<PAGE>   1

                                                                   EXHIBIT 10.18

                                  OFFICE LEASE

                             MARINA BUSINESS CENTER

                            SPIEKER PROPERTIES, L.P.,
                        a California limited partnership,
                                  as Landlord,
                                       and
                                   L90, INC.,
                             a Delaware corporation,
                                   as Tenant.



<PAGE>   2

                                  OFFICE LEASE

THIS OFFICE LEASE ("LEASE") is made between SPIEKER PROPERTIES, L.P., a
California limited partnership ("LANDLORD"), and L90, INC., a Delaware
corporation ("TENANT"), as of October 25, 2000 (the "DATE OF THIS LEASE").

                             BASIC LEASE INFORMATION

PROJECT:       Marina Business Center, Marina del Rey, California

BUILDING:      4499 Glencoe Avenue, Marina del Rey, California

DESCRIPTION OF PREMISES: Suite: 150 (the Premises is as outlined in red or as
shown in cross-hatching on EXHIBIT B).

RENTABLE AREA OF PREMISES: 23,729 rentable square feet

PERMITTED USE: General offices uses, internet sales uses and network hosting and
management, all to the extent consistent with a first class office building
only.

SCHEDULED TERM COMMENCEMENT DATE: January 1,2001

SCHEDULED INITIAL TERM: 60 months   SCHEDULED EXPIRATION DATE: December 31, 2005

BASE RENT:

(a) Initial Annual Base Rent $811,531.80   (c) Subject to increase pursuant to
                                               Paragraph 3.1(b) as follows:

(b) Initial Monthly Installment of Base Rent: $67,627.65

<TABLE>
<CAPTION>
                                                         Monthly Installment
                               Year of Initial Term          of Base Rent
                               --------------------          ------------
                               <S>                       <C>
                                         1                   $67,627.65
                                         2                   $70,332.76
                                         3                   $73,146.07
                                         4                   $76,071.91
                                         5                   $79,114.79
</TABLE>

SECURITY DEPOSIT: $750,000.00

ESTIMATED FIRST YEAR OPERATING EXPENSES: $21,493.00 per month

BASE YEAR: The calendar year 2001.

TENANT'S PROPORTIONATE SHARE OF BUILDING: 51.05%        OF PROJECT: 9.13%

<TABLE>
<S>                                                             <C>
PARKING: Four (4) passes per 1,000 rentable square feet of      OCCUPANCY DENSITY: Six (6) persons per 1,000 rentable square
         the Premises, of which four (4) spaces in front of                        feet of the Premises
         the Building shall be identified by Landlord, at
         Tenants cost, as reserved for Tenant's visitors
         (the "VISITOR SPACES")
</TABLE>

TENANT'S NAICS CODE: 541512

TENANT CONTACT: See address for notices, as set forth herein.

<TABLE>
<S>                        <C>                                        <C>
ADDRESSES FOR NOTICES:     To: Tenant                                 To: Landlord
                           Before Term Commencement Date:             13160 Mindinao Way
                           2020 Santa Monica Boulevard                Suite 184
                           Suite 400                                  Marina del Rey, California 90292
                           Santa Monica, California 90404             Attn: Elva Dedeurwaerder
                           Attn: Peter Bryant and General             Fax No.: (310)821-7709
                               Counsel
                           Fax No.: (310)315-1369
                           On and After Term Commencement
                           Date:
                           4499 Glencoe Avenue
                           Suite 150
                           Marina del Rey, California 90292
                           Attn: Peter Bryant and General
                               Counsel
                           Fax No.: (310)315-1369
</TABLE>

TENANT'S BILLING ADDRESS [IF DIFFERENT FROM NOTICE ADDRESS]: See address for
notices, as set forth herein.

LANDLORD'S REMITTANCE ADDRESS:        P.O. Box 60077
                                      Department 12281
                                      Los Angeles, California 90060-0077

GUARANTOR: None.

<PAGE>   3

        IN WITNESS WHEREOF, the parties hereto have executed this Lease,
consisting of the foregoing Basic Lease Information, the following Standard
Lease Provisions consisting of PARAGRAPHS 1 THROUGH 24 (THE "STANDARD LEASE
PROVISIONS") and Exhibits A, B, C, D, and E all of which are incorporated herein
by this reference (collectively, this "LEASE"). In the event of any conflict
between the provisions of the Basic Lease Information and the provisions of the
Standard Lease Provisions, the Standard Lease Provisions shall control.

"LANDLORD"                                  "TENANT"

                                            L90, INC.,
SPIEKER PROPERTIES, L.P.,                   a Delaware corporation
a California limited partnership,

By: Spieker Properties, Inc.                By: /s/ LUCREZIA BICKERTON
    a Maryland corporation,                    ---------------------------------
    its general partner                       Name: Lucrezia Bickerton
                                                   ----------------------------
                                              Title: Asst. Secretary, VP Finance
                                                    ---------------------------

By: /s/ THOMAS A. HERTA                     By: /s/ JOHN BOHAN
   ---------------------------------           ---------------------------------
     Name: Thomas A. Herta                       Name: John Bohan
          -------------------------------             --------------------------
     Title: Vice President                       Title: CEO
           ------------------------------              -------------------------

By:                                         Date: 10-26-00
   ---------------------------------             -------------------------------
     Name:
          -------------------------------
     Title:
           ------------------------------


Date: 10/27/00
     -------------------------------



                                      -2-
<PAGE>   4

                            STANDARD LEASE PROVISIONS

1. PREMISES.

        Landlord hereby ]cases to Tenant and Tenant hereby leases from Landlord,
subject to all of the terms and conditions set forth herein, those certain
premises (the "PREMISES") described in the Basic Lease Information and as
outlined in red or as shown in the cross-hatched markings on the floor plan
attached hereto as EXHIBIT B. The parties agree that for all purposes hereunder
the Premises shall be stipulated to contain the number of square feet of
rentable area described in the Basic Lease Information. The Premises are located
in that certain office building (containing 46,478 rentable square feet of
space) (the "BUILDING") whose street address is as shown in the Basic Lease
Information, and such rentable area shall not be subject to remeasurement or
modification. The Building is located on that certain land which is also
improved with landscaping, parking facilities and other improvements and
appurtenances. Such land, together with all such improvements and appurtenances
and the Building, are all or part of a project which may consist of more than
one building and additional facilities, as described in the Basic Lease
Information (containing 260,026 rentable square feet of space) (collectively
referred to herein as the "PROJECT"). However, Landlord reserves the right to
make such changes, additions and/or deletions to such land, the Building and the
Project and/or the common areas and parking or other facilities thereof as it
shall determine from time to time, provided that, in connection with such
changes, additions and/or deletions (i) Tenant's obligations under Paragraph 3
of this Lease shall not be increased as a result thereof, and (ii) Landlord
agrees to use commercially reasonable efforts to avoid material and adverse
interference with Tenant's use of or access to the Premises and the parking
facilities servicing the same. During the Term, Landlord shall maintain the
Building and Project in a manner at least consistent with the manner in which
the Building and Project are being maintained as of the date of this Lease.
Subject to Landlord's reasonable rules and regulations, Tenant shall have access
to the Premises and the parking facilities servicing the same, twenty-four (24)
hours a day, seven (7) days a week.

2. TERM.

        (a) Unless earlier terminated in accordance with the provisions hereof,
the term of this Lease (the "TERM") shall be as set forth in the Basic Lease
Information; provided, however, in the event the Term Commencement Date (defined
below) occurs on a date other than the first day of a calendar month, there
shall be added to the Term the partial month ("PARTIAL LEASE MONTH") from the
Term Commencement Date to (but not including) the first day of the calendar
month following the Term Commencement Date.

        (b) Subject to the provisions of this Paragraph 2, the Term shall
commence on the date (the "TERM COMMENCEMENT DATE") which is the earlier of (i)
January 1, 2001, and (ii) the date Tenant commences use of any portion of the
Premises for any material business purpose (specifically excluding moving in).
Notwithstanding the foregoing, in the event that Landlord is delayed in
delivering the Premises by reason of any act or omission of Tenant, the Term
Commencement Date shall be (unless Tenant takes possession or commences use of
the Premises prior thereto) the date the Premises would have been delivered by
Landlord had such Tenant caused delay(s) not occurred. This Lease shall be a
binding contractual obligation effective upon execution hereof by Landlord and
Tenant, notwithstanding the later commencement of the Term. Tenant acknowledges
that Tenant has inspected and accepts the Premises in their present condition,
"as is". Accordingly, Tenant further acknowledges and agrees that Landlord shall
not be obligated to provide or pay for any improvements relating to the
Premises.

        (c) Landlord may deliver to Tenant Landlord's standard form "Start-Up
Letter" for Tenant's acknowledgment and confirmation of the Term Commencement
Date. Tenant shall execute and deliver such Start-Up Letter to Landlord within
ten (10) business days after receipt thereof, but Tenant's failure or refusal to
do so shall not negate Tenant's acceptance of the Premises or affect
determination of the Term Commencement Date.

