<PAGE>
 
                                                                    EXHIBIT 10.6

                      SUMMARY OF BASIC LEASE INFORMATION
                      ----------------------------------   
     
    This Summary of Basic Lease Information ("SUMMARY") is hereby
incorporated into and made a part of the attached Office Lease. Each reference
in the Office Lease to any term of this Summary shall have the meaning as set
forth in this Summary for such term. In the event of a conflict between the
terms of this Summary and the Office Lease, the terms of the Office Lease shall
prevail. Any capitalized terms used herein and not otherwise defined herein
shall have the meaning as set forth in the Office Lease.

<TABLE> 
<CAPTION> 
         TERMS OF LEASE                                     DESCRIPTION
         <S>                                                <C> 
         (References are to
         the Office Lease)

         1.       Date:                                     June 19, 1998.

         2.       Landlord:                                 W9/WLA REAL ESTATE LIMITED
                                                            PARTNERSHIP,
                                                            a Delaware limited partnership

         3.       Address of Landlord's Agent               LPC MS, Inc.
                  (Section 24.19):                          4041 MacArthur Boulevard
                                                            Suite 175
                                                            Newport Beach, California 92600
                                                            Attn:  Steven Center

                                                            with a copy to:

                                                            LPC MS, Inc.
                                                            455 Market Street, Suite 1520
                                                            San Francisco, California  94105
                                                            Attn:  Mr. D. Allen Palmer

         4.       Tenant:                                   EDUTREK INTERNATIONAL, INC., a Georgia
                                                            corporation

         5.       Address of Tenant                         Edutrek International                           
                  (Section 24.19):                          3340 Peachtree Road Northeast               
                                                            Suite 2000                                  
                                                            Atlanta, Georgia  30326                     
                                                            Attention:  Ms. Stephanie Kirkpatrick       
                                                                                                        
                                                            with a copy to:                             
                                                                                                        
                                                            Smith, Gambrell & Russell, LLP              
                                                            1230 Peachtree Street, N.E.                 
                                                            Suite 3100, Promenade 11                    
                                                            Atlanta, Georgia  30309-3595                
                                                            Attention:  Arthur Jay Schwartz, Esq.        

                                                            and
                                                            Cushman & Wakefield
                                                            3300 One Atlantic Center
                                                            1201 West Peachtree Street
                                                            Atlanta, Georgia  30309
                                                            Attention:  Mr. Andrew Ghertner
                                                            (Prior to Lease Commencement Date)
</TABLE> 
<PAGE>
 
<TABLE> 
<S>                                                                <C> 
                                                                   and

                                                                   Edutrek International, Inc.
                                                                   12655 West Jefferson Boulevard
                                                                   Los Angeles, California 90066
                                                                   Attention: Mr. Kevin Martin
                                                                   with a copy to:
                                                                   Smith, Gambrell & Russell, LLP
                                                                   1230 Peachtree Street, N.E.
                                                                   Suite 3100, Promenade 11
                                                                   Atlanta, Georgia  30309-3595
                                                                   Attention:  Arthur Jay Schwartz, Esq.

                                                                   and
                                                                   Cushman & Wakefield
                                                                   3300 One Atlantic Center
                                                                   1201 West Peachtree Street
                                                                   Atlanta, Georgia  30309
                                                                   Attention:  Mr. Andrew Ghertner
                                                                   (After Lease Commencement Date)

         6.       Premises (Article 1):                            Approximately  86,471  rentable  (83,503 usable)
                                                                   square   feet  of   space,   as  set   forth  on
                                                                   Exhibit A,   attached   hereto   (the   "Initial
                                                                   Premises"),which  Initial  Premises  consists of
                                                                   the entire  rentable area of the Building  other
                                                                   than the  "Expansion  Premises," as that term is
                                                                   defined  in  Section  1.3 of this  Lease.  As of
                                                                   the "Expansion  Premises  Commencement Date," as
                                                                   that  term is  defined  in  Section  1.3 of this
                                                                   Lease,  the Premises shall consist of all of the
                                                                   rentable  area of the Building,  which  consists
                                                                   of   approximately   88,215   rentable   (85,101
                                                                   usable) square feet of space.

         7.       Term (Article 2).

                  7.1      Lease Term:                             Ten (10) years and nine (9) months.

                  7.2      Lease Commencement
                           Date:                                   The  earlier  to occur of  (i) ninety  (90) days
                                                                   following  the  date  Tenant   receives   final,
                                                                   nonappealable  "Governmental Approvals," as that
                                                                   term is defined in Section  2.2.1 of this Lease,
                                                                   (ii) October 15,   1998,   and  (iii) the   date
                                                                   Tenant  commences to conduct  business  from the
                                                                   Premises.

                  7.3      Lease Expiration Date:                  The last day of the  month in which the ten (10)
                                                                   year  and  nine  (9)  month  anniversary  of the
                                                                   Lease Commencement Date occurs.

                  7.4      Amendment to Lease:                     Landlord  and  Tenant  shall  confirm  the Lease
                                                                   Commencement  Date and Lease  Expiration Date in
                                                                   an  Amendment  to  Lease   (Exhibit "C")  to  be
                                                                                               -----------
                                                                   executed  pursuant  to  Article 2 of the  Office
                                                                   Lease.

         8.       Base Rent (Article 3):
</TABLE> 
<PAGE>
 
<TABLE> 
<CAPTION> 
         Month of                                 Annual                 Installment
         Lease Term                              Base Rent              of Base Rent
         ----------                              ---------              ------------ 
<S>                                           <C>                       <C> 
One (1) through Five (5)                      $  529,202.52             $ 44,100.21

Six (6) through Eight (8)                     $  653,720.76             $ 54,476.73

Nine (9) through Eleven (11)                  $  944,263.32             $ 78,688.61

Twelve (12) through Fourteen (14)             $1,224,429.30             $102,035.78

Fifteen (15) through Seventeen (17)           $1,680,996.20             $140,083.02

Eighteen (18) through Thirty (30)             $2,137,563.10             $178,130.26

Thirty-One (31) through Sixty (60)            $2,365,846.50             $197,153.88

Sixty-One (61) through Ninety (90)            $2,614,883.00             $217,906.92

Ninety (91) through One Hundred Twenty        $2,895,049.00             $241,254.09
(120)

One Hundred Twenty-One (121) through          $3,206,344.60             $267,195.39
One Hundred Twenty-Nine (129)
</TABLE> 

THE BASE RENT SET FORTH ABOVE DOES NOT REFLECT TENANT'S LEASE OF THE EXPANSION
PREMISES AND THEREFORE SHALL INCREASE AS OF THE EXPANSION PREMISES COMMENCEMENT
DATE IN ACCORDANCE WITH THE TERMS OF SECTION 1.3 OF THIS LEASE.

<TABLE> 
         <S>                                                       <C> 
         9.       Additional Rent (Article 4):

                  9.1      Base Year:                              The first twelve (12) months of the Lease Term
                                                                   beginning on the Lease Commencement Date.

                  9.2      Tenant's Share of
                           Direct Expenses:                        Approximately 98.02%, provided that, as of the
                                                                   Expansion Premises Commencement Date, Tenant's
                                                                   Share of Direct Expenses shall be 100%.

         10.      Security Deposit/Letter of Credit                $522,584.35.
                  (Article 20):

         11.      Parking (Article 23):                            All parking spaces less six (6) parking spaces,
                                                                   provided that, as of the Expansion Premises
                                                                   Commencement Date, Tenant shall be entitled to
                                                                   all of the parking spaces servicing the
                                                                   Building.
</TABLE> 
<PAGE>
 
<TABLE> 
         <S>                                                       <C> 
         12.      Brokers (Section 24.25):                         The Seeley Company
                                                                   11111 Santa Monica Boulevard
                                                                   Suite 350
                                                                   Los Angeles, California  90025
                                                                  
                                                                   and
                                                                   
                                                                   Cushman & Wakefield
                                                                   1801 Century Park East
                                                                   Suite 120
                                                                   Los Angeles, California  90067
</TABLE> 
<PAGE>
 
                        12655 WEST JEFFERSON BOULEVARD
                                 OFFICE LEASE
                                 ------------

         This Office Lease, which includes the preceding Summary attached hereto
and incorporated herein by this reference (the Office Lease and Summary to be
known sometimes collectively hereafter as the "LEASE"), dated as of the date set
forth in Section 1 of the Summary, is made by and between W9/WLA REAL ESTATE
LIMITED PARTNERSHIP, a Delaware limited partnership ("LANDLORD"), and EDUTREK
INTERNATIONAL, INC., a Georgia corporation ("TENANT").

                                   ARTICLE 1
                                   ---------   
           REAL PROPERTY, BUILDING AND PREMISES; EXPANSION PREMISES
           --------------------------------------------------------

         1.1 Real Property, Building and Premises. Upon and subject to the
             ------------------------------------
terms, covenants and conditions hereinafter set forth in this Lease, Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord the premises set
forth in Section 6 of the Summary (the "PREMISES"), which Premises are part of
the building (the "BUILDING") located at 12655 West Jefferson Boulevard, Los
Angeles, California. The outline of the floor plan of the Premises is set forth
in Exhibit A attached hereto. Landlord and Tenant hereby acknowledge and agree
that the rentable and usable square footage of the Initial Premises and the
Expansion Premises shall be as set forth in this Lease and shall not be subject
to remeasurement or modification. The Building, the Building's parking facility
("BUILDING PARKING FACILITY"), any outside plaza areas, land and other
improvements surrounding the Building which are designated from time to time by
Landlord as common areas appurtenant to or servicing the Building, and the land
upon which any of the foregoing are situated, are herein sometimes collectively
referred to as the "REAL PROPERTY." Tenant is hereby granted the right to the
nonexclusive use of the common corridors and hallways, stairwells, elevators,
restrooms and other public or common areas located on the Real Property (the
"COMMON AREAS") to the extent the same are not otherwise included within the
definition of the Premises; provided, however, that the use thereof shall be
subject to such rules, regulations and restrictions as Landlord may make from
time to time. Landlord reserves the right to make alterations or additions to or
to change the location of elements of the Real Property and the common areas
thereof, provided that such alterations, additions or changes are reasonable and
do not materially interfere with Tenant's ability to access, use and occupy of
the Premises and the Building Parking Facility.

         1.2 Condition of Premises. Except as expressly set forth in this Lease
             ---------------------
and in the Tenant Work Letter attached hereto as Exhibit B, Landlord shall not
be obligated to provide or pay for any improvement, remodeling or refurbishment
work or services related to the improvement, remodeling or refurbishment of the
Premises, and Tenant shall accept the Premises and the Building in their "As Is"
condition on the Lease Commencement Date.

         1.3 Expansion Premises. Landlord and Tenant hereby acknowledge and
             ------------------
agree that approximately 1,744 rentable (1,598 usable) square feet of space
located on the ground floor of the Building, as more particularly set forth on
Exhibit A-1, attached hereto (the "EXPANSION PREMISES"), are as of the date
hereof leased to an existing third party tenant (the "EXISTING TENANT"). The
term of the Existing Tenant's lease of the Expansion Premises is scheduled to
expire on or about December 4, 1998. As more particularly set forth in Section 6
of the Summary, prior to the Expansion Premises Commencement Date, the Premises
shall be comprised of all of the rentable area of the Building other than the
Expansion Premises. Commencing upon the date (the "EXPANSION PREMISES
COMMENCEMENT DATE") which is ninety (90) days following the later to occur of
(a) the expiration or earlier termination of the Existing Tenant's lease of the
Expansion Premises, and (b) the Existing Tenant's vacation and surrender of the
Expansion Premises, the Premises shall automatically be comprised of (i) the
Initial Premises, and (ii) the Expansion Premises. The Initial Premises and the
Expansion Premises comprise all of the rentable area of the Building. Tenant's
lease of the Expansion Premises shall expire coterminously with Tenant's lease
of the Initial Premises. Tenant's lease of the Expansion Premises shall be upon
all of the terms and conditions set forth in this Lease, except as specifically
set forth in this Section 1.3.

             1.3.1 Expansion Rent. The "Base Rent," as that term is defined in
                   --------------
Article 3 of this Lease, payable for the Expansion Premises shall be at the same
rate per rentable square foot as Base Rent is payable by Tenant with respect to
the Initial Premises (as and when such Initial Premises Base Rent is increased
pursuant to the terms of this Lease). Effective as of the Expansion Premises
Commencement Date, Tenant's Share shall equal 100%.

             1.3.2 Construction of Expansion Premises. Tenant shall accept the
                   ----------------------------------
Expansion Premises on the Expansion Premises Commencement Date in its then
existing, "as is" condition; provided, however, that Landlord shall deliver the
Expansion Premises to Tenant (i) in a broom clean condition, (ii) with all "Base
Building Systems," as that term is defined below, in good working order, and
(iii) with all of the Existing Tenant's furniture, fixtures and equipment
removed (unless Tenant delivers notice to Landlord not less than thirty (30)
days prior to the Expansion Premises Commencement Date indicating Tenant's
election to have all or a portion of the equipment which the Existing Tenant may
not remove from the Expansion Premises remain in the Expansion Premises as of
the Expansion Premises Commencement Date), provided that Landlord shall not be
obligated to repair any damage to the Expansion Premises caused by Landlord's
removal of any of the Existing Tenant's furniture, fixtures and equipment,
provided further that Landlord shall cap all applicable utility lines. Landlord
shall endeavor to provide Tenant with not less than thirty (30) days prior
written notice of the date of Landlord's intended delivery of the Expansion
Premises to Tenant. The terms of the Tenant Work Letter shall be inapplicable
with respect to the Expansion Premises, and the construction of the improvements
in the Expansion Premises shall comply with the terms of Article 8 of this
Lease. Tenant shall be entitled to a one-time allowance (the "EXPANSION PREMISES
ALLOWANCE") for the design and installation of improvements which are
permanently affixed to the Expansion Premises and for telephone and data cabling
(collectively, the "EXPANSION IMPROVEMENTS") in an amount up to but not
exceeding the product of (i) $25.00 and (ii) the usable square footage of the
Expansion Premises. The Expansion Premises Allowance shall be disbursed by
Landlord upon receipt by Landlord of invoices, mechanics lien releases and such
other documentation as may reasonably be required by Landlord, and otherwise in
accordance with Landlord's reasonable disbursement procedure. In the event that
Tenant shall fail to utilize all or a portion of the Expansion Premises
Allowance for Expansion Improvements on or before the date which is six (6)
months following the Expansion Premises Commencement Date, such unused amounts
shall revert to Landlord and Tenant shall have no further rights with respect
thereto. For purposes of this Lease, the "BASE BUILDING SYSTEMS" shall mean (a)
the structural portions of the Building and Building Parking Facility, (b) the
base building plumbing, heating, ventilating, air-conditioning, fire/life
safety, elevator and electrical systems installed or furnished by Landlord and
located within the core of the Building, and (c) the telecommunications
equipment located on and servicing the Real Property (up to the point of entry
into the Building).
<PAGE>
 
             1.3.3 Parking. Commencing upon the Expansion Premises Commencement
                   -------
Date and continuing throughout the Lease Term, notwithstanding anything in
Section 11 of the Summary to the contrary, Tenant shall be entitled to use all
of the parking spaces servicing the Building upon the terms and conditions set
forth in Article 23 of this Lease.

             1.3.4 Amendment to Lease. Within thirty (30) days following the
                   ------------------
Expansion Premises Commencement Date, Landlord and Tenant shall execute an
amendment to this Lease setting forth Tenant's lease of the Expansion Premises
upon the terms and conditions set forth in this Section 1.3.

                                   ARTICLE 2
                                   ---------
    INITIAL LEASE TERM; GOVERNMENTAL APPROVALS; TENANT TERMINATION RIGHT; 
    ---------------------------------------------------------------------
                                 OPTION TERMS
                                 ------------

         2.1 Initial Lease Term. The terms and provisions of this Lease shall be
             ------------------
effective as of the date of this Lease except for the provisions of this Lease
relating to the payment of Rent. The term of this Lease (the "LEASE TERM") shall
be as set forth in Section 7.1 of the Summary and shall commence on the date
(the "LEASE COMMENCEMENT DATE") set forth in Section 7.2 of the Summary
(subject, however, to the terms of the Tenant Work Letter), and shall terminate
on the date (the "LEASE EXPIRATION DATE") set forth in Section 7.3 of the
Summary, unless this Lease is sooner terminated as hereinafter provided. For
purposes of this Lease, the term "LEASE YEAR" shall mean each consecutive twelve
(12) month period during the Lease Term, provided that the last Lease Year shall
end on the Lease Expiration Date. At any time during the Lease Term, Landlord or
Tenant may deliver to the other party an amendment in the form as set forth in
Exhibit C, attached hereto, which amendment Tenant or Landlord, as the case may
---------
be, shall execute and return to the other party within five (5) business days
after receipt thereof.

         2.2 Governmental Approvals; Tenant Termination Right.
             ------------------------------------------------

             2.2.1 Governmental Approvals. Landlord and Tenant hereby
                   ----------------------
acknowledge and agree that Tenant shall be required to obtain certain approvals,
variances and/or permits from applicable governmental authorities in order to
utilize the Premises as an education institution (the "GOVERNMENTAL APPROVALS").
Immediately following the full execution and delivery of this Lease, Tenant
shall, at Tenant's sole cost and expense, in good faith, use commercially
reasonable efforts and diligently seek to obtain the Governmental Approvals.
Landlord shall reasonably cooperate with Tenant in order to assist Tenant in
obtaining the Governmental Approvals. Upon request from Landlord from time to
time, Tenant shall deliver to Landlord reasonable information and documentation
relating to Tenant's efforts to obtain the Governmental Approvals. In addition,
immediately upon receipt or rejection of the Governmental Approvals, Tenant
shall deliver notice of such approval or notice of such rejection, as the case
may be, to Landlord.

             2.2.2 Tenant Termination Right.
                   ------------------------

                   2.2.2.1  Deadline  Date.  In consideration for, and as a
                            --------------
condition precedent to, the rights granted to Tenant pursuant to the terms of
this Section 2.2.2, concurrently with the execution of this Lease by Tenant,
Tenant shall deliver to Landlord an amount equal to $100,000.00 (the
"TERMINATION FEE"). In the event that (i) Tenant is not in default under this
Lease as of the date of Tenant's delivery of the "Election Notice," as that term
is defined below, and (ii) Tenant has not obtained, but has employed
commercially reasonable efforts and diligently sought to obtain, final,
nonappealable Governmental Approvals on or before July 15, 1998 (the "DEADLINE
DATE"), then the "Original Tenant," as that term is defined in Section 2.3.1 of
this Lease, shall have the right, at its option, to deliver notice (the
"ELECTION NOTICE") to Landlord following the Deadline Date but before 5:00 p.m.
Los Angeles time on July 16, 1998, which Election Notice shall indicate Tenant's
election to terminate this Lease, effective upon Landlord's receipt of such
notice

                   2.2.2.2  Personal  Nature of Rights.  The rights contained in
                            --------------------------
this Section 2.2.2 shall be personal to the Original Tenant and may only be
exercised by the Original Tenant (and not any assignee, sublessee or other
transferee of the Original Tenant's interest in this Lease).

                   2.2.2.3  Termination  of Rights.  Notwithstanding anything in
                            ----------------------
this Section 2.2.2 to the contrary, Tenant's right to terminate this Lease
pursuant to the terms of this Section 2.2.2 shall terminate immediately upon
Tenant's receipt of final, nonappealable Governmental Approvals.

            2.2.3  Termination/Continuation of this Lease.
                   --------------------------------------

                   2.2.3.1 In the event that Tenant timely and properly
terminates this Lease pursuant to the terms of this Section 2.2, then (i) the
Termination Fee shall be the sole property of Landlord and Tenant shall have no
rights with respect thereto, and (ii) this Lease shall automatically terminate
and be of no further force or effect and Landlord and Tenant shall be relieved
of their respective obligations under the Lease as of the termination date,
except those obligations set forth in the Lease, which specifically survive the
expiration or earlier termination of the Lease.

                   2.2.3.2 In the event that Tenant fails to timely and properly
terminate this Lease pursuant to the terms of this Section 2.2, then (i) the
Termination Fee shall be held by Landlord and applied to the first Rent due
under this Lease, and (ii) this Lease shall continue in full force and effect
and Tenant shall have no further right to terminate this Lease pursuant to the
terms of this Section 2.2.

             2.2.4 Tenant Improvement Allowance. Notwithstanding anything in
                   ----------------------------
this Lease or the Tenant Work Letter to the contrary, in no event shall Landlord
be obligated to disburse all or any portion of the "Tenant Improvement
Allowance," as that term is defined in Section 2.1 of the Tenant Work Letter,
unless and until Tenant's right to terminate this Lease pursuant to the terms
and conditions set forth in this Section 2.2 has been waived or has expired or
otherwise has no further applicability.

         2.3 Option Terms.
             ------------

             2.3.1 Option Right. Landlord hereby grants the Tenant named in
                   ------------
this Lease (the "ORIGINAL TENANT") or a "Permitted Assignee," as that term is
defined, below, two (2) options to extend the Lease Term for a period of five
(5) years each (each, an "OPTION TERM"), which options shall be exercisable only
by Tenant's delivery of the "Exercise Notice," as that term is defined in
Section 2.3.3, below, delivered by Tenant to Landlord as provided below,
provided that, as of the date of delivery of each applicable Exercise Notice,
Tenant is not in monetary default or material non-monetary default under the
Lease after the expiration of the applicable cure period. Upon the proper
exercise of such option to extend, and, at Landlord's option, provided that, as
of the end of the initial Lease Term or the first Option Term, as applicable,
Tenant is not in monetary default or material non-monetary default under this
Lease after the expiration of the applicable cure period, the Lease Term shall
be extended for the Option Term. The rights contained in this Section 2.3 shall
be personal to the Original Tenant or a Permitted Assignee and may only be
exercised by the Original Tenant or a Permitted Assignee (and not any other
assignee, sublessee or other transferee of the Original Tenant's interest in
<PAGE>
 
this Lease) if the Original Tenant, a Permitted Assignee or any sublessee under
a "Permitted Assignment," as that term is defined in Section 14.7 of this Lease,
collectively occupies seventy-five percent (75%) or more of the rentable area of
the Premises as of the date of the Exercise Notice. In addition, Tenant's right
to lease the Premises during the second Option Term shall be of no force or
effect in the event that Tenant fails to lease the Premises during the first
Option Term. For purposes of this Lease, a "PERMITTED ASSIGNEE" shall mean
either (i) an assignee of Tenant's entire interest in this Lease approved by
Landlord or otherwise permitted pursuant to the terms of Article 14 of this
Lease, or (ii) an assignee of Tenant's entire interest in this Lease as a result
of a "Permitted Assignment," as that term is defined in Section 14.7 of this
Lease.

                  2.3.2 Option Rent. The Annual Base Rent payable by Tenant
                        -----------
during the applicable Option Term (the "OPTION RENT") shall be equal to the then
prevailing fair market rental rate (projected to the commencement date of the
applicable Option Term) that would be agreed to by a comparable landlord and a
comparable tenant (including comparable size and creditworthiness) each of whom
is willing, but neither of whom is compelled, to enter into a lease transaction
(for other than an equity, sublease or expansion lease transaction), for space
comparable in size, location and quality to the Premises for a comparable term,
which comparable space is located in the "Comparable Buildings," as that term is
defined, below, taking into account all relevant factors, including, without
limitation, (i) the modified gross nature of this Lease (i.e., the fact that
Tenant is responsible for paying for the cost of all utilities utilized at the
Real Property), (ii) rental abatement concessions being granted such tenants, if
any, in connection with such comparable space, (iii) tenant improvements or
allowances being granted in connection with such comparable space (giving due
consideration to the value of the existing improvements in the Premises as of
the first day of the applicable Option Term, with such value to be based on the
age, quality and layout of such improvements and the extent to which they can be
utilized by a general office user), and (iii) other monetary concessions being
granted such tenants in connection with such comparable space; provided,
however, that in calculating the Option Rent, no consideration shall be given to
any period of rental abatement, if any, granted to tenants in comparable
transactions in connection with the design, permitting and construction of
tenant improvements in such comparable spaces. All other terms and conditions of
the Lease shall apply throughout each applicable Option Term, except that the
Base Year shall be the calendar year in which the applicable Option Term
commences; provided, however, that any obligation of Landlord to construct
tenant improvements or provide an allowance shall not apply during either Option
Term and Tenant shall in no event have the option to extend the Lease Term
beyond the second Option Term described in Section 2.3.1, above. For purposes of
this Lease, the term "COMPARABLE BUILDINGS" shall mean comparable first class,
high-rise office buildings in Marina del Rey and Playa del Rey, California.

                  2.3.3 Exercise of Option. Each of the options contained in
                        ------------------
this Section 2.3 shall be exercised by Tenant, if at all, only in the following
manner: (i) Tenant shall deliver written notice to Landlord not more than
twenty-four (24) months nor less than twelve (12) months prior to the expiration
of the initial Lease Term or the first Option Term, as the case may be, stating
that Tenant may be interested in exercising its option; (ii) Landlord, after
receipt of Tenant's notice, shall deliver notice (the "OPTION RENT NOTICE") to
Tenant not less than ten (10) months prior to the expiration of the initial
Lease Term or the first Option Term, as the case may be, setting forth the
Option Rent; and (iii) if Tenant wishes to exercise such option, Tenant shall,
on or before the date (the "EXERCISE DATE") which is the earlier of (A) the date
occurring nine (9) months prior to the expiration of the initial Lease Term or
the first Option Term, as the case may be, and (B) the date occurring thirty
(30) days after Tenant's receipt of the applicable Option Rent Notice, exercise
the option by delivering written notice ("EXERCISE NOTICE") thereof to Landlord,
and upon, and concurrent with, such exercise, Tenant may, at its option, object
to Landlord's determination of the Option Rent contained in the Option Rent
Notice, in which case the parties shall follow the procedure, and the Option
Rent shall be determined, as set forth in Section 2.3.4, below. Tenant's failure
to timely deliver the Exercise Notice shall be deemed to constitute Tenant's
waiver of its extension right hereunder.

                  2.3.4 Determination of Option Rent. In the event Tenant timely
                        ----------------------------   
objects in writing to the Option Rent initially determined by Landlord in the
Option Rent Notice, Landlord and Tenant shall attempt to agree upon the Option
Rent, using their best good-faith efforts. If Landlord and Tenant fail to reach
agreement within twenty (20) days following Tenant's objection to the Option
Rent submitted by Landlord in the Option Rent Notice (the "OUTSIDE AGREEMENT
DATE"), then each party shall make a separate determination of the Option Rent,
as the case may be, within fifteen (15) business days, and such determinations
shall be submitted to arbitration in accordance with Sections 2.3.4.1 through
2.3.4.7 below.

                        2.3.4.1  Landlord and Tenant shall each appoint one
arbitrator who shall by profession be a real estate broker or appraiser who
shall have been active over the five (5) year period ending on the date of such
appointment in the leasing (or appraisal, as the case may be) of commercial 
high-rise properties in the West Los Angeles, California area. The 
determination of the arbitrators shall be limited solely to the issue area of
whether Landlord's or Tenant's submitted Option Rent is the closest to the
actual Option Rent, as determined by the arbitrators, taking into account the
requirements of Section 2.3.2 of this Lease. Each such arbitrator shall be
appointed within fifteen (15) business days after the Outside Agreement Date.

                        2.3.4.2  The two arbitrators so appointed shall within
ten (10) days of the date of the appointment of the last appointed arbitrator
agree upon and appoint a third arbitrator who shall be qualified under the same
criteria set forth hereinabove for qualification of the initial two arbitrators.

                        2.3.4.3  The three arbitrators shall within thirty (30)
days of the appointment of the third arbitrator reach a decision as to whether
the parties shall use Landlord's or Tenant's submitted Option Rent and shall
notify Landlord and Tenant thereof.

                        2.3.4.4  The decision of the majority of the three
arbitrators shall be binding upon Landlord and Tenant.

                        2.3.4.5  If either Landlord or Tenant fails to appoint
an arbitrator within fifteen (15) business days after the Outside Agreement
Date, the arbitrator appointed by one of them shall reach a decision, notify
Landlord and Tenant thereof, and such arbitrator's decision shall be binding
upon Landlord and Tenant.

                        2.3.4.6  If the two arbitrators fail to agree upon and
appoint a third arbitrator, or both parties fail to appoint an arbitrator, then
the appointment of the third arbitrator or any arbitrator shall be dismissed and
the matter to be decided shall be forthwith submitted to arbitration under the
provisions of the American Arbitration Association, but subject to the
instruction set forth in this Section 2.3.4.

