to which it is attached. Capitalized terms which are
used herein and defined in the Lease shall have the meanings given in the Lease.

         1.       General.

                  1.1.  Capital Improvements.  At Landlord's sole cost
and expense, Landlord shall do the following (collectively, the
"Capital Improvements"):

         -        Remove all existing interior improvements in the Building
                  including existing restrooms (provided, however, that both
                  sets of existing stairs to the mezzanine and the masonry wall
                  will be left intact); reconstruction of the restrooms will be
                  part of the Tenant Improvement Costs (as defined below).

         -        Provide new HVAC equipment, consisting of chillers and
                  boilers, ground mounted on the exterior of the
                  Building, with piping to air handlers and coils to be
                  located inside the Building in to-be determined
                  locations within 100 feet of the chillers (all HVAC
                  distribution servicing the Premises, including without
                  limitation ducting and controls, will be part of Tenant
                  Improvement Costs), HVAC system will be sized for
                  standard office loads (i.e., 400 sq. ft. per ton).

         -        Provide 2,000 amp, 480 volt electrical service to a main
                  electrical panel to be located inside the Building, within 100
                  feet of the electrical transformer located on the exterior of
                  the Building (all conduit, electrical wiring and control
                  devices will be part of the Tenant Improvement Costs).

         -        Upgrade the structural system of the Building per the plans
                  prepared by Cabak, Rooney, Jordan Associates dated July 18,
                  1996 (attached hereto as Exhibit C-2).

         -        Remove the existing roof and replace it with a 3-ply
                  built-up roof with a mineral-surfaced cap sheet.






                                    EXHIBIT C
                                   Page 1 of 9
<PAGE>   64
         -        Install four domed plastic skylights, 4 feet x 8 feet, at
                  locations to be mutually agreed upon by Tenant and Landlord.
                  The skylights are to be set on the roof structure, not headed
                  off.

         -        Provide glazing, as detailed in the Structural Drawings dated
                  July 18, 1996 (attached hereto as Exhibit C-2), set in
                  anodized aluminum frames at locations on the ground floor and
                  the mezzanine level as specified in the Building 1: Exterior
                  Elevation Drawing dated August 7, 1996 (attached hereto as
                  Exhibit C-1).

         -        Assure that as of the Rent Commencement Date, the
                  exterior of the Building complies with the ADA.

Landlord shall also cause Contractor (as defined below) to perform all initial
leasehold improvements, in accordance with the approved Final Plans and as
otherwise may be required to comply with applicable law (collectively, the
"Tenant Improvements"). The parties acknowledge and agree that the Capital
Improvements and the Tenant Improvements constitute all of the work required to
enable Tenant to occupy, and operate its business in, the Premises.

                  1.2. Tenant Improvement Costs. The cost of performing the
Tenant Improvements, including without limitation the costs described in
Paragraph 6 below (collectively, the "Tenant Improvement Costs") shall be paid
in the manner set forth in Paragraph 5 below.

         2.       Approval of Plans for Tenant Improvements.

                  2.1.  Architect.  Tenant has selected Studios Architecture
("Architect") for the design and preparation of plans for the Tenant
Improvements.  Tenant shall retain Architect's administrative services
throughout the performance of the Tenant Improvements.

                  2.2.  Submittal of Plans.

                           2.2.1.  Preliminary Plans.  Landlord has delivered to
Architect the following plans for the Building: (i) Building 1: Exterior
Elevation Drawing dated August 7, 1996 (attached hereto as Exhibit C-1), (ii)
Structural Drawings (attached hereto as Exhibit C-2), and (iii) Existing
Conditions Plan (attached hereto as Exhibit C-3).  Tenant shall cause Architect
to use the Site Study, the Structural Drawings, and the Existing Conditions Plan
to prepare preliminary plans (the "Preliminary Plans") for the Tenant
Improvements to be performed at the Premises.  Tenant