        (d) Tenant's Entry Into the Premises Prior to Term Commencement Date.
Subject to Landlord's reasonable, nondiscriminatory rules and regulations
(including, without limitation, the requirement of evidence of insurance
acceptable to Landlord), Landlord shall allow Tenant access to the Premises
prior to the Term Commencement Date for the purpose of Tenant installing
furniture, equipment or fixtures (including Tenant's data and telephone
equipment) in the Premises. Prior to Tenant's entry into the Premises as
permitted by the terms of this Paragraph 2(d), Tenant shall coordinate with
Landlord the timing and purpose of Tenant's entry. Except to the extent of
Landlord's negligence or willful misconduct, Tenant shall hold Landlord harmless
from and indemnify, protect and defend Landlord against any loss or damage to
the Building or Premises and against injury to any persons caused by Tenant's
actions pursuant to this Paragraph 2(d). In addition, Tenant shall reimburse
Landlord for any costs incurred by Landlord as a result of Tenant's entry into
the Premises in accordance with the terms of this Paragraph 2(d), but Tenant
shall not be charged for services and utilities, bathrooms, and elevators during
any such early entry.

        (e) In the event the Term Commencement Date does not occur by March
1,2001 (the "OUTSIDE COMMENCEMENT DATE"), which date shall be extended by
governmental delays (not to exceed 120 days), delays caused by "Force Majeure,"
as that term is defined in Paragraph 24 of this Lease (not to exceed 60 days)
(provided that in no event shall the Outside Commencement date be extended by
more than 120 days, in the aggregate, for Force Majeure delays and governmental
delays), Tenant shall have the right to terminate this Lease by delivering ten
(10) days' prior notice to Landlord at any time prior to the occurrence of the
Term Commencement Date.

3. RENT AND OPERATING EXPENSES.

        3.1 BASE RENT.

        (a) Subject to the provisions of this Paragraph 3.1, Tenant agrees to
pay during the Term as Base Rent for the Premises the sums specified in the
Basic Lease Information (as increased from time to time as provided in the Basic
Lease Information or as may otherwise be provided in this Lease) ("BASE RENT").

        (b) Base Rent shall increase as set forth in the Basic Lease Information
or as may otherwise be provided in this Lease.

        (c) Except as expressly provided to the contrary herein, Base Rent shall
be payable in equal consecutive monthly installments, in advance, without
deduction or offset, commencing on the Term Commencement Date and continuing on
the first day of each calendar month thereafter. However, the first full monthly
installment of Base Rent shall be payable upon Tenant's execution of this Lease.
If the Term Commencement Date is a day other than the first day of a calendar
month, then the Rent for the Partial Lease Month (the "PARTIAL LEASE MONTH
RENT") shall be prorated based on the actual number of days in the applicable
month. The Partial Lease Month Rent shall be payable by Tenant on the first day
of the calendar month next succeeding the Term Commencement Date. Base Rent, all
forms of additional rent payable hereunder by Tenant and all other amounts,
fees, payments or charges payable hereunder by Tenant (collectively, "ADDITIONAL
RENT") shall (i) each constitute rent payable hereunder (and shall sometimes
collectively be referred to herein as "Rent"), (ii) be payable to Landlord in
lawful money of the United States when due without any prior demand therefor,
except as may be expressly provided to the contrary herein, and (iii) be payable
to Landlord at Landlord's Remittance Address set forth in the Basic Lease
Information or to such other person or to such other place as Landlord may from
time to time designate in writing to Tenant. Any Rent or other amounts payable
to Landlord by Tenant hereunder for any fractional month shall be prorated based
on the actual number of days in the applicable month.



                                      -3-
<PAGE>   5

        3.2 Operating Expenses.

        (a) Subject to the provisions of this Lease, Tenant shall pay to
Landlord pursuant to this Paragraph 3.2 as Additional Rent an amount equal to
Tenant's Proportionate Share (defined below) of Operating Expenses (defined
below) allocable to each Expense Year (defined below) which are in excess of the
amount of the Operating Expenses allocable to the Base Year; provided, however,
that in no event shall any decrease in Operating Expenses for any Expense Year
below Operating Expenses for the Base Year entitle Tenant to any decrease in
Base Rent or any credit against sums due under this Lease. "Tenant's
Proportionate Share" is, subject to the provisions of this Paragraph 3.2, the
percentage number (representing the Premises' share of the Building and the
Project) set forth in the Basic Lease Information. An "Expense Year" is any
calendar year any portion of which falls within the Term.

                (b) "Operating Expenses" means all costs, expenses and
obligations incurred or payable by Landlord because of or in connection with the
operation, ownership, repair, replacement, restoration, management or
maintenance of the Project during or allocable to an Expense Year during the
Term (other than costs, expenses or obligations specifically attributable to
Tenant or other tenants of the Building or Project), all as determined by sound
real estate accounting principles reasonably and consistently applied, including
without limitation the following:

                (i) All property taxes, assessments, charges or impositions and
other similar governmental ad valorem or other charges levied on or attributable
to the Project (including personal and real property contained therein) or its
ownership, operation or transfer, and all taxes, charges, assessments or similar
impositions imposed in lieu or substitution (partially or totally) of the same
(collectively, "TAXES"). "TAXES" shall also include (A) all taxes, assessments,
levies, charges or impositions on any interest of Landlord in the Project, the
Premises or in this Lease, or on the occupancy or use of space in the Project or
the Premises; or on the gross or net rentals or income from the Project,
including, without limitation, any gross income tax, excise tax, sales tax or
gross receipts tax levied by any federal, state or local governmental entity
with respect to the receipt of Rent; or (B) any possessory taxes charged or
levied in lieu of real estate taxes. There shall be excluded from Taxes (i) all
excess profits taxes, franchise taxes, gift taxes, capital stock taxes,
inheritance and succession taxes, estate taxes, federal and state income taxes,
and other taxes to the extent applicable to Landlord's general or net income (as
opposed to rents, receipts or income attributable to operations at the Project),
(ii) any tax penalties, and (III) any amounts payable directly by Tenant or
other tenants; and

                (ii) The cost of all utilities, supplies, equipment, tools,
materials, service contracts, janitorial services, waste and refuse disposal,
landscaping, and insurance (with the nature and extent of such insurance to be
carried by Landlord to be determined by Landlord in its sole and absolute
discretion); insurance deductibles; compensation and benefits of all persons who
perform services connected with the operation, management, maintenance or repair
of the Project (up to the level of the Project director (and/or vice president
responsible for the Project) and building engineer); personal property taxes on
and maintenance and repair of equipment and other personal property; costs and
fees for administration and management of the Project (not to exceed five
percent (5%) of Project revenues in any Expense Year), whether by Landlord or by
an independent contractor, and other management office operational expenses;
rental expenses for or a reasonable allowance for depreciation of, personal
property used in the operation, management, maintenance or repair of the
Project, license, permit and inspection fees; and all inspections, activities,
alterations, improvements or other matters required by any governmental or
quasi-governmental authority or by Regulations (defined below), amortization
over its reasonable useful life (including interest on the unamortized cost at a
rate equal to the "Interest Rate," as that term is defined, below) of the cost
of acquiring or the rental expense of personal property used in the maintenance,
operation and repair of the Project, or any portion thereof the cost of any
capital repairs, replacements or other improvements made to the Project or other
costs incurred in connection with the Project (A) which are intended to reduce
Operating Expenses in connection with the operation or maintenance of the
Project, or any portion thereof to the extent of cost savings reasonably
anticipated by Landlord (based on sound documentation) at the time of such
expenditure to be incurred in connection therewith, or (B) that are required
under any applicable municipal, state, federal or other governmental statutes,
rules, requirements, regulations, laws, standards, orders or ordinances
including, without limitation, zoning ordinances and regulations, and covenants,
easements and restrictions of record (collectively, "REGULATIONS") enacted after
the Term Commencement Date; provided, however, that any such permitted capital
expenditure shall be amortized (with interest at a rate equal to the floating
commercial loan rate announced from time to time by Bank of America, a national
banking association, or its successor, as its prime rate, plus 2% per annum (the
"INTEREST RATE")) over its reasonable useful life; common area repair, operation
and maintenance; security systems or services, if any, deemed reasonably
appropriate by Landlord (but without obligation to provide the same except as
specifically set forth in this Lease); and any other cost or expense incurred or
payable by Landlord in connection with the operation, ownership, repair,
replacement, restoration, management or maintenance of the Project.