                        2.3.4.7  The cost of arbitration shall be paid by
Landlord and Tenant equally.
<PAGE>
 
                                   ARTICLE 3
                                   ---------
                                   BASE RENT
                                   ---------

         Tenant shall pay, without notice or demand, to Landlord or Landlord's
agent at the management office of the Building, or at such other place as
Landlord may from time to time designate in writing, in currency or a check for
currency which, at the time of payment, is legal tender for private or public
debts in the United States of America, base rent ("BASE RENT") as set forth in
Section 8 of the Summary, payable in equal monthly installments as set forth in
Section 8 of the Summary in advance on or before the first day of each and every
month during the Lease Term, without any setoff or deduction whatsoever, except
as specifically set forth in this Lease. Within five (5) days following the date
the termination right set forth in Section 2.2.2 of this Lease expires, is
waived, or otherwise has no further applicability, Tenant shall deliver a check
payable to Landlord in the amount of Forty-Four Thousand One Hundred and 21/100
Dollars ($44,100.21), which amount shall be applied to the Base Rent due for the
first month of the Lease Term. If any rental payment date (including the Lease
Commencement Date) falls on a day of the month other than the first day of such
month or if any rental payment is for a period which is shorter than one month,
then the rental for any such fractional month shall be a proportionate amount of
a full calendar month's rental based on the proportion that the number of days
in such fractional month bears to the number of days in the calendar month
during which such fractional month occurs. All other payments or adjustments
required to be made under the terms of this Lease that require proration on a
time basis shall be prorated on the same basis.

                                   ARTICLE 4
                                   ---------
                                ADDITIONAL RENT
                                ---------------

         4.1  Additional Rent. In addition to paying the Base Rent specified in
              ---------------
Article 3 of this Lease, Tenant shall pay as additional rent "Tenant's Share" of
the annual "Direct Expenses," as those terms are defined in Sections 4.2.8 and
4.2.3 of this Lease, respectively, which are in excess of the amount of Direct
Expenses applicable to the "Base Year," as that term is defined in Section 4.2.1
of this Lease. Such additional rent, together with any and all other amounts
payable by Tenant to Landlord pursuant to the terms of this Lease (including,
without limitation, pursuant to Article 6), shall be hereinafter collectively
referred to as the "ADDITIONAL RENT." The Base Rent and Additional Rent are
herein collectively referred to as the "RENT." All amounts due under this
Article 4 as Additional Rent shall be payable for the same periods and in the
same manner, time and place as the Base Rent. Without limitation on other
obligations of Tenant which shall survive the expiration of the Lease Term, the
obligations of Tenant to pay the Additional Rent provided for in this Article 4
shall survive the expiration of the Lease Term.

         4.2  Definitions.  As used in this Article 4, the following terms 
              -----------
shall have the meanings hereinafter set forth:

              4.2.1 "BASE YEAR" shall mean the year set forth in Section 9.1
of the Summary.

              4.2.2 "CALENDAR YEAR" shall mean each calendar year in which
any portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires.

              4.2.3 "DIRECT EXPENSES" shall mean "Operating Expenses" and "Tax
Expenses."

              4.2.4 "EXPENSE YEAR" shall mean each Calendar Year, provided that
Landlord, upon notice to Tenant, may change the Expense Year from time to time
to any other twelve (12) consecutive-month period, and, in the event of any such
change, Tenant's Share of Direct Expenses shall be equitably adjusted for any
Expense Year involved in any such change.

              4.2.5 "OPERATING EXPENSES" shall mean all expenses, costs and
amounts of every kind and nature which Landlord shall pay during any Expense
Year because of or in connection with the ownership, management, maintenance,
repair, replacement, restoration or operation of the Building and Real Property,
including, without limitation, any amounts paid for: (i) the cost of operating,
maintaining, repairing, renovating and managing the utility systems, mechanical
systems, sanitary and storm drainage systems, any elevator systems and all other
"Systems and Equipment" (as defined in Section 4.2.6 of this Lease), and the
cost of supplies and equipment and maintenance and service contracts in
connection therewith; (ii) the cost of licenses, certificates, permits and
inspections, and the cost of contesting the validity or applicability of any
governmental enactments which may affect Operating Expenses, and the costs
incurred in connection with implementation and operation of a governmentally
mandated transportation system management program or similar program (unless
Tenant elects, and is permitted pursuant to applicable law, to implement and
operate such program or programs in lieu of Landlord, in which event Landlord
shall refrain from incurring such costs and the same will be excluded from
Operating Expenses); (iii) the cost of insurance carried by Landlord, in such
amounts as Landlord may reasonably determine or as may be required by any
mortgagees or the lessor of any underlying or ground lease affecting the Real
Property and/or the Building; (iv) the cost of landscaping, relamping, supplies,
tools, equipment and materials, and all fees, charges and other costs (including
consulting fees, legal fees and accounting fees) incurred in connection with the
management, operation, repair and maintenance of the Building and Real Property;
(v) the cost of parking area repair, restoration, and maintenance; (vi) any
equipment rental agreements or management agreements (including the cost of any
management fee and the fair rental value of any office space provided
thereunder); (vii) wages, salaries and other compensation and benefits of all
persons engaged in the operation, management, maintenance or security of the
Building and Real Property, and employer's Social Security taxes, unemployment
taxes or insurance, and any other taxes which may be levied on such wages,
salaries, compensation and benefits; (viii) payments under any easement,
license, operating agreement, declaration, restrictive covenant, underlying or
ground lease (excluding rent), or instrument pertaining to the sharing of costs
by the Building or Real Property; (ix) the cost of janitorial service, alarm and
security service, window cleaning, trash removal, replacement of wall and floor
coverings, ceiling tiles and fixtures in lobbies, corridors, restrooms and other
common or public areas or facilities, maintenance and replacement of curbs and
walkways, repair to roofs and re-roofing; (x) amortization (including interest
on the unamortized cost) of the cost of acquiring or the rental expense of
personal property used in the maintenance, operation and repair of the Building
and Real Property; (xi) the cost of any capital improvements or other costs (I)
which are intended as a labor-saving device or to effect other economies in the
operation or maintenance of the Building and Real Property, or (II) made to the
Building or Real Property after the Lease Commencement Date that are required
under any governmental law or regulation enacted after the Lease Commencement
Date; provided, however, that if any such cost described in (I) or (II) above,
is a capital expenditure, such cost shall be amortized (including interest on
the unamortized cost) over its useful life as Landlord shall reasonably
determine; and further provided that in the case of any expenditure described in
(I), the amount included in Operating Expenses shall in no event exceed the
Operating Expense savings achieved, for the period in question, as a consequence
of such expenditure; and
<PAGE>
 
(xii) the cost of utilities (other than electricity) supplied to the Building
and Real Property. If the Building is not fully occupied during all or a portion
of any Expense Year (including the Base Year), Landlord shall make an
appropriate adjustment to the variable components of Direct Expenses for such
year or applicable portion thereof, employing sound accounting and management
principles, to determine the amount of Direct Expenses that would have been paid
had the Building been fully occupied; and the amount so determined shall be
deemed to have been the amount of Direct Expenses for such year, or applicable
portion thereof. Notwithstanding anything to the contrary set forth in this
Article 4, when calculating Direct Expenses for the Base Year, Operating
Expenses shall exclude temporary market-wide labor-rate increases due to
extraordinary circumstances, including, but not limited to, boycotts and
strikes, provided that such temporary increases are of short duration and are
not likely to be repeated on a routine basis.

                  Notwithstanding the foregoing, Operating Expenses shall not,
however, include: (A) all marketing or advertising expenses, costs of leasing
commissions, attorneys' fees and other costs and expenses incurred in connection
with negotiations or disputes with present or prospective tenants or other
occupants of the Building; (B) costs (including permit, license, design and
inspection costs) incurred in renovating or otherwise improving, decorating or
redecorating rentable space for other tenants or vacant rentable space,
including the Premises; (C) costs incurred due to the violation by Landlord of
the terms and conditions of this Lease or any other lease of space in the
Building; (D) costs of overhead or profit increment paid to Landlord or to
subsidiaries or affiliates of Landlord for services in or in connection with the
Building to the extent the same exceeds the costs of overhead and profit
increment included in the costs of such services which could be obtained from
third parties on a competitive basis; (E) except as otherwise specifically
provided in this Section 4.2.5, costs of interest on debt or amortization on any
mortgages, and rent payable under any ground lease of the Real Property; (F) the
cost of utilities consumed at the Real Property, (G) expenses incurred by
Landlord for repairs or other work occasioned by fire, windstorm, or other
insurable casualty to the extent of the insurance proceeds received by Landlord
(or the insurance proceeds Landlord would have received had Landlord, using its
good faith, commercially reasonable judgment, elected to file a claim against
its insurance company with respect to such casualty); (H) expenses for the
replacement of any item covered under warranty; (I) except as specifically
permitted in this Section 4.2.5, any interest or penalties due for late payment
by Landlord of any of the building operating expenses; (J) cost of repairs
necessitated by Landlord's gross negligence, or of correcting any latent defects
or original design defects in the base, shell and core of the Building; (K)
expenses for any item or service which Tenant pays directly to a third party or
separately reimburses Landlord and expenses incurred by Landlord to the extent
the same are reimbursed from any other tenants, occupants of the property, or
third parties; (L) expenses for any item or service not provided to Tenant but
exclusively to certain other tenants in the Building; (M) a property management
fee for the Building in excess the lesser of (i) five percent (5%) of the gross
revenues of the Building (exclusive of security deposits and interest thereon)
for the relevant Expense Year, and (ii) $1.50 per rentable square foot of the
Building; (N) salaries of (i) employees above the grade of Building
superintendent or Building manager, and (ii) employees whose time is not spent
exclusively in the operation of the Real Property, unless such salaries are
prorated to reflect time spent on operating and managing the Real Property
vis-a-vis time spent on matters unrelated to operating and managing the Real
Property; (O) Landlord's general corporate overhead and administrative expenses
except if it is solely for the Building; (P) business interruption insurance;
(Q) reserves; (R) Tax Expenses; (S) operating costs incurred by Landlord in
connection with retail stores and any specialty service in the Building; (T)
operating expenses which are the responsibility of any other tenant; (U) the
cost of any service that Landlord sells to tenants and for which Landlord is
entitled to be reimbursed by such tenants; (V) any costs or expenses for which
Landlord is separately reimbursed or for which Landlord receives a credit from
any other party; (W) costs for the acquisition of sculptures, paintings or other
objects of art; (X) the cost of installing, operating or maintaining any
specialty services such as observatory, broadcasting facility or special
facility for any building dining facility or club; (Y) charitable or political
contributions; (Z) the cost of any capital improvements that are not
specifically identified as being allowed pursuant to clause (x) and (xi) of the
preceding paragraph and then only to the extent provided for in such clauses;
(AA) costs incurred to comply with laws relating to the removal of "Hazardous
Material," as that term is defined in Article 5 of this Lease, which was in
existence in the Building or on the Real Property prior to the Lease
Commencement Date, and was of such a nature that a federal, state or municipal
governmental authority, if it had then had knowledge of the presence of such
Hazardous Material, in the state, and under the conditions that it then existed
in the Building or on the Real Property, would have then required the removal of
such Hazardous Material or other remedial or containment action with respect
thereto; (BB) costs incurred to remove, remedy, contain, or treat Hazardous
Material, which Hazardous Material is brought into the Building or onto the Real
Property after the date hereof by Landlord or any other tenant of the Real
Property and is of such a nature, at that time, that a federal, state or
municipal governmental authority, if it had then had knowledge of the presence
of such Hazardous Material, in the state, and under the conditions, that it then
exists in the Building or on the Real Property, would have then required the
removal of such Hazardous Material or other remedial or containment action with
respect thereto; (CC) other items not customarily included as operating expenses
for Comparable Buildings; and (DD) costs of structural alterations to the
columns located in the Building Parking Facility to the extent required by
governmental authorities as a result of the 1994 Northridge earthquake.

                  4.2.6  "SYSTEMS AND EQUIPMENT" shall mean any plant,
machinery, transformers, duct work, cable, wires, and other equipment,
facilities, and systems designed to supply heat, ventilation, air conditioning
and humidity or any other services or utilities, or comprising or serving as any
component or portion of the electrical, gas, steam, plumbing, sprinkler,
communications, alarm, security, or fire/life safety systems or equipment, or
any other mechanical, electrical, electronic, computer or other systems or
equipment which serve the Building in whole or in part.

                  4.2.7  "TAX EXPENSES" shall mean all federal, state, county,
or local governmental or municipal taxes, fees, assessments, charges or other
impositions of every kind and nature, whether general, special, ordinary or
extraordinary, (including, without limitation, real estate taxes, general and
special assessments, transit assessments, fees and taxes, child care subsidies,
fees and/or assessments, job training subsidies, fees and/or assessments, open
space fees and/or assessments, housing subsidies and/or housing fund fees or
assessments, public art fees and/or assessments, leasehold taxes or taxes based
upon the receipt of rent, including gross receipts or sales taxes applicable to
the receipt of rent, personal property taxes imposed upon the fixtures,
machinery, equipment, apparatus, systems and equipment, appurtenances, furniture
and other personal property used in connection with the Real Property), which
Landlord shall pay during any Expense Year because of or in connection with the
ownership, leasing and operation of the Real Property or Landlord's interest
therein. For purposes of this Lease, Tax Expenses shall be calculated as if the
tenant improvements in the Building were fully constructed and the Real
Property, the Building, and all tenant improvements in the Building were fully
assessed for real estate tax purposes.

                         4.2.7.1  Tax Expenses shall include, without
limitation:
<PAGE>
 
                    (i)    Any tax on Landlord's rent, right to rent or other
income from the Real Property or as against Landlord's business of leasing any
of the Real Property;

                    (ii)   Any assessment, tax, fee, levy or charge in addition
to, or in substitution, partially or totally, of any assessment, tax, fee, levy
or charge previously included within the definition of real property tax, it
being acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election ("PROPOSITION 13")
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants. It is the intention of
Tenant and Landlord that all such new and increased assessments, taxes, fees,
levies, and charges and all similar assessments, taxes, fees, levies and charges
be included within the definition of Tax Expenses for purposes of this Lease;

                    (iii)  Any assessment, tax, fee, levy, or charge allocable
to or measured by the area of the Premises or the rent payable hereunder,
including, without limitation, any gross income tax upon or with respect to the
possession, leasing, operating, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises, or any portion thereof;

                    (iv)   Any assessment, tax, fee, levy or charge, upon this
transaction or any document to which Tenant is a party, creating or transferring
an interest or an estate in the Premises; and

                    (v)    Any reasonable expenses incurred by Landlord in
attempting to protest, reduce or minimize Tax Expenses.

                 4.2.7.2  In no event shall Tax Expenses for any Expense Year be
less than the component of Tax Expenses comprising a portion of the Base Year.

                 4.2.7.3  Notwithstanding anything to the contrary contained in
this Section 4.2.7, there shall be excluded from Tax Expenses (i) all excess
profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and
succession taxes, estate taxes, federal and state net income taxes, and other
taxes to the extent applicable to Landlord's net income (as opposed to rents,
receipts or income attributable to operations at the Building or Real Property),
(ii) any items included as Operating Expenses, and (iii) any items paid by
Tenant under Section 4.4 of this Lease.

           4.2.8 "TENANT'S SHARE" shall mean the percentage set forth in
Section 9.2 of the Summary. Tenant's Share was calculated by multiplying the
number of rentable square feet of the Premises by 100 and dividing the product
by the total rentable square feet in the Building (i.e., 88,215 rentable square
feet).

     4.3   Calculation and Payment of Additional Rent.
           ------------------------------------------

           4.3.1 Calculation of Excess. If for any Expense Year ending or
                 ---------------------
commencing within the Lease Term, Tenant's Share of Direct Expenses for such
Expense Year exceeds Tenant's Share of Direct Expenses for the Base Year, then
Tenant shall pay to Landlord, in the manner set forth in Section 4.3.2, below,
and as Additional Rent, an amount equal to the excess (the "EXCESS"). For any
Expense Year comprised of less than twelve full calendar months occurring during
the Lease Term, the amount of any Excess payable by Tenant applicable to such
year shall be prorated on the ratio that the number of days of such Expense Year
that occur during the Lease Term bears to 365.

           4.3.2 Statement of Actual Direct Expenses and Payment by Tenant.
                 ---------------------------------------------------------
Landlord shall give to Tenant on or before the first day of July following the
end of each Expense Year, a statement (the "STATEMENT") which shall state the
Direct Expenses incurred or accrued for such preceding Expense Year, and which
shall indicate the amount, if any, of any Excess. Upon receipt of the Statement
for each Expense Year ending during the Lease Term, if an Excess is present,
Tenant shall pay, with its next installment of Base Rent due, the full amount of
the Excess for such Expense Year, less the amounts, if any, paid during such
Expense Year as "Estimated Excess," as that term is defined in Section 4.3.3 of
this Lease. The failure of Landlord to timely furnish the Statement for any
Expense Year shall not prejudice Landlord from enforcing its rights under this
Article 4. Even though the Lease Term has expired and Tenant has vacated the
Premises, when the final determination is made of Tenant's Share of the Direct
Expenses for the Expense Year in which this Lease terminates, if an Excess is
present, Tenant shall, within thirty (30) days following receipt of the
Statement, pay to Landlord an amount as calculated pursuant to the provisions of
Section 4.3.1 of this Lease. In the event that a Statement shall indicate that
Tenant has overpaid for Tenant's Share of Direct Expenses for a particular
Expense Year, then Landlord shall, at Tenant's option, either provide Tenant
with a Rent credit or refund such overpayment to Tenant. In the absence of
Tenant notifying Landlord otherwise, Tenant shall be deemed to have elected to
receive a Rent credit for any such overcharge, except in the event this Lease
has expired or been terminated, in which event Tenant shall be deemed to have
elected to receive a refund for such overcharge. Any Rent credit owing pursuant
to the preceding sentence shall be applied by Landlord without notice or demand
against the next Rent next due under this Lease and any refund due Tenant
pursuant to the preceding sentence shall be paid to Tenant within thirty (30)
days following the final determination that Tenant has made an overpayment with
respect to the Direct Expenses. The provisions of this Section 4.3.2 shall
survive the expiration or earlier termination of the Lease Term.

           4.3.3 Statement of Estimated Direct Expenses. In addition, Landlord
                 --------------------------------------
shall give Tenant a yearly expense estimate statement (the "ESTIMATE STATEMENT")
which shall set forth Landlord's reasonable estimate (the "ESTIMATE") of what
the total amount of Direct Expenses for the then-current Expense Year shall be
(which shall not exceed by more than 10 percent Landlord's actual Direct
Expenses for the prior Expense Year) and the estimated Excess (the "ESTIMATED
EXCESS") as calculated by comparing Tenant's Share of Direct Expenses, which
shall be based upon the Estimate, to Tenant's Share of Direct Expenses for the
Base Year. The failure of Landlord to timely furnish the Estimate Statement for
any Expense Year shall not preclude Landlord from enforcing its rights to
collect any Estimated Excess under this Article 4. If pursuant to the Estimate
Statement an Estimated Excess is calculated for the then-current Expense Year,
Tenant shall pay, with its next installment of Base Rent due, a fraction of the
Estimated Excess for the then-current Expense Year (reduced by any amounts paid
pursuant to the last sentence of this Section 4.3.3). Such fraction shall have
as its numerator the number of months which have elapsed in such current Expense
Year to the month of such payment, both months inclusive, and shall have twelve
(12) as its denominator. Until a new Estimate Statement is furnished, Tenant
shall pay monthly, with the monthly Base Rent installments, an amount equal to
one-twelfth (1/12) of the total Estimated Excess set forth in the previous
Estimate Statement delivered by Landlord to Tenant.

     4.4   Taxes and Other Charges for Which Tenant Is Directly Responsible.
           ----------------------------------------------------------------
Tenant shall reimburse Landlord upon demand for any and all taxes or assessments
required to be paid by Landlord (except to the extent included in Tax Expenses
by Landlord), excluding state, local and federal personal or corporate income
taxes measured by the net income of Landlord from all sources and estate and
inheritance taxes, whether or not now customary or within the contemplation of
the parties hereto, when:
<PAGE>
 
          4.4.1  Said taxes are measured by or reasonably attributable to the
cost or value of Tenant's equipment, furniture, fixtures and other personal
property located in the Premises, or by the cost or value of any leasehold
improvements made in or to the Premises by or for Tenant, to the extent the cost
or value of such leasehold improvements exceeds the greater of (i) $25.00 per
usable square foot, and (ii) cost or value of a building standard build-out as
reasonably determined by Landlord, regardless of whether title to such
improvements shall be vested in Tenant or Landlord;

          4.4.2  Said taxes are assessed upon or with respect to the possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises or any portion of the Real Property
(including the Building Parking Facility); or

          4.4.3  Said taxes are assessed upon this transaction or any document
to which Tenant is a party creating or transferring an interest or an estate in
the Premises.

     4.5  Late Charges. If any installment of Rent or any other sum due from
          ------------
Tenant shall not be received by Landlord or Landlord's designee by the due date
therefor, then upon demand by Landlord, Tenant shall pay to Landlord a late
charge equal to three percent (3%) of the amount due, provided that the
foregoing late charge shall not be due the first time in any Lease Year that
Tenant fails to pay the Rent or other charge prior to the date due so long as
such amount is paid within five (5) days following the date due. The late charge
shall be deemed Additional Rent and the right to require it shall be in addition
to all of Landlord's other rights and remedies hereunder, at law and/or in
equity and shall not be construed as liquidated damages or as limiting
Landlord's remedies in any manner. In addition to the late charge described
above, any Rent or other amounts owing hereunder which are not paid by the date
that they are due shall bear interest from the date due until the date paid at a
rate (the "INTEREST RATE") equal to the lesser of (i) the "Prime Rate" or
"Reference Rate" announced from time to time by the Bank of America (or such
reasonable comparable national banking institution as selected by Landlord in
the event Bank of America ceases to exist or publish a Prime Rate or Reference
Rate), plus two percent (2%), or (ii) the highest rate permitted by applicable
law, provided that the foregoing interest charges shall not be due the first
time in any Lease Year that Tenant fails to pay the Rent or other charge prior
to the date due so long as the amount due is paid within five (5) days following
the date due.

     4.6  Landlord's Books and Records. Landlord shall maintain commercially
          ----------------------------
reasonable records relating to the calculation of Direct Expenses for a period
of not less than two (2) years following the expiration of the Expense Year to
which such records relate. Within two (2) years after receipt of a Statement by
Tenant (the "REVIEW PERIOD"), if Tenant disputes the amount of Additional Rent
set forth in the Statement, an independent certified public accountant (which
accountant is a member of a nationally recognized accounting firm and is working
on a noncontingency fee basis), designated and paid for by Tenant, may, after
reasonable notice to Landlord and at reasonable times, inspect Landlord's
records with respect to the Statement at Landlord's offices, provided that
Tenant is not then in monetary default under this Lease. In connection with such
inspection, Tenant, Tenant's agents, Tenant's employees and such accountant
shall be required to agree in advance to follow Landlord's reasonable rules and
procedures regarding inspections of Landlord's records, and shall execute a
commercially reasonable confidentiality agreement regarding such inspection.
Tenant's failure to dispute the amount of Additional Rent set forth in any
Statement within two (2) years following Tenant's receipt of a Statement shall
be deemed to be Tenant's approval of such Statement and Tenant, thereafter,
waives the right or ability to dispute the amounts set forth in such Statement.
If after such inspection, Tenant still disputes such Additional Rent and
notifies Landlord in writing of such dispute prior to the expiration of the
Review Period, a determination as to the proper amount shall be made, at
Tenant's expense, by a big six accounting firm which has no existing or prior
affiliation with Landlord or its principals or affiliates, and which is working
on a noncontingency fee basis (the "ACCOUNTANT"). The Accountant shall be
selected by Landlord, subject to Tenant's reasonable approval. If the
determination by the Accountant proves that Direct Expenses in such Statement
were overstated by more than five percent (5%), then the cost of the Accountant
shall be paid for by Landlord (provided that in no event shall Landlord be
responsible for paying such Accountant an amount in excess of the overcharge to
Tenant). In addition, any amounts determined by the Accountant to be owing
either party shall (i) in the case of amounts owed by Tenant to Landlord, be
paid within thirty (30) days following Accountant's determination, and (ii) in
the case of amounts owed by Landlord to Tenant, be credited against the next
Rent due under this Lease or, at Tenant's option, refunded to Tenant. Landlord
and Tenant agree that this Section 4.6 shall be the sole method to be used by
Tenant and Landlord to resolve any such dispute concerning the amount of any
Direct Expenses payable or not payable by Tenant pursuant to the terms of this
Lease, and Tenant and Landlord hereby waive any other rights of law or in equity
relating thereto.

                                   ARTICLE 5
                                   ---------
                                USE OF PREMISES
                                ---------------

     Tenant shall use the Premises solely for general office purposes and,
subject to Tenant's receipt of all governmental approvals, including, without
limitation, the Governmental Approvals, as an educational institution consistent
with the character of the Building as a first-class building, except that,
subject to applicable laws, following the Expansion Premises Commencement Date,
Tenant may utilize the Expansion Premises as a cafeteria to service Tenant's
employees and guests (the "CAFETERIA"). Tenant shall not use or permit the
Premises to be used for any other purpose or purposes whatsoever. Tenant hereby
agrees that (i) the Cafeteria shall in no event be open to the public, and (ii)
Tenant shall operate the Cafeteria in a clean and sanitary manner. Tenant
further covenants and agrees that it shall not use, or suffer or permit any
person or persons to use, the Premises or any part thereof for any use or
purpose contrary to the provisions of Exhibit D, attached hereto, or in
violation of the laws of the United States of America, the state in which the
Building is located, or the ordinances, regulations or requirements of the local
municipal or county governing body or other lawful authorities having
jurisdiction over the Building. Tenant shall comply with all recorded covenants,
conditions, and restrictions, and the provisions of all ground or underlying
leases, affecting the Real Property and recorded as of the date of this Lease.
Tenant shall not use or allow another person or entity to use any part of the
Premises for the storage, use, treatment, manufacture or sale of "Hazardous
Material," as that term is defined below. Landlord acknowledges, however, that
Tenant will maintain products in the Premises which are incidental to the
operation of its offices, such as art supplies, photocopy supplies, secretarial
supplies and limited janitorial supplies, which products contain chemicals which
are categorized as Hazardous Materials. Landlord agrees that the use of such
products in the Premises in the manner in which such products are designed to be
used and in compliance with applicable laws shall not be a violation by Tenant
of this Article 5. As used herein, the term "HAZARDOUS MATERIAL" means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the state in which the Building is located or
the United States Government.
<PAGE>
 
                                   ARTICLE 6
                                   ---------
                            SERVICES AND UTILITIES
                            ----------------------

         6.1  Standard Tenant Services. Landlord shall provide the following
              ------------------------
services twenty-four (24) hours a day on all days during the Lease Term, unless
otherwise stated below.

              6.1.1  Landlord shall provide heating and air conditioning so as
to maintain temperatures within the Premises that are consistent with the design
capacity of the heating and air conditioning system serving the Premises.

              6.1.2  Landlord shall provide hot and cold city water from the
regular Building outlets for drinking, lavatory and toilet purposes as well as
for use in the Cafeteria.

              6.1.3  Landlord shall provide janitorial services five (5) days
per week, except the date of observation of New Year's Day, Presidents' Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day,
in and about the Premises and window washing services in a manner consistent
with the Comparable Buildings but in no event to a standard which is less than
that set forth on the specifications set forth on Exhibit F attached to this
Lease. In the event that (i) the Real Property is not owned nor operated by
Landlord or any affiliate of Landlord, and (ii) Landlord shall fail to satisfy
its obligations to provide janitorial services in accordance with the terms of
this Lease following sixty (60) days notice from Tenant, then Tenant shall have
the right, at Tenant's sole cost and expense, to supply its own janitorial
services to the Premises, provided that the provider of such janitorial services
shall be approved by Landlord, in Landlord's reasonable discretion. In the event
that Tenant shall elect to supply its own janitorial services to the Premises
pursuant to the preceding sentence, Landlord shall thereafter exclude from
Operating Expenses for the Base Year the amount initially included therein for
janitorial services to the Premises.

              6.1.4  Landlord shall provide nonexclusive automatic passenger
elevator service at all times.

              6.1.5  The replacement of lamps, starters and ballasts as needed.

              6.1.6  Grounds care, including the sweeping of walks and parking
areas and the maintenance of landscaping in a reasonably attractive manner.