                                    EXHIBIT C
                                   Page 2 of 9
<PAGE>   65
shall cause Architect to deliver the Preliminary Plans to Landlord on or before
August 16, 1996. Within five (5) days after Landlord's receipt of the
Preliminary Plans, Landlord shall either approve or disapprove the Preliminary
Plans. If Landlord disapproves the Preliminary Plans, then Landlord shall state
in reasonable detail the changes which Landlord requires to be made thereto.
Tenant shall submit to Landlord revised Preliminary Plans within five (5) days
after Tenant's receipt of Landlord's disapproval notice. Following Landlord's
receipt of the revised Preliminary Plans from Tenant, Landlord shall have the
right to review and approve the revised Preliminary Plans pursuant to this
Paragraph 2.2.1. Landlord shall give Tenant written notice of its approval or
disapproval of the revised Preliminary Plans within five (5) days after the date
of Landlord's receipt thereof. If Landlord disapproves the revised Preliminary
Plans, then Landlord and Tenant shall continue to follow the procedures set
forth in this Paragraph 2.2.1 until either (x) Landlord and Tenant approve the
Preliminary Plans in accordance with this Paragraph 2.2.1, or (y) the date that
is thirty (30) days after the execution of the Lease, whichever shall first
occur. If Landlord and Tenant do not mutually agree upon the Preliminary Plans
within thirty (30) days after the execution of the Lease, then Landlord may in
its sole discretion terminate the Lease upon written notice to Tenant. If
Landlord neither approves nor disapproves the Preliminary Plans or the revised
Preliminary Plans within the applicable time periods provided above, Landlord
shall be deemed to have disapproved such Preliminary Plans as submitted.

                           2.2.2.  Preliminary Budget.  Landlord has retained
Devcon Construction ("Contractor") as the general contractor for the
construction of the Tenant Improvements. Upon the later to occur of (i) twelve
(12) days after approval by Landlord and Tenant of the Preliminary Plans, or
(ii) August 28, 1996, Contractor shall prepare a preliminary budget for the
Tenant Improvements based upon the approved Preliminary Plans, which Contractor
shall submit to Tenant for its review and approval. Within three (3) days after
Tenant's receipt of the preliminary budget, Tenant shall either approve or
disapprove the preliminary budget. If Tenant rejects such preliminary budget,
Landlord may in its sole discretion elect by written notice to Tenant within
five (5) days of Landlord's receipt of Tenant's written rejection notice, to
either (i) require Architect to revise the Preliminary Plans to reduce the cost
of the Tenant Improvements, or (ii) terminate the Lease upon written notice to
Tenant. Following Landlord's election under clause (i) above, Landlord and
Tenant shall again follow the procedures set forth in Paragraph 2.2.1 and this
Paragraph 2.2.2 with respect to the approval of the Preliminary Plans and to the
submission and approval of the



                                    EXHIBIT C
                                   Page 3 of 9
<PAGE>   66
preliminary budget from Contractor. If Landlord and Tenant do not mutually agree
upon the preliminary budget for the Tenant Improvements on or before September
6, 1996, then Landlord may in its sole discretion terminate the Lease upon
written notice to Tenant.