        Landlord (x) shall not collect or be entitled to collect from Tenant an
amount in excess of Tenant's Proportionate Share of one hundred percent (100%)
of the Operating Expenses actually paid or incurred by Landlord; and (y) shall
reduce the amount of the Operating Expenses by any refund or discount received
by Landlord in connection with any expenses previously included in the Operating
Expenses (such reduction to be credited to Tenant in the year in which the
refund or discount is received by Landlord). Notwithstanding the foregoing, for
purposes of this Lease, the Operating Expenses shall not, however, include:

                (a) except as specifically set forth above in Paragraph
3.2(b)(ii), bad debt expenses and interest, principal, points and fees on debts
(except in connection with the financing of items which may be included in the
Operating Expenses) or amortization on any mortgage or mortgages or any other
debt instrument encumbering the Building or the Project;

                (b) marketing costs, including leasing commissions, attorneys'
fees in connection with the negotiation and preparation of letters, deal memos,
letters of intent, leases, subleases and/or assignments, space planning costs,
and other costs and expenses incurred in connection with tease, sublease and/or
assignment negotiations and transactions with present or prospective tenants or
other occupants of the Project, including attorneys' fees and other costs and
expenditures incurred in connection with disputes with present or prospective
tenants or other occupants of the Project;

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

                (d) the cost of providing any service directly to and paid
directly by any tenant;

                (e) any costs expressly excluded from the Operating Expenses
elsewhere in this Lease;

                (f) costs of any items (including, but not limited to, costs
incurred by Landlord for the repair or damage to the Project or Building) to the
extent Landlord receives reimbursement from insurance proceeds (such proceeds to
be deducted from the Operating Expenses in the year in which received) or from a
third party (such proceeds to be credited to the Operating Expenses in the year
in which received), except that any deductible amount under any insurance policy
shall be included within the Operating Expenses of the Project);

                (g) except as specifically set forth above in Paragraph
3.2(b)(ii), costs of a capital nature, including, without limitation, capital
improvements, capital repairs and capital equipment;

                (h) rentals and other related expenses for leasing a HVAC
system, elevators, or other items (except when needed in connection with normal
repairs and maintenance of the Project and further excepting from this exclusion
such equipment rented or leased to



                                      -4-
<PAGE>   6

remedy or ameliorate an emergency condition at the Project) which if purchased,
rather than rented, would constitute a capital improvement not included in the
Operating Expenses pursuant to this Lease;

                (i) depreciation, amortization and interest payments, except as
specifically included in the Operating Expenses pursuant to the terms of this
Lease and except on materials, tools, supplies and vendor-type equipment
purchased by Landlord to enable Landlord to supply services Landlord might
otherwise contract for with a third party, where such depreciation, amortization
and interest payments would otherwise have been included in the charge for such
third party's services;

                (j) expenses in connection with services or other benefits which
are not offered to Tenant or for which Tenant is charged for directly but which
are provided to another tenant or occupant of the Project, without charge;

                (k) costs incurred by Landlord due to the violation by Landlord
or any tenant of the terms and conditions of any lease of space in the Project;

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

                (m) Landlord's general corporate overhead and general and
administrative expenses, excluding on-site management to the level of Project
director (and/or vice president responsible for the Project) and Project
engineer and on-site accounting attributable to the Project, but including costs
associated with the operation of the business of the ownership or entity which
constitutes "Landlord," as distinguished from the costs of building operations,
including, but not limited to, partnership accounting and legal matters, costs
of defending any lawsuits with any mortgagee, costs of selling, syndicating,
financing, mortgaging or hypothecating any of Landlord's interest in the
Project, costs of any disputes between Landlord and its employees or with its
Project management;

                (n) advertising and promotional expenditures, and costs (except
for routine maintenance) of signs in or on the Project identifying the owner of
the Project or other tenants' signs, except for Project directories or Project
standard signage;

                (o) electric power costs or other utility costs for which any
tenant directly contracts with the local public service company (but Landlord
shall have the right to "gross up" as if the floor was vacant);

                (p) tax penalties incurred as a result of Landlord's negligence,
inability or unwillingness to make payments or file returns when due;

                (q) costs arising from Landlord's charitable or political
contributions;

                (r) costs of installing, maintaining and operating any specialty
service operated by landlord including without limitation, any luncheon club or
athletic facility, or the repair thereof;

                (s) costs necessitated by or resulting from the gross negligence
of Landlord, or any of its agents, employees or independent contractors;

                (t) any ground lease rental;

                (u) costs of capital acquisition of sculptures, paintings or
other objects of art;

                (v) costs incurred to comply with Regulations with respect to
hazardous material (as defined by applicable law) which was in existence in the
Building or on the Project prior to the Term Commencement Date, and was of such
a nature that a federal, state or municipal governmental or quasi-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 Project, would have then required the removal, remediation or
other action with respect to such hazardous material; and costs incurred with
respect to hazardous material, which hazardous material is brought into the
Building or onto the Project after the date hereof by Landlord or any other
tenant of the Project or by anyone other than Tenant or any Tenant Party and is
of such a nature, at that time, that a federal, state or municipal governmental
or quasi-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 Project, would have then required the removal,
remediation or other action with respect to such hazardous material;

                (w) management fees to the extent in excess of that specifically
includable in Operating Expenses;

                (x) costs of the initial development and construction of the
Project; and

                (y) costs of electricity and janitorial services provided to
tenant spaces.

        Notwithstanding anything contained in this Lease to the contrary, in no
event shall amounts paid by Tenant in any Expense Year pursuant to this
Paragraph 3.2 as reimbursement to Landlord for Landlord's payment of insurance
deductibles exceed $1.00 per rentable square foot of the Premises.

        (c) ADDITIONAL ADJUSTMENTS.

                (i) Variable items of Operating Expenses (e.g., expenses that
are affected by variations in occupancy levels) for each Expense Year during
which actual occupancy of the Project is less than one hundred percent (100%) of
the rentable area of the Project shall be appropriately adjusted, in accordance
with sound real estate accounting principles consistently applied, to reflect
one hundred percent (100%) occupancy of the existing rentable area of the
Project during such period. Operating Expenses for the Base Year shall include
market-wide labor-rate increases due to extraordinary circumstances, including,
but limited to, boycotts and strikes, and utility rate increases due to
extraordinary circumstances including, but not limited to, conservation
surcharges, boycotts, embargoes or other shortages, or amortized costs relating
to capital improvements; provided, however, that at such time as any such
particular assessments, charges, costs or fees are no longer included in
Operating Expenses, such particular assessments, charges, costs or fees shall be
excluded from the Base Year calculation of Operating Expenses. In no event shall
the components of Operating Expenses for any Expense Year related to electrical
costs be less than the components of Operating Expenses related to electrical
costs in the Base Year. If Landlord does not carry earthquake insurance for the
Project during the Base Year but subsequently obtains earthquake insurance for
the Project during the Term, then from and after the date upon which Landlord
obtains such earthquake insurance and continuing throughout the period during
which Landlord maintains such insurance, Operating Expenses for the Base Year
shall be deemed to be increased by the amount of the premium Landlord would have
incurred had Landlord maintained such insurance for the same period of time
during the Base Year as such insurance is maintained by Landlord during such
subsequent year.



                                      -5-
<PAGE>   7

                        (ii) For purposes of this Lease, Taxes shall be
calculated as if the tenant improvements in the Project were fully constructed
(at a Building standard amount) and the Project (including the land upon which
the Project is located), and all tenant improvements in the Project were fully
assessed for real estate tax purposes, and accordingly, during the portion of
any Expense Year or the Base Year, Tax Expenses shall be deemed to be increased
appropriately. Taxes which can be paid by Landlord in installments, shall be
paid by Landlord in the maximum number of installments permitted by law (except
to the extent inconsistent with the general practice of the Comparable
Buildings) and shall be included as Taxes in the year in which the assessment or
premium installment is actually paid. Subject to the remaining terms hereof, tax
refunds shall be credited against Taxes and refunded to Tenant, regardless of
when received, based on the year to which the refund is applicable.
Notwithstanding anything to the contrary set forth in this Lease, the amount of
Taxes for the Base Year and any Expense Year shall be calculated without taking
into account any decreases in real estate taxes obtained in connection with
Proposition 8, and, therefore, the Taxes in the Base Year and/or an Expense Year
may be greater than those actually incurred by Landlord, but shall, nonetheless,
be the Taxes due under this Lease; provided that (i) any reasonable costs and
expenses incurred by Landlord in securing any Proposition 8 reduction shall not
be deducted from Taxes nor included in Operating Expenses for purposes of this
Lease, and (ii) tax refunds under Proposition 8 shall not be deducted from Taxes
nor refunded to Tenant, but rather shall be the sole property of Landlord.
Landlord and Tenant acknowledge this Paragraph 3.2(c)(ii) is not intended to in
any way affect (A) the inclusion in Taxes of the statutory two percent (2.0%)
annual increase in Taxes (as such statutory increase may be modified by
subsequent legislation) or (B) the inclusion or exclusion of Taxes pursuant to
the terms of Proposition 13. Notwithstanding the foregoing, upon a reassessment
of the Building and/or Project pursuant to the terms of Proposition 13 (a
"REASSESSMENT") occurring after the Base Year which results in a decrease in
Taxes, the component of Taxes for the Base Year which is attributable to the
assessed value of the Building and/or Project under Proposition 13 prior to the
Reassessment (without taking into account any Proposition 8 reductions) shall be
reduced, if at all, for the purposes of comparison to all subsequent Expense
Years (commencing with the Expense Year in which the Reassessment takes place)
to an amount equal to the real estate taxes based upon such Reassessment.