              6.1.7  General management, including supervision, inspections and
management functions at levels similar to Comparable Buildings.

              6.1.8  Landlord shall provide a card key access control system for
the Building. Notwithstanding the foregoing, Landlord shall in no case be liable
for personal injury or property damage for any error with regard to the
admission to or exclusion from the Building or Real Property of any person.
Tenant hereby acknowledges that no guard service shall be provided by Landlord.

              6.1.9  Electricity to operate the Building and Real Property, and
to operate the Premises during all hours by providing electric current in
reasonable amounts necessary for normal office uses, lighting and heating,
ventilating and air conditioning. Landlord agrees that it shall endeavor in good
faith to obtain such electricity (as well as all other utility services charged
to Tenant, either directly or through the Operating Expenses) at a reasonable
cost. Within five (5) business days following receipt of applicable invoices
from Landlord, Tenant shall pay Tenant's Share of the cost of all electricity
consumed on the Real Property.

         6.2  Overstandard Tenant Use. In the event that Tenant shall use, or
              -----------------------
desire to use, electricity, water, heating and air conditioning or any other
utilities supplied to the Real Property (collectively, the "UTILITY SERVICES")
in quantities that exceed the capacity of the equipment supplying the same to
the Real Property, then, subject to applicable law, Landlord shall install such
supplemental equipment as may be reasonably required to provide such excess
capacity, provided that Tenant shall pay to Landlord, not less than ten (10)
days prior to Landlord's installation of such equipment, the cost of such
equipment and the installation thereof. In addition, within ten (10) days after
billing, Tenant shall pay to Landlord the cost of the operation and maintenance
of any such equipment installed by Landlord. Furthermore, in the event that
Tenant shall utilize one or more Utility Services in a quantity or during hours
which exceed that utilized by a typical general office user, then Tenant shall
pay to Landlord, within ten (10) days after billing, the cost of increased wear
and tear on, and/or to the extent required the cost of replacement of, existing
equipment caused by such excess consumption.

         6.3  Interruption of Use. Tenant agrees that Landlord shall not be
              ------------------- 
liable for damages, by abatement of Rent (except as specifically set forth in
Section 6.5, below) or otherwise, for failure to furnish or delay in furnishing
any service (including telephone and telecommunication services), or for any
diminution in the quality or quantity thereof, when such failure or delay or
diminution is occasioned, in whole or in part, by repairs, replacements, or
improvements, by any strike, lockout or other labor trouble, by inability to
secure electricity, gas, water, or other fuel at the Building after reasonable
effort to do so, by any accident or casualty whatsoever, by act or default of
Tenant or other parties, or by any other cause beyond Landlord's reasonable
control; and such failures or delays or diminution shall never be deemed to
constitute an eviction or disturbance of Tenant's use and possession of the
Premises or relieve Tenant from paying Rent (except as specifically set forth in
Section 6.5, below) or performing any of its obligations under this Lease.
Furthermore, Landlord shall not be liable under any circumstances for a loss of,
or injury to, property or for injury to, or interference with, Tenant's
business, including, without limitation, loss of profits, however occurring,
through or in connection with or incidental to a failure to furnish any of the
services or utilities as set forth in this Article 6.

         6.4  Additional Services. With Tenant's approval, which may be granted
              -------------------
or withheld in Tenant's sole discretion, Landlord shall be permitted, but shall
have no obligation, to provide any additional services which may be required by
Tenant, including, without limitation, locksmithing, additional janitorial
service, and additional repairs and maintenance, provided that Tenant shall pay
to Landlord upon billing, the sum of all reasonable costs to Landlord of such
additional services plus a reasonable administration fee. Charges for any
utilities or service for which Tenant is required to pay from time to time
hereunder, shall be deemed Additional Rent hereunder and shall be billed on a
monthly basis.

         6.5  Abatement. Notwithstanding anything in Section 6.3 above to the
              ---------
contrary, in the event that an "Abatement Event," as that term is defined,
below, shall occur for a continuous period in excess of three (3) business days
after Landlord receives written notice from Tenant of such Abatement Event which
is within Landlord's reasonable control, or in excess of ten (10) business days
after Landlord receives written notice from Tenant of an Abatement Event not
arising from matters within Landlord's reasonable control (in either event, the
"ELIGIBILITY PERIOD"), and such Abatement Event materially interferes with
Tenant's use and enjoyment of all or a portion of the Premises such that the
same becomes untenantable and is, in fact, not utilized by the Tenant, then, and
in such event, the Rent payable by Tenant shall be abated or reduced, as the
case may be, after expiration of the Eligibility Period, for such time that
Tenant continues to be so prevented from using, and does not use, the Premises
or a portion thereof, in the proportion that the rentable area of the portion of
the Premises that Tenant is prevented from using, and does not use, bears to the
total rentable area of the
<PAGE>
 
Premises. Notwithstanding anything contained herein to the contrary, no
abatement of Rent shall be allowed (i) if the Abatement Event arises from an act
or omission of Tenant, its assignees or subtenants or any of their respective
contractors, agents, employees or invitees, or (ii) with respect to a deminimus
portion of the Premises (i.e. 100 rentable sq. ft. or less) or with respect to
areas not actively utilized by Tenant in the conduct of its business (i.e.
janitorial closets and similar spaces). For purposes of this Section 6.5, an
"ABATEMENT EVENT" shall mean (i) Landlord's failure to provide services to
Tenant or to make any repair as required by this Lease, or (ii) Landlord's
undertaking of any repair at the Building pursuant to the terms of this Lease.

                                   ARTICLE 7
                                   ---------
                                    REPAIRS
                                    -------

         7.1  Tenant's Repairs. Subject to Landlord's repair obligations in
              ----------------   
Sections 7.2, 11.1 and 12.3 below, Tenant shall, at Tenant's own expense, keep
the Premises, including all improvements, fixtures and furnishings therein, in
good order, repair and condition at all times during the Lease Term, which
repair obligations shall include, without limitation, the obligation to promptly
and adequately repair all damage to the Premises and replace or repair all
damaged or broken fixtures and appurtenances; provided however, that, at
Landlord's option, or if Tenant fails to make such repairs, Landlord may, but
need not, make such repairs and replacements, and Tenant shall pay Landlord the
cost thereof, including a percentage of the cost thereof (to be uniformly
established for the Building but not to exceed ten percent (10%)) sufficient to
reimburse Landlord for all overhead, general conditions, fees and other costs or
expenses arising from Landlord's involvement with such repairs and replacements
within thirty (30) days following being billed for same.

         7.2  Landlord's Repairs. Anything contained in Section 7.1 above to the
              ------------------
contrary notwithstanding, and subject to Articles 11 and 12 of this Lease,
Landlord shall repair and maintain (i) the structural portions of the Building,
including, without limitation, the roof, core restrooms, exterior walls and
exterior glass, (ii) the Base Building Systems, and (iii) the portion of the
Real Property located outside of the Building including, without limitation, the
Building Parking Facility (provided that Tenant shall be responsible, at
Tenant's sole cost and expense, for any attendants required or desired by Tenant
in the Building Parking Facility); provided, however, if such maintenance and
repairs are caused in part or in whole by the act, neglect, fault of or omission
of any duty by Tenant, its agents, servants, employees or invitees, Tenant shall
pay to Landlord as additional rent, the reasonable cost of such maintenance and
repairs. Landlord shall not be liable for any failure to make any such repairs,
or to perform any maintenance unless such failure shall persist for an
unreasonable time after written notice of the need of such repairs or
maintenance is given to Landlord by Tenant. There shall be no abatement of rent
(except as specifically set forth in Section 6.5 of this Lease) and no liability
of Landlord by reason of any injury to or interference with Tenant's business
arising from the making of any repairs, alterations or improvements in or to any
portion of the Building or the Premises or in or to fixtures, appurtenances and
equipment therein. Except as specifically set forth in Section 7.3, below,
Tenant hereby waives and releases its right to make repairs at Landlord's
expense under Sections 1941 and 1942 of the California Civil Code; or under any
similar law, statute, or ordinance now or hereafter in effect.

         7.3  Tenant's Right to Make Repairs. Notwithstanding the provisions of
              ------------------------------
Sections 6.1 and 7.2 of this Lease to the contrary, if Tenant provides notice to
Landlord of an event or circumstance which requires the action of Landlord with
respect to repair and/or maintenance as set forth in Sections 6.1 or 7.2, above,
and Landlord fails to provide such action within a reasonable period of time,
given the circumstances, after the receipt of such notice, but in any event not
later than twenty-one (21) days after receipt of such notice, then Tenant may
proceed to take the required action upon delivery of an additional ten (10)
business days notice to Landlord specifying that Tenant is taking such required
action, and if such action was required under the terms of this Lease to be
taken by Landlord, then Tenant shall be entitled to reimbursement by Landlord of
Tenant's reasonable costs and expenses in taking such action in accordance with
the terms of this Section 7.3. In the event Tenant takes such action, and such
work will affect the Building Systems and Equipment, or the structural integrity
of the Building or the exterior appearance of the Building, Tenant shall use
only those contractors used by Landlord in the Building for work on the
Building's Systems and Equipment, structure or exterior, as the case may be,
unless such contractors are unwilling or unable to perform such work, in which
event Tenant may utilize the services of any other qualified contractor which
normally and regularly performs similar work in the Comparable Buildings.
Further, if Landlord does not deliver a detailed written objection to Tenant,
within thirty (30) days after receipt of an invoice by Tenant of its costs of
taking action which Tenant claims should have been taken by Landlord, and if
such invoice from Tenant sets forth a reasonably particularized breakdown of its
costs and expenses in connection with taking such action on behalf of Landlord,
then Tenant shall be entitled to deduct from Rent payable by Tenant under this
Lease, the amount set forth in such invoice. If, however, Landlord delivers to
Tenant within thirty (30) days after receipt of Tenant's invoice, a written
objection to the payment of such invoice, setting forth with reasonable
particularity Landlord's reasons for its claim that such action did not have to
be taken by Landlord pursuant to the terms of this Lease or that the charges are
excessive (in which case Landlord shall pay the amount it contends would not
have been excessive), then Tenant shall not be entitled to such deduction from
Rent, but Tenant may proceed to claim a default by Landlord under this Lease. In
the event that Tenant shall obtain a final, nonappealable judgment for amounts
expended by Tenant and disputed by Landlord in accordance with the terms of this
Section 7.3, Tenant shall thereafter have the right to offset the amount of such
judgment, plus interest at the Interest Rate, against the Rent next due under
this Lease.

                                   ARTICLE 8
                                   ---------
                           ADDITIONS AND ALTERATIONS
                           ------------------------- 

         8.1  Landlord's Consent to Alterations. Except for cosmetic and
              ---------------------------------  
non-structural alterations which are not visible from the exterior of the
Premises and do not affect the Building's Systems and Equipment, such as
recarpeting, repainting, construction and relocation of interior non-loadbearing
walls and the installation of built-in fixtures and furniture (all of which can
be performed upon notice to Landlord but without the necessity of obtaining
Landlord's consent (individually and collectively a "PREAPPROVED ALTERATION"),
Tenant will not make any improvements, alterations, additions, changes or
improvements to the Premises (collectively, the "ALTERATIONS") without first
procuring the prior written consent of Landlord to such Alterations, which
consent shall not be unreasonably withheld, conditioned or delayed by Landlord
unless the applicable Alteration may adversely affect the structural integrity
of the Building, the Systems and Equipment, or the exterior appearance of the
Building, in which event Landlord's consent may be withheld or conditioned in
Landlord's sole discretion. The construction of the initial improvements to the
Premises shall be
<PAGE>
 
governed by the terms of the Tenant Work Letter and not the terms of this
Article 8.

         8.2  Manner of Construction. Landlord may impose, as a condition of its
              ----------------------
consent to all Alterations (other than Preapproved Alterations), such
requirements as Landlord in its reasonable discretion may deem desirable,
including, but not limited to, the requirement that Tenant utilize for such
purposes only contractors, materials, mechanics and materialmen approved by
Landlord in Landlord's reasonable discretion; provided, however, Landlord may
impose such requirements as Landlord may determine, in its sole and absolute
discretion, with respect to any work affecting the structural components of the
Building or Systems and Equipment (including designating specific contractors to
perform such work, provided that such contractors are reasonably competitively
priced). Tenant shall construct such Alterations and perform such repairs in
conformance with any and all applicable rules and regulations of any federal,
state, county or municipal code or ordinance and pursuant to a valid building
permit, issued by the city in which the Building is located, and in conformance
with Landlord's construction rules and regulations. Landlord's approval of the
plans, specifications and working drawings for Tenant's Alterations shall create
no responsibility or liability on the part of Landlord for their completeness,
design sufficiency, or compliance with all laws, rules and regulations of
governmental agencies or authorities. All work with respect to any Alterations
must be done in a good and workmanlike manner and diligently prosecuted to
completion to the end that the Premises shall at all times be a complete unit
except during the period of work. In performing the work of any such
Alterations, Tenant shall have the work performed in such manner as not to
obstruct access to the Building or the common areas for any other tenant of the
Building, and as not to obstruct the business of Landlord or other tenants in
the Building, or interfere with the labor force working in the Building. If
Tenant makes any Alterations, Tenant agrees to carry "Builder's All Risk"
insurance in an amount reasonably approved by Landlord covering the construction
of such Alteration, and such other insurance as Landlord may require, it being
understood and agreed that all of such Alterations shall be insured by Tenant
pursuant to Article 10 of this Lease immediately upon completion thereof. In
addition, Landlord may, in its discretion, require Tenant to obtain a lien and
completion bond or some alternate form of security satisfactory to Landlord in
an amount sufficient to ensure the lien-free completion of such Alterations and
naming Landlord as a co-obligee. Upon completion of any Alterations, Tenant
shall (i) cause a Notice of Completion to be recorded in the office of the
Recorder of the county in which the Building is located in accordance with
Section 3093 of the Civil Code of the State of California or any successor
statute, (ii) deliver to the Building management office a reproducible copy of
the "as built" drawings of the Alterations, and (iii) deliver to Landlord
evidence of payment, contractors' affidavits and full and final waivers of all
liens for labor, services or materials.

         8.3  Landlord's Property. All Alterations of a permanent nature made or
              -------------------
installed by Tenant in the Premises shall become the property of Landlord at the
expiration or earlier termination of this Lease. With respect to any Alteration
(including any Preapproved Alterations) which is not comparable to a general
office improvement or any Alteration (including any Preapproved Alteration)
which is comparable to a general office improvement but which requires
significant expense to remove (including, without limitation, any stairwell
installed in the Premises), Landlord reserves the right to require Tenant to
remove the same upon the expiration or earlier termination of this Lease and to
repair and restore the Premises to their condition prior to such Alteration,
reasonable wear and tear, unrepaired casualty, and condemnation excepted, but
only if Landlord has stated in writing, at or prior to the time Tenant requests
the right to make such Alteration, that such item must be removed by Tenant at
the expiration or earlier termination of the Lease Term. Except as set forth
above in this Section 8.3, Tenant shall have no obligation to remove any
Alterations at the expiration or earlier termination of this Lease. If Tenant
fails to complete any removal and/or to repair any damage caused by the removal
as required in this Section 8.3, Landlord may do so and may charge the cost
thereof to Tenant.

         8.3  Payment for Improvements. If Tenant orders any work directly from
              ------------------------ 
Landlord, Tenant shall pay to Landlord a percentage of the cost of such work
sufficient to compensate Landlord for all overhead, general conditions, fees and
other costs and expenses arising from Landlord's involvement with such work. If
Tenant does not order any work directly from Landlord, Tenant shall reimburse
Landlord for Landlord's reasonable, actual, out-of-pocket costs and expenses
actually incurred in connection with Landlord's review of such work.

                                   ARTICLE 9
                                   ---------
                            COVENANT AGAINST LIENS
                            ----------------------

         Tenant has no authority or power to cause or permit any lien or
encumbrance of any kind whatsoever, whether created by act of Tenant, operation
of law or otherwise, to attach to or be placed upon the Real Property, Building
or Premises, and any and all liens and encumbrances created by Tenant shall
attach to Tenant's interest only. Landlord shall have the right at all times to
post and keep posted on the Premises any notice which it deems necessary for
protection from such liens. Tenant covenants and agrees not to suffer or permit
any lien of mechanics or materialmen or others to be placed against the Real
Property, the Building or the Premises with respect to work or services claimed
to have been performed for or materials claimed to have been furnished to Tenant
or the Premises during the Lease Term, and any other period Tenant occupies the
Premises, and, in case of any such lien attaching or notice of any lien, Tenant
covenants and agrees to cause it to be immediately released and removed of
record. Notwithstanding anything to the contrary set forth in this Lease, if any
such lien is not released and removed on or before the date which is fifteen
(15) days following the date notice of such lien is delivered by Landlord to
Tenant, Landlord, at its sole option, may immediately take all action necessary
to release and remove such lien, without any duty to investigate the validity
thereof, and all sums, costs and expenses, including reasonable attorneys' fees
and costs, actually incurred by Landlord in connection with such lien shall be
deemed Additional Rent under this Lease and shall immediately be due and payable
by Tenant.

                                  ARTICLE 10
                                  ----------
                         INDEMNIFICATION AND INSURANCE
                         ----------------------------- 

         10.1  Indemnification and Waiver. Tenant hereby assumes all risk of
               --------------------------
damage to property and injury to persons, in, on, or about the Premises from any
cause whatsoever and agrees that Landlord, and its partners and subpartners, and
their respective officers, agents, property managers, servants, employees, and
independent contractors (collectively, "LANDLORD PARTIES") shall not be liable
for, and are hereby released from any responsibility for, any damage to property
or injury to persons or resulting from the loss of use thereof, which damage or
injury is sustained by Tenant or by other persons claiming through Tenant.
Tenant shall indemnify, defend, protect, and hold harmless the Landlord Parties
from any and all loss, cost, damage, expense and liability (including without
limitation court costs and reasonable attorneys' fees) incurred in connection
with or arising from any cause in, on or about the
<PAGE>
 
Premises (including, without limitation, Tenant's installation, placement and
removal of Alterations, improvements, fixtures and/or equipment in, on or about
the Premises), and any acts, omissions or negligence of Tenant or of any person
claiming by, through or under Tenant, or of the contractors, agents, servants,
employees, licensees or invitees of Tenant or any such person, in, on or about
the Premises, Building and Real Property. Notwithstanding anything in this
Section 10.1 to the contrary, the foregoing release and indemnity shall not
apply to claims to the extent (i) resulting from the negligence or willful
misconduct of Landlord or its agents, contractors, employees or representatives,
(ii) not covered by Tenant's insurance (and which would not have been covered by
Tenant's insurance had Tenant carried the insurance required pursuant to the
terms of this Lease), (iii) not self-insured by Tenant pursuant to the terms of
this Lease and (iv) resulting from Landlord's breach of this Lease (the
"EXCLUDED CLAIMS"), and Landlord shall indemnify, protect, defend and hold
harmless Tenant and its affiliates and their respective partners, sub-partners,
officers, agents, employees, contractors and representatives (collectively,
"TENANT PARTIES") from and against any and all loss, cost, damage, expense and
liability (including without limitation court costs and reasonable attorneys'
fees) to the extent incurred in connection with or arising from Excluded Claims
but only to the extent Landlord's liability is not waived pursuant to the terms
of Section 10.4 of this Lease (provided that Landlord's indemnity shall not
extend to loss of profits, loss of business or other similar consequential
damages incurred by Tenant or the Tenant Parties). Notwithstanding anything to
the contrary contained in this Lease, nothing in this Lease shall impose any
obligations on Tenant or Landlord to be responsible or liable for, and each
hereby releases the other from all liability for, consequential damages other
than those consequential damages (i) incurred by Landlord in connection with a
holdover of the Premises by Tenant after the expiration or earlier termination
of this Lease, subject to the terms of Article 16 of this Lease, or (ii) to
which Landlord may be entitled pursuant to the terms of California Civil Code
Section 1951.2 (excluding Section 1951.2(a)(4)). The provisions of this Section
10.1 shall survive the expiration or sooner termination of this Lease.

         10.2  Landlord's Liability and Fire and Casualty Insurance. Landlord
               ----------------------------------------------------
shall carry commercial general liability insurance with respect to the Building
during the Lease Term, and shall further insure the Building (except, at
Landlord's option, with respect to items required to be insured by Tenant
pursuant to Section 10.3.2 of this Lease) during the Lease Term against loss or
damage due to fire and other casualties covered within the classification of
fire and extended coverage, vandalism coverage and malicious mischief, sprinkler
leakage, water damage and special extended coverage. Such coverage shall be in
such amounts, from such companies, and on such other terms and conditions, as
Landlord may from time to time reasonably determine. Additionally, at the option
of Landlord, such insurance coverage may include the risks of earthquakes and/or
flood damage and additional hazards, a rental loss endorsement and one or more
loss payee endorsements in favor of the holders of any mortgages or deeds of
trust encumbering the interest of Landlord in the Building or the ground or
underlying lessors of the Building, or any portion thereof. Notwithstanding the
foregoing provisions of this Section 10.2, the coverage and amounts of insurance
carried by Landlord in connection with the Building shall, at a minimum, be
comparable to the coverage and amounts of insurance which are carried by
reasonably prudent landlords of Comparable Buildings. Notwithstanding anything
in this Section 4.2.5 to the contrary, in the event that, following the Base
Year, Landlord shall reduce the deductible and/or increase the coverage ratio
with respect to the earthquake insurance carried by Landlord, then from and
after the date upon which Landlord obtains such revised earthquake insurance
coverage and continuing throughout the period during which Landlord maintains
such revised earthquake insurance coverage, Operating Expenses for the Base Year
shall be deemed increased by the amount of the earthquake insurance premium
Landlord would have incurred had Landlord maintained such revised insurance for
the same period of time during the Base Year as such revised insurance in
maintained by Landlord during the applicable Expense Year. In no event shall
Landlord increase the earthquake insurance deductible and/or reduce the
earthquake insurance coverage ratio from that carried during the Base Year,
unless the earthquake insurance deductible and coverage ratio carried during the
Base Year is not available. Tenant shall, at Tenant's expense, comply as to the
Premises with all insurance company requirements pertaining to the use of the
Premises. If Tenant's conduct or use of the Premises causes any increase in the
premium for such insurance policies, then Tenant shall reimburse Landlord for
any such increase. Tenant, at Tenant's expense, shall comply with all rules,
orders, regulations or requirements of the American Insurance Association
(formerly the National Board of Fire Underwriters) and with any similar body.

         10.3  Tenant's Insurance.  Tenant shall maintain the following
               ------------------
coverages in the following amounts.

               10.3.1  Commercial General Liability Insurance covering the
insured against claims of bodily injury, personal injury and property damage
arising out of Tenant's operations, assumed liabilities or use of the Premises,
including a Broad Form Commercial General Liability endorsement covering the
insuring provisions of this Lease and the performance by Tenant of the indemnity
agreements set forth in Section 10.1 of this Lease, for limits of liability not
less than:

         Bodily Injury and                          $3,000,000 each occurrence
         Property Damage Liability                  $3,000,000 annual aggregate

         Personal Injury Liability                  $3,000,000 each occurrence
                                                    $3,000,000 annual aggregate
                                                    0% Insured's participation

               10.3.2  Physical Damage and Earthquake Insurance covering (i) all
office furniture, trade fixtures, office equipment, merchandise and all other
items of Tenant's property on the Premises installed by, for, or at the expense
of Tenant, (ii) the Tenant Improvements, including any Tenant Improvements which
Landlord permits to be installed above the ceiling of the Premises or below the
floor of the Premises, and (iii) all other improvements, alterations and
additions to the Premises, including any improvements, alterations or additions
installed at Tenant's request above the ceiling of the Premises or below the
floor of the Premises. Such insurance shall be written on an "all risks" of
physical loss or damage basis, for the full replacement cost value new without
deduction for depreciation of the covered items and in amounts that meet any co-
insurance clauses of the policies of insurance and shall include a vandalism and
malicious mischief endorsement, sprinkler leakage coverage and earthquake
sprinkler leakage coverage.

               10.3.3  Form of Policies. The minimum limits of policies of
                       ----------------
insurance required of Tenant under this Lease shall in no event limit the
liability of Tenant under this Lease. Such insurance maintained by Tenant shall
(i) name Landlord, and any other party it so specifies that has an interest in
Real Property, Building or Premises, as an additional insured; (ii) specifically
cover the liability assumed by Tenant under this Lease, including, but not
limited to, Tenant's obligations under Section 10.1 of this Lease; (iii)
<PAGE>
 
be issued by an insurance company having a rating of not less than A-X in Best's
Insurance Guide or which is otherwise acceptable to Landlord and licensed to do
business in the state in which the Building is located; (iv) be primary
insurance as to all claims thereunder and provide that any insurance carried by
Landlord is excess and is non-contributing with any insurance requirement of
Tenant; (v) provide that said insurance shall not be canceled or coverage
changed unless thirty (30) days' prior written notice shall have been given to
Landlord and any mortgagee or ground or underlying lessor of Landlord; and (vi)
contain a cross-liability endorsement or severability of interest clause
acceptable to Landlord. Tenant shall deliver said policy or policies or
certificates thereof to Landlord on or before the Lease Commencement Date and at
least thirty (30) days before the expiration dates thereof. If Tenant shall fail
to procure such insurance, or to deliver such policies or certificate, within
such time periods, Landlord may, at its option, in addition to all of its other
rights and remedies under this Lease, and without regard to any notice and cure
periods set forth in Section 19.1, procure such policies for the account of
Tenant, and the cost thereof shall be paid to Landlord as Additional Rent within
ten (10) days after delivery of bills therefor.

           10.3.4  Notwithstanding any provision in this Lease to the contrary,
Tenant may self-insure for the insurance requirement set forth in Section
10.3.2(i) of this Lease to the extent that it is not prohibited by law from
doing so. This provision will not be applicable, however, to any assignee or
subtenant that is not an "Affiliate," as that term is defined in Section 14 of
this Lease. Any self-insurance shall be deemed to contain all of the terms and
conditions applicable to such insurance as required in this Article 10,
including, without limitation, a full waiver of subrogation.

     10.4  Subrogation. Landlord and Tenant agree to have their respective
           -----------
insurance companies issuing property damage insurance waive any rights of
subrogation that such companies may have against Landlord or Tenant, as the case
may be, so long as the insurance carried by Landlord and Tenant, respectively,
is not invalidated thereby. Anything in this Lease to the contrary
notwithstanding, to the fullest extent permitted by law, Landlord and Tenant
hereby waive and release each other of and from any and all rights of recovery,
claim, action or cause of action, against each other, their partners, agents,
officers and employees, for any loss or damage that may occur to the Premises,
Building or Real Property, or personal property within the Building, regardless
of cause or origin, including the negligence of Landlord or Tenant and their
partners, agents, representatives, officers and employees, but only to the
extent such loss or damage is covered by, and proceeds are collectible under,
insurance in effect at the time of such loss or damage or would be covered by
the casualty insurance to be carried under Sections 10.2 and 10.3 above if such
insurance is self-insured or is otherwise not being carried in breach of said
obligations. Landlord and Tenant agree to give immediately to their respective
insurance companies, which have issued policies of insurance covering any risk
of direct physical loss, written notice of the terms of the mutual waivers
contained in this Section 10.4, and to have the insurance policies properly
endorsed, if necessary. Landlord and Tenant acknowledge that the waivers and
releases set forth in this Section 10.4 are intended to result in any loss or
damage which is covered by casualty insurance being borne by the insurance
carrier of Landlord or Tenant, as the case may be, or by the party having the
insurable interest if such loss is not covered by such insurance or is being
self-insured and this Lease required such party to maintain insurance to cover
such loss. Landlord and Tenant agree that such waivers and releases were freely
bargained for and willingly and voluntarily agreed to by Landlord and Tenant and
do not constitute a violation of public policy.

     10.5  Additional Insurance Obligations. Tenant shall carry and maintain
           --------------------------------
during the entire Lease Term, at Tenant's sole cost and expense, increased
amounts of the insurance required to be carried by Tenant pursuant to this
Article 10, and such other reasonable types of insurance coverage and in such
reasonable amounts covering the Premises and Tenant's operations therein, as may
be reasonably requested by Landlord; provided that such insurance coverages and
limits are customarily required by landlords at Comparable Buildings and further
provided that no such additional coverage or limits may be required in the first
sixty (60) months of the Lease Term, and required insurance limits may not be
changed more often than once every sixty (60) months.