                           2.2.3.  Final Plans.  Upon the later to occur of
(i) twelve (12) days after approval by Landlord and Tenant of the preliminary
budget for the Tenant Improvements, or (ii) September 9, 1996, Tenant shall
cause Architect to commence preparing complete plans, specifications and working
drawings which incorporate and are consistent with the approved Preliminary
Plans and preliminary budget, and which show in detail the intended design,
construction and finishing of all portions of the Tenant Improvements described
in the Preliminary Plans (collectively, the "Final Plans"). Tenant shall cause
Architect to deliver the Final Plans to Landlord, for Landlord's review and
approval, no later than September 27, 1996. Within five (5) days after
Landlord's receipt of the Final Plans, Landlord shall either approve or
disapprove the Final Plans. If Landlord disapproves the Final Plans, then
Landlord shall state in reasonable detail the changes which Landlord requires to
be made thereto. Tenant shall submit to Landlord revised Final Plans within five
(5) days after Tenant's receipt of Landlord's disapproval notice. Following
Landlord's receipt of the revised Final Plans from Tenant, Landlord shall have
the right to review and approve the revised Final Plans pursuant to this
Paragraph 2.2.3. Landlord shall give Tenant written notice of its approval or
disapproval of the revised Final Plans within five (5) days after the date of
Landlord's receipt thereof. If Landlord disapproves the revised Final Plans,
then Landlord and Tenant shall continue to follow the procedures set forth in
this Paragraph 2.2.3 until either (x) Landlord and Tenant approve such Final
Plans in accordance with this Paragraph 2.2.3, or (y) October 4, 1996. If
Landlord and Tenant do not mutually agree upon the Final Plans on or before
October 4, 1996, then Landlord may in its sole discretion terminate this Lease
upon written notice to Tenant. If Landlord neither approves nor disapproves the
Final Plans within the applicable time periods provided above, Landlord shall be
deemed to have disapproved the Final Plans as submitted.

                           2.2.4.  Tenant Delay.  Any failure by Tenant to
perform its obligations under this Paragraph 2 as and when required shall be
deemed to create Tenant Delay for the purposes of the Lease.

         3.       Construction Budget.  Upon approval by Landlord and
Tenant of the Final Plans, Landlord shall instruct Contractor to



                                    EXHIBIT C
                                   Page 4 of 9
<PAGE>   67
obtain competitive bids for the Tenant Improvements from at least three (3)
qualified subcontractors for each of the major subtrades (excluding the
mechanical and electrical trades, which shall be on a design/build basis) and to
submit the same to Landlord and Tenant for their review and approval. Upon
selection of the subcontractors and approval of the bids, Contractor shall
prepare a cost estimate for the Tenant Improvements described in such Final
Plans, based upon the bids submitted by the subcontractors selected. Contractor
shall submit such cost estimate to Landlord and Tenant for their review and
approval. Landlord or Tenant may each approve or reject such cost estimate in
their reasonable sole discretion. If either Landlord or Tenant rejects such cost
estimate, Landlord may in its sole discretion elect by written notice to Tenant
within five (5) days of Landlord's receipt of Tenant's written rejection notice,
to either (i) resolicit bids based on such Final Plans, in accordance with the
procedures specified above, or (ii) terminate the Lease upon written notice to
Tenant. Following any resolicitation of bids by Landlord pursuant to this
Paragraph 3, Landlord and Tenant shall again follow the procedures set forth in
this Paragraph 3 with respect to the submission and approval of the cost
estimate from Contractor.

         4.       Landlord to Construct. Landlord shall cause Contractor to
construct the Tenant Improvements in a good and workmanlike manner, in
accordance with the approved Final Plans and in compliance with all applicable
laws. Architect shall be responsible for obtaining all necessary building
permits and approvals and other authorizations from governmental agencies
required in connection with the Tenant Improvements. The cost of all such
permits and approvals, including inspection and other building fees required to
obtain the permits for the Tenant Improvements, shall be included as part of the
Tenant Improvement Costs. Tenant shall have the benefit of any warranties
provided by Contractor, the subcontractors and suppliers in connection with the
Tenant Improvements.

         5.       Payment for Tenant Improvements.  The Tenant
Improvement Costs shall be paid as follows:

                  5.1. Landlord's Initial Share. Landlord shall bear all of the
Tenant Improvement Costs up to an aggregate maximum amount equal to Twenty-Two
Dollars ($22.00) multiplied by the amount of Rentable Area in the Premises then
being improved, as determined by Landlord in its sole discretion ("Landlord's
Initial Share").