                (d) Prior to or shortly following the commencement of (and from
time to time during) each calendar year of the Term following the Term
Commencement Date, Landlord shall give to Tenant a written estimate, on a
line-item by line-item basis, of the excess of (i) Tenant's Proportionate Share
of the projected Operating Expenses for the Project for such Expense Year over
(ii) Tenant's Proportionate Share of Operating Expenses for the Base Year (the
"EXCESS"). Commencing with the first day of the calendar month which is at least
thirty (30) days following the month in which such estimate was delivered to
Tenant, Tenant shall pay such estimated amount (less amounts, if any, previously
paid toward such year) to Landlord in equal monthly installments over the
remainder of such calendar year, in advance on the first day of each month
during such year (or remaining months, if less than all of the year remains).
Subject to the provisions of this Lease, Landlord shall furnish to Tenant within
a reasonable period after the end of each Expense Year, a statement (a
"RECONCILIATION STATEMENT") indicating in reasonable detail on a line-item by
line-item basis the Excess, and the parties shall, within thirty (30) days
thereafter, make any payment or allowance necessary to adjust Tenant's estimated
payments to the actual Excess as indicated by such annual Reconciliation
Statement (which obligation shall survive the expiration of the Term).

                (e) Tenant shall pay ten (10) days before delinquency all taxes
and assessments levied against any personal property or trade fixtures of Tenant
in or about the premises. If any such taxes or assessments are levied against
Landlord or Landlord's property or if the assessed value of the Project is
increased by the inclusion therein of a value placed upon such personal property
or trade fixtures, Tenant shall, within ten (10) days of demand, reimburse
Landlord for the taxes and assessments so levied against Landlord, or any such
taxes, levies and assessments resulting from such increase in assessed value.

                (f)  Any delay or failure of Landlord in (i) delivering any
estimate or statement described in this Paragraph 3.2, or (ii) computing or
billing Tenant's Proportionate Share of Operating Expenses shall not
(A) constitute a waiver of its right to subsequently deliver such estimate or
statement or require any increase in Rent contemplated by this Paragraph 3.2, or
(B) in any way waive or impair the continuing obligations of Tenant under this
Paragraph 3.2; provided, however, that notwithstanding anything to the
contrary contained in this Paragraph 3.2, Tenant shall not be responsible for
Tenant's Proportionate Share of Operating Expenses attributable to any year
which are first billed to Tenant more than two (2) calendar years after the
earlier of the expiration of the year to which the same are applicable or the
Lease expiration date, as the case may be, provided that in any event Tenant
shall be responsible for Tenant's Proportionate Share of Operating Expenses
levied by any governmental authority or by any public utility companies at any
time (provided that Landlord delivers Tenant a supplemental statement for such
amounts within two (2) years following Landlord's receipt of the bill therefor).
Provided that Tenant is not then in default under this Lease beyond any
applicable notice and cure period subject to compliance with Landlord's
reasonable rules and regulations for the same, Tenant shall have the right, upon
the condition that Tenant shall first pay to Landlord the amount in dispute, to
have independent certified public accountants of national standing (who are not
compensated on a contingency basis) of Tenant's selection (and subject to
Landlord's reasonable approval) review Landlord's Operating Expense books and
records relating to the Expense Year subject to a particular Reconciliation
Statement during the two (2) year period following delivery to Tenant of the
Reconciliation Statement for such Expense Year. If such review discloses an
error in Tenant's Proportionate Share of Operating Expenses payable by Tenant in
excess of five percent (5(degree)/a) of Operating Expenses, the cost of such
review shall be borne by Landlord; otherwise such cost shall be borne by Tenant.
Tenant waives the right to dispute or contest, and shall have no right to
dispute or contest, any matter relating to the calculation of Operating Expenses
or other forms of Rent under this Paragraph 3.2 with respect to each Expense
Year for which a Reconciliation Statement is given to Tenant if no claim or
dispute with respect thereto is asserted by Tenant in writing to Landlord within
two (2) years of delivery to Tenant of the original or most recent
Reconciliation Statement with respect thereto.

4. DELINQUENT PAYMENT; HANDLING CHARGES. In the event Tenant shall fail to pay
any amount of Rent or any other payment due under this Lease within five (5)
business days following notice from Landlord that the same was not paid when
due, then Tenant shall pay Landlord, within thirty (30) days of Landlord's
written demand therefor, a late charge equal to five percent (5%) of the
delinquent amount. In addition, any amount due from Tenant to Landlord hereunder
which is not paid within ten (10) days of the date due shall bear interest at an
annual rate (the "DEFAULT RATE") equal to twelve percent (12%).

5. LETTER OF CREDIT.

        5.1 DELIVERY of LETTER of CREDIT. In lieu of depositing a security
deposit with Landlord, Tenant shall, concurrently with Tenant's execution of
this Lease, deliver to Landlord and cause to be in effect during the Lease Term
an unconditional, irrevocable letter of credit ("LOC") in the amount specified
for the Security Deposit in the Basic Lease Information (the "LOC AMOUNT") for
an initial term of one (1) year and thereafter shall renew automatically from
year to year through 30 days beyond the expiration date of his Lease or any
extension thereto. The LOC shall be in a form reasonably acceptable to Landlord
and shall be issued by an LOC bank selected by Tenant and reasonably acceptable
to Landlord. An LOC bank is a bank that accepts deposits, maintains accounts,
has a local office that will negotiate a letter of credit, and the deposits of
which are insured by the Federal Deposit Insurance Corporation, provided that
Landlord hereby approves City National Bank. Tenant shall pay all expenses,
points, or fees incurred by Tenant in obtaining the LOC. The LOC shall not be
mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the
prior written consent of Landlord. Tenant acknowledges that Landlord has the
right to transfer or mortgage its interest in the Project, the Building and in
this Lease and Tenant agrees that in the event of any such transfer or mortgage,
Landlord shall have the right to transfer or assign the LOC and/or the LOC
Security Deposit (as defined below) to the transferee or mortgagee, and in the
event of such transfer, Tenant shall look solely to such transferee or mortgagee
for the return of the LOC and/or the LOC Security Deposit. Tenant shall, within
ten (10) business days of request by Landlord, execute such further instruments
or assurances as Landlord may reasonably deem necessary to evidence or confirm
Landlord's transfer or assignment of the LOC Security Deposit and/or the LOC to
such transferee or mortgagee.

        5.2 REPLACEMENT OF LETTER OF CREDIT. Tenant may, from time to time,
replace any existing LOC with a new LOC if the new LOC (a) becomes effective
prior to the expiration of the LOC that it replaces; (b) is in the required LOC
amount; (c) is issued by an LOC bank acceptable to Landlord; and (d) otherwise
complies with the requirements of this Paragraph 5.



                                      -6-
<PAGE>   8

        5.3 LANDLORD'S RIGHT TO DRAW ON LETTER OF CREDIT. The LOC 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. The LOC shall not be mortgaged, assigned or encumbered in
any manner whatsoever by Tenant without the prior written consent of Landlord.
Landlord shall hold the LOC as security for the performance of Tenant's
obligations under this Lease. If, after notice and failure to cure within any
applicable period provided in this Lease, Tenant defaults on any provision of
this Lease, Landlord may, without prejudice to any other remedy it has, draw on
all or any portion of the LOC necessary to (a) pay Rent or other sum in default;
(b) pay or reimburse Landlord for any amount that Landlord may spend or become
obligated to spend in exercising Landlord's rights under Paragraph 17(d)(ii);
and/or (c) compensate Landlord for any expense, loss, or damage that Landlord
may suffer because of Tenant's default. The use, application or retention of the
LOC, or any portion there of, by Landlord shall not prevent Landlord from
exercising any other right or remedy provided by this Lease or by law, it being
intended that Landlord shall not first be required to proceed against the LOC
and shall not operate as a limitation on any recovery to which Landlord may
otherwise be entitled. If Tenant fails to renew or replace the LOC at least
thirty (30) days before its expiration, Landlord may, without prejudice to any
other remedy it has, draw on the entire amount of the LOC.

        5.4 LOC SECURITY DEPOSIT. Any amount of the LOC that is drawn on by
Landlord but not applied by Landlord shall be held by Landlord as a security
deposit (the "LOC SECURITY DEPOSIT").

        5.5 RESTORATION OF LETTER OF CREDIT AND LOC SECURITY DEPOSIT. If
Landlord draws on all or any portion of the LOC and/or applies all or any
portion of such draw, Tenant shall, within five (5) business days after demand
by Landlord, either (a) deposit cash with Landlord in an amount that, when added
to the amount remaining under the LOC and the amount of any LOC Security
Deposit, shall equal the LOC Amount then required under this Paragraph 5; or (b)
reinstate the LOC to the full LOC Amount, and Tenant's failure to do so shall be
a default under this Lease.