                                  ARTICLE 11
                                 -----------
                            DAMAGE AND DESTRUCTION
                            ----------------------
              
     11.1  Repair of Damage to Premises by Landlord. Tenant shall promptly 
           ----------------------------------------
notify Landlord of any damage to the Premises resulting from fire or any other
casualty, unless it is reasonable to assume that Landlord is aware of the same,
and provided, however, that Tenant's failure to provide prompt notice shall not
give rise to any liability on the part of Tenant. If the Premises, Building
Parking Facility, or any other common areas of the Building or Real Property
serving or providing access to the Premises shall be damaged by fire or other
casualty, Landlord shall promptly and diligently, subject to reasonable delays
for insurance adjustment or other matters beyond Landlord's reasonable control,
and subject to all other terms of this Article 11, restore the base, shell, and
core of the Premises, the Building Parking Facility and such common areas to
substantially the condition thereof as existed prior to the casualty, except for
modifications required by zoning and building codes and other laws, or any other
modifications to the common areas deemed desirable by Landlord in its reasonable
discretion, provided use of and access to the Premises and any common restrooms
serving the Premises shall not be materially impaired. Notwithstanding any other
provision of this Lease, upon the occurrence of any damage to the Premises,
Tenant shall assign to Landlord (or to any party designated by Landlord) all
insurance proceeds payable to Tenant under Tenant's insurance required under
Section 10.3 of this Lease, and Landlord shall repair any injury or damage to
the tenant improvements and alterations installed in the Premises (using first
the proceeds available to Landlord under Tenant's casualty policy and
secondarily using the proceeds available under the Landlord's insurance policy)
and shall return such tenant improvements and alterations to their original
condition; provided that if the cost of such repair by Landlord exceeds the
amount of insurance proceeds received by Landlord from Tenant's insurance
carrier, as assigned by Tenant, and Landlord's insurance carrier, the cost of
such repairs shall be paid by Tenant to Landlord prior to Landlord's repair of
the damage. In connection with such repairs and replacements, Tenant shall,
prior to the commencement of construction, submit to Landlord, for Landlord's
review and approval (which approval shall not be unreasonably withheld,
conditioned or delayed), all plans, specifications and working drawings relating
thereto, and Landlord shall, in its reasonable discretion, select the
contractors to perform such improvement work. Landlord shall not be liable for
any inconvenience or annoyance to Tenant or its visitors, or injury to Tenant's
business resulting in any way from such damage or the repair thereof; provided
however, that if such fire or other casualty shall have damaged the Premises,
the Building Parking Facility or other or common areas necessary to Tenant's
occupancy, Landlord shall allow Tenant a proportionate abatement of Base Rent
and Tenant's Share of Direct Expenses, provided that if the damage is the result
of the negligence or wilful misconduct or Tenant or its employees or
contractors, Landlord shall only allow Tenant a proportionate abatement of Base
Rent and Tenant's Share of Direct Expenses to the extent Landlord is reimbursed
from the proceeds of rental interruption insurance purchased by Landlord as part
of Operating Expenses. 
<PAGE>
 
Any abatement of Rent permitted pursuant to the terms of this Section 11.1 shall
continue during the time and to the extent the Premises are unfit for occupancy
for the purposes permitted under this Lease, and not occupied by Tenant for the
purpose of conducting its business in the ordinary course as a result thereof.

         11.2  Landlord's Option to Repair. Notwithstanding the terms of Section
               ---------------------------
11.1 of this Lease, Landlord may elect not to rebuild and/or restore the
Premises and/or Building and instead terminate this Lease by notifying Tenant in
writing of such termination within sixty (60) days after the date of damage,
such notice to include a termination date giving Tenant ninety (90) days to
vacate the Premises, but Landlord may so elect only if the Building shall be
damaged by fire or other casualty or cause, whether or not the Premises are
affected, and one or more of the following conditions is present: (i) repairs
cannot reasonably be completed within three hundred sixty-five (365) days of the
date of damage (when such repairs are made without the payment of overtime or
other premiums); or (ii) the damage is not fully covered, except for deductible
amounts, by Landlord's insurance policies. In addition, if the Premises or the
Building is destroyed or damaged to any substantial extent during the last
twelve (12) months of the Lease Term and Tenant has not elected to renew this
Lease pursuant to Section 2.3 above, then notwithstanding anything contained in
this Article 11, Landlord shall have the option to terminate this Lease by
giving written notice to Tenant of the exercise of such option within thirty
(30) days after such damage or destruction, in which event this Lease shall
cease and terminate as of the date of such notice. Upon any such termination of
this Lease pursuant to this Section 11.2, Tenant shall pay the Base Rent and
Additional Rent, properly apportioned up to such date of termination, and both
parties hereto shall thereafter be freed and discharged of all further
obligations hereunder, except as provided for in provisions of this Lease which
by their terms survive the expiration or earlier termination of the Lease Term.

         11.3  Tenant's Termination Rights. In the event that this Lease is not
               ---------------------------
terminated pursuant to the terms of Section 11.2, above, upon request by Tenant
not less than thirty (30) days following the casualty, Landlord shall deliver
notice (the "REPAIR Notice") to Tenant of Landlord's reasonable estimate of the
time required to substantially complete such repair or restoration (the
"ESTIMATED REPAIR TIME"). If the Estimated Repair Time exceeds three hundred
sixty five (365) days from the date of the casualty and the damage caused by the
casualty materially interferes with Tenant's use of or access to the Premises or
the Building Parking Facility, then Tenant shall have the right to terminate
this Lease upon notice (the "CASUALTY TERMINATION NOTICE") to Landlord, which
Casualty Termination Notice shall be delivered by Tenant to Landlord not later
than thirty (30) days after the date of Tenant's receipt of the Repair Notice.
If the Estimated Repair Time is less than three hundred sixty five (365) days,
or if Tenant fails to exercise its said right to terminate this Lease, this
Lease shall remain in force and effect. Notwithstanding any provision of this
Lease to the contrary, Tenant may, at its option, terminate this Lease, if
Landlord elects or is otherwise required to repair or restore as provided in
this Article 11, and such repair or restoration is not completed within the
Estimated Repair Time, plus sixty (60) days, plus the number of days of delay,
if any, attributable to events of "Force Majeure," as that term is defined in
Section 24.17 hereof (provided that the total number of days of delay
attributable to an event of Force Majeure may not exceed ninety (90)), plus the
number of days of delay, if any, as are attributable to the acts or omissions of
Tenant.

         11.4  Waiver of Statutory Provisions. The provisions of this Lease,
               ------------------------------
including this Article 11, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or any other portion of the Real Property, and any
statute or regulation of the state in which the Building is located, including,
without limitation, Sections 1932(2) and 1933(4) of the California Civil Code,
with respect to any rights or obligations concerning damage or destruction in
the absence of an express agreement between the parties, and any other statute
or regulation, now or hereafter in effect, shall have no application to this
Lease or any damage or destruction to all or any part of the Premises, the
Building or any other portion of the Real Property.

                                  ARTICLE 12
                                  ----------
                                 CONDEMNATION
                                 ------------

         12.1  Permanent Taking. If the whole or any material part of the
               ----------------
Premises, Building or Building Parking Facility shall be taken by power of
eminent domain or condemned by any competent authority for any public or
quasi-public use or purpose, or if any adjacent property or street shall be so
taken or condemned, or reconfigured or vacated by such authority in such manner
as to require the use, reconstruction or remodeling of any part of the Premises
or Building, or if Landlord shall grant a deed or other instrument in lieu of
such taking by eminent domain or condemnation, Landlord shall have the option to
terminate this Lease upon ninety (90) days' notice, provided such notice is
given no later than two hundred ten (210) days after the date of such taking,
condemnation, reconfiguration, vacation, deed or other instrument. If more than
twenty-five percent (25%) of the rentable square feet of the Premises is taken,
or if in excess of twenty-five percent (25%) of Tenant's available parking
spaces are taken, or if access to the Premises is substantially impaired, Tenant
shall have the option to terminate this Lease upon ninety (90) days' notice,
provided such notice is given no later than two hundred ten (210) days after the
date of such taking. Landlord shall be entitled to receive the entire award or
payment in connection therewith, except that (i) Tenant shall have the right to
file any separate claim available to Tenant for any taking of Tenant's personal
property and fixtures belonging to Tenant and removable by Tenant upon
expiration of the Lease Term pursuant to the terms of this Lease, and for moving
expenses, so long as such claim does not diminish the award available to
Landlord, its ground lessor with respect to the Real Property or its mortgagee,
and such claim is payable separately to Tenant and (ii) Landlord and Tenant
shall each be entitled to receive fifty percent (50%) of the "bonus value" of
the leasehold estate in connection therewith, which bonus value shall be equal
to the difference between the Rent payable under this Lease and the sum
established by the condemning authority as the award for compensation for the
leasehold estate. All Rent shall be apportioned as of the date of such
termination, or the date of such taking, whichever shall first occur. If any
part of the Premises shall be taken, and this Lease shall not be so terminated,
the Rent shall be proportionately abated. Tenant hereby waives any and all
rights it might otherwise have pursuant to Section 1265.130 of The California
Code of Civil Procedure.

         12.2  Temporary Taking. Notwithstanding anything to the contrary
               ----------------
contained in this Article 12, in the event of a temporary taking of all or any
portion of the Premises for a period of one hundred and eighty (180) days or
less, then this Lease shall not terminate but the Base Rent and the Additional
Rent shall be abated for the period of such taking in proportion to the ratio
that the amount of rentable square feet of the Premises taken bears to the total
rentable square feet of the Premises. Landlord shall be entitled to receive the
entire award made in connection with any such temporary taking, except that
Tenant may file and retain a claim for its business related losses so long as
such claim does not diminish the award available to Landlord, its ground lessor
with respect to the Real Property or its mortgagee, and such claim is payable
separately to Tenant.

         12.3  Restoration. In the event that this Lease is not terminated
               -----------
pursuant to this Article 12, Landlord shall, at its sole cost
<PAGE>
 
and expense, promptly restore the Real Property, Building or Premises, as the
case may be, to a reasonable condition, given the nature and extent of the
taking.

                                  ARTICLE 13
                                  ----------
                          COVENANT OF QUIET ENJOYMENT
                          ---------------------------

         Landlord covenants that Tenant, on paying the Rent, charges for
services and other payments herein reserved and on keeping, observing and
performing all the other terms, covenants, conditions, provisions and agreements
herein contained on the part of Tenant to be kept, observed and performed,
shall, during the Lease Term, peaceably and quietly have, hold and enjoy the
Premises subject to the terms, covenants, conditions, provisions and agreements
hereof without interference by Landlord or any persons claiming by or through
Landlord. The foregoing covenant is in lieu of any other covenant express or
implied.

                                  ARTICLE 14
                                  ----------
                           ASSIGNMENT AND SUBLETTING
                           -------------------------

         14.1  Transfers. Tenant shall not, without the prior written consent of
               ---------
Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to
attach to, or otherwise transfer, this Lease or any interest hereunder, permit
any assignment or other such foregoing transfer of this Lease or any interest
hereunder by operation of law, sublet the Premises or any part thereof, or
permit the use of the Premises by any persons other than Tenant and its
employees (all of the foregoing are hereinafter sometimes referred to
collectively as "TRANSFERS" and any person to whom any Transfer is made or
sought to be made is hereinafter sometimes referred to as a "TRANSFEREE"). If
Tenant shall desire Landlord's consent to any Transfer, Tenant shall notify
Landlord in writing, which notice (the "TRANSFER NOTICE") shall include (i) the
proposed effective date of the Transfer, which shall not be less than thirty
(30) days nor more than one hundred eighty (180) days after the date of delivery
of the Transfer Notice, (ii) a description of the portion of the Premises to be
transferred (the "SUBJECT SPACE"), (iii) all of the terms of the proposed
Transfer, the name and address of the proposed Transferee, and a copy of all
existing and/or proposed documentation pertaining to the proposed Transfer,
including all existing operative documents to be executed to evidence such
Transfer or the agreements incidental or related to such Transfer, (iv) current
financial statements of the proposed Transferee certified by an officer, partner
or owner thereof,, and (v) such other information as Landlord may reasonably
require. Any Transfer made without Landlord's prior written consent shall, at
Landlord's option, be null, void and of no effect, and shall, at Landlord's
option, constitute a default by Tenant under this Lease. Whether or not Landlord
shall grant consent, Tenant shall pay Landlord's reasonable legal fees incurred
by Landlord (not to exceed $750.00 in connection with any particular request for
approval), within thirty (30) days after written request by Landlord.

         14.2  Landlord's Consent. Landlord shall not unreasonably withhold,
               ------------------
condition, or delay its consent to any proposed Transfer of the Subject Space to
the Transferee on the terms specified in the Transfer Notice. In the event that
(i) Landlord shall fail to grant or deny its consent to a proposed Transfer
within ten (10) business days after request by Tenant, (ii) Tenant shall,
following the expiration of such 10-business day period, deliver a second
request for approval of the applicable Transfer, and (iii) Landlord shall fail
to grant or deny its consent to the proposed Transfer within three (3) business
days following such second request, then Landlord's consent to the applicable
Transfer shall be deemed granted. The parties hereby agree that it shall be
reasonable under this Lease and under any applicable law for Landlord to
withhold consent to any proposed Transfer where one or more of the following
apply, without limitation as to other reasonable grounds for withholding
consent:

               14.2.1  The Transferee is of a character or reputation or engaged
in a business which is not consistent with the quality of the Building;

               14.2.2  The Transferee intends to use the Subject Space for
purposes which are not permitted under this Lease;

               14.2.3  The Transferee is either a governmental agency or
instrumentality thereof;

               14.2.4  The Transfer will result in more than a reasonable and
safe number of occupants per floor within the Subject Space;

               14.2.5  The Transferee is not a party of reasonable financial
worth and/or financial stability in light of the responsibilities involved under
the Lease as to the Subject Space on the date consent is requested; or

               14.2.6  The proposed Transfer would cause Landlord to be in
violation of another lease or agreement to which Landlord is a party, or would
give an occupant of the Building a right to cancel its lease.

         If Landlord consents to any Transfer pursuant to the terms of this
Section 14.2 (and does not exercise any recapture rights Landlord may have under
Section 14.4 of this Lease), Tenant may within six (6) months after Landlord's
consent, but not later than the expiration of said six-month period, enter into
such Transfer of the Premises or portion thereof, upon substantially the same
terms and conditions as are set forth in the Transfer Notice furnished by Tenant
to Landlord pursuant to Section 14.1 of this Lease, provided that if there are
any material changes in the terms and conditions from those specified in the
Transfer Notice (i) such that Landlord would initially have been entitled to
refuse its consent to such Transfer under this Section 14.2, or (ii) which would
cause the proposed Transfer to be materially more favorable to the Transferee
than the terms set forth in Tenant's original Transfer Notice, Tenant shall
again submit the Transfer to Landlord for its approval and other action under
this Article 14 (including Landlord's right of recapture, if any, under Section
14.4 of this Lease).

         14.3  Transfer Premium. If Landlord consents to a Transfer, as a
               ---------------- 
condition thereto which the parties hereby agree is reasonable, Tenant shall pay
to Landlord fifty percent (50%) of any "Transfer Premium," as that term is
defined in this Section 14.3, received by Tenant from such Transferee, provided
that no Transfer Premium shall be payable to Landlord in connection with a
"Permitted Assignment," as that term is defined in Section 14.7, below.
"TRANSFER PREMIUM" shall mean all rent, additional rent or other consideration
payable by such Transferee in excess of the Rent and Additional Rent payable by
Tenant under this Lease on a per rentable square foot basis if less than all of
the Premises is transferred, after deducting the reasonable expenses incurred by
Tenant for (i) any changes, alterations and improvements to the Premises in
connection with the Transfer, (ii) commercially reasonable marketing and
advertising costs, (iii) out-of-pocket monetary concessions, and (iv) any
brokerage commissions in connection with the Transfer (collectively, the
"SUBLEASING COSTS"). "Transfer Premium" shall also include, but not be limited
to, key money and bonus money paid by Transferee to Tenant in connection with
such transfer, and any payment in excess of fair market value for services
rendered by Tenant to Transferee or for assets, fixtures, inventory, equipment,
or furniture transferred by Tenant to Transferee in

<PAGE>
 
connection with such Transfer.

         14.4 Landlord's Option as to Subject Space. Notwithstanding anything to
              -------------------------------------
the contrary contained in this Article 14, in the event Tenant contemplates a
Transfer (other than a Permitted Assignment) that, when aggregated with all
prior Transfers (other than with respect to Permitted Assignments), results in
40,000 of more rentable square feet of the Premises having been Transferred
(other than with respect to Permitted Assignments), Tenant shall give Landlord
notice (the "INTENTION TO TRANSFER NOTICE") of such contemplated Transfer
(whether or not the contemplated Transferee or the terms of such contemplated
Transfer have been determined). The Intention to Transfer Notice shall specify
the portion of and amount of rentable square feet of the Premises which Tenant
intends to Transfer (the "CONTEMPLATED TRANSFER SPACE"), the contemplated date
of commencement of the contemplated Transfer (the "CONTEMPLATED EFFECTIVE
DATE"), and the contemplated length of the term of such contemplated Transfer,
and shall specify that such Intention to Transfer Notice is delivered to
Landlord pursuant to this Section 14.4 in order to allow Landlord to elect to
recapture the Contemplated Transfer Space for the term set forth in the
Intention to Transfer Notice. Thereafter, Landlord shall have the option, by
giving written notice to Tenant within ten (10) business days after receipt of
any Intention to Transfer Notice, to recapture the Contemplated Transfer Space.
Such recapture shall cancel and terminate this Lease with respect to such
Contemplated Transfer Space as of the Contemplated Effective Date until the last
day of the term of the contemplated Transfer as set forth in the Intention to
Transfer Notice. In the event of a recapture by Landlord, if this Lease shall be
canceled with respect to less than the entire Premises, the Rent reserved herein
shall be prorated on the basis of the number of rentable square feet retained by
Tenant in proportion to the number of rentable square feet contained in the
Premises, and this Lease as so amended shall continue thereafter in full force
and effect, and upon request of either party, the parties shall execute written
confirmation of the same. If Landlord declines, or fails to elect in a timely
manner, to recapture such Contemplated Transfer Space under this Section 14.4,
then, subject to the other terms of this Article 14, for a period of six (6)
months (the "SIX MONTH PERIOD") commencing on the last day of such ten (10)
business day period, Landlord shall not have any right to recapture the
Contemplated Transfer Space with respect to any Transfer made during the Six
Month Period, provided that any such Transfer is substantially on the terms set
forth in the Intention to Transfer Notice; provided however, that any such
Transfer shall be subject to the remaining terms of this Article 14. If such a
Transfer is not so consummated within the Six Month Period (or if a Transfer is
so consummated, then upon the expiration of the term of any Transfer of such
Contemplated Transfer Space consummated within such Six Month Period), Tenant
shall again be required to submit a new Intention to Transfer Notice to Landlord
with respect any contemplated Transfer, as provided above in this Section 14.4.

         14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the
              ------------------
terms and conditions of this Lease shall in no way be deemed to have been waived
or modified, (ii) such consent shall not be deemed consent to any further
Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to
Landlord, promptly after execution, an original executed copy of all
documentation pertaining to the Transfer in form reasonably acceptable to
Landlord, and (iv) no Transfer relating to this Lease or agreement entered into
with respect thereto, whether with or without Landlord's consent, shall relieve
Tenant or any guarantor of the Lease from liability under this Lease. Landlord
or its authorized representatives shall have the right at all reasonable times
to audit the books, records and papers of Tenant relating to any Transfer, and
shall have the right to make copies thereof. If the Transfer Premium respecting
any Transfer shall be found understated, Tenant shall, within thirty (30) days
after demand, pay the deficiency and, if the deficiency shall be by more than
five percent (5%), then Tenant shall also pay Landlord's costs of such audit;
provided, however, that in no event shall Tenant be responsible for paying such
audit expenses in an amount in excess of the deficiency owed by Tenant.

         14.6 Additional Transfers. Subject to the terms of Section 14.7, below,
              --------------------
for purposes of this Lease, the term "Transfer" shall also include (i) if Tenant
is a partnership, the withdrawal or change, voluntary, involuntary or by
operation of law, of fifty percent (50%) or more of the partners, or transfer of
twenty-five percent or more of partnership interests, within a twelve (12)-month
period, or the dissolution of the partnership without immediate reconstitution
thereof, and (ii) if Tenant is a closely held corporation (i.e., whose stock is
not publicly held and not traded through an exchange or over the counter), (A)
the dissolution, merger, consolidation or other reorganization of Tenant, (B)
the sale or other transfer of more than an aggregate of fifty percent (50%) of
the voting shares of Tenant (other than to immediate family members by reason of
gift or death), within a twelve (12)-month period, or (C) the sale, mortgage,
hypothecation or pledge of more than an aggregate of fifty percent (50%) of the
value of the unencumbered assets of Tenant within a twelve (12) month period.

         14.7 Permitted Assignments. Notwithstanding any provision of this
              ---------------------
Article 14 to the contrary, Tenant, without the necessity of obtaining
Landlord's consent, shall have the right to sublease all or a portion of the
Premises or to assign this Lease (any such assignment or sublease to be referred
to as a "PERMITTED ASSIGNMENT") to (i) any corporation or entity that directly,
or indirectly through one or more intermediaries is in control of, controlled by
or under common control with Tenant (an "AFFILIATE"), with "control" meaning the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of the specified corporation or entity, whether
through the ownership of voting securities, by contract or otherwise, or (ii)
any corporation or entity into which or with which Tenant merges or consolidates
or effects a similar reorganization transaction or which acquires all or
substantially all of Tenant's stock or assets, provided that (a) Tenant notifies
Landlord of any such assignment or sublease and promptly supplies Landlord with
any documents or information requested by Landlord regarding such assignment or
sublease or such Affiliate, (b) such assignment or sublease is not a subterfuge
by Tenant to avoid its obligations under this Lease, and (c) such transferee or
affiliate shall have a net worth (not including goodwill as an asset), computed
in accordance with generally accepted accounting principles, reasonably
sufficient to meet the obligations of Tenant under this Lease with respect to
the Subject Space. Tenant shall remain fully liable under this Lease in the case
of any such Permitted Assignment.

                                  ARTICLE 15
                                  ----------
                             SURRENDER; OWNERSHIP
                             --------------------
                         AND REMOVAL OF TRADE FIXTURES
                         -----------------------------

         15.1 Surrender of Premises. No act or thing done by Landlord or any
              --------------------- 
agent or employee of Landlord during the Lease Term shall be deemed to
constitute an acceptance by Landlord of a surrender of the Premises unless such
intent is specifically acknowledged in a writing signed by Landlord. The
delivery of keys to the Premises to Landlord or any agent or employee of
Landlord shall not constitute a surrender of the Premises or effect a
termination of this Lease, whether or not the keys are thereafter retained by
Landlord, and notwithstanding such delivery Tenant shall be entitled to the
return of such keys at any reasonable time upon request until this Lease shall
have been properly terminated. The voluntary or other surrender of this Lease by
Tenant, whether accepted by
<PAGE>
 
Landlord or not, or a mutual termination hereof, shall not work a merger, and at
the option of Landlord shall operate as an assignment to Landlord of all
subleases or subtenancies affecting the Premises.

         15.2 Removal of Tenant Property by Tenant. Upon the expiration of the
              ------------------------------------
Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject
to the provisions of this Article 15, quit and surrender possession of the
Premises to Landlord in as good order and condition as when Tenant took
possession and as thereafter improved by Landlord and/or Tenant, reasonable wear
and tear and repairs which are specifically made the responsibility of Landlord
hereunder excepted; provided, however, that Tenant shall, at its sole cost and
expense, cause the "Stairwells," as that term is defined in Section 3.2 of the
Tenant Work Letter, to be removed in accordance with the terms of Section 3.2 of
the Tenant Work Letter. Upon such expiration or termination, Tenant shall,
without expense to Landlord, remove or cause to be removed from the Premises all
debris and rubbish, and such items of furniture, equipment, free-standing
cabinet work, and other articles of personal property owned by Tenant or
installed or placed by Tenant at its expense in the Premises, and such similar
articles of any other persons claiming under Tenant, and Tenant shall repair at
its own expense all damage to the Premises and Building resulting from such
removal.


                                  ARTICLE 16
                                  ----------
                                 HOLDING OVER
                                 ------------

         If Tenant holds over after the expiration of the Lease Term hereof,
with or without the express or implied consent of Landlord, such tenancy shall
be from month-to-month only, and shall not constitute a renewal hereof or an
extension for any further term, and in such case Base Rent shall be payable at a
monthly rate equal to one hundred fifty percent (150%) of Base Rent applicable
during the last rental period of the Lease Term under this Lease. Such
month-to-month tenancy shall be subject to every other term, covenant and
agreement contained herein. Landlord hereby expressly reserves the right to
require Tenant to surrender possession of the Premises to Landlord as provided
in this Lease upon the expiration or other termination of this Lease. The
provisions of this Article 16 shall not be deemed to limit or constitute a
waiver of any other rights or remedies of Landlord provided herein or at law. If
Tenant fails to surrender the Premises upon the termination or expiration of
this Lease, in addition to any other liabilities to Landlord accruing therefrom,
Tenant shall protect, defend, indemnify and hold Landlord harmless from all
loss, costs (including reasonable attorneys' fees) and liability resulting from
such failure, including, without limiting the generality of the foregoing, any
claims made by any succeeding tenant founded upon such failure to surrender, and
any lost profits to Landlord resulting therefrom.

                                  ARTICLE 17
                                  ----------
                             ESTOPPEL CERTIFICATES
                             ---------------------

         Within ten (10) business days following a request in writing by
Landlord, Tenant shall execute and deliver to Landlord an estoppel certificate,
which, as submitted by Landlord, shall be substantially in the form of Exhibit
E, attached hereto, (or such other form as may be required by any prospective
mortgagee or purchaser of the Real Property, or any portion thereof), indicating
therein any exceptions thereto that may exist at that time, and shall also
contain any other information reasonably requested by Landlord or Landlord's
mortgagee or prospective mortgagee. Tenant shall execute and deliver whatever
other instruments may be reasonably required for such purposes. Failure of
Tenant to timely execute and deliver such estoppel certificate or other
instruments shall constitute an acceptance of the Premises and an acknowledgment
by Tenant that statements included in the estoppel certificate are true and
correct, without exception. Within ten (10) business days following a request in
writing by Tenant, which shall be made only in connection with a proposed
assignment or sublease, Landlord shall execute and deliver to Tenant an estoppel
certificate, which, as submitted by Tenant, shall be comparable to the form of
estoppel certificate attached hereto as Exhibit E (or such other form as may be
reasonably required by a prospective assignee or subtenant of Tenant),
indicating therein any exceptions thereto that may exist at that time, and shall
also contain any other information reasonably requested by Tenant's actual or
prospective assignee or subtenant. Landlord shall execute and deliver whatever
other instruments may be reasonably required for such purposes. Failure of
Landlord to timely execute and deliver such estoppel certificate or other
instruments five (5) business days following a second request by Tenant shall
constitute an acknowledgment by Landlord that statements included in the
estoppel certificate are true and correct, without exception.

                                  ARTICLE 18
                                  ----------
                                 SUBORDINATION
                                 -------------

         18.1 Subordination. Subject to the terms of Section 18.2, below, this
              ------------- 
Lease is subject and subordinate to all present and future ground or underlying
leases of the Real Property and to the lien of any mortgages or trust deeds, now
or hereafter in force against the Real Property and the Building, if any, and to
all renewals, extensions, modifications, consolidations and replacements
thereof, and to all advances made or hereafter to be made upon the security of
such mortgages or trust deeds, unless the holders of such mortgages or trust
deeds, or the lessors under such ground lease or underlying leases, require in
writing that this Lease be superior thereto. Subject to Section 18.2, below,
Tenant covenants and agrees in the event any proceedings are brought for the
foreclosure of any such mortgage, or if any ground or underlying lease is
terminated, to attorn, to the purchaser upon any such foreclosure sale, or to
the lessor of such ground or underlying lease, as the case may be, if so
requested to do so by such purchaser or lessor, and to recognize such purchaser
or lessor as the lessor under this Lease. Tenant shall, within five (5) days of
request by Landlord, execute such further instruments or assurances as Landlord
may reasonably deem necessary to evidence or confirm the subordination or
superiority of this Lease to any such mortgages, trust deeds, ground leases or
underlying leases.