                  5.2.  Tenant's Initial Share.  Tenant shall then bear
all of the Tenant Improvement Costs in excess of Landlord's



                                    EXHIBIT C
                                   Page 5 of 9
<PAGE>   68
Initial Share, up to an aggregate maximum amount (including Landlord's Initial
Share) equal to Twenty-Four and 50/100ths Dollars ($24.50) multiplied by the
amount of Rentable Area in the Premises then being improved, as determined by
Landlord in its sole discretion ("Tenant's Initial Share").

                  5.3. Landlord's Additional Share. Landlord shall then bear all
of the Tenant Improvement Costs in excess of Tenant's Initial Share, up to an
aggregate maximum amount (including Landlord's Initial Share and Tenant's
Initial Share) equal to Twenty-Seven Dollars ($27.00) multiplied by the amount
of Rentable Area in the Premises then being improved, as determined by Landlord
in its sole discretion ("Landlord's Additional Share").

                  5.4. Tenant's Additional Share. Tenant then bear all of the
Tenant Improvement Costs in excess of Landlord's Additional Share, up to an
aggregate maximum amount (including Landlord's Initial Share, Tenant's Initial
Share, and Landlord's Additional Share) equal to Twenty-Nine and 50/100ths
Dollars ($29.50) multiplied by the amount of Rentable Area in the Premises then
being improved, as determined by Landlord in its sole discretion ("Tenant's
Additional Share").

                  5.5. Landlord's Final Share. Landlord shall then bear all of
the Tenant Improvement Costs in excess of Tenant's Additional Share, up to an
aggregate maximum amount (including Landlord's Initial Share, Tenant's Initial
Share, Landlord's Additional Share, and Tenant's Additional Share) equal to
Thirty-Two Dollars ($32.00) multiplied by the amount of Rentable Area in the
Premises then being improved, as determined by Landlord in its sole discretion
("Landlord's Final Share") (with Landlord's Initial Share, Landlord's Additional
Share, and Landlord's Final Share being hereafter from time to time collectively
called "Landlord's Share").

                  In no event shall any portion of Landlord's Share be
applicable to any of Tenant's Personal Property, trade fixtures, equipment,
inventory, computer network, communications system, promotional materials,
signage or related expenses.

                  5.6 Tenant's Responsibility. Tenant shall be responsible for
paying any and all Tenant Improvement Costs for the Tenant Improvements equal to
Tenant's Initial Share and Tenant's Additional Share, and any and all Tenant
Improvement Costs in excess of Landlord's Final Share (collectively, the "Excess
Improvement Costs").


                                    EXHIBIT C
                                   Page 6 of 9
<PAGE>   69
                           5.6.1  Set-Aside Funds.  Within five (5) days
after the parties have mutually agreed upon the cost estimate for the Tenant
Improvements pursuant to Paragraph 3 above, Tenant shall deposit into a separate
account with Comerica Bank an amount (the "Set-Aside Funds") equal to the
aggregate total of the Excess Improvement Costs, based on the assumption that
the Tenant Improvement Costs shall equal such cost estimate. Landlord shall
instruct Comerica Bank to hold the Set-Aside Funds in a separate
interest-bearing account with interest to accrue for Tenant's account, and shall
utilize the Set-Aside Funds to pay for the Excess Improvement Costs in the
manner set forth in this Paragraph 5.

                           5.6.2  Payment.  As and when any Excess
Improvement Costs become due and payable, Landlord shall request Comerica Bank
to utilize the remaining Set-Aside Funds to pay such Excess Improvement Costs;
provided, however, that if at any time there are insufficient Set-Aside Funds to
pay Excess Improvement Costs, Tenant shall pay any and all such Excess
Improvement Costs to Landlord within ten (10) days after the date of Tenant's
receipt of Landlord's written request therefor. Any failure by Tenant to pay the
Excess Improvement Costs as and when required under this Agreement shall
constitute a default by Tenant under the Lease.