6. LANDLORD'S OBLIGATIONS.

        6.1 SERVICES.

                6.1.1 Subject to the provisions of this Lease, Landlord shall
furnish to Tenant during the Term (a) twenty-four (24) hour a day city or
utility company water at those points of supply provided for general use of the
tenants of the Building for normal office kitchen, lavatory, and drinking
purposes; (b) subject to Regulations, heating and air conditioning 6:00 a.m. to
7:00 p.m., Monday through Friday (not including legal holidays) ("BUSINESS
HOURS") for the Building at such temperatures and in such amounts as is
appropriate for normal comfort for normal office use in the Premises; (c)
twenty-four (24) hour a day nonexclusive passenger elevator service; and (d)
twenty-four (24) hour a day adequate electrical wiring, facilities and power
sufficient to provide the "Electrical Capacity," as that term is defined, below,
provided that in no event shall Tenant's electrical usage exceed the
Electrical Capacity. For purposes of this Lease, "Electrical Capacity" shall
mean six (6) watts connected load per usable square foot. If Tenant desires any
of the services specified in this Paragraph 6.1 at any time other than during
the times set forth herein, then subject to such nondiscriminatory conditions
and standards as Landlord shall apply to the same, upon the written request of
Tenant, such services shall be supplied to Tenant in accordance with Landlord's
customary procedures for the Building, including such advance request deadlines
as Landlord shall reasonably require from time to time, and Tenant shall pay to
Landlord Landlord's then reasonable and customary charge for such services
within thirty (30) days after Landlord has delivered to Tenant an invoice
therefor, provided that the hourly charge for any after hours HVAC utilized by
Tenant shall equal the product of (i) the number of the Building's HVAC package
units required to supply the Premises (or the applicable portion thereon with
HVAC, and (ii) $5.00 (the "After Hours HVAC Charge"). Notwithstanding the
foregoing, the After Hours HVAC Charge shall be subject to increase by Landlord,
but only to the extent of any actual increases in Landlord's cost of providing
such service following the date of this Lease. Landlord and Tenant hereby
acknowledge and agree that (A) the prior tenant of the Premises installed a unit
independent of the Building HVAC to provide HVAC to a portion of the Premises
(the "Premises HVAC Unit"), (B) Tenant shall not be responsible for the After
Hours HVAC Charge in connection with Tenant's use of the Premises HVAC Unit (but
Tenant shall be responsible for electricity consumed by such Premises HVAC Unit
in accordance with the terms of Paragraph 6.2 of this Lease), and (C) Tenant
shall be responsible, at Tenant's sole cost and expense, for the repair,
maintenance, and replacement, as necessary, of the Premises HVAC Unit. Landlord
reserves the right to change the supplier or provider of any such service from
time to time. Tenant shall not have the right to obtain any such service for the
Premises directly from a supplier or provider of such service except as provided
herein and in Paragraph 6.4 below.

                6.1.2 JANITORIAL SERVICES. Landlord shall not provide janitorial
services for the Premises. Tenant shall be solely responsible for performing all
janitorial services and other cleaning of the Premises appropriate to maintain
the Premises in a manner consistent with space located at the "Comparable
Buildings," as that term is defined in Paragraph 22.5, below, including, without
limitation, the following.

                        6.1.2.1 Tenant shall cause the carpets or other floor
coverings in the Premises to be professionally cleaned at least once every three
(3) months during the Term.

                        6.1.2.2 Tenant shall cause to be provided (i) monthly
interior window washing, and (ii) five days per week (excluding Holidays)
sweeping and cleaning of the Premises.

                        6.1.2.3 Tenant shall deposit trash five days per week
(excluding Holidays), in the area designated by Landlord from time to time,
which trash shall be sealed in double plastic bags. All trash containers must be
covered and stored in a manner to prevent the emanation of odors into the
Premises or the Building.

                        6.1.2.4 Tenant shall cause to be provided pest
eradication and control services, as required by Landlord in its reasonable
discretion, with respect to the Premises.

                        6.1.2.5 Tenant shall take all actions necessary to
prevent odors from escaping into the Premises, the Building or the Project.

If requested by Landlord, Tenant shall promptly present a cleaning and
maintenance schedule to Landlord for approval, which shall not be unreasonably
withheld, and shall clean and maintain the Premises in accordance with such
schedule. Landlord shall have the right to inspect the services provided
hereunder by Tenant in accordance with the terms of this Lease and to require
Tenant to provide additional cleaning, if necessary. In the event Tenant shall
fail to provide any of the services described in this Paragraph 6.1.2 within
five (5) business days after notice from Landlord, which notice shall not be
required in the event of an emergency, Landlord shall have the right to provide
such services and any charge or cost incurred by Landlord in connection
therewith shall be deemed Additional Rent due and payable by Tenant within
thirty (30) days following receipt by Tenant of a written statement of cost from
Landlord. Failure of Tenant to comply with any one or more of the foregoing
provisions shall be deemed to be a default under this Lease, subject to any
applicable notice and cure period set forth in this Lease.

        6.2 ELECTRICAL USE/PAYMENT BY TENANT. Tenant shall not install or use,
without Landlord's prior written consent, which shall not be unreasonably
withheld, any equipment that requires more than 110 volts. In addition, Tenant
shall not install or use any equipment whose operation is in excess of, or
inconsistent with the capacity of the existing feeders and risers to, or wiring
in, the Premises. Within ten (10) days following demand by Landlord, Tenant
shall pay to Landlord the cost of electricity utilized at the Premises, as
reasonably determined by Landlord based upon an equitable pro-ration of the
electricity consumed in the Building by each of the tenants occupying the same.



                                      -7-
<PAGE>   9

        6.3 RESTORATION OF SERVICES. Following receipt of Tenant's request to do
so, Landlord shall use good faith efforts to restore any service specifically to
be provided under Paragraph 6.1 that becomes unavailable and which is in
Landlord's reasonable control to restore; provided, however, that in no case
shall the unavailability of such services or any other service (or any
diminution in the quality or quantity thereof) or any interference in Tenant's
business operations within the Premises render Landlord liable to Tenant or any
person using or occupying the Premises under or through Tenant (including,
without limitation, any contractor, employee, agent, invitee or visitor of
Tenant) (each, a "TENANT PARTY") for any damages of any nature whatsoever caused
thereby, constitute a constructive eviction of Tenant, constitute a breach of
any implied warranty by Landlord, or entitle Tenant to any abatement of Tenant's
rental obligations hereunder (except as specifically set forth in Paragraph
16.2.2 of this Lease).

        6.4 ACCESS CONTROL. Landlord shall provide reasonable access control
services for the Building and in the Building parking facility seven (7) days
per week, twenty-four (24) hours per day, in a manner consistent with buildings
comparable to and in the vicinity of 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 Project of any person. Tenant may, at its own expense, install its
own security system ("TENANT'S SECURITY SYSTEM") in the Premises subject to and
in accordance with the terms of Paragraph 7 of this Lease; provided, however,
that Tenant shall coordinate the installation and operation of Tenant's Security
System with Landlord to assure that Tenant's Security is compatible with
Landlord's security system and the Building systems and equipment and to the
extent that Tenant's Security System is not compatible with Landlord's security
system and the Building systems and equipment, Tenant shall not be entitled to
install or operate it. Tenant shall be solely responsible, at Tenant's sole cost
and expense, for the monitoring, operation and removal of Tenant's Security
System. Notwithstanding anything to the contrary contained herein, but subject
to the terms of this Lease, upon the expiration of the term of this Lease, or
upon any earlier termination of this Lease, Tenant may, at its expense, remove
or cause to be removed from the Premises Tenant's Security System (if installed
by Tenant), provided that Tenant shall repair all damage resulting from such
removal.

        6.5 SIGNAGE.

                6.5.1 TENANT'S SIGNS. Subject to the terms of this Paragraph
6.5.1 and applicable law, Tenant shall be entitled, at its sole cost and
expense, to install (i) one (1) nonexclusive sign at the top of the Building
(the "BUILDING TOP SIGN"); (ii) subject to the remaining terms hereof, one (1)
nonexclusive sign on a multi-tenant monument (the "MONUMENT"), if Landlord, at
Landlord's option, shall construct such monument to service the Project (the
"MONUMENT SIGN"), and (iii) one (1) sign identifying Tenant above the entrance
to the Premises (collectively, "TENANT'S SIGNS"). All of Tenant's Signs shall at
all times remain the property of Tenant, and Tenant shall remove its signs at
the expiration or earlier termination of this Lease or upon the earlier
termination of Tenant's right to Tenant's Sign as set forth herein. Tenant shall
repair any damage caused in the removal of any sign. Notwithstanding anything
contained herein to the contrary, Tenant hereby acknowledges and agrees that
Landlord shall have no obligation whatsoever to construct the Monument, and that
Tenant's rights to Tenant's Sign on the Monument, as set forth in item (ii),
above, shall be applicable only in the event that Landlord shall elect, in its
sole discretion, to construct the Monument.