         18.2 SNDA. As soon as reasonably practicable following the full
              ----  
execution and delivery of this Lease, but subject to the remaining terms of this
Section 18.2, Landlord shall obtain a subordination, non-disturbance and
attornment agreement in the form attached hereto as Exhibit G (the "SNDA ") from
each holder of a ground or underlying lease, mortgage, or deed of trust, which
encumbers the Premises, Building or Real Property and which has priority over
this Lease. If (i) Landlord shall fail to obtain such SNDA within ninety (90)
days following the date of the full execution and delivery of this Lease, (ii)
following the expiration of such ninety (90)-day period, Tenant delivers notice
to Landlord requesting the SNDA, and (iii) Landlord fails to deliver the SNDA
within
<PAGE>
 
thirty (30) days following receipt of Tenant's notice, then, as Tenant's
sole and exclusive remedy at law or in equity, Tenant may elect to terminate
this Lease by written notice to Landlord delivered at any time prior to
Landlord's obtaining such SNDA. Concurrently with Tenant's execution of this
Lease, Tenant shall execute and deliver to Landlord the SNDA. Notwithstanding
anything contained in this Lease (including Section 18.1) to the contrary,
Tenant's agreement to attorn to a successor in title to the Premises, or to
subordinate this Lease to the interest of any subsequent lienholder, is
conditioned upon Tenant's prior receipt of a commercially reasonable
subordination, non-disturbance and attornment agreement.

                                  ARTICLE 19
                                  ----------
                    TENANT'S DEFAULTS; LANDLORD'S REMEDIES
                    --------------------------------------

         19.1 Events of Default by Tenant. All covenants and agreements to be
              ---------------------------
kept or performed by Tenant under this Lease shall be performed by Tenant at
Tenant's sole cost and expense and without any reduction of Rent. The occurrence
of any of the following shall constitute a default of this Lease by Tenant:

              19.1.1 Any failure by Tenant to pay any Rent or any other charge
required to be paid under this Lease, or any part thereof, within five (5)
business days following notice from Landlord that the same was not paid when
due; or

              19.1.2 Any failure by Tenant to observe or perform any other
provision, covenant or condition of this Lease to be observed or performed by
Tenant where such failure continues for thirty (30) days after written notice
thereof from Landlord to Tenant; provided however, that any such notice shall be
in lieu of, and not in addition to, any notice required under California Code of
Civil Procedure Section 1161 or any similar or successor law; and provided
further that if the nature of such default is such that the same cannot
reasonably be cured within a thirty (30)-day period, Tenant shall not be deemed
to be in default if it diligently commences such cure within such period and
thereafter diligently proceeds to rectify and cure said default as soon as
possible; or

              19.1.3 Abandonment of the Premises by Tenant. Abandonment is
herein defined to include, but is not limited to, any absence by Tenant from the
Premises for five (5) or more consecutive business days while in monetary
default of this Lease; it being acknowledged by Landlord that Tenant shall have
no obligation to occupy all or any portion of the Premises.

         19.2 Landlord's Remedies Upon Default. Upon the occurrence of any such
              --------------------------------
default by Tenant, Landlord shall have, in addition to any other remedies
available to Landlord at law or in equity, subject to applicable law, the option
to pursue any one or more of the following remedies, each and all of which shall
be cumulative and nonexclusive.

              19.2.1 Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord, and if Tenant fails to do so,
Landlord may, without prejudice to any other remedy which it may have for
possession or arrearages in rent, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be occupying the
Premises or any part thereof, without being liable for prosecution or any claim
or damages therefor; and Landlord may recover from Tenant the following:

                     (i)   The worth at the time of award of any unpaid rent
which has been earned at the time of such termination; plus

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

                     (iii) The worth at the time of award of the amount by which
the unpaid rent for the balance of the Lease Term after the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus

                     (iv)  Any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, specifically including but not limited to, brokerage
commissions and advertising expenses incurred, expenses of remodeling the
Premises or any portion thereof for a new tenant, whether for the same or a
different use, and any special concessions made to obtain a new tenant; and

                     (v)   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
applicable law.

The term "rent" as used in this Section 19.2 shall be deemed to be and to mean
all sums of every nature required to be paid by Tenant pursuant to the terms of
this Lease, whether to Landlord or to others. As used in Paragraphs 19.2.1(i)
and (ii), above, the "worth at the time of award" shall be computed by allowing
interest at the Interest Rate set forth in Section 4.5 of this Lease. As used in
Paragraph 19.2.1(iii) above, the "worth at the time of award" shall be computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%).

              19.2.2 Landlord shall have the remedy described in California
Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's
breach and abandonment and recover rent as it becomes due, if lessee has the
right to sublet or assign, subject only to reasonable limitations). Accordingly,
if Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.

              19.2.3 Landlord may, but shall not be obligated to, make any
such payment or perform or otherwise cure any such obligation, provision,
covenant or condition on Tenant's part to be observed or performed (and may
enter the Premises for such purposes). In the event of Tenant's failure to
perform any of its obligations or covenants under this Lease, and such failure
to perform poses a material risk of injury or harm to persons or damage to or
loss of property, then Landlord shall have the right to cure or otherwise
perform such covenant or obligation at any time after such failure to perform by
Tenant, whether or not any such notice or cure period set forth in Section 19.1
above has expired. Any such actions undertaken by Landlord pursuant to the
foregoing provisions of this Section 19.2.3 shall not be deemed a waiver of
Landlord's rights and remedies as a result of Tenant's failure to perform and
shall not release Tenant from any of its obligations under this Lease.

         19.3 Payment by Tenant. Tenant shall pay to Landlord, within fifteen
              -----------------
(15) days after delivery by Landlord to Tenant of statements therefor: (i) sums
equal to expenditures reasonably made and obligations incurred by Landlord in
connection with Landlord's performance or cure of any of Tenant's obligations
pursuant to the provisions of Section 19.2.3 above; and (ii) sums equal to all
expenditures made and obligations incurred by Landlord in collecting or
attempting to collect the Rent or in enforcing or attempting to enforce any
rights of Landlord under this Lease or pursuant to law, including, without
limitation, all legal fees and other
<PAGE>
 
amounts so expended. Tenant's obligations under this Section 19.3 shall survive
the expiration or sooner termination of the Lease Term.

         19.4 Sublessees of Tenant. Whether or not Landlord elects to terminate
              --------------------
this Lease on account of any default by Tenant, as set forth in this Article 19,
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed
to Tenant's interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord's election to succeed to Tenant's interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.

         19.5 Waiver of Default. No waiver by Landlord or Tenant of any
              -----------------
violation or breach by the other party of any of the terms, provisions and
covenants herein contained shall be deemed or construed to constitute a waiver
of any other or later violation or breach by such party of the same or any other
of the terms, provisions, and covenants herein contained. Forbearance by
Landlord or Tenant in enforcement of one or more of the remedies herein provided
upon a default by the other party shall not be deemed or construed to constitute
a waiver of such default. The acceptance of any Rent hereunder by Landlord
following the occurrence of any default, whether or not known to Landlord, shall
not be deemed a waiver of any such default, except only a default in the payment
of the Rent so accepted. Likewise, the payment of any Rent hereunder by Tenant
following the occurrence of any default, whether or not known to Tenant, shall
not be deemed a waiver of any such default.

         19.6 Efforts to Relet. For the purposes of this Article 19, Tenant's
              ----------------
right to possession shall not be deemed to have been terminated by efforts of
Landlord to relet the Premises, by its acts of maintenance or preservation with
respect to the Premises, or by appointment of a receiver to protect Landlord's
interests hereunder. The foregoing enumeration is not exhaustive, but merely
illustrative of acts which may be performed by Landlord without terminating
Tenant's right to possession.

         19.7 Landlord Default.
              ----------------    

              19.7.1 In General. Notwithstanding anything to the contrary
                     ---------- 
set forth in this Lease, Landlord shall not be in default in the performance of
any obligation required to be performed by Landlord pursuant to this Lease
unless (i) in the event such default is with respect to the payment of money,
Landlord fails to pay such unpaid amounts within ten (10) days of written notice
from Tenant that the same was not paid when due, or (ii) in the event such
default is other than the obligation to pay money, Landlord fails to perform
such obligation within thirty (30) days after the receipt of notice from Tenant
specifying in detail Landlord's failure to perform; provided, however, 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 in default under this
Lease if it shall commence such performance within such thirty (30) day period
and thereafter diligently pursue the same to completion. Upon any such default
by Landlord under this Lease, Tenant may, except as otherwise specifically
provided in this Lease to the contrary, exercise any of its rights provided at
law or in equity.

              19.7.2 Cure by Landlord's Mortgagees. In addition to and not
                     -----------------------------
in lieu of any cure rights given to Landlord herein in the event that Landlord
defaults under this Lease, each and every mortgagee and ground lessor having an
interest in the Building shall have the right (but not the obligation) to cure
any such defaults on the part of Landlord hereunder in accordance with and
subject to the following terms and conditions:

                     19.7.2.1 The rights granted hereunder to a mortgagee or a
ground lessor shall be given to any mortgagee or ground lessor of which Tenant
has written notice prior to the occurrence of such default. Such notice shall be
given to Tenant by virtue of (A) any subordination, non-disturbance and
attornment agreement to which Tenant is a party, or (B) any other written notice
of such mortgagee or ground lessor given by Landlord to Tenant in accordance
with the notice provisions specified herein. Such notice by Landlord shall
specify the name and address for such notice purposes of the mortgagee or ground
lessor in question, and the instrument or document from which the interest of
the mortgagee or ground lessor derives;

                     19.7.2.2 Tenant shall deliver to all such mortgagees or
ground lessors a copy of any notice of default or demand to perform on the part
of Landlord hereunder at the time such notice or demand is delivered to
Landlord, and no such notice shall be effective as to the mortgagee or ground
lessor unless and until it has been so delivered to such mortgagee or ground
lessor;

                     19.7.2.3 The mortgagee or ground lessor in question shall
have the amount of time from the date of default that Landlord has plus an
additional thirty (30) days to cure any default on the part of Landlord under
this Lease; and

                     19.7.2.4 Tenant shall accept a cure of the mortgagee or the
ground lessor in question within any applicable cure period as if such cure were
the cure of Landlord.

                                  ARTICLE 20
                                  ----------
                       SECURITY DEPOSIT/LETTER OF CREDIT
                       ---------------------------------

         Concurrent with Tenant's execution of this Lease, Tenant shall either
(i) deposit with Landlord a security deposit (the "SECURITY DEPOSIT") in the
amount set forth in Section 10 of the Summary upon the terms and conditions set
forth in Section 20.1, below, or (ii) deliver to Landlord a letter of credit in
the amount set forth in Section 10 of the Summary, upon the terms and conditions
set forth in Section 20.2, below.

         20.1 Security Deposit. In the event that Tenant shall elect to deliver
              ----------------
for Security Deposit, the terms of this Section 20.1 shall be applicable. The
Security Deposit shall be held by Landlord as security for the faithful
performance by Tenant of all the terms, covenants, and conditions of this Lease
to be kept and performed by Tenant during the Lease Term. If Tenant defaults
with respect to any provisions of this Lease, including, but not limited to, the
provisions relating to the payment of Rent, Landlord may, but shall not be
required to, use, apply or retain all or any part of the Security Deposit for
the payment of any Rent or any other sum in default, or for the payment of any
amount that Landlord may spend or become obligated to spend by reason of
Tenant's default, or to compensate Landlord for any other loss or damage that
Landlord may suffer by reason of Tenant's default. If any portion of the
Security Deposit is so used or applied, Tenant shall, within five (5) days after
written demand therefor, deposit cash with Landlord in an amount sufficient to
restore the Security Deposit to its original amount, and Tenant's failure to do
so shall be a default under this Lease. If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it, the Security
Deposit, or any balance thereof, shall be returned to Tenant, or, at Landlord's
option, to the last assignee of Tenant's interest hereunder, within sixty (60)
days following the expiration of the Lease Term. Tenant shall not be entitled to
any interest on the Security Deposit. Tenant hereby waives the provisions of
Section 1950.7 of the California Civil Code, or any successor statute.

         20.2 Additional Collateral for Performance of Lease Obligations. In the
              ----------------------------------------------------------
event that Tenant elects to provide a letter of
<PAGE>
 
credit, the terms of this Section 20.2 shall be applicable. Tenant shall deliver
to Landlord, as collateral for the full and faithful performance by Tenant of
all of its obligations under this Lease and for all losses and damages Landlord
may suffer as a result of any default by Tenant under this Lease, an irrevocable
and unconditional negotiable letter of credit (the "LETTER OF CREDIT"), in the
form and containing the terms required herein, payable in the County of Los
Angeles, California, running in favor of Landlord issued by a solvent bank under
the supervision of the Superintendent of Banks of the State of California, or a
National Banking Association, in the amount set forth in Section 10 of the
Summary (the "LETTER OF CREDIT AMOUNT"); provided, however, that in the event
that Tenant is not in default under this Lease as of the last day of the second
(2nd) Lease Year, the Letter of Credit Amount shall thereafter be reduced by an
amount equal to $250,000.00. The Letter of Credit shall be (a) at sight and
irrevocable, (b) subject to the terms of this Section 20.2, maintained in
effect, whether through replacement, renewal or extension, for the entire Lease
Term (the "LETTER OF CREDIT EXPIRATION DATE") and Tenant shall deliver a new
Letter of Credit or certificate of renewal or extension to Landlord at least
thirty (30) days prior to the expiration of the Letter of Credit, without any
action whatsoever on the part of Landlord, (c) subject to the Uniform Customs
and Practices for Documentary Credits (1993-Rev) International Chamber of
Commerce Publication #400, and (d) fully assignable by Landlord in connection
with a transfer of Landlord's interest in this Lease and permit partial draws.
In addition to the foregoing, the form and terms of the Letter of Credit (and
the bank issuing the same) shall be acceptable to Landlord, in Landlord's
reasonable discretion, and shall provide, among other things, in effect that:
(1) Landlord, or its then managing agent, shall have the right to draw down an
amount up to the face amount of the Letter of Credit upon the presentation to
the issuing bank of Landlord's (or Landlord's then managing agent's) of a
written affidavit that such amount is due to Landlord under the terms and
conditions of this Lease, it being understood that if Landlord or its managing
agent be a corporation, partnership or other entity, then such affidavit shall
be signed by an officer (if a corporation), a general partner (if a
partnership), or any authorized party (if another entity); (2) the Letter of
Credit will be honored by the issuing bank without inquiry as to the accuracy
thereof and regardless of whether the Tenant disputes the content of such
affidavit; and (3) in the event of a transfer of Landlord's interest in the
Building, Landlord shall transfer the Letter of Credit, in whole or in part (or
cause a substitute letter of credit to be delivered, as applicable) to the
transferee and thereupon the Landlord shall, without any further agreement
between the parties, be released by Tenant from all liability therefor, and it
is agreed that the provisions hereof shall apply to every transfer or assignment
of the whole or any portion of said Letter of Credit to a new Landlord. If, as
result of any application or use by Landlord of all or any part of the Letter of
Credit (or any "Cash Collateral," as that term is defined, below), the amount of
the Letter of Credit and Cash Collateral shall collectively be less than the
Letter of Credit Amount, Tenant shall within five (5) days thereafter provide
Landlord with either (i) cash (the "CASH COLLATERAL") to be held and applied by
Landlord as collateral in the same manner as if Landlord held such amount as
part of the Letter of Credit, or (ii) additional letter(s) of credit in an
amount equal to the deficiency (or a replacement letter of credit in the total
amount of the Letter of Credit Amount and any such additional (or replacement)
letter of credit shall comply with all of the provisions of this Section 20.2,
and if Tenant fails to comply with the foregoing, the same shall constitute an
uncurable default by Tenant. Tenant further covenants and warrants that it will
neither assign nor encumber the Letter of Credit or Cash Collateral, as the case
may be, or any part thereof and that neither Landlord nor its successors or
assigns will be bound by any such assignment, encumbrance, attempted assignment
or attempted encumbrance. Without limiting the generality of the foregoing, if
the Letter of Credit expires earlier than the Letter of Credit Expiration Date,
Landlord will accept Cash Collateral, a renewal letter of credit or substitute
letter of credit (such renewal or substitute letter of credit or Cash Collateral
to be in effect and delivered to Landlord, as applicable, not later than thirty
(30) days prior to the expiration of the Letter of Credit), which with respect
to any letter of credit shall be irrevocable and automatically renewable as
above provided through the Letter of Credit Expiration Date upon the same terms
as the expiring Letter of Credit or such other terms as may be acceptable to
Landlord in its reasonable discretion. However, if Cash Collateral is not timely
delivered or the Letter of Credit is not timely renewed or a substitute Letter
of Credit is not timely received, or if Tenant fails to maintain the Letter of
Credit and/or the Cash Collateral in the amount and in accordance with the terms
set forth in this Section 20.2, Landlord shall have the right to present the
Letter of Credit to the bank in accordance with the terms of this Section 20.2,
and the entire sum evidenced thereby shall be paid to and held by Landlord as
Cash Collateral for performance of all of Tenant's obligations under this Lease
and for all losses and damages Landlord may suffer as a result of any default by
Tenant under this Lease. If there shall occur a default under this Lease as set
forth in Article 19 of this Lease, Landlord may, but without obligation to do
so, draw upon the Letter of Credit and/or utilize the Cash Collateral, in part
or in whole, to cure any default of Tenant and/or to compensate Landlord for any
and all damages of any kind or nature sustained or which may be sustained by
Landlord resulting from Tenant's default. Tenant agrees not to interfere in any
way with payment to Landlord of the proceeds of the Letter of Credit, either
prior to or following a "draw" by Landlord of any portion of the Letter of
Credit, regardless of whether any dispute exists between Tenant and Landlord as
to Landlord's right to draw from the Letter of Credit, provided that the
foregoing shall not impair or reduce Tenant's rights pursuant to applicable law
in the event that it is determined that Landlord's draw of the Letter of Credit
or the use of any proceeds thereof or Cash Collateral was not permitted pursuant
to the terms of this Lease. No condition or term of this Lease shall be deemed
to render the Letter of Credit conditional to justify the issuer of the Letter
of Credit in failing to honor a drawing upon such Letter of Credit in a timely
manner. Landlord and Tenant acknowledge and agree that in no event or
circumstance shall the Letter of Credit or any renewal thereof or substitute
therefor or Cash Collateral be (i) deemed to be or treated as a "security
deposit" within the meaning of California Civil Code Section 1950.7, (ii)
subject to the terms of such Section 1950.7, or (iii) intended to serve as a
"security deposit" within the meaning of such Section 1950.7. The parties hereto
(x) recite that the Letter of Credit and/or Cash Collateral, as the case may be,
is not intended to serve as a security deposit and such Section 1950.7 and any
and all other laws, rules and regulations applicable to security deposits in the
commercial context ("SECURITY DEPOSIT LAWS") shall have no applicability or
relevancy thereto and (y) waive any and all rights, duties and obligations
either party may now or, in the future, will have relating to or arising from
the Security Deposit Laws.

                                  ARTICLE 21
                                  ---------- 
                              COMPLIANCE WITH LAW
                              -------------------

         Tenant shall not do anything or suffer anything to be done in or about
the Premises which will in any way conflict with any law, statute, ordinance or
other governmental rule, regulation or requirement now in force or which may
hereafter be enacted or promulgated ("APPLICABLE LAWS"). At its sole cost and
expense, Tenant shall promptly comply with all Applicable Laws relating to the
Premises (including the restrooms, except as specifically otherwise set forth in
Section 1 of the Tenant Work Letter), other than the making of structural
changes or changes to the Building Parking Facility, Common Areas, and the Base
Building Systems
<PAGE>
 
(collectively the "EXCLUDED CHANGES") except to the extent such Excluded Changes
are required due to Tenant's alterations to the Premises or Tenant's use of the
Premises for other than general office purposes. In addition, Tenant shall fully
comply with all present or future programs intended to manage parking,
transportation or traffic in and around the Building, and in connection
therewith, Tenant shall take responsible action for the transportation planning
and management of all employees located at the Premises by working directly with
Landlord, any governmental transportation management organization or any other
transportation-related committees or entities. The judgment of any court of
competent jurisdiction or the admission of Tenant in any judicial action,
regardless of whether Landlord is a party thereto, that Tenant has violated any
of said governmental measures, shall be conclusive of that fact as between
Landlord and Tenant. Landlord shall comply with all Applicable Laws relating to
the Building's structure, the Base Building Systems, the Building Parking Garage
and the Common Areas, provided that (i) compliance with such Applicable Laws is
not the responsibility of Tenant under this Lease, and (ii) Landlord's failure
to comply with such Applicable Laws would (a) prohibit Tenant from obtaining or
maintaining a certificate of occupancy for the Premises or prohibit Tenant from
utilizing the Premises for the use permitted pursuant to the terms of this Lease
in the ordinary course of Tenant's business, (b) adversely affect the safety of
Tenant's employees, (c) create a significant health hazard for Tenant's
employees, (d) materially and adversely affect Tenant's accreditation or ability
to participate in significant grant or loan programs, or (e) otherwise
materially and adversely affect Tenant's use of the Premises. Landlord shall be
permitted to include in Operating Expenses any costs or expenses incurred by
Landlord under this Article 24 to the extent consistent with the terms of
Section 4.2.5 above.

                                  ARTICLE 22
                                  ----------
                               ENTRY BY LANDLORD
                               -----------------

         Landlord reserves the right at all reasonable times and upon reasonable
notice to Tenant to enter the Premises to (i) inspect them; (ii) show the
Premises to prospective purchasers, mortgagees or, during the last nine (9)
months of the Lease Term, tenants, or to the ground or underlying lessors; (iii)
to post notices of nonresponsibility; or (iv) alter, improve or repair the
Premises or the Building if necessary to comply with current building codes or
other applicable laws, or for structural alterations, repairs or improvements to
the Building, or as Landlord may otherwise reasonably desire or deem necessary.
Notwithstanding anything to the contrary contained in this Article 22, Landlord
may enter the Premises at any time, without notice to Tenant, to perform
janitorial or other services required of Landlord pursuant to this Lease. Any
such entries shall be without the abatement of Rent and shall include the right
to take such reasonable steps as required to accomplish the stated purposes,
provided that Landlord shall use commercially reasonable efforts to minimize
inconvenience with respect to Tenant's use of or access to the Premises and the
Building Parking Facility resulting from Landlord's entry into the Premises
pursuant to the terms of this Article 22. Tenant hereby waives any claims for
damages or for any injuries or inconvenience to or interference with Tenant's
business, lost profits, any loss of occupancy or quiet enjoyment of the
Premises, and any other loss occasioned thereby. For each of the above purposes,
Landlord shall at all times have a key with which to unlock all the doors in the
Premises, excluding Tenant's vaults, safes and special security areas designated
in advance by Tenant. In an emergency, Landlord shall have the right to use any
means that Landlord may deem proper to open the doors in and to the Premises,
provided Landlord shall take reasonable precautions under the circumstances to
secure the Premises. Any entry into the Premises in the manner hereinbefore
described shall not be deemed to be a forcible or unlawful entry into, or a
detainer of, the Premises, or an actual or constructive eviction of Tenant from
any portion of the Premises. Except in the event of an emergency, Landlord shall
consult with Tenant regarding the scheduling of any repair work required in or
about the Premises and shall comply with Tenant's reasonable scheduling
requests; provided, however, Landlord shall not be required to perform any such
work at times other than ordinary business hours, unless Tenant pays Landlord
for the overtime and other additional expenses incurred in performing such work
after ordinary business hours.

                                   ARTICLE 23
                                   ----------
                                TENANT PARKING
                                --------------

         Tenant shall have the right to use up to the number of undesignated,
unreserved parking spaces set forth in Section 11 of the Summary for parking in
the Building Parking Facility. Tenant shall abide, and cause its employees and
visitors who utilize the Building Parking Facility to abide, by all parking
rules and regulations for parking in the Building Parking Facility, as may be
adopted and/or modified by Landlord and/or Landlord's parking operator from time
to time. Tenant hereby acknowledges and agrees that Tenant shall use its best
efforts to cause its employees and visitors to park in the Building Parking
Facility and not on the streets adjacent to the Real Property. During the
initial Lease Term, Tenant's right to use the number of parking spaces permitted
to be utilized by Tenant pursuant to the terms of this Lease shall be free of
charge. During the Option Term, if applicable, Tenant shall pay to Landlord the
prevailing rate charged for parking by landlords of the Comparable Buildings in
connection with comparable parking facilities. Notwithstanding anything in this
Lease to the contrary, Tenant hereby acknowledges and agrees that (i) pursuant
to that certain document entitled Covenant and Agreement to Provide Parking
Attendant, Landlord may be required to provide a parking attendant at the
Building Parking Facility (an "ATTENDANT"), and (ii) Landlord shall be entitled
to include in Operating Expenses any and all costs incurred by Landlord in
connection with any such Attendant ("ATTENDANT COSTS"), provided that (a) in no
event shall Attendant Costs be included in Operating Expenses for the Base Year,
and (b) in the event that Landlord shall incur Attendant Costs during the Base
Year, Tenant shall pay to Landlord any and all of such costs.

                                  ARTICLE 24
                                  ----------
                           MISCELLANEOUS PROVISIONS
                           ------------------------

         24.1 Terms; Captions. The necessary grammatical changes required to
              ---------------  
make the provisions hereof apply either to corporations or partnerships or
individuals, men or women, as the case may require, shall in all cases be
assumed as though in each case fully expressed. The captions of Articles and
Sections are for convenience only and shall not be deemed to limit, construe,
affect or alter the meaning of such Articles and Sections.

         24.2 Binding Effect. Each of the provisions of this Lease shall extend
              --------------
to and shall, as the case may require, bind or inure
<PAGE>
 
to the benefit not only of Landlord and of Tenant, but also of their respective
successors or assigns, provided this clause shall not permit any assignment by
Tenant contrary to the provisions of Article 14 of this Lease.

         24.3 No Waiver. No waiver of any provision of this Lease shall be
              --------- 
implied by any failure of a party to enforce any remedy on account of the
violation of such provision, even if such violation shall continue or be
repeated subsequently, any waiver by a party of any provision of this Lease may
only be in writing, and no express waiver shall affect any provision other than
the one specified in such waiver and that one only for the time and in the
manner specifically stated. No receipt of monies by Landlord from Tenant after
the termination of this Lease shall in any way alter the length of the Lease
Term or of Tenant's right of possession hereunder or after the giving of any
notice shall reinstate, continue or extend the Lease Term or affect any notice
given Tenant prior to the receipt of such monies, it being agreed that after the
service of notice or the commencement of a suit or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of said Rent shall not waive or affect said notice, suit or
judgment.

         24.4 Modification of Lease. Should any current or prospective mortgagee
              ---------------------
or ground lessor for the Building require a modification or modifications of
this Lease, which modification or modifications will not cause an increased cost
or expense to Tenant or in any other way materially and adversely change the
rights and obligations of Tenant hereunder, then and in such event, Tenant
agrees that this Lease may be so modified and agrees to execute whatever
documents are required therefor and deliver the same to Landlord within ten (10)
days following the request therefor. Should Landlord or Tenant or any such
current or prospective mortgagee or ground lessor require execution of a short
form of Lease for recording, containing, among other customary provisions, the
names of the parties, a description of the Premises and the Lease Term, Landlord
or Tenant, as the case may be, agrees to execute such short form of Lease and to
deliver the same to other party within ten (10) days following the request
therefor. Any documentary transfer taxes, recording or similar fees in
connection with the recordation of a short form of Lease shall be borne by the
party requesting such document. In the event that Tenant shall request the
recordation of a short form of Lease pursuant to this Section 24.4, then
concurrently with Tenant's execution thereof, Tenant shall execute, acknowledge
and deliver to Lessor a commercially reasonable quitclaim relating thereto,
which Landlord shall only be entitled to record following the expiration or
earlier termination of this Lease.

         24.5 Transfer of Landlord's Interest. Tenant acknowledges that Landlord
              -------------------------------  
has the right to transfer all or any portion of its interest in the Real
Property and Building and in this Lease, and Tenant agrees that in the event of
any such transfer, Landlord shall automatically be released from all liability
under this Lease and Tenant agrees to look solely to such transferee for the
performance of Landlord's obligations hereunder after the date of transfer. The
liability of any transferee of Landlord shall be limited to the interest of such
transferee in the Real Property and Building (including related rental, sales
and insurance proceeds) and such transferee shall be without personal liability
under this Lease, and Tenant hereby expressly waives and releases such personal
liability on behalf of itself and all persons claiming by, through or under
Tenant. Tenant further acknowledges that Landlord may assign its interest in
this Lease to a mortgage lender as additional security and agrees that such an
assignment shall not release Landlord from its obligations hereunder and that
Tenant shall continue to look to Landlord for the performance of its obligations
hereunder.