                           5.6.3  Penalties.  To the extent that any
contractor or subcontractor working on the Tenant Improvements imposes upon
Landlord any penalty or late charge due to Tenant's failure to pay to Landlord
any amount due under this Paragraph 5.6 as and when such amount is due, Tenant
shall be solely responsible for paying such penalty or late charge; provided,
however, that if Tenant disputes the imposition of such penalty or late charge,
Tenant shall not be required to pay the penalty or late charge until the dispute
has been settled or otherwise resolved; provided further, that if any penalty or
late charge is imposed due to Tenant's exercise of its rights under this
Paragraph 5.6.3, Tenant shall pay such penalty or late charge as provided in
this Paragraph 5.6.3.

         6.       Tenant Improvement Costs.  The Tenant Improvement Costs shall
include all reasonable costs incurred in connection with the Tenant
Improvements, as determined by Landlord in its reasonable discretion, including
the following:

                  (a) All costs of space plans and other architectural and
engineering plans and specifications for the Tenant Improvements, including
engineering costs associated with completion of the State of California energy
utilization calculations under Title 24 legislation required in connection



                                    EXHIBIT C
                                   Page 7 of 9
<PAGE>   70
with the Tenant Improvements;

                  (b) All costs of obtaining building permits and other
necessary authorizations from the City of Redwood City;

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

                  (d) All direct and indirect costs of procuring, constructing
and installing the Tenant Improvements in the Premises, including, but not
limited to, the construction fee payable to the Contractor for overhead and
profit, and the cost of all on-site supervisory and administrative staff,
office, equipment and temporary services rendered by Contractor in connection
with construction of the Tenant Improvements;

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

                  (f) Sewer connection fees (if any);

                  (g) All costs of installing an emergency power supply systems
in each of the Buildings, which emergency power supply shall include emergency
HVAC for Tenant's computer rooms; and

                  (h) A construction management fee payable to Landlord equal to
three percent (3%) of the total Tenant Improvement Costs.

         In no event shall the Tenant Improvement Costs include any costs of
procuring, constructing or installing in the Premises any of Tenant's Personal
Property, trade fixtures, equipment, inventory, computer network, communications
system, promotional materials, signage or related expenses.

          7. Change Requests. No revisions to the approved Final Plans shall be
made by either Landlord or Tenant unless approved in writing by both parties.
Landlord agrees to make all changes (i) required by any public agency to conform
with governmental regulations, or (ii) requested in writing by Tenant and
approved in writing by Landlord, which approval shall not be unreasonably
withheld. Any costs related to such changes shall be added to the Tenant
Improvement Costs and shall be paid for in accordance with Paragraph 5. The
billing for such additional costs shall be accompanied by evidence of the
amounts billed as is customarily used in the business. Costs related to changes
shall include,



                                    EXHIBIT C
                                   Page 8 of 9
<PAGE>   71
without limitation, any architectural, structural engineering, or design fees,
and the Contractor's price for effecting the change. Any change order which may
extend the date of substantial completion of the Tenant Improvements may be
disapproved by Landlord unless Tenant agrees that for purposes of payment of
Monthly Rent and Additional Rent, the Tenant Improvements shall be deemed to
have been substantially completed on that date on which such Tenant Improvements
would have been substantially completed without giving effect to the change
order in question.

LANDLORD:                                   TENANT

MARTIN/CAMPUS ASSOCIATES, L.P.,             EXCITE, INC.
a Delaware limited partnership              a California corporation

MARTIN/REDWOOD PARTNERS, L.P.,
a California limited partnership            By  Richard B. Redding
General Partner                             ____________________________
                                            Its Director of Finance
By:   THE MARTIN GROUP OF COMPANIES, INC.   ___________________________
      a California corporation
      General Partner


      By: /s/ Michael Covarrubias
          __________________________    
      Name:   MICHAEL COVARRUBIAS
          __________________________
      Title:  PRESIDENT
          __________________________









                                    EXHIBIT C
                                   Page 9 of 9