                        6.5.1.1 SPECIFICATIONS; OTHER TERMS. The graphics,
materials, color, design, lettering, lighting, size and other specifications
(collectively, the "SPECIFICATIONS") of Tenant's Signs shall be subject to the
prior written approval of Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed, and shall be consistent and compatible with
the quality and nature of the Building and Project, provided that Landlord and
Tenant hereby acknowledge and agree that (i) Landlord shall designate the exact
location of Tenant's Signs, (ii) Landlord hereby approves the logo used by
Tenant as of the date of this Lease, and (iii) Tenant's Sign on the Monument, if
applicable, shall be no smaller than any other tenant's sign thereon.
Furthermore, Tenant's Signage shall comply with all applicable governmental
rules and regulations and shall comply with Landlord's Project standards.
Landlord shall be responsible for the cost of the Monument, if applicable,
provided that Tenant shall be responsible for all costs incurred in connection
with the design, construction, installation, repair and maintenance, compliance
with laws and removal of Tenant's Signs (including without limitation, Tenant's
Sign on the Monument, if applicable), as well as the cost of any utilities
consumed by Tenant's Signs. Upon the expiration or earlier termination of this
Lease, Tenant shall, at its sole cost and expense, remove Tenant's Signs
(including Tenant's sign on the Monument but not the Monument itself) and repair
any and all damage to the Building and the Project caused by such removal.

                        6.5.1.2 BUILDING TOP SIGN RENT. In the event that Tenant
shall elect pursuant to the terms hereof to install the Building Top Sign,
Tenant shall pay to Landlord, in the same manner and pursuant to the same timing
as Base Rent, as additional rent, for each month of the Term during which the
Building Top Sign is on the Building, an amount equal to the "Building Top Sign
Rent," as that term is defined, below, applicable from time to time. For
purposes of this Lease, the "Building Top Sign Rent" shall equal $5,000.00 per
month during each month of the first year of the Term, and, during each year of
the Term thereafter, an amount equal to the product of (i) the Building Top Sign
Rent applicable during the prior year, and (ii) 1.04.

                        6.5.1.3 PERSONAL NATURE OF RIGHTS. Tenant's right to the
Building Top Sign and the Monument Sign, as applicable, shall (i) be personal to
the Original Tenant and may not be utilized by or transferred to any assignee,
sublessee or other transferee of the Original Tenant's interest in this Lease or
the Premises, and (ii) be contingent upon the Original Tenant actually occupying
seventy-five percent (75%) of the Premises.

                6.5.2 INTERIOR PREMISES SIGNAGE. Subject to Landlord's prior
written approval, in its reasonable discretion, and provided all signs are in
keeping with the quality, design and style of the Building and Project, Tenant,
at its sole cost and expense, may install identification signage anywhere in the
Premises, provided that such signs must not be visible from the exterior of the
Building.

        6.6 TENANT HVAC SYSTEM. Subject to the terms of Paragraph 7 of this
Lease, Tenant, at its sole expense may install supplemental HVAC systems in the
Premises (the "TENANT HVAC SYSTEM"), provided that the same does not interfere
with the Building's electrical, HVAC or other systems. In connection with the
Tenant HVAC System, Tenant may, at its sole cost and expense, connect into the
Building's water system to the extent available (as reasonably determined by
Landlord), if and to the extent that (i) Tenant's use of water pursuant to this
Paragraph 6.6 will not materially adversely affect the water system or the use
thereof by other tenants of the Building, and (ii) such connection is otherwise
approved by Landlord, which approval shall not be unreasonably withheld,
conditioned or delayed unless a "Design Problem," as that term is defined,
below, exists. If Tenant connects into the Building's water system pursuant to
the terms of the foregoing sentence, (x) Tenant shall install, at Tenant's
expense, a meter to measure Tenant's use of water, and (y) Tenant shall
reimburse Landlord for Tenant's use of water. Tenant shall be responsible for
the cost of all electricity utilized by the Tenant HVAC System. At Landlord's
sole option, which option shall be exercised (if at all) at the time Landlord
grants its consent to Tenant's installation of the Tenant HVAC System, Tenant
shall remove the Tenant HVAC System, and repair any damages to the Building
caused by such removal, or leave same in the Premises, in which event the same
shall become a part of the realty and belong to Landlord and shall be
surrendered with the Premises upon the expiration or earlier termination of this
Lease. For purposes of this Lease, a "Design Problem" is defined as, and will be
deemed to exist if the applicable work or improvement will 0) affect the
exterior appearance of the Building; (ii) adversely or materially affect the
Building structure; (iii) adversely or materially affect the Building systems;
(iv) unreasonably and materially interfere with any other Project occupant's
normal and customary office operation or (v) fail to comply with Regulations.

7. IMPROVEMENTS, ALTERATIONS, REPAIRS AND MAINTENANCE.

        7.1 IMPROVEMENTS; ALTERATIONS.

                7.1.1 IN GENERAL. Any alterations, additions, deletions,
modifications or utility installations in, of or to the improvements contained
within the Premises (collectively, "ALTERATIONS") shall be installed at Tenant's
expense and only in accordance with detailed plans and



                                      -8-
<PAGE>   10

specifications, construction methods, and, to the extent applicable, all
appropriate permits and licenses, all of which have been previously submitted to
and approved in writing by Landlord, and by a professionally qualified and
licensed contractor and subcontractors reasonably approved by Landlord. No
Alterations in or to the Premises may be made without (a) Landlord's prior
written consent, which shall not be unreasonably withheld, and (b) compliance
with such reasonable, nondiscriminatory requirements and construction
regulations concerning such Alterations as Landlord may impose from time to
time. Landlord shall not unreasonably withhold its consent with respect to
proposed Alterations (and shall grant or deny such consent within twenty (20)
business days following Landlord's receipt of Tenant's request therefor
[together with all relevant information required by Landlord with respect to
such Alterations], stating detailed reasons for denial, if applicable). Landlord
will not be deemed to unreasonably withhold its consent to any Alteration that
violates Regulations, may materially, adversely affect or be incompatible with
the Building's structure or its HVAC, plumbing, telecommunications, elevator,
life-safety, electrical, mechanical or other basic systems, or the appearance of
the interior common areas or exterior of the Project, or which may unreasonably
interfere with the use or occupancy of any other portion of the Project. All
Alterations made in or upon the Premises shall, (i) at Landlord's option, either
be removed by Tenant prior to the end of the Term (and Tenant shall restore the
portion of the Premises affected to its condition existing immediately prior to
such Alteration), or shall remain on the Premises at the end of the Term
(provided that in the event that Tenant's request for approval of any
Alterations shall request a designation pursuant to this item (i), Landlord
shall indicate in its approval (if applicable) of the applicable Alteration
whether or not the same shall be required to be removed prior to the expiation
of the Term in accordance with the terms hereof), and (ii) be constructed,
maintained, insured and used by Tenant, at its risk and expense, in a good and
workmanlike manner, and in accordance with all Regulations. Tenant shall
reimburse Landlord for all actual, out-of-pocket costs which Landlord may incur
in connection with granting approval to Tenant for any such Alterations,
including any costs or expenses which Landlord may incur in electing to have
outside architects and engineers review said plans and specifications, and shall
pay Landlord an administration fee of seven and one half percent (7.5%) of the
cost of the Alterations as additional rent hereunder (provided that such
administration fee shall be reduced to 5% in connection with any cosmetic
Alterations which do not require Landlord's consent pursuant to Paragraph 7.1.2,
below). If any Alteration made or initiated by Tenant or the removal thereof
shall cause, trigger or result in any portion of the Project outside of the
Premises, any portion of the Building's shell and core improvements (including
restrooms, if any) within the Premises, or any Building system inside or outside
of the Premises being required by any governmental authority to be altered,
improved or removed, or may otherwise potentially affect such portions of the
Project or any other tenants of the Project, Landlord shall have the option (but
not the obligation) of performing the same at Tenant's expense, in which case
Tenant shall pay to Landlord (within thirty (30) days of Landlord's written
demand) in advance Landlord's reasonable estimate of the cost of such work, and
any actual costs of such work in excess of Landlord's estimate, plus an
administrative charge of ten percent (10%) thereof. At least ten (10) days
before beginning construction of any Alteration, Tenant shall give Landlord
written notice of the expected commencement date of that construction to permit
Landlord to post and record a notice of non-responsibility. Upon substantial
completion of construction, if the law so provides, Tenant shall cause a timely
notice of completion to be recorded in the office of the recorder of the county
in which the Building is located. In the event Tenant fails to so record the
notice of completion as required pursuant to this Paragraph 7.1, then such
failure shall not, in and of itself, constitute a default hereunder but Tenant
shall indemnify, defend, protect and hold harmless Landlord and the Landlord
Parties from any and all loss, cost, damage, expense and liability (including,
without limitation, court costs and reasonable attorneys' fees) in connection
with such failure by Tenant to so record the Notice of Completion as required
hereunder. Tenant shall have the right to use non-union contractors to perform
all or a portion of the Alterations, but only to the extent (A) Tenant provides
Landlord with prior written notice of its request to hire a non-union
contractor, and (B) hiring non-union contractors does not violate any contracts
to which Landlord is a party;. provided, however, if Tenant chooses to use
nonunion labor and, in Landlord's reasonable opinion, labor harmony with the
workforce or trades engaged in performing the work, labor or services in or
about the Project is disturbed, then, following written notice received by
Tenant from Landlord, Tenant shall (I) immediately cease using all nonunion
labor, and (II) hire only union labor.