         24.6 Prohibition Against Recording. Except as provided in Section 24.4
              -----------------------------
of this Lease, neither this Lease, nor any memorandum, affidavit or other
writing with respect thereto, shall be recorded by Tenant or by anyone acting
through, under or on behalf of Tenant, and the recording thereof in violation of
this provision shall make this Lease null and void at Landlord's election.

         24.7 Landlord's Title. Landlord's title is and always shall be
              ----------------
paramount to the title of Tenant. Nothing herein contained shall empower Tenant
to do any act which can, shall or may encumber the title of Landlord.

         24.8 Tenant's Signs.
              --------------

              24.8.1 Interior Signs. Tenant shall be entitled, at its sole
                     --------------
cost and expense, to interior signs which are not readily visible from the
exterior of the Building, which interior signage (except any signage located in
the lobby of the Building) shall not be subject to Landlord's prior written
approval. Prior to the Expansion Premises Commencement Date, any signage located
in the lobby of the Building which is not readily visible from the exterior of
the Building shall be subject to the approval of Landlord, which approval shall
not be unreasonably withheld. Upon the expiration or earlier termination of this
Lease, Tenant shall be responsible, at its sole cost and expense, for the
removal of such signage and the repair of all damage to the Building caused by
such removal. Except for such identification signs, and except as set forth in
Section 24.8.2, below, Tenant may not install any signs on the exterior or roof
of the Building or the common areas of the Building or the Real Property. Any
signs, window coverings, or blinds (even if the same are located behind the
Landlord approved window coverings for the Building), or other items visible
from the exterior of the Premises or Building are subject to the prior approval
of Landlord, in its reasonable discretion.

              24.8.2 Building Top Sign. Tenant shall have the exclusive right to
                     -----------------   
(a) two (2) signs at the top of the Building, (b) one (1) monument sign in the
front of the Building, and (c) one (1) sign above the entrance to the Building
Parking Facility (collectively, "TENANT'S SIGNAGE"); provided, however, that (i)
the location of Tenant's Signage shall be subject to Landlord's approval, which
approval shall not be unreasonably withheld, conditioned or delayed (ii) the
size, materials and design of the Tenant's Signage shall be subject to
Landlord's prior written consent, which consent may be withheld in Landlord's
reasonable discretion; (iii) the Tenant's Signage shall comply with all
applicable governmental rules and regulations; and (iv) the right to Tenant's
Signage shall be personal to the Original Tenant or a Permitted Assignee, and
may only be utilized by the Original Tenant or a Permitted Assignee and may not
be exercised or used by, or assigned to, any assignee or sublessee or any other
person or entity, provided that any such Permitted Assignee shall only have the
right to utilize the Tenant's Signage to the extent such Permitted Assignee does
not have a name which relates to an entity which is of a character or
reputation, or is associated with a political faction or orientation, which is
inconsistent with the quality of the Real Property, or which would otherwise
reasonably offend a landlord of the Comparable Buildings. In addition, Tenant's
rights to retain Tenant's Signage is subject to and conditioned upon the
Original Tenant occupying the entire Premises during the Lease Term. Tenant
shall be permitted to place the name "American Intercontinental University" or
"AIU" on Tenant's Signage, but no other markings. Landlord shall have no
obligation or liability to Tenant as a result of any failure of any applicable
governmental agency to approve Tenant's Signage. Tenant shall be responsible for
all costs incurred by Tenant in connection with the design, construction,
installation, maintenance and repair of Tenant's Signage; such obligations of
Tenant shall be subject to such rules and regulations as Landlord may reasonably
establish from time to time, including, without limitation, any maintenance
program as may be adopted by Landlord from time to time, and shall be performed
by contractors, subcontractors and other applicable persons and/or entities
selected by Tenant (and pursuant to contracts) subject to Landlord's approval,
which approval shall not be unreasonably withheld, conditioned or delayed. Upon
the expiration or earlier termination of Tenant's rights to Tenant's Signage or
upon the expiration or earlier termination of this Lease, Tenant shall, at its
sole cost and expense, remove Tenant's Signage
<PAGE>
 
and repair any and all damage to the Building caused by such removal. In the
event Tenant fails to comply with the terms of the preceding sentence, Landlord
shall have the right, at Tenant's sole cost and expense, to remove Tenant's
Signage and to repair any and all damage to the Building caused by such removal.

         24.9 Relationship of Parties. Nothing contained in this Lease shall be
              -----------------------
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant, it being expressly understood and
agreed that neither the method of computation of Rent nor any act of the parties
hereto shall be deemed to create any relationship between Landlord and Tenant
other than the relationship of landlord and tenant.

         24.10 Application of Payments. In the absence of Tenant's specific
               ----------------------- 
designation for its payments, Landlord shall have the right to apply payments
received from Tenant pursuant to this Lease, to satisfy any obligations of
Tenant hereunder, in such order and amounts as Landlord, in its sole discretion,
may elect.

         24.11 Time of Essence.  Time is of the essence of this Lease and each
               ---------------
 of its provisions.

         24.12 Partial Invalidity. If any term, provision or condition contained
               ------------------ 
in this Lease shall, to any extent, be invalid or unenforceable, the remainder
of this Lease, or the application of such term, provision or condition to
persons or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.

         24.13 No Warranty. In executing and delivering this Lease, Tenant has
               -----------
not relied on any representation, including, but not limited to, any
representation whatsoever as to the amount of any item comprising Additional
Rent or the amount of the Additional Rent in the aggregate or that Landlord is
furnishing the same services to other tenants, at all, on the same level or on
the same basis, or any warranty or any statement of Landlord which is not set
forth herein or in one or more of the Exhibits attached hereto.

         24.14 Landlord Exculpation. It is expressly understood and agreed that
               --------------------
notwithstanding anything in this Lease to the contrary, and notwithstanding any
applicable law to the contrary, the liability of Landlord and the Landlord
Parties hereunder (including any successor landlord) and any recourse by Tenant
against Landlord or the Landlord Parties shall be limited solely and exclusively
to an amount which is equal to the interest of Landlord in the Real Property and
Building (including related rental, sales and insurance proceeds), and neither
Landlord, nor any of the Landlord Parties shall have any personal liability
therefor, and Tenant hereby expressly waives and releases such personal
liability on behalf of itself and all persons claiming by, through or under
Tenant. Notwithstanding any of the foregoing or anything else contained in this
Lease to the contrary, neither Landlord nor any of the Landlord Parties shall be
exculpated from any liability relating to the misapplication of any security
deposit, insurance proceeds, rents or other proceeds provided by Tenant or
insurance companies.

         24.15 Entire Agreement. It is understood and acknowledged that there
               ----------------
are no oral agreements between the parties hereto affecting this Lease and this
Lease supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. This Lease and
any side letter or separate agreement executed by Landlord and Tenant in
connection with this Lease and dated of even date herewith contain all of the
terms, covenants, conditions, warranties and agreements of the parties relating
in any manner to the rental, use and occupancy of the Premises, shall be
considered to be the only agreement between the parties hereto and their
representatives and agents, and none of the terms, covenants, conditions or
provisions of this Lease can be modified, deleted or added to except in writing
signed by the parties hereto. All negotiations and oral agreements acceptable to
both parties have been merged into and are included herein. There are no other
representations or warranties between the parties, and all reliance with respect
to representations is based totally upon the representations and agreements
contained in this Lease.

         24.16 Right to Lease. Landlord reserves the absolute right to effect
               --------------
such other tenancies in the Building as Landlord in the exercise of its sole
business judgment shall determine to best promote the interests of the Building.
Tenant does not rely on the fact, nor does Landlord represent, that any specific
tenant or type or number of tenants shall, during the Lease Term, occupy any
space in the Building.

         24.17 Force Majeure. Any prevention, delay or stoppage due to strikes,
               -------------
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease and further except for matters arising from the financial
condition of the party so affected, including the inability to raise capital or
borrow funds (collectively, the "FORCE MAJEURE"), notwithstanding anything to
the contrary contained in this Lease, shall excuse the performance of such party
for a period equal to any such prevention, delay or stoppage and, therefore, if
this Lease specifies a time period for performance of an obligation of either
party, that time period shall be extended by the period of any delay in such
party's performance caused by a Force Majeure.

         24.18 Notices. All notices, demands, statements or communications
               -------
(collectively, "NOTICES") given or required to be given by either party to the
other hereunder shall be in writing, shall be sent by United States certified or
registered mail, postage prepaid, return receipt requested, or delivered
personally, or delivered by a nationally recognized overnight courier service
such as UPS or Federal Express (i) to Tenant at the appropriate address set
forth in Section 5 of the Summary, or to such other place as Tenant may from
time to time designate in a Notice to Landlord; or (ii) to Landlord at the
addresses of Landlord's agent set forth in Section 3 of the Summary, or to such
other firm or to such other place as Landlord may from time to time designate in
a Notice to Tenant. Any Notice will be deemed given on the date it is mailed as
provided in this Section 24.19 or upon the date personal delivery is made or
upon the date overnight courier delivery is made. If Tenant is notified of the
identity and address of Landlord's mortgagee or ground or underlying lessor,
Tenant shall give to such mortgagee or ground or underlying lessor written
notice of any default by Landlord under the terms of this Lease by registered or
certified mail, and such mortgagee or ground or underlying lessor shall be given
a reasonable opportunity to cure such default prior to Tenant's exercising any
remedy available to Tenant.

         24.19 Joint and Several. If there is more than one Tenant, the
               -----------------   
obligations imposed upon Tenant under this Lease shall be joint and several.

         24.20 Authority. If Tenant is a corporation or partnership, each
               ---------
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in the state in which the Building is located and that Tenant has full
right and authority to execute and deliver this Lease and that each person
signing on behalf of Tenant is authorized to do so.

         24.21 Jury Trial; Attorneys' Fees. IF EITHER PARTY COMMENCES LITIGATION
               ---------------------------
AGAINST THE OTHER FOR THE
<PAGE>
 
SPECIFIC PERFORMANCE OF THIS LEASE, FOR DAMAGES FOR THE BREACH HEREOF OR
OTHERWISE FOR ENFORCEMENT OF ANY REMEDY HEREUNDER, THE PARTIES HERETO AGREE TO
AND HEREBY DO WAIVE ANY RIGHT TO A TRIAL BY JURY. In the event of any such
commencement of litigation, the prevailing party shall be entitled to recover
from the other party such costs and reasonable attorneys' fees as may have been
incurred, including any and all costs incurred in enforcing, perfecting and
executing such judgment.

         24.22 Governing Law. This Lease shall be construed and enforced in
               -------------
accordance with the laws of the state in which the Building is located.

         24.23 Submission of Lease. Submission of this instrument for
               -------------------
examination or signature by Tenant does not constitute a reservation of or an
option for lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.

         24.24 Brokers. Landlord and Tenant hereby warrant to each other that
               -------
they have had no dealings with any real estate broker or agent in connection
with the negotiation of this Lease, excepting only the real estate brokers or
agents specified in Section 12 of the Summary (the "BROKERS"), and that they
know of no other real estate broker or agent who is entitled to a commission in
connection with this Lease. Each party agrees to indemnify and defend the other
party against and hold the other party harmless from any and all claims,
demands, losses, liabilities, lawsuits, judgments, and costs and expenses
(including without limitation reasonable attorneys' fees) with respect to any
leasing commission or equivalent compensation alleged to be owing on account of
the indemnifying party's dealings with any real estate broker or agent other
than the Brokers.

         24.25 Independent Covenants. This Lease shall be construed as though
               ---------------------
the covenants herein between Landlord and Tenant are independent and not
dependent and Tenant hereby expressly waives the benefit of any statute to the
contrary and agrees that if Landlord fails to perform its obligations set forth
herein, Tenant shall not be entitled to make any repairs or perform any acts
hereunder at Landlord's expense or to any setoff of the Rent or other amounts
owing hereunder against Landlord; provided, however, that the foregoing shall in
no way impair the right of Tenant to commence a separate action against Landlord
for any violation by Landlord of the provisions hereof so long as notice is
first given to Landlord and any holder of a mortgage or deed of trust covering
the Building, Real Property or any portion thereof, of whose address Tenant has
theretofore been notified, and an opportunity is granted to Landlord and such
holder to correct such violations as provided above.

         24.26 Building Name and Signage. Landlord shall have no right (except
               -------------------------
to the extent required be applicable law) to install, affix and maintain any
signs on the exterior of the Building which in Tenant's sole judgment detract
from the appearance of the Building or identify any business entity other than
that of Tenant. Tenant shall not use the name of the Building or use pictures or
illustrations of the Building in advertising or other publicity in a derogatory
or offensive manner. If Landlord should change the name or address of the
Building, then Landlord shall provide Tenant with not less than ninety (90) days
prior written notice, and shall reimburse Tenant for its reasonable
out-of-pocket costs incurred for reasonable quantities of incorrect stationary,
business cards, brochures or similar items, and for the cost of printing and
mailing change of address announcements.

         24.27 Building Directory. Tenant shall be entitled to reasonable use of
               ------------------
the Building directory to display the name and location of Tenant and its
employees in the Building.

         24.28 Satellite Dish.
               -------------- 

               24.28.1 Landlord hereby agrees that Tenant shall have the
nonexclusive right at Tenant's sole cost and expense and subject to the
provisions of this Section 24.28, to install up to six (6) satellite dishes,
each of which shall not exceed eighteen (18) inches in diameter (individually
and collectively, a "SATELLITE DISH") on the roof of the Building in a location
reasonably designated by Landlord. Notwithstanding the foregoing, in no event
shall Tenant's Satellite Dishes occupy in excess of fifty percent (50%) of the
available space upon the roof of the Building. All of Tenant's Satellite Dishes
shall be reasonably adjacent to the other Satellite Dishes installed by Tenant
pursuant to the terms of this Section 24.28. In addition, Tenant shall have the
right, subject to available capacity of the Building, to install such connection
equipment, such as conduits, cables, risers, feeders and materials
(collectively, the "CONNECTING EQUIPMENT") in the shafts, ducts, conduits,
chases, utility closets and other facilities of the Building as is reasonably
necessary to connect the Satellite Dish to Tenant's other machinery and
equipment in the Premises, subject however, to the provisions of Section
24.28.2, below, and subject to the availability of vertical riser and feeder
excess capacity. Tenant shall also have the right of access, consistent with
Section 24.28.4, below, to the areas where any such Connecting Equipment is
located for the purposes of maintaining, repairing, testing and replacing the
same. In connection with the rights granted to Tenant pursuant to the terms of
this Section 24.28, Tenant shall pay to Landlord, as Additional Rent, a monthly
amount equal to the product of (i) $1,000.00, and (ii) the number of Satellite
Dishes in excess of two (2) Satellite Dishes installed by Tenant upon the roof
of the Building (the "SATELLITE RENT"). The Satellite Rent shall be due at the
same time and in the same manner as Base Rent.

               24.28.2 The installation of the Satellite Dish and related
Connecting Equipment (hereby referred to together and/or separately as the
"SATELLITE EQUIPMENT") shall be performed in accordance with and subject to the
provisions of Article 8 of this Lease, and the Satellite Equipment shall be
treated for all purposes of this Lease as if the same were Tenant's property.
For the purposes of determining Tenant's obligations with respect to its use of
the roof of the Building herein provided, the portion of the roof of the
Building affected by the Satellite Equipment shall be deemed to be a portion of
Tenant's Premises; consequently, all of the provisions of this Lease with
respect to Tenant's obligations hereunder shall apply to the installation, use
and maintenance of the Satellite Equipment, including without limitation,
provisions relating to compliance with requirements as to insurance, indemnity,
repairs and maintenance, and compliance with laws. Landlord shall have no
obligation with regard to the affected portion of the roof or the Satellite
Equipment except as provided in this Section 24.28.

               24.28.3 It is expressly understood that Landlord retains the
right to grant third parties the right to utilize any portion of the roof not
utilized by Tenant and to use the portion of the roof on which the Satellite
Equipment is located for any purpose whatsoever, provided in each event that
Tenant shall have reasonable access to, and Landlord shall not unduly interfere
with the use of, the Satellite Equipment.

               24.28.4 Tenant shall install, use, maintain and repair the
Satellite Equipment so as not to damage or interfere with the operation of the
Building or the Systems and Equipment or any other communications or similar
equipment located on the roof of the Building; and Tenant hereby agrees to
indemnify, defend and hold Landlord harmless from and against any and all
claims, costs, damages, expenses and liabilities (including attorney's fees)
arising out of Tenant's failure to comply with the provisions of this Section
24.28.4.

               24.28.5 Landlord shall not have any obligations with respect
to the Satellite Equipment or compliance with any
<PAGE>
 
requirements relating thereto nor shall Landlord be responsible for any damage
that may be caused to the Satellite Equipment except to the extent caused by the
gross negligence or willful misconduct of Landlord. Landlord makes no
representation that the Satellite Equipment will be able to receive or transmit
communication signals without interference or disturbance and Tenant agrees that
Landlord shall not be liable to Tenant therefor.

                  24.28.6 Tenant, at Tenant's sole cost and expense, shall paint
the Satellite Equipment in such color(s) as Landlord shall reasonably determine
and shall maintain such equipment and install such fencing and other protective
equipment on or about the Satellite Equipment as Landlord may reasonably
determine.

                  24.28.7 Tenant shall (i) be solely responsible for any damage
caused as a result of the Satellite Equipment, (ii) promptly pay any tax,
license or permit fees charged pursuant to any requirements in connection with
the installation, maintenance or use of the Satellite Equipment and comply with
all precautions and safeguards recommended by all governmental authorities, and
(iii) make necessary repairs, replacements to or maintenance of the Satellite
Equipment.

                  24.28.8 If any of the conditions set forth in this Section
24.28 are not complied with by Tenant, then without limiting Landlord's rights
and remedies it may otherwise have under this Lease, Tenant shall, upon written
notice from Landlord, have the option either to (i) immediately discontinue its
use of the Satellite Equipment, remove the same, and make such repairs and
restoration as required under Section 24.28.9 below, (ii) reposition the
Satellite Equipment to a location designated by Landlord if Landlord elects to
permit such repositioning, and make such repairs and restorations as required
under Section 24.28.9 below, or (iii) correct such noncompliance within thirty
(30) days after receipt of notice. If Tenant fails to correct noncompliance
within thirty (30) days after receipt of notice, then Tenant shall immediately
discontinue its use of the Satellite Equipment and remove the same.

                  24.28.9 Upon the expiration of the Lease Term or upon any
earlier termination of this Lease, Tenant shall, subject to the control of and
direction from Landlord, remove the Satellite Equipment, repair and damage
caused thereby, and restore the roof and other facilities of the Building to
their condition existing prior to the installation of the Satellite Equipment.

                  24.28.10 Tenant's rights under this Section 24.28 shall be
personal to the Original Tenant or a Permitted Assignee or any subtenant
approved or otherwise permitted pursuant to the term of Article 14 of this
Lease, and may only be utilized by the such entities (and may not be exercised
or utilized by any other assignee, sublessee or other transferee of the Original
Tenant's interest in this Lease or the Premises); provided that nothing in this
Section 24.28.10 shall prohibit such entities from utilizing the Satellite Dish
for the transmission of any information such entities deem desirable.

            24.29 Consent and Approvals. Except (i) for matters for which there
                  ---------------------
is a standard of consent or discretion specifically set forth in this Lease,
(ii) matters which could have an adverse effect on the Systems and Equipment, or
which could affect the exterior appearance of the Building, or (iii) matters
covered by Article 19 (Defaults; Remedies) of this Lease (collectively, the
"EXCEPTED MATTERS"), any time the consent of Landlord or Tenant is required
under this Lease, such consent shall not be unreasonably withheld or delayed,
and, except with regard to the Excepted Matters, whenever this Lease grants
Landlord or Tenant the right to take action, exercise discretion, establish
rules and regulations or make an allocation or other determination, Landlord and
Tenant shall act reasonably and in good faith. With respect to the Excepted
Matters, Landlord shall be entitled to grant its consent or exercise its
discretion in its sole and absolute discretion.
  
            IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.

                                      "Landlord":
                                      W9/WLA REAL ESTATE LIMITED PARTNERSHIP,
                                      a Delaware limited partnership
                                      By:    LPC MS, Inc.,
                                      as agent and manager for Landlord
                                      By: ______________________________________
                                          D. Allen Palmer, Senior Vice President



                                      "Tenant":
                                      EDUTREK INTERNATIONAL, INC.,
                                      a Georgia corporation,
                                      By:  _____________________________________
                                      Name:_____________________________________
                                      Its: _____________________________________
                                      By:  _____________________________________
                                      Name:_____________________________________
                                      Its: _____________________________________

                                     -28-
<PAGE>
 
                                   EXHIBIT A
                                   ---------
                       OUTLINE OF FLOOR PLAN OF PREMISES
                       ---------------------------------
                               [TO BE PROVIDED]
                               ----------------

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                          [INTENTIONALLY LEFT BLANK]

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                          [INTENTIONALLY LEFT BLANK]

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                          [INTENTIONALLY LEFT BLANK]

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                                  EXHIBIT A-1
                                  -----------
                          OUTLINE OF EXPANSION PREMISES
                          -----------------------------
                                [TO BE PROVIDED]
                                ----------------

                                      -35-
<PAGE>
 
                                   EXHIBIT B
                                   ---------
                              TENANT WORK LETTER
                              ------------------

         This Tenant Work Letter shall set forth the terms and conditions
relating to the construction of the Premises. This Tenant Work Letter is
essentially organized chronologically and addresses the issues of the
construction of the Premises, in sequence, as such issues will arise during the
actual construction of the Premises. All references in this Tenant Work Letter
to Articles or Sections of "this Lease" shall mean the relevant portions of
Articles 1 through 24 of the Office Lease to which this Tenant Work Letter is
---------------------
attached as Exhibit B, and all references in this Tenant Work Letter to Sections
            ---------
of "this Tenant Work Letter" shall mean the relevant portions of Sections 1
                                                                 ----------
through 5 of this Tenant Work Letter.
---------


                                    SECTION 1
                                    ---------
                      DELIVERY OF THE PREMISES AND BUILDING
                      -------------------------------------

         Following the earlier to occur of (I) the date Tenant obtains final,
nonappealable Governmental Approvals, and (II) the date Tenant's termination
right set forth in Section 2.2.2 of the Lease expires, is waived, or otherwise
has no further applicability, Landlord shall deliver the Premises (which shall
include the raised floors and HVAC equipment located on the second floor of the
Building) and Building to Tenant, and Tenant shall accept the Premises
(including the raised floors and HVAC equipment located on the second floor of
the Building) and Building from Landlord in their presently existing, "as-is"
condition, provided that (i) the Base Building Systems servicing the Building
shall be in good working order, (ii) any modifications to the portion of the
Base Building Systems comprised of the main life-safety panel which are required
in order for Tenant to install strobes as required by Applicable Law, shall be
performed by Landlord, at Landlord's sole cost and expense, on or before July
31, 1998, and (iii) any modifications to the core restrooms (as configured as of
the date of this Lease) required by Applicable Law as of the date of this Lease,
shall by performed by Landlord, at Landlord's sole cost and expense. In
connection with the foregoing, Landlord and Tenant hereby acknowledge and agree
that (a) as set forth on the "Supplemental Plans," as that term is defined in
Section 3.2 of this Tenant Work Letter, which have not been approved by Landlord
as of the date hereof (except with respect to the fire exit stairwells), Tenant
intends to expand the core restrooms, and (b) to the extent the Supplemental
Plans are approved by Landlord or to the extent Landlord otherwise approves
modifications to the core restrooms in the "Construction Drawings," as that term
is defined in Section 3.1 of this Tenant Work Letter, all costs associated with
such modifications to the core restrooms (including costs incurred to comply
with Applicable Laws as a result of such modifications) shall be the sole
responsibility of Tenant.

                                   SECTION 2
                                   ---------
                               TENANT IMPROVEMENTS
                               -------------------

         2.1 Tenant Improvement Allowance. Tenant shall be entitled to a
             ----------------------------
one-time tenant improvement allowance (the "Tenant Improvement Allowance") in
the amount up to but not exceeding Twenty-Five Dollars ($25.00) per usable
square foot of the Premises for the costs relating to the initial design and
construction of Tenant's improvements, which are permanently affixed to the
Premises (the "Tenant Improvements"). In no event shall Landlord be obligated to
make disbursements pursuant to this Tenant Work Letter in a total amount which
exceeds the Tenant Improvement Allowance. In the event that Tenant shall fail to
utilize all or a portion of the Tenant Improvement Allowance for Tenant
Improvements on or before the date which is twenty-four (24) months following
the Lease Commencement Date, such unused amounts shall revert to Landlord and
Tenant shall have no further rights with respect thereto.

        2.2  Disbursement of the Tenant Improvement Allowance.
             ------------------------------------------------
     
             2.2.1 Tenant Improvement Allowance Items. Except as otherwise
                   ---------------------------------- 
set forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be
disbursed by Landlord only for the following items and costs (collectively the
"Tenant Improvement Allowance Items"):

                   2.2.1.1  Payment of the fees of the "Architect" and the
"Engineers," as those terms are defined in Section 3.1 of this Tenant Work
                                           -----------
Letter;

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

                   2.2.1.3  The cost of construction of the Tenant Improvements,
including, without limitation, testing and inspection costs, trash removal
costs, and contractors' fees and general conditions, provided that parking for
Tenant's contractor shall be provided free of charge;

                   2.2.1.4  The cost of any changes in any portion of the
Building when such changes are required by the Construction Drawings (including
if such changes are due to the fact that such work is prepared on an unoccupied
basis), such cost to include all direct architectural and/or engineering fees
and expenses incurred in connection therewith;

                   2.2.1.5  The cost of any changes to the Construction Drawings
or Tenant Improvements required by all applicable building codes (the "Code");

                   2.2.1.6  Telephone and data cabling;

                   2.2.1.7  The cost of the "Coordination Fee," as that term is
defined in Section 4.2.2.1 of this Tenant Work Letter;
           ---------------

                   2.2.1.8  Sales and use taxes and Title 24 fees; and

                   2.2.1.9  All other costs to be expended by Landlord in
connection with the construction of the Tenant Improvements.

             2.2.2 Disbursement of Tenant Improvement Allowance. During the
                   --------------------------------------------
construction of the Tenant Improvements, Landlord shall make monthly
disbursements of the Tenant Improvement Allowance for Tenant Improvement
Allowance Items for the benefit of Tenant and shall authorize the release of
monies for the benefit of Tenant as follows.

                   2.2.2.1 Monthly Disbursements. Subject to the terms of
                           ---------------------
Section 2.2.4 of this Lease, on or before the 1st day of each calendar month, as
determined by Landlord, during the construction of the Tenant Improvements (or
such other date as Landlord may designate), Tenant shall deliver to Landlord:
(i) a request for payment of the "Contractor," as that term is defined in
Section 4.1 of this Tenant Work Letter, approved by Tenant, in a form to be
-----------
provided by Landlord (such form to be subject to Tenant's reasonable approval),
showing the schedule, by trade, of percentage of completion of the Tenant
Improvements in the Premises, detailing the portion of the work completed and
the portion not completed; (ii) invoices from all of "Tenant's Agents," as that
term is defined in Section 4.1.2 of this Tenant Work Letter, for labor rendered
                   -------------
and materials delivered to the Premises; (iii) executed

                                      -36-
<PAGE>
 
mechanic's lien releases from all of Tenant's Agents which shall comply with the
appropriate provisions, as reasonably determined by Landlord, of California
Civil Code Section 3262(d); and (iv) all other information reasonably requested
by Landlord (collectively, "Disbursement Documentation"). Tenant's request for
payment shall be deemed Tenant's acceptance and approval of the work furnished
and/or the materials supplied as set forth in Tenant's payment request vis-a-vis
Landlord. Thereafter, Landlord shall deliver a check to Tenant made jointly
payable to Contractor and Tenant in payment of the lesser of: (A) the amounts so
requested by Tenant, as set forth in this Section 2.2.2.1, above, less a ten
percent (10%) retention (the aggregate amount of such retentions to be known as
the "Final Retention"), and (B) the balance of any remaining available portion
of the Tenant Improvement Allowance (not including the Final Retention),
provided that Landlord does not dispute any request for payment based on
material non-compliance of any work with the "Approved Working Drawings," as
that term is defined in Section 3.4 below, or due to any substandard work, or
                        -----------
for any other reasonable reason. Landlord's payment of such amounts shall not be
deemed Landlord's approval or acceptance of the work furnished or materials
supplied as set forth in Tenant's payment request.

               2.2.2.2  Final Retention. Subject to the provisions of this
                        ----------------
Tenant Work Letter, a check for the Final Retention payable jointly to Tenant
and Contractor shall be delivered by Landlord to Tenant following the completion
of construction of the Premises, provided that (i) Tenant delivers to Landlord
properly executed mechanics lien releases in compliance with both California
Civil Code Section 3262(d)(2) and either Section 3262(d)(3) or Section
3262(d)(4) ("Final Releases"), (ii) Landlord has determined that no substandard
work exists which adversely affects the mechanical, electrical, plumbing,
heating, ventilating and air conditioning, life-safety or other systems of the
Building, the curtain wall of the Building, the structure or exterior appearance
of the Building, or any other tenant's use of such other tenant's leased
premises in the Building and (iii) Architect delivers to Landlord a certificate,
in a form reasonably acceptable to Landlord, certifying that the construction of
the Tenant Improvements in the Premises has been substantially completed.

               2.2.2.3 Other Terms. Landlord shall only be obligated to make
                       -----------
disbursements from the Tenant Improvement Allowance to the extent costs are
incurred by Tenant for Tenant Improvement Allowance Items. All Tenant
Improvement Allowance Items for which the Tenant Improvement Allowance has been
made available shall be deemed Landlord's property under the terms of this
Lease, except for intellectual property rights that may pertain to the
Construction Drawings.

     2.3  Standard Tenant Improvement Package. Landlord has established
          -----------------------------------
specifications (the "Specifications") for the Building standard components to be
used in the construction of the Tenant Improvements in the Premises
(collectively, the "Standard Improvement Package"), which Specifications have
been supplied to Tenant by Landlord. The quality of Tenant Improvements shall be
equal to or of greater quality than the quality of the Specifications, provided
that the Tenant Improvements shall comply with those Specifications for which
substitutes are not allowed, as designated by Landlord in writing, prior to
Landlord's approval of the Construction Drawings. Landlord may make reasonable
changes to the Specifications for the Standard Improvement Package from time to
time; provided, however, that such changes do not increase Tenant's material or
construction costs and require materials with unusually long lead times, and
further provided that such changes shall not apply to any improvements that are
the subject of Construction Drawings that have been previously approved by
Landlord, and further provided, that such changes do not in Tenant's reasonable
opinion adversely affect its ability to construct subsequent improvements that
are consistent (both aesthetically and on a cost and availability basis) with
improvements that were the subject of previously approved Construction Drawings.

     2.4  Failure to Disburse Tenant Improvement Allowance. In the event that
          ------------------------------------------------
(i) Landlord fails to fulfill its obligation to disburse the Tenant Improvement
Allowance in accordance with the terms of Section 2.2.2, above, within thirty
(30) days following notice from Tenant, (ii) Tenant shall, following the
expiration of such 30-day period, provide notice to Landlord of such failure,
and (iii) Landlord shall fail to fulfill its obligation to disburse the Tenant
Improvement Allowance within ten (10) business days following receipt of such
second notice, Tenant shall have the right to offset such due but unpaid portion
of the Tenant Improvement Allowance (plus interest at the Interest Rate from the
date Landlord should have disbursed such portion of the Tenant Improvement
Allowance pursuant to the terms of Section 2.2.2 of this Lease) against Tenant's
obligation for Rent next due under this Lease.

                                    SECTION 3
                                    ---------
                              CONSTRUCTION DRAWINGS
                              ---------------------

     3.1  Selection of Architect/Construction Drawings. Tenant shall retain
          --------------------------------------------
the architect/space planner approved by Landlord (the "Architect") to prepare
the "Construction Drawings," as that term is defined in this Section 3.1.
                                                             -----------
Landlord hereby approves Niles Bolton Associates to serve as the Architect.
Tenant shall retain HESM&A Consulting Engineers or another engineering
consultant approved by Landlord (the "Engineers") to prepare all plans and
engineering working drawings relating to the structural, mechanical, electrical,
plumbing, HVAC, lifesafety, and sprinkler work in the Premises, which work is
not part of the base building, provided that in the event that the Engineers
designated by Landlord are not price competitive, Tenant shall use such
Engineers as it may select, subject to Landlord's reasonable approval. The plans
and drawings to be prepared by Architect and the Engineers hereunder shall be
known collectively as the "Construction Drawings." All Construction Drawings
shall comply with the drawing format and specifications determined by Landlord
and communicated to Tenant, and shall be subject to Landlord's reasonable
approval. Tenant and Architect shall verify, in the field, the dimensions and
conditions as shown on the relevant portions of the base building plans, and
Tenant and Architect shall be solely responsible for the same, and Landlord
shall have no responsibility in connection therewith. Landlord's review of the
Construction Drawings as set forth in this Section 3, shall be for its sole
                                           ---------
purpose and shall not imply Landlord's review of the same, or obligate Landlord
to review the same, for quality, design, Code compliance or other like matters.
Accordingly, notwithstanding that any Construction Drawings are reviewed by
Landlord or its space planner, architect, engineers and consultants, and
notwithstanding any advice or assistance which may be rendered to Tenant by
Landlord or Landlord's space planner, architect, engineers, and consultants,
Landlord shall have no liability whatsoever in connection therewith and shall
not be responsible for any omissions or errors contained in the Construction
Drawings, and Tenant's waiver and indemnity set forth in this Lease shall
specifically apply to the Construction Drawings.

     3.2  Final Space Plan. Landlord has approved (i) that certain final
          ----------------
space plan, dated June 1, 1998, prepared by Architect, sheets ID1.6, ID2.6,
ID3.6, ID4.6, ID5.6, and ID6.6, and (ii) the third fire exit stairwells for
floors one through six, as set forth in room numbers 115, 212, 335, 435A, 546A,
and 669 of those certain plans, prepared by Architect, dated June 5, 1998,
sheets ID 0.0 through ID 10.0 (the "Supplemental Plans"). In connection with the
foregoing, Tenant hereby acknowledges and agrees that prior to the expiration or
earlier termination of this Lease, Tenant shall, at its sole cost and expense,
remove such stairwells (the "Stairwells") and 

                                      -37-
<PAGE>
 
return the affected areas of the Building to the condition which exists as of
the date of this Lease.

     3.3  Final Working Drawings. Tenant shall supply the Engineers with a
          ----------------------
complete listing of standard and non-standard equipment and specifications,
including, without limitation, B.T.U. calculations, electrical requirements and
special electrical receptacle requirements for the Premises, to enable the
Engineers and the Architect to complete the "Final Working Drawings" (as that
term is defined below) in the manner as set forth below. In addition, Tenant
shall promptly cause the Architect and the Engineers to complete the
architectural and engineering drawings for the Premises, and Architect shall
compile a fully coordinated set of architectural, structural, mechanical,
electrical and plumbing working drawings in a form which is substantially
complete to allow subcontractors to bid on the work and to obtain all applicable
permits (collectively, the "Final Working Drawings") (but Tenant shall not
obtain such bids or permits prior to Landlord's approving such Final Working
Drawings) and shall submit the same to Landlord for Landlord's approval, which
approval shall not be unreasonably withheld, conditioned or delayed. Tenant
shall supply Landlord with four (4) copies signed by Tenant of such Final
Working Drawings. Landlord shall advise Tenant within five (5) business days
after Landlord's receipt of the Final Working Drawings for the Premises if the
same is unsatisfactory or incomplete in any respect. If Tenant is so advised,
Tenant shall immediately revise the Final Working Drawings in accordance with
such review and any disapproval of Landlord in connection therewith. In the
event that (i) Landlord shall fail to approve or disapprove of the proposed
Final Working Drawings (as the same may be revised from time to time in response
to Landlord's comments) within five (5) business days after Landlord's receipt
of the same, (ii) Tenant shall, following the expiration of such 5-business day
period, deliver a second request for Landlord's approval of the proposed Final
Working Drawings, and (iii) Landlord shall not approve or disapprove of the
proposed Final Working Drawings within three (3) business days following receipt
of Tenant's second request for approval, then Landlord's approval of the
proposed Final Working Drawings shall be deemed granted.

     3.4  Approved Working Drawings. The Final Working Drawings shall be
          -------------------------
approved by Landlord (which approval shall not be unreasonably withheld,
conditioned or delayed) (the "Approved Working Drawings") prior to the
commencement of construction of the Premises by Tenant. After approval by
Landlord of the Final Working Drawings, Tenant may submit the same to the
appropriate municipal authorities for all applicable building permits. Tenant
hereby agrees that neither Landlord nor Landlord's consultants shall be
responsible for obtaining any building permit or certificate of occupancy for
the Premises and that obtaining the same shall be Tenant's responsibility;
provided, however, that Landlord shall cooperate with Tenant in executing permit
applications and performing other ministerial acts reasonably necessary to
enable Tenant to obtain any such permit or certificate of occupancy. No material
changes, modifications or alterations in the Approved Working Drawings may be
made without the prior written consent of Landlord, which consent may not be
unreasonably withheld, conditioned or delayed.

                                   SECTION 4
                                   ---------
                    CONSTRUCTION OF THE TENANT IMPROVEMENTS
                    ---------------------------------------

     4.1  Tenant's Selection of Contractors.
          ---------------------------------
          4.1.1 The Contractor. A general contractor shall be retained by Tenant
                --------------
to construct the Tenant Improvements. Such general contractor ("Contractor")
shall be selected by Tenant from the list of general contractors set forth on
Schedule 1 attached to this Tenant Work Letter, and Tenant shall deliver to
Landlord notice of its selection of the Contractor upon such selection.

          4.1.2 Tenant's Agents. All subcontractors, laborers, materialmen, and
                ---------------
suppliers used by Tenant (such subcontractors, laborers, materialmen, and
suppliers, and the Contractor to be known collectively as "Tenant's Agents")
must be approved in writing by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed. If Landlord does not approve any
of Tenant's proposed subcontractors, laborers, materialmen or suppliers, Tenant
shall submit other proposed subcontractors, laborers, materialmen or suppliers
for Landlord's written approval. Landlord shall grant or deny its consent to
Tenant's Agents within two (2) business days following Tenant 's request. In the
event that (i) Landlord shall fail to approve or disapprove of any proposed
Tenant's Agents within such 2-business day period, (ii) Tenant shall, following
the expiration of such 2-business day period, deliver a second request for
Landlord's approval of the proposed Tenant's Agents, and (iii) Landlord shall
not approve or disapprove of the proposed Tenant's Agents within two (2)
business days following receipt of Tenant's second request for approval, then
Landlord's approval of the proposed Tenant's Agents shall be deemed granted.

     4.2  Construction of Tenant Improvements by Tenant's Agents.
          ------------------------------------------------------

          4.2.1 Construction Contract; Cost Budget. Prior to Tenant's execution
                ----------------------------------
of the construction contract and general conditions with Contractor (the
"Contract"), Tenant shall submit the Contract to Landlord for its approval,
which approval shall not be unreasonably withheld, conditioned or delayed. Prior
to the commencement of the construction of the Tenant Improvements, and after
Tenant has accepted all bids for the Tenant Improvements, Tenant shall provide
Landlord with a detailed breakdown, by trade, of the final costs to be incurred
or which have been incurred, as set forth more particularly in Sections 2.2.1.1
                                                               ----------------
through 2.2.1.9, above, in connection with the design and construction of the
---------------
Tenant Improvements to be performed by or at the direction of Tenant or the
Contractor, which costs form a basis for the amount of the Contract (the "Final
Costs"). For purposes of this Section 4.2.1, the "Over-Allowance Amount" shall
be equal to the difference between the amount of the Final Costs and the amount
of the Tenant Improvement Allowance (less any portion thereof already disbursed
by Landlord, or in the process of being disbursed by Landlord, on or before the
commencement of construction of the Tenant Improvements). In the event that,
after the Final Costs have been delivered by Tenant to Landlord, the costs
relating to the design and construction of the Tenant Improvements shall change,
then any additional costs necessary to such design and construction in excess of
the Final Costs (the "Additional Costs") shall, to the extent that such
Additional Costs, when aggregated with the Final Costs, exceed the amount of the
Tenant Improvement Allowance, be an addition to the Over-Allowance Amount.
Within five (5) business days following notice from Landlord that Landlord has
received Disbursement Documentation with respect to all or substantially all of
the Tenant Improvement Allowance, Tenant shall, at Tenant's option, either (i)
deposit cash with Landlord in the amount of the Over-Allowance Amount, or (ii)
deliver to Landlord a letter of credit (the "TWL Letter of Credit") upon all of
the terms and conditions set forth in Section 20.2 of the Lease, provided that
(a) the "Letter of Credit Amount" shall be equal to the Over-Allowance Amount,
and (b) the TWL Letter of Credit shall serve as collateral for the full and
faithful performance of all of Tenant's obligations under this Tenant Work
Letter, including, without limitation, the completion of construction of the
Tenant Improvements, the payment of all costs thereof which exceed the Tenant
Improvement Allowance and the obtaining of Final Releases, all as set forth in
this Tenant Work Letter. In the event that Tenant shall elect to deliver the TWL
Letter of Credit to Landlord, then Tenant shall pay the Over-Allowance Amount
directly to Contractor pursuant to the same

                                      -38-
<PAGE>
 
disbursement procedure as is set forth in Section 2.2.2 of this Tenant Work
Letter. Tenant's obligation pursuant to the preceding sentence shall include,
without limitation, the obligation to continue to provide Landlord with
Disbursement Documentation and Final Releases. In the event that Tenant shall
elect to deliver to Landlord cash in the amount of the Over-Allowance Amount,
then such cash shall be disbursed by Landlord in the same manner as the Tenant
Improvement Allowance. Finally, in the event that, after Tenant's delivery to
Landlord of cash or the TWL Letter of Credit as set forth above in this Section
4.2.1, the cost of the design and/or construction of the Tenant Improvements
shall increase, then within five (5) business days following demand by Landlord,
Tenant shall either deliver to Landlord additional cash or an additional or
increased TWL Letter of Credit in the amount of such increased costs as if such
costs were initially part of the Over-Allowance Amount.

          4.2.2  Tenant's Agents.
                 ---------------

                   4.2.2.1 Landlord's General Conditions for Tenant's Agents and
                           -----------------------------------------------------
Tenant Improvement Work. Tenant's and Tenant's Agent's construction of the
-----------------------
Tenant Improvements shall comply with the following: (i) the Tenant Improvements
shall be constructed in substantially accordance with the Approved Working
Drawings; (ii) Tenant's Agents shall submit schedules of all work relating to
the Tenant's Improvements to Contractor and Contractor shall, within five (5)
business days of receipt thereof, inform Tenant's Agents of any changes which
are necessary thereto, and Tenant's Agents shall adhere to such corrected
schedule; and (iii) Tenant shall abide by all reasonable rules made by
Landlord's Building manager with respect to the use of freight, loading dock and
service elevators, storage of materials, coordination of work with the
contractors of other tenants, and any other reasonable matter in connection with
this Tenant Work Letter, including, without limitation, the construction of the
Tenant Improvements. Tenant shall pay (as a deduction from the Tenant
Improvement Allowance) a logistical coordination fee (the "Coordination Fee") to
Landlord in an amount equal to Twenty-Five Thousand Dollars and No/100ths
($25,000.00), which Coordination Fee shall be for services relating to the
coordination of the construction of the Tenant Improvements, and to cover the
payment of any fees incurred by, and the cost of documents and materials
supplied by, Landlord and Landlord's consultants in connection with the
preparation and review of the Construction Drawings.

                   4.2.2.2 Indemnity. Tenant's indemnity of Landlord as set
                           ---------
forth in this Lease shall also apply with respect to any and all costs, losses,
damages, injuries and liabilities related in any way to any act or omission of
Tenant or Tenant's Agents, or anyone directly or indirectly employed by any of
them, or in connection with Tenant's non-payment (for reasons other than the
Landlord's inability or wrongful refusal to advance the Tenant Improvement
Allowance) of any amount arising out of the Tenant Improvements and/or Tenant's
disapproval of all or any portion of any request for payment. Such indemnity by
Tenant, as set forth in this Lease, shall also apply with respect to any and all
costs, losses, damages, injuries and liabilities related in any way to
Landlord's performance of any ministerial acts taken by Landlord at the express
direction of Tenant (i) to permit Tenant to complete the Tenant Improvements,
and (ii) to enable Tenant to obtain any building permit or certificate of
occupancy for the Premises.

                   4.2.2.3 Requirements of Tenant's Agents. Each of Tenant's
                           -------------------------------
Agents shall guarantee to Tenant and for the benefit of Landlord that the
portion of the Tenant Improvements for which it is responsible shall be free
from any defects in workmanship and materials for a period of not less than one
(1) year from the date of completion thereof. Tenant shall endeavor to cause
each of Tenant's Agents shall be responsible for the replacement or repair,
without additional charge, of all work done or furnished in accordance with its
contract that shall become defective within one (1) year after the completion of
the work performed by such contractor or subcontractors. Tenant shall endeavor
to cause the correction of such work to include, without additional charge, all
additional expenses and damages incurred in connection with such removal or
replacement of all or any part of the Tenant Improvements, and/or the Building
and/or common areas that may be damaged or disturbed thereby. All such
warranties or guarantees as to materials or workmanship of or with respect to
the Tenant Improvements shall be contained in the Contract or subcontract and
shall be written such that such guarantees or warranties shall inure to the
benefit of both Landlord and Tenant, as their respective interests may appear,
and can be directly enforced by either. Tenant covenants to give to Landlord any
assignment or other assurances which may be necessary to effect such right of
direct enforcement.

                   4.2.2.4 Insurance Requirements.
                           ----------------------

                           4.2.2.4.1 General Coverages. All of Tenant's Agents
                                     -----------------
shall carry worker's compensation insurance covering all of their respective
employees, and shall also carry public liability insurance, including property
damage, all with limits, in form and with companies as are required to be
carried by Tenant as set forth in this Lease.

                           4.2.2.4.2 Special Coverages. Tenant shall carry
                                     -----------------
"Builder's All Risk" insurance in an amount approved by Landlord covering the
construction of the Tenant Improvements, and such other insurance as Landlord
may require, it being understood and agreed that the Tenant Improvements shall
be insured by Tenant pursuant to this Lease immediately upon completion thereof.
Such insurance shall be in amounts and shall include such extended coverage
endorsements as may be reasonably required by Landlord including, but not
limited to, the requirement that all of Tenant's Agents shall carry excess
liability and Products and Completed Operation Coverage insurance, each in
amounts not less than $500,000 per incident, $1,000,000 in aggregate, and in
form and with companies as are required to be carried by Tenant as set forth in
this Lease.

                           4.2.2.4.3 General Terms. Certificates for all
                                     -------------
insurance carried pursuant to this Section 4.2.2.4 shall be delivered to
                                   ---------------
Landlord before the commencement of construction of the Tenant Improvements and
before the Contractor's equipment is moved onto the site. All such policies of
insurance must contain a provision that the company writing said policy will
give Landlord fifteen (15) days prior written notice of any cancellation or
lapse of the effective date or any reduction in the amounts of such insurance.
In the event that the Tenant Improvements are damaged by any cause during the
course of the construction thereof, Tenant shall immediately repair the same at
Tenant's sole cost and expense. Tenant's Agents shall maintain all of the
foregoing insurance coverage in force until the Tenant Improvements are fully
completed and accepted by Landlord. All policies carried under this Section
                                                                    -------
4.2.2.4 shall insure Landlord and Tenant, as their interests may appear, as well
-------
as Contractor and Tenant's Agents. All insurance, except Workers' Compensation,
maintained by Tenant's Agents shall preclude subrogation claims by the insurer
against anyone insured thereunder. Such insurance shall provide that it is
primary insurance as respects the owner and that any other insurance maintained
by owner is excess and noncontributing with the insurance required hereunder.
The requirements for the foregoing insurance shall not derogate from the
provisions for indemnification of Landlord by Tenant under Section 4.2.2.2 of
                                                           ---------------
this Tenant Work Letter. Landlord may, in its discretion, require Tenant to
obtain a lien and completion bond or some alternate form of security
satisfactory to Landlord in an amount sufficient to ensure the lien-free
completion of the Tenant Improvements and naming Landlord as a

                                      -39-
<PAGE>
 
co-obligee.

          4.2.3 Governmental Compliance. The Tenant Improvements shall comply in
                -----------------------    
all respects with the following: (i) the Code and other state, federal, city or
quasi-governmental laws, codes, ordinances and regulations, as each may apply
according to the rulings of the controlling public official, agent or other
person; (ii) applicable standards of the American Insurance Association
(formerly, the National Board of Fire Underwriters) and the National Electrical
Code; and (iii) building material manufacturer's specifications.

          4.2.4 Inspection by Landlord. Landlord shall have the right to inspect
                ----------------------
the Tenant Improvements at all times, provided however, that Landlord's failure
to inspect the Tenant Improvements shall in no event constitute a waiver of any
of Landlord's rights hereunder nor shall Landlord's inspection of the Tenant
Improvements constitute Landlord's approval of the same. Should Landlord
disapprove any portion of the Tenant Improvements, Landlord shall notify Tenant
in writing of such disapproval and shall specify the items disapproved. Any
defects or impermissible deviations in, and/or reasonable disapproval by
Landlord of, the Tenant Improvements shall be rectified by Tenant at no expense
to Landlord, provided however, that in the event Landlord determines that a
defect or impermissible deviation exists or reasonably disapproves of any matter
in connection with any portion of the Tenant Improvements and such defect,
deviation or matter might reasonably be expected to adversely affect the
mechanical, electrical, plumbing, heating, ventilating and air conditioning or
life-safety systems of the Building, the structure or exterior appearance of the
Building or any other tenant's use of such other tenant's leased premises,
Landlord may, take such action as Landlord reasonably deems necessary, at
Tenant's expense and without incurring any liability on Landlord's part, to
correct any such defect, deviation and/or matter, including, without limitation,
causing the cessation of performance of the construction of the Tenant
Improvements until such time as the defect, deviation and/or matter is corrected
to Landlord's reasonable satisfaction.

          4.2.5 Meetings. Commencing upon the execution of this Lease, Tenant
                --------
shall hold weekly meetings at a reasonable time, with the Architect and the
Contractor regarding the progress of the preparation of Construction Drawings
and the construction of the Tenant Improvements, which meetings shall be held at
the Building, and Landlord and/or its agents shall receive prior notice of, and
shall have the right to attend, all such meetings, and, upon Landlord's request,
certain of Tenant's Agents shall attend such meetings. In addition, minutes
shall be taken at all such meetings, a copy of which minutes shall be promptly
delivered to Landlord. One such meeting each month shall include the review of
Contractor's current request for payment.

     4.3  Notice of Completion; Copy of Record Set of Plans. Within ten (10)
          -------------------------------------------------
days after completion of construction of the Tenant Improvements, Tenant shall
cause a Notice of Completion to be recorded in the office of the Recorder of the
county in which the Building is located in accordance with Section 3093 of the
Civil Code of the State of California or any successor statute, and shall
furnish a copy thereof to Landlord upon such recordation, provided that Tenant
shall be entitled to record and deliver to Landlord earlier Notices of
Completion in accordance with the terms of this sentence with respect to
portions of the Tenant Improvements which have completed prior to the completion
of the entirety of the Tenant Improvements. If Tenant fails to do so five (5)
days following notice by Landlord (which notice shall not be delivered prior to
the expiration of such 10-day period), Landlord may execute and file the same on
behalf of Tenant as Tenant's agent for such purpose, at Tenant's sole cost and
expense. At the conclusion of construction, (i) Tenant shall cause the Architect
and Contractor (A) to update the Approved Working Drawings as necessary to
reflect all changes made to the Approved Working Drawings during the course of
construction, (B) to certify to the best of their knowledge that the "record-
set" of as-built drawings are true and correct in all material respects, which
certification shall survive the expiration or termination of this Lease, and (C)
to deliver to Landlord two (2) sets of copies of such record set of drawings
within ninety (90) days following issuance of a certificate of occupancy for the
Premises, and (ii) Tenant shall deliver to Landlord a copy of all warranties,
guaranties, and operating manuals and information relating to the improvements,
equipment, and systems in the Premises.

     4.4  Construction Schedule. Tenant will endeavor to cause the Tenant
          ---------------------
Improvements to be constructed in three phases which will allow Tenant to
complete the Premises and commence its beneficial occupancy of the same in
accordance with the following schedule:

                    STAGES (IN RENTABLE SQUARE FEET)
                    --------------------------------

                      Phase I         Phase II           Phase III

     Floors          10/15/98          1/1/99             6/1/99
     ------          --------          ------             ------ 
                                                     
        1              1,200            4,871                -
                                                     
        2              4,140              -                  -
                                                     
        3                -             19,994                -
                                                     
        4                -             19,408                -

                                      -40-
<PAGE>
 
        5                -              5,450             13,920
                                                     
        6              6,400              -               12,832
        -              -----            -----             ------
                                                     
     TOTALS           11,740           49,723             26,752

Notwithstanding the foregoing, Landlord and Tenant hereby acknowledge and agree
that (i) nothing in this Section 4.4 shall alter or modify the Lease
Commencement Date, as set forth in Section 7.2 of the Summary, and (ii) Tenant
shall be obligated to commence the payment of Rent in accordance with the terms
of this Lease upon the Lease Commencement Date.


                                   SECTION 5
                                   ---------
                       DELAY OF LEASE COMMENCEMENT DATE
                       --------------------------------

         5.1 Landlord Caused Delays. The Lease Commencement Date shall occur as
             ----------------------
provided in Section 2.1 of this Lease, provided that the Lease Commencement Date
shall be delayed by the number of days of delay of the "substantial completion
of the Tenant Improvements," as that term is defined below in this Section 5, in
the Premises which is caused solely by a "Landlord Caused Delay." As used
herein, the term "Landlord Caused Delay" shall mean only an actual delay
resulting from the acts or omissions of Landlord including, but not limited to
(i) failure of Landlord to timely approve or disapprove any Construction
Drawings; (ii) unreasonable and material interference by Landlord, its agents or
contractors with the completion of the Tenant Improvements and which objectively
preclude construction of tenant improvements in the Building by any person,
which interference relates to access by Tenant, its agents and contractors to
the Building or any Building facilities (including loading docks and freight
elevators) or service (including temporary power and parking areas as provided
herein) during normal construction hours, or the use thereof during normal
construction hours; and (iii) delays due to the acts or failures to act of
Landlord, its agents or contractors with respect to payment of the Tenant
Improvement Allowance and/or any cessation of work upon the Tenant Improvements
as a result thereof.

         5.2 Determination of Landlord Caused Delay. If Tenant contends that a
             --------------------------------------
Landlord Caused Delay has occurred, Tenant shall notify Landlord in writing
within two (2) business days of each of (i) the date upon which such Landlord
Caused Delay becomes known to Tenant, Architect, or Contractor and (ii) the date
upon which such Landlord Caused Delay ends (the "Delay Termination Date").
Tenant's failure to deliver either or both of such notices to Landlord within
the required time period shall be deemed to be a waiver by Tenant of the
contended Landlord Caused Delay to which such notices would have related. If
such actions, inaction or circumstances described in the notice set forth in
clause (i), above (the "Delay Notice") qualify as a Landlord Caused Delay, then
a Landlord Caused Delay shall be deemed to have occurred commencing as of the
commencement of the Landlord Caused Delay and ending as of the Delay Termination
Date.

         5.3 Definition of Substantial Completion of the Tenant Improvements.
             ---------------------------------------------------------------
For purposes of this Section 5, "substantial completion of the Tenant
Improvements" shall mean completion of construction of the Tenant Improvements
in the Premises pursuant to the Approved Working Drawings, with the exception of
any punch list items, any furniture, fixtures, work-stations, built-in furniture
or equipment (even if the same requires installation or electrification by
Tenant's Agents), and any tenant improvement finish items and materials which
are selected by Tenant but which are not available within a reasonable time
(given the date of the Lease Commencement Date).

                                    SECTION 6
                                    ---------
                                  MISCELLANEOUS
                                  -------------

         6.1 Tenant's Representative. Tenant has designated Ms. Stephanie
             -----------------------
Kirkpatrick as its sole representative with respect to the matters set forth in
this Tenant Work Letter, who shall have full authority and responsibility to act
on behalf of the Tenant as required in this Tenant Work Letter.

         6.2 Landlord's Representative. Landlord has designated Mr. Steve Lovett
             -------------------------
as its sole representatives with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.