                7.1.2 COSMETIC ALTERATIONS. Notwithstanding anything in
Paragraph 7.1.1 to the contrary, Tenant may make any cosmetic Alterations which
do not affect the Building systems and equipment, exterior appearance of the
Building, or structural aspects of the Building, by providing Landlord with
notice not less than ten (10) business days prior to the commencement thereof.
Landlord's consent shall not be required with respect to any such Alterations,
provided the cost of said Alterations do not exceed $100,000.00 in any twelve
(12) month period.

        7.2 REPAIRS AND MAINTENANCE. Landlord shall maintain in such condition
and operating order (and shall keep in such repair and condition), in a manner
substantially consistent with the maintenance and operational standards employed
by landlords of Comparable Buildings, the structural portions of the Building,
including the foundation, floor/ceiling slabs, roof, curtain wall, exterior
glass and mullions, columns, beams, shafts (including elevator shafts), stairs,
parking areas, stairwells, escalators, elevator cabs, plazas, pavement,
sidewalks, curbs, entrances, landscaping, art work, sculptures, public men's and
women's washrooms, Building mechanical, electrical and telephone closets, and
all common and public areas (collectively, "BUILDING STRUCTURE") and the base
building mechanical, electrical, life safety, plumbing, sprinkler systems and
HVAC systems and other base building systems and equipment which were not
constructed by Tenant and are not located within the Premises (collectively, the
"BUILDING SYSTEMS") and otherwise operate the Project in a manner and condition
materially comparable with the standards of operation as are generally customary
for Comparable Buildings. Notwithstanding anything in this Lease to the
contrary, Tenant shall be required to repair the Building Structure and/or the
Building Systems to the extent required because of (i) Tenant's use of the
Premises for other than normal and customary business office operations, or (ii)
the negligence or willful misconduct of Tenant or the Tenant Parties, unless and
to the extent such damage is covered by insurance carried or required to be
carried by Landlord pursuant to this Lease and to which the waiver of
subrogation is applicable (such obligation to the extent applicable to Tenant as
qualified and conditioned will hereinafter be defined as the "BS/BS EXCEPTION").
Except as provided as part of Landlord's obligations set forth above or
elsewhere in this Lease, Tenant shall, at Tenant's own expense, pursuant to the
terms of this Lease, including without limitation Paragraph 7 hereof, keep the
Premises, including all improvements (including all existing improvement and all
Alterations) and fixtures, in good order and repair condition at all times
during the Lease Term (but such obligation shall not extend to the Building
Structure and the Building Systems except pursuant to the BS/BS exception). In
addition, except as provided as part of Landlord's repair obligations set forth
above or elsewhere in this Lease, Tenant shall, at Tenant's own expense but
under the supervision and subject to the prior approval of Landlord, and within
any reasonable period of time specified by Landlord, pursuant to the terms of
this Lease, including without limitation Paragraph 7 hereof, promptly. and
adequately repair all damage to the Premises and replace or repair all damaged
or broken fixtures and appurtenances (but such obligation shall not extend to
the Building Structure and the Building Systems except pursuant to the BS/BS
exception); provided however, that, at Landlord's option, but only if Tenant
fails to make such repairs and replacements within thirty (30) days after notice
thereof from Landlord (or such sooner period of time in the case of an emergency
or to otherwise to protect life and property), Landlord may, but need not, make
such repairs and replacements and Tenant shall pay Landlord the cost thereof,
sufficient to reimburse Landlord for all costs arising from Landlord's
involvement with such repairs and replacements to the extent not duplicative of
Operating Expenses and to the extent the work is not performed by people whose
salaries are paid out of Operating Expenses forthwith upon being billed for
same. Landlord may, but shall not be required to, enter the Premises at all
reasonable times to make such repairs, alterations, improvements and additions
to the Premises or to the Project or to any equipment located in the Project as
Landlord shall desire or deem necessary or as Landlord may be required to do by
applicable Regulations; provided, however, except for emergencies, any such
entry into the Premises by Landlord shall be performed in a manner so as not to
materially or adversely interfere with Tenant's use of, or ingress or egress to,
the Premises. Tenant shall, at Tenant's own expense, pursuant to the provisions
of this Lease, including without limitation Paragraph 7 hereof, keep the
Premises, including all improvements, fixtures and existing improvements,
Alterations, fixtures, and the floor or the floors of me Building on which the
Premises are located, in good order, repair and condition at all times during
the Term (but such obligation shall not extend to the Building Structure and the
Building Systems except pursuant to the BS/BS Exception). Tenant hereby waives
any and all rights under the benefits of Section l of Section 1932 and Sections
1941 and 1942 of the California Civil Code or under any similar law, statute, or
ordinance now or hereafter in effect.

        7.3 MECHANIC'S LIENS. Tenant shall not cause, suffer or permit any
mechanic's or materialman's lien, claim, or stop notice to be filed or asserted
against the Premises, the Building or any funds of Landlord for any work
performed, materials furnished, or obligation incurred by or at the request of
Tenant or any Tenant Party. If any such lien, claim or notice is filed or
asserted, then Tenant shall, within ten (10) business days after Landlord has
delivered notice of the same to Tenant, either (a) pay and satisfy in full the
amount of (and eliminate of record) the lien, claim or notice



                                      -9-
<PAGE>   11

or (b) diligently contest the same and deliver to Landlord a bond or other
security therefor in substance and amount (and issued by an issuer) satisfactory
to Landlord.

8. USE.

        8.1 IN GENERAL. Tenant shall use the Premises only for the uses set
forth in the Basic Lease Information, consistent with the standards of the
Comparable Buildings (the "PERMITTED USE"). Tenant shall conduct its business
and shall cause each Tenant Party to actin such a manner as to (a) not release
or permit the release of any Hazardous Material in, under, on or about the
Project in violation of any Regulations, (b) use or store any Hazardous
Materials (other than incidental amounts of cleaning and office supplies) in or
about the Premises or (c) not create or permit any nuisance or unreasonable
interference with or disturbance of other tenants of the Project or Landlord in
its management of the Project or (d) not create any occupancy density in the
Premises or parking density with respect to Tenant and any Tenant Party at the
Project greater than those specified in the Basic Lease Information. "HAZARDOUS
MATERIAL" means any hazardous, explosive, radioactive or toxic substance,
material or waste which is or becomes regulated by any local, state or federal
governmental authority or agency, including, without limitation, any material or
substance which is (i) defined or listed as a "hazardous waste," "extremely
hazardous waste," "restricted hazardous waste," "hazardous substance,"
"hazardous material," "pollutant" or "contaminant" under any Regulation, (ii) a
flammable explosive, (iii) a radioactive material, (iv) a polychlorinated
biphenyl, (v) asbestos or asbestos containing material, or (vi) a carcinogen.

        8.2 COMPLIANCE WITH LAWS. Tenant shall not do anything or suffer
anything to be done in or about the Premises or the Project which will in any
way conflict with any Regulation. At its sole cost and expense, Tenant shall,
except as otherwise expressly provided in this Lease, promptly comply with all
such Regulations to the extent that such Regulations relate to (i) Tenant's use
of the Premises, (ii) the existing improvements located in the Premises or any
Alterations thereof, and (iii) the Building Structure and the Building Systems
(collectively, the "BASE BUILDING"), but as to the Base Building, only to the
extent such obligations are triggered by non-general office Alterations made by
Tenant to the Premises, any existing non-general office tenant improvements, or
Tenant's use of the Premises for a non-general office use. Subject to the
foregoing, Tenant shall be responsible, at its sole cost and expense, to make
all alterations to the Premises as are required to comply with the governmental
rules, regulations, requirements or standards described in this Paragraph 8.2.
The judgment of any court of competent jurisdiction or the admission of either
party hereto in any judicial action, regardless of whether the other party is a
party thereto, that such party has violated any of said governmental measures,
shall be conclusive of that fact as between Landlord and Tenant. Landlord shall
comply with all Regulations relating to the Base Building, provided that
compliance with such Regulations is not the responsibility of Tenant under this
Lease, and provided further that Landlord's failure to comply therewith would
prohibit Tenant from obtaining or maintaining a certificate of occupancy for the
Premises, or would unreasonably and materially affect the safety of Tenant or
create a significant health hazard for Tenant or otherwise materially interfere
with or materially affect Tenant's permitted use and enjoyment of the Premises.
Landlord shall be permitted to include in Operating Expenses any costs or
expenses incurred by Landlord under this Paragraph 8.2 to the extent consistent
with, and amortized to the extent required by, the provisions of Paragraph 3 of
this Lease.