         6.3 Time of the Essence in This Tenant Work Letter. Unless otherwise
             ----------------------------------------------
indicated, all references herein to a "number of days" shall mean and refer to
calendar days. If any item requiring approval is timely disapproved by Landlord,
the procedure for preparation of the document and approval thereof shall be
repeated until the document is approved by Landlord.

         6.4 Tenant's Lease Default. Notwithstanding any provision to the
             ----------------------
contrary contained in this Lease, if an event of default as described in the
Lease or this Tenant Work Letter has occurred at any time on or before the
Substantial Completion of the Premises, and if such default is a monetary
default or a material nonmonetary default, then (i) in addition to all other
rights and remedies granted to Landlord pursuant to this Lease, Landlord shall
have the right to withhold payment of all or any portion of the Tenant
Improvement Allowance and/or Landlord may cause Contractor to cease the
construction of the Premises (in which case, Tenant shall be responsible for any
delay in the substantial completion of the Premises caused by such work
stoppage), and (ii) all other obligations of Landlord under the terms of this
Tenant Work Letter shall be forgiven until such time as such default is cured
pursuant to the terms of this Lease (in which case, Tenant shall be responsible
for any delay in the substantial completion of the Premises caused by such
inaction by Landlord).

                                      -41-
<PAGE>
 
                                  SCHEDULE 1
                                  ----------
                             APPROVED CONTRACTORS
                             --------------------

1.   CANNON CONSTRUCTORS
2.   CORPORATE CONTRACTORS, INC.
3.   ILLIG CONSTRUCTION
4.   TURELK, INC.
5.   INNERSPACE CONSTRUCTION

                                      -42-
<PAGE>
 
                                   EXHIBIT C
                                   ---------
                              AMENDMENT TO LEASE
                              ------------------

         This AMENDMENT TO LEASE ("Amendment") is made and entered into
effective as of _________________, 19__, by and between W9/WLA REAL ESTATE
LIMITED PARTNERSHIP, a Delaware limited partnership ("Landlord"), and EDUTREK
INTERNATIONAL, INC., a Georgia corporation ("Tenant")


                                R E C I T A L S :
                                ----------------

         A. Landlord and Tenant entered into that certain Office Lease dated as
of _____________________ (the "Lease") pursuant to which Landlord leased to
Tenant and Tenant leased from Landlord certain "Premises", as described in the
Lease, located in the Building located at 12655 West Jefferson Boulevard, Los
Angeles, California 90066.

         B. Except as otherwise set forth herein, all capitalized terms used in
this Amendment shall have the same meaning five such terms in the Lease.

         C. Landlord and Tenant desire to amend the Lease to confirm the
commencement and expiration dates of the term, as hereinafter provided.

         NOW, THEREFORE, in consideration of the foregoing Recitals and the
mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

         1. Confirmation of Dates. The parties hereby confirm that (a) the term
            ---------------------
of the Lease commenced as of ____________________ (the "Lease Commencement
Date") for a term of _________________________ ending on _______________________
(unless sooner terminated as provided in the Lease and (b) in accordance with
the Lease, Rent commenced to accrue on _________________________________.

         2. No Further Modification. Except as set forth in this Amendment, all
            ----------------------- 
of the terms and provisions of the Lease shall remain unmodified and in full
force and effect.

         IN WITNESS WHEREOF, this Amendment to Lease has been executed as of the
day and year first above written.

                           "Landlord":
                           W9/WLA  REAL ESTATE LIMITED PARTNERSHIP,
                           a Delaware limited partnership

                           By:   LPC MS, Inc., as agent and manager for Landlord

                           By:    ___________________________________
                             Name:_________________________  
                             Its: _________________________    

                           "Tenant":
                           EDUTREK INTERNATIONAL, INC.,
                           a Georgia corporation
                           By:      
                             Name:___________________________________
                             Its: _________________________
                           By:    ___________________________________     
                               Name:_______________________
                               Its:________________________

                                      -43-
<PAGE>
 
                                   EXHIBIT D
                                   ---------
                              RULES AND REGULATIONS
                              ---------------------

         Tenant shall faithfully observe and comply with the following Rules and
Regulations. In the event of any conflict between the Rules and Regulations and
the terms of the Lease (including the Tenant Work Letter), the terms of the
Lease shall control.

         1. Tenant shall not alter any lock or install any new or additional
locks or bolts on any doors or windows of the Premises without obtaining
Landlord's prior written consent. Tenant shall bear the cost of any lock changes
or repairs required by Tenant. Two keys will be furnished by Landlord for the
Premises, and any additional keys required by Tenant must be obtained from
Landlord at a reasonable cost to be established by Landlord.

         2. All doors opening to public corridors shall be kept closed at all
times except for normal ingress and egress to the Premises, unless electrical
hold backs have been installed.

         3. Landlord reserves the right to close and keep locked all entrance
and exit doors of the Building during such hours as are customary for comparable
buildings in the vicinity of the Building. Tenant, its employees and agents must
be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register when so doing. Access to the Building may be
refused unless the person seeking access has proper identification or has a
previously arranged pass for access to the Building. The Landlord and its agents
shall in no case be liable for damages for any error with regard to the
admission to or exclusion from the Building of any person. In case of invasion,
mob, riot, public excitement, or other commotion, Landlord reserves the right to
prevent access to the Building during the continuance of same by any means it
deems appropriate for the safety and protection of life and property.

         4. Landlord shall have the right to prescribe the weight, size and
position of all safes and other heavy property brought into the Building. Safes
and other heavy objects shall, if considered necessary by Landlord, stand on
supports of such thickness as is necessary to properly distribute the weight.
Landlord will not be responsible for loss of or damage to any such safe or
property in any case. All damage done to any part of the Building, its contents,
occupants or visitors by moving or maintaining any such safe or other property
shall be the sole responsibility of Tenant and any expense of said damage or
injury shall be borne by Tenant.

         5. Landlord shall have the right to control and operate the public
portions of the Building, the public facilities, the heating and air
conditioning, and any other facilities furnished for the common use of tenants,
in such manner as is customary for comparable buildings in the vicinity of the
Building.

         6. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord.

         7. Tenant shall not disturb, solicit, or canvass any occupant of the
Building and shall cooperate with Landlord or Landlord's agents to prevent same.

         8. The toilet rooms, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the tenant who, or whose employees or agents, shall have caused it.

         9. Tenant shall not overload the floor of the Premises.

         10. Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines of any description other
than fractional horsepower office machines shall be installed, maintained or
operated upon the Premises without the written consent of Landlord.

         11. Tenant shall not use any method of heating or air conditioning
other than that which may be supplied by Landlord, without the prior written
consent of Landlord.

         12. Tenant shall not use or keep in or on the Premises or the Building
any kerosene, gasoline or other inflammable or combustible fluid or material.
Tenant shall not use, keep or permit to be used or kept, any foul or noxious gas
or substance in or on the Premises, or permit or allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Building by reason of noise, odors, or vibrations, or interfere
in any way with other Tenants or those having business therein.

         13. Tenant shall not bring into or keep within the Building or the
Premises any animals, birds, bicycles or other vehicles.

         14. No cooking shall be done or permitted by any tenant on the Premises
(except in the Cafeteria in compliance with all applicable laws), nor shall the
Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages, provided that such use is in accordance with all applicable federal,
state and city laws, codes, ordinances, rules and regulations, and does not
cause odors which are objectionable to Landlord and other Tenants.

         15. Landlord will approve where and how telephone and telegraph wires
are to be introduced to the Premises. No boring or cutting for wires shall be
allowed without the consent of Landlord. The location of telephone, call boxes
and other office equipment affixed to the Premises shall be subject to the
approval of Landlord.

         16. Landlord reserves the right to exclude or expel from the Building
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in violation
of any of these Rules and Regulations.

         17. Tenant, its employees and agents shall not loiter in the entrances
or corridors, nor in any way obstruct the sidewalks, lobby, halls, stairways or
elevators, and shall use the same only as a means of ingress and egress for the
Premises.

         18. Tenant shall store all its trash and garbage within the interior of
the Premises. No material shall be placed in the trash boxes or receptacles if
such material is of such nature that it may not be disposed of in the ordinary
and customary manner of removing and disposing of trash and garbage in the city
in which the Building is located without violation of any law or ordinance
governing such disposal. All trash, garbage and refuse disposal shall be made
only through entry-ways and elevators provided for such purposes at such times
as Landlord shall designate.

                                      -44-
<PAGE>
 
         19. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.

         20. Tenant shall assume any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed, when the Premises are not
occupied.

         21. No awnings or other projection shall be attached to the outside
walls of the Building without the prior written consent of Landlord. No
curtains, blinds, shades or screens shall be attached to or hung in, or used in
connection with, any window or door of the Premises without the prior written
consent of Landlord. The sashes, sash doors, skylights, windows, and doors that
reflect or admit light and air into the halls, passageways or other public
places in the Building shall not be covered or obstructed by Tenant, nor shall
any bottles, parcels or other articles be placed on the windowsills. All
electrical ceiling fixtures hung in offices or spaces along the perimeter of the
Building must be fluorescent and/or of a quality, type, design and bulb color
approved by Landlord.

         22. The washing and/or detailing of or, the installation of
windshields, radios, telephones in or general work on, automobiles shall not be
allowed on the Real Property to the extent the same is visible from outside the
Building.

         23. Tenant must comply with requests by the Landlord concerning the
informing of their employees of items of importance to the Landlord.

         24. Tenant shall comply with any non-smoking ordinance adopted by any
applicable governmental authority.

         25. Landlord reserves the right at any time to reasonably change or
rescind any one or more of these Rules and Regulations, or to make such other
and further reasonable Rules and Regulations as in Landlord's reasonable
judgment may from time to time be necessary for the management, safety, care and
cleanliness of the Premises and Building, and for the preservation of good order
therein. Tenant shall be deemed to have read these Rules and Regulations and to
have agreed to abide by them.

                                      -45-
<PAGE>
 
                                   EXHIBIT E
                                   ---------
                     FORM OF TENANT'S ESTOPPEL CERTIFICATE
                     -------------------------------------

         The undersigned, as Tenant under that certain Office Lease (the
"LEASE") made and entered into as of _________________, 19__ and between W9/WLA
REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership as Landlord, and
the undersigned as Tenant, for Premises on the ___________ floor(s) of the
Building located at 12655 West Jefferson Boulevard, Los Angeles, California
hereby certifies as follows:

         1. Attached hereto as Exhibit A is a true and correct copy of the Lease
and all amendments and modifications thereto. The documents contained in Exhibit
                                                                         -------
A represent the entire agreement between the parties as to the Premises.
-
         2. The undersigned has commenced occupancy of the Premises described in
the Lease, currently occupies the Premises, and the Lease Term commenced on
_________.

         3. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.
                                                         ---------
         4. Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:

         5. Tenant shall not modify the documents contained in Exhibit A or
prepay any amounts owing under the Lease to Landlord in excess of thirty (30)
days without the prior written consent of Landlord's mortgagee.

         6. Base Rent became payable on _______________.

         7. The Lease Term expires on _________________.

         8. All conditions of the Lease to be performed by Landlord necessary to
the enforceability of the Lease have been satisfied and Landlord is not in
default thereunder.

         9. No rental has been paid in advance and no security has been
deposited with Landlord except as provided in the Lease.

         10. As of the date hereof, there are no existing defenses or offsets
that the undersigned has, which preclude enforcement of the Lease by Landlord.

         11. All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through _________________. The current monthly installment of Base Rent is
$__________.

         12. The undersigned acknowledges that this Estoppel certificate may be
delivered to Landlord's prospective mortgagee, or a prospective purchaser, and
acknowledges that it recognizes that if same is done, said mortgagee,
prospective mortgagee, or prospective purchaser will be relying upon the
statements contained herein in making the loan or acquiring the property of
which the Premises are a part, and in accepting an assignment of the Lease as
collateral security, and that receipt by it of this certificate is a condition
of making of the loan or acquisition of such property.

         13. If Tenant is a corporation or partnership, each individual
executing this Estoppel Certificate on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in the state in which the Building is located and that Tenant has full
right and authority to execute and deliver this Estoppel Certificate and that
each person signing on behalf of Tenant is authorized to do so.

         Executed at __________________ on the _____ day of ______________,
19___.
                                                "Tenant":

                                                _______________________________,
                                                a _____________________________
                                                By: ___________________________
                                                Name:__________________________
                                                Its:______

                                                By:   _________________________
                                                Name: _________________________
                                                Its:  _____

                                      -46-
<PAGE>
 
                                   EXHIBIT F
                                   --------- 
                           JANITORIAL SPECIFICATIONS
                           -------------------------

                                      -47-
<PAGE>
 
                          [Intentionally left blank]

                                      -48-
<PAGE>
 
                          [Intentionally left blank]

                                      -49-
<PAGE>
 
                                   EXHIBIT G
                                   ---------
                                     SNDA
                                     ----
 
Recording Requested By
and When Recorded Mail to:
Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, CA  92660
Attn: Real Estate Investments
Loan #: MCC 4025817

________________________________________________________________________________

________________________________________________________________________________
                   (Space above this line for Recorder's Use)

                         SUBORDINATION, NON-DISTURBANCE
                         ------------------------------
                            AND ATTORNMENT AGREEMENT
                            ------------------------

          NOTICE TO TENANT: THE SUBORDINATION PROVIDED FOR IN THIS AGREEMENT
RESULTS IN YOUR LEASEHOLD ESTATE IN THE PROPERTY BECOMING SUBJECT TO AND OF
LOWER PRIORITY THAN THE SECURITY INTEREST IN THE PROPERTY CREATED BY SOME OTHER
OR LATER INSTRUMENT.

          THIS AGREEMENT, made as of this 19th day of June, 1998, by and between
W9/WLA REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership
("Landlord"), EDUTREK INTERNATIONAL, INC., a Georgia corporation, Tenant under
the hereinafter described lease ("Tenant"), and Credit Suisse First Boston
Mortgage Capital LLC, a Delaware Limited Liability Company ("Lender"), the
beneficiary under the Deed of Trust hereinafter described. Landlord, Tenant and
Lender are sometimes collectively referred to herein as the "Parties."


                             W I T N E S S E T H:
                             -------------------

          WHEREAS, Lender is the present beneficiary of that certain Deed of
Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing,
dated November 25, 1997, and recorded in the Official Records of Los Angeles
County as Instrument No. 97-1890314 ("Deed of Trust), which Deed of Trust
secures payment of a promissory note made payable to Lender or to order. The
Deed of Trust encumbers certain real property (the "Property") located in the
City of Los Angeles, County of Los Angeles, State of California, more
particularly described in Exhibit A attached hereto.
                          ---------

          WHEREAS, Landlord and Tenant have entered in to a lease dated June 19,
1998 (the "Lease") covering space within a building located on the Property
(such space further described in the Lease and hereinafter referred to as the
"Premises"), for the term and upon the terms and conditions therein set forth;
and

          WHEREAS, the Parties desire to expressly subordinate the Lease to the
lien of the Deed of Trust; and

          WHEREAS, Tenant has request that Lender agree not to disturb the
peaceful and quiet possession or right of possession of the Premises by Tenant.

          NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:

          1.   Landlord and Tenant declare and agree that each hereby
subordinates the priority and superiority of the Lease, the leasehold interest
and estates created thereby, and the rights, privileges and powers of the Tenant
and Landlord thereunder, in favor of the Deed of Trust, and that the Lease, the
leasehold interests and estates created thereby, and the rights, privileges and
powers of the Tenant and Landlord thereunder, be and the same are hereby, and
with full knowledge and understanding of the effect of such subordination,
unconditionally (subject only to the terms and conditions of this Agreement)
made subordinate to the lien and charge of the Deed of Trust, to all terms,
conditions and provisions of the Deed of Trust, to all advances made or to be
made thereunder, to any renewals, extensions, modifications or replacements of
the Deed of Trust, and to the rights, privileges and powers of the Lender
thereunder, and shall hereafter be junior and inferior to the lien and charge of
the Deed of Trust.

          2.   The Parties declare and agree that this Agreement shall
supersede, to the extent inconsistent herewith, the provisions of the Lease
relating to the subordination of the Lease and the leasehold interests and
estates created thereby to the lien or charge of the Deed of Trust.

          3.   In the event Lender, its successors or assigns or any other
purchaser at a foreclosure sale or sale under private power contained in the
Deed of Trust succeeds to the interest of Landlord under the Lease by reason of
any foreclosure of the Deed of Trust or the acceptance by Lender of a deed in
lieu of foreclosure, or by any other manner (the "Succession") then:

               a.   Lender agrees that it shall not disturb Tenant's peaceful
and quiet possession of the Premises, nor shall the Lease or its appurtenances
be extinguished, terminated or affected thereby, nor shall Lender join Tenant as
a party in any action or proceeding against Landlord; provided, the Tenant shall
not be in default under any of the terms, covenants or conditions of the Lease
or of this Agreement on Tenant's part to be observed or performed as would
entitle Landlord to terminate the Lease or would cause, without any further
action of Landlord, the termination of the Lease or would entitle Landlord to
dispossess tenant thereunder

               b.   Tenant shall be bound to Lender, its successors or assigns
or such other purchaser under all of the terms, covenants and conditions of the
Lease for the remaining balance of the term of the Lease, with the same force
and effect as if Lender, its successors or assigns or such other purchaser were
the Landlord under such Lease, and Lender, its successors or assigns or such
other purchaser, shall be bound to the Tenant under all of the provisions of the
Lease, and Tenant shall from and after the date Lender acquires the interest of
Landlord or comes into possession of or acquires title to the Premises, have the
same remedies against Lender for the breach of any agreement contained in the
Lease that the tenant might have had under the Lease against Landlord. Tenant
does hereby agree to attorn to Lender, its successors or assigns or such other
purchaser as its Landlord, such attornment to be effective and self-operative
without the execution of any further instruments on the part of any of the
Parties, immediately upon Lender, its successors or assigns or such other
purchaser succeeding to the interest of Landlord under the Lease; provided,
however, that Tenant agrees to execute and deliver to Lender, its successors or
assigns or such other purchaser any instrument reasonably requested by such
party to evidence such attornment.

                                      -50-
<PAGE>
 
               c.   Tenant shall be under no obligation to pay rent to Lender
until Tenant receives written notice from Lender stating that Lender is entitled
to receive the rents under the Lease directly from Tenant. Landlord, by its
execution hereof, hereby authorizes Tenant to accept such direction from Lender
and to pay the rents directly to Lender and waives all claims against Tenant for
any sums so paid at Lender's direction. Landlord specifically agrees that Tenant
may conclusively rely upon any written notice Tenant receives from Lender
notwithstanding any claims by Landlord contesting the validity of any term or
condition of such notice, including any default claimed by Lender, and Tenant
shall have no duty to inquire into the validity or appropriateness of any such
notice.

               d.   Subject to the observance and performance by Tenant of all
of the terms, covenants and conditions of the Lease on the part of the Tenant to
be observed and performed, Lender, its successors or assigns or such other
purchaser shall recognize the leasehold estate of Tenant under all of the terms,
covenants and conditions of the Lease for the remaining balance of the term with
the same force and effect as if Lender, its successors or assigns or such other
purchaser were the landlord under the Lease; provided, however, that Lender, its
successors or assigns or such other purchaser shall not be (i) liable for any
act or omission of Landlord under the Lease, except to the extent that Lender
continues such action or omission after Lender succeeds to the interest of
Landlord, (ii) subject to any offsets or defenses which Tenant may be entitled
to assert against Landlord (except for Tenant's offset rights and defenses
expressly provided for in the Lease), (iii) bound by any payment of rent or
additional rent by Tenant to Landlord for more than thirty (30) days in advance
of the due date under the Lease, (iv) liable or responsible for or with respect
to the retention, application and/or return to Tenant of any security deposit
paid to Landlord, whether or not still held by Landlord, unless and until Lender
or such other purchaser has actually received for its own account as landlord
the full amount of such security deposit, (v) bound by any provision in the
Lease which obligates the landlord to erect or complete any building or to
perform any construction work or to make any improvements to the Premises or to
expand or rehabilitate any existing improvements or except as expressly provided
in the Lease to restore any improvement following any casualty or taking, except
for repair and maintenance obligations as provided in the Lease, (vi) bound by
any amendment or modification of the Lease made without the written consent of
Lender, its successors or assigns or such other purchaser, (vii) bound by any
notice of termination, cancellation or surrender not provided for in the Lease
without Lender's prior written consent thereto, (viii) bound by any assignment
of the Lease or sublet of the Premises other than an assignment or sublet made
in accordance with the provisions of the Lease, or (ix) personally liable under
the Lease, and Lender's liability under the Lease shall be limited to the
ownership interest of Lender in Premises.

          4.   The agreements contained herein shall run with the land and shall
be binding upon and inure to the benefit of the respective heirs,
administrators, executors, legal representatives, successors and assigns of the
Parties.

          5.   Tenant hereby agrees that, in the event Tenant notifies Landlord
of a default on the part of Landlord under the Lease, Tenant shall concurrently
send a copy of such notice to Lender, at the address set forth in Paragraph 6
below, certified or registered mail, postage prepaid, return receipt requested.
Tenant agrees that notwithstanding any other provision of the Lease, Tenant
shall not terminate the Lease by reason of any default by Landlord unless Lender
has received the foregoing notice and has failed to cure such default within
thirty (30) days of the date of receipt of such notice, or if the default cannot
reasonably be cured within such thirty (30) day period, within such longer
period of time as is reasonably necessary for Lender to obtain possession of the
Property and to cure such default.

          6.   The address of Lender for all purposes hereunder, unless changed
by Lender giving written notice to Tenant, shall be as follows:

                    Pacific Life Insurance Company
                    700 Newport Center Drive
                    Newport Beach, California  92660
                    Attention:  Vice President, Real Estate Investments

          7.   The address of Tenant for all purposes hereunder, unless changed
by Tenant giving written notice to Lender, shall be as follows:

                    Edutrek International
                    3340 Peachtree Road Northeast
                    Suite 2000
                    Atlanta, Georgia  30326
                    Attention:  Ms. Stephanie Kirkpatrick
                    with a copy to:
                    Smith, Gambrell & Russell, LLP
                    1230 Peachtree Street, N.E.
                    Suite 3100, Promenade 11
                    Atlanta, Georgia  30309-3595
                    Attention:  Arthur Jay Schwartz, Esq.

          IN WITNESS OF THE ABOVE, the undersigned Parties have executed this
instrument as of the day and year first above written.

          NOTICE: THE SUBORDINATION PROVIDED FOR IN THIS AGREEMENT RESULTS IN
YOUR LEASEHOLD ESTATE IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY
THAN THE SECURITY INTEREST IN THE PROPERTY CREATED BY SOME OTHER OR LATER
INSTRUMENT.

                         "LANDLORD"
                         W9/WLA REAL ESTATE LIMITED PARTNERSHIP,
                         a Delaware limited partnership
                         By:  LPC MS, Inc.,
                         as agent and manager for Landlord
                         By:  __________________________________

                                      -51-
<PAGE>
 
                         D. Allen Palmer, Senior Vice President
            
                    "TENANT"
                    EDUTREK INTERNATIONAL, INC.,
                    a Georgia corporation,
                    By:  ___________________________________

                    Name:___________________________________

                    Its:____ 

                    By:  ___________________________________

                    Name:___________________________________

                    Its:____ 

                    "LENDER"

                    By:  CREDIT SUISSE FIRST BOSTON MORTGAGE 
                         CAPITAL LLC,
                    a Delaware Limited Liability Company
 
                    By:  ___________________________________

                    Its:____

                    By:  ___________________________________

                    Its:____

                                      -52-
<PAGE>
 
STATE OF_______________)
                       )  ss.
COUNTY OF______________)

          On ________________________, before me, ________________________, a
Notary Public in and for said state, personally appeared __________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.

          WITNESS my hand and official seal.

                              _______________________________________
                                Notary Public in and for said State

STATE OF_______________)
                       )  ss.
COUNTY OF______________)

          On ________________________, before me, ________________________, a
Notary Public in and for said state, personally appeared _________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.

          WITNESS my hand and official seal.

                              _______________________________________ 
                                Notary Public in and for said State

STATE OF ______________)
                       )  ss.
COUNTY OF _____________)

          On ________________________, before me, ________________________, a
Notary Public in and for said state, personally appeared _________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument .

          WITNESS my hand and official seal.

                              _______________________________________    
                                Notary Public in and for said State

                                      -53-
<PAGE>
 
STATE OF_______________)
                       )  ss.
COUNTY OF______________)

          On ________________________, before me, ________________________, a
Notary Public in and for said state, personally appeared _________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.

          WITNESS my hand and official seal.

                              _______________________________________
                                Notary Public in and for said State
                     
STATE OF_______________)
                       )  ss.
COUNTY OF______________)

          On ________________________, before me, ________________________, a
Notary Public in and for said state, personally appeared _________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument .

          WITNESS my hand and official seal.

                              _______________________________________
                                Notary Public in and for said State

                                      -54-
<PAGE>
 
                                   EXHIBIT A
                                   ---------
                         LEGAL DESCRIPTION OF PROPERTY
                         -----------------------------
                               [TO BE SUPPLIED]
                               ---------------- 

                                    Page 55
<PAGE>
 
                                  OFFICE LEASE
                                  ------------

                         1265 WEST JEFFERSON BOULEVARD
                            LOS ANGELES, CALIFORNIA
                    W9/WLA REAL ESTATE LIMITED PARTNERSHIP,
                        A DELAWARE LIMITED PARTNERSHIP,
                                 as Landlord,
                                      and


                         EDUTREK INTERNATIONAL, INC.,
                            a Georgia corporation,
                                  as Tenant.

                                    Page 56
<PAGE>
 
                        12655 WEST JEFFERSON BOULEVARD

                               TABLE OF CONTENTS
                               -----------------

<TABLE> 
<CAPTION> 
ARTICLE                                                                                                                 PAGE
-------                                                                                                                 ----
<S>                                                                                                                     <C> 
ARTICLE 1     REAL PROPERTY, BUILDING AND PREMISES; EXPANSION PREMISES...............................................     4
              
ARTICLE 2     INITIAL LEASE TERM; GOVERNMENTAL APPROVALS; TENANT                                                          
              TERMINATION RIGHT; OPTION TERMS........................................................................     5
              
ARTICLE 3     BASE RENT..............................................................................................     7
              
ARTICLE 4     ADDITIONAL RENT........................................................................................     7
              
ARTICLE 5     USE OF PREMISES........................................................................................    11
              
ARTICLE 6     SERVICES AND UTILITIES.................................................................................    11
              
ARTICLE 7     REPAIRS................................................................................................    13
              
ARTICLE 8     ADDITIONS AND ALTERATIONS..............................................................................    13
              
ARTICLE 9     COVENANT AGAINST LIENS.................................................................................    14
              
ARTICLE 10    INDEMNIFICATION AND INSURANCE..........................................................................    15
              
ARTICLE 11    DAMAGE AND DESTRUCTION.................................................................................    16
              
ARTICLE 12    CONDEMNATION...........................................................................................    17
              
ARTICLE 13    COVENANT OF QUIET ENJOYMENT............................................................................    18
              
ARTICLE 14    ASSIGNMENT AND SUBLETTING..............................................................................    18
              
ARTICLE 15    SURRENDER; OWNERSHIP AND REMOVAL OF TRADE FIXTURES.....................................................    20
              
ARTICLE 16    HOLDING OVER...........................................................................................    20
              
ARTICLE 17    ESTOPPEL CERTIFICATES..................................................................................    21
              
ARTICLE 18    SUBORDINATION..........................................................................................    21
              
ARTICLE 19    TENANT'S DEFAULTS; LANDLORD'S REMEDIES.................................................................    21
              
ARTICLE 20    SECURITY DEPOSIT/LETTER OF CREDIT......................................................................    23
              
ARTICLE 21    COMPLIANCE WITH LAW....................................................................................    24
              
ARTICLE 22    ENTRY BY LANDLORD......................................................................................    25
              
ARTICLE 23    TENANT PARKING.........................................................................................    25
              
ARTICLE 24    MISCELLANEOUS PROVISIONS...............................................................................    25
</TABLE> 

EXHIBITS
A        OUTLINE OF PREMISES
A-1      EXPANSION PREMISES
B        TENANT WORK LETTER
C        AMENDMENT TO LEASE
D        RULES AND REGULATIONS
E        FORM OF TENANT'S ESTOPPEL CERTIFICATE
F        JANITORIAL SPECIFICATIONS
G        SNDA

                                    Page 57