9. ASSIGNMENT AND SUBLETTING.

        9.1 TRANSFERS: Consent. Tenant shall not, without the prior written
consent of Landlord (which shall not be unreasonably withheld and which shall be
granted or denied within twenty (20) days following Tenant's request therefor in
accordance with the terms of this Paragraph 9.1), (a) assign, transfer,
mortgage, hypothecate, or encumber this Lease or any estate or interest herein,
whether directly, indirectly or by operation of law, (b) sublet any portion of
the Premises, or (c) grant any license, concession, or other right of occupancy
of or with respect to any portion of the Premises, or (d) permit the use of the
Premises by any party other than Tenant or a Tenant Party (each of the events
listed in this Paragraph 9.1 being referred to herein as a "TRANSFER"). If
Tenant requests Landlord's consent to any Transfer, then at least twenty (20)
days prior to the effective date of the proposed Transfer, Tenant shall provide
Landlord with a written description of all terms and conditions of the proposed
Transfer and all consideration therefor (including a calculation of the Transfer
Profits described below), copies of the proposed documentation, and the
following information relating to the proposed transferee: name and address;
information reasonably satisfactory to Landlord concerning the proposed
transferee's business and business history; its proposed use of the Premises;
banking, financial, and other credit information; and general references
sufficient to enable Landlord to determine the proposed transferee's
creditworthiness and character. Landlord s hall not unreasonably withhold its
consent to any assignment or subletting of the Premises, provided that the
parties agree that it shall be reasonable for Landlord to withhold any such
consent if, without limitation, (A) the proposed assignee does not agree to be
bound by and assume the obligations of Tenant under this Lease in a commercially
reasonable form and substance reasonably satisfactory to Landlord; (B) the use
of the Premises by such proposed assignee or subtenant would not be a permitted
use under this Lease or would violate any exclusivity or other arrangement which
Landlord has with any other tenant or occupant or any Regulation or would
violate the Occupancy Density set forth in this Lease; (C) the proposed assignee
or subtenant is not of sound financial condition in light of its obligations
under any such sublease or assignment; (D) the proposed assignee or subtenant is
a governmental agency with the power of condemnation or high foot traffic or
otherwise of a character which is not consistent (in Landlord's reasonable
opinion) with the professional image of the Building or the character of the
other tenant's therein; (E) the proposed assignee or subtenant does not have a
good reputation as a tenant of property or a good business reputation (as
determined by Landlord in its reasonable discretion); (F) the proposed assignee
or subtenant is a person with whom Landlord is actively negotiating to lease
space in the Project (which for purposes of this Lease, shall mean a written
lease proposal or proposals setting forth the material business terms of a
proposed lease have been exchanged within the immediately proceeding three (3)
month period between Landlord and the proposed transferee) or is a present
tenant of the Project (provided that Landlord has space in the Project
reasonably capable of satisfying the proposed transferee's requirements); (G)
the assignment or subletting would entail any use of any Hazardous Materials or
other noxious use or use which may disturb other tenants of the Project; or (H)
Tenant is in default of any obligation of Tenant under this Lease, beyond
applicable notice and cure periods. Any Transfer made without Landlord's consent
shall be void and, at landlord election, shall constitute an default by Tenant,
subject to any applicable notice and cure period. Tenant shall also, within ten
(10) days of written demand therefor, pay to Landlord its reasonable
out-of-pocket costs and reasonable attorneys' fees and all other out-of-pocket
costs Incurred in connection with considering any request for consent to a
proposed Transfer, provided that such cost and expenses shall not exceed Two
Thousand Five Hundred Dollars ($2,500.00) for a Transfer. If Landlord consents
to a proposed Transfer, then the proposed transferee shall deliver to Landlord
Landlord's standard form transfer consent and agreement (which shall be subject
to commercially reasonable modifications) whereby the proposed transferee
expressly assumes the Tenant's obligations hereunder. Landlord's consent to a
Transfer shall not release Tenant from its obligations under this Lease (or any
guarantor of this Lease of its obligations with respect thereto), but rather
Tenant and its transferee shall be jointly and orally liable for all obligations
under this Lease allocable to the space subject to such Transfer. Landlord's
consent to any Transfer shall not waive Landlord's rights as to any subsequent
Transfers. In the event of any claim by Tenant that Landlord has breached its
obligations under this Paragraph 9.1, Tenant's remedies shall be limited to
recovery of its out-of-pocket damages and injunctive relief.

        9.2 BONUS RENT. Any Rent or other consideration realized by Tenant under
any such sublease or assignment in excess of the Rent payable hereunder, after
deducting any "Subleasing Costs," as that term is defined below, incurred by
Tenant in connection with the applicable Transfer (which Subleasing Costs shall
be amortized over the term of the applicable Transfer), shall be divided and
paid, fifty percent (50%) to Tenant, fifty percent (50%) to Landlord.
"Subleasing Costs" shall mean reasonable, out-of-pocket expenses for (i) any
changes, alterations and improvements to the Premises in connection with the
transfer, (ii) any brokerage commissions in connection with the transfer, (iii)
any costs to buyout or takeover the previous lease of a transferee, (iv)
reasonable legal fees incurred in connection with the transfer including those
fees and costs reimbursed to Landlord pursuant to this Lease, and (v) any other
"out-of-pocket" monetary concessions reasonably provided in connection with the
transfer including, but not limited to, tenant improvement or decorating
allowances (collectively, the "SUBLEASING COSTS"). In any assignment or
subletting undertaken by Tenant, Tenant shall diligently seek to obtain the
maximum rental amount available in the marketplace for comparable space
available for a comparable term.



                                      -10-
<PAGE>   12
        9.3 NON-TRANSFERS. Notwithstanding anything to the contrary contained in
this Paragraph, neither (i) an assignment or subletting of all or a portion of
the Premises (A) to an entity which is controlled by, controls or is under
common control with Tenant (or a valid assignee of this Lease), or (B) to a
purchaser of all or substantially all of the assets of Tenant or of an entity
which is controlled by, controls or is under common control with Tenant (or a
valid assignee of this Lease), nor (ii) a transfer, by operation of law or
otherwise, in connection with the merger, consolidation or other reorganization
of Tenant or of an entity which is controlled by, controls or is under common
control with Tenant (or a valid assignee of this Lease), shall be subject to the
Landlord's consent or Tenant's payment of Bonus Rent (collectively, such
entities, purchasers, and parties shall be referred to herein collectively or
individually as an "AFFILIATE"), provided that at least five (5) business days
prior to such assignment or sublease (a) Tenant notifies Landlord of any such
assignment or sublease and promptly supplies Landlord with any documents or
information reasonably requested by Landlord regarding such assignment or
sublease or such Affiliate; and (b) such assignment or sublease is not a
subterfuge by Tenant to avoid its obligations under this Lease. No such
assignment, sublease or other transfer under this Paragraph 9.3 shall relieve
Tenant from any liability under this Lease. For purposes of this Lease,
"control" shall mean the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a person or entity, or
majority ownership of any sort, whether through the ownership of voting
securities, by contractor otherwise.

        9.4 LANDLORD'S OPTION AS TO SUBJECT SPACE. Notwithstanding anything to
the contrary contained in this Paragraph 9, in the event Tenant contemplates a
Transfer of all or a portion of the Premises (other than to an Affiliate),
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"), 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 Paragraph 9.4 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 twenty (20) days after receipt
of any Intention to Transfer Notice, to recapture the 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 (the
"RECAPTURE TERM"), and during the Recapture Term, Tenant shall be relieved of
its obligations under the terms of this Lease. 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 Paragraph 9.4, then, subject to the terms of Paragraph
9, for a period of nine (9) months (the "NINE MONTH PERIOD") commencing on the
last date of such twenty (20) day period, Landlord shall not have any right to
recapture the Contemplated Transfer Space with respect to any Transfer made
during the Nine Month Period, provided that any such Transfer is substantially
on the terms set forth in the Intention to Transfer Notice, and provided further
that any such Transfer shall be subject to the remaining terms of this Paragraph
9. If Landlord elects to recapture as provided herein for less than all of the
Premises or less than the entire Lease Term, Landlord shall return such space to
Tenant at the end of the Recapture Term in the same condition when received if
Tenant will be using the Contemplated Transfer Space in its then existing or
substantially similar condition. If such a Transfer is not so consummated within
the Nine 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 Nine Month Period), Tenant shall again be required to
submit a new Intention to Transfer Notice to Landlord with respect to any
contemplated Transfer, as provided in this Paragraph 9.4.

10. INSURANCE, WAIVERS OF SUBROGATION AND INDEMNITY.

        10.1 INSURANCE. Tenant shall maintain throughout the Term each of the
insurance policies described on EXHIBIT D attached hereto and shall otherwise
comply with the obligations and requirements provided on EXHIBIT D. Landlord
shall maintain, throughout the Term, the insurance attributable to Landlord, as
described on Exhibit D.

        10.2 WAIVER OF SUBROGATION. Landlord and Tenant each waives any claim,
loss or cost it might have against the other for any injury to or death of any
person or persons, or damage to or theft, destruction, loss, or loss of use of
any property (a "LOSS"), to the extent the same is insured against (or is
required to be insured against under the terms hereof) under any "all risk"
property damage insurance policy covering the Building, the Premises, Landlord's
or Tenant's fixtures, personal property, leasehold improvements, or business,
regardless of whether the negligence of the other party caused such Loss.

        10.3 INDEMNITY. Subject to Paragraph 10.2, Tenant shall indemnify,
defend and hold Landlord, Spieker Properties, Inc., and each of their respective
directors, shareholders, partners, lenders, members, managers, affiliates and
employees (collectively, "LANDLORD INDEMNITEES") from and against all claims,
demands, proceedings, losses, obligations, liabilities, causes of action, suits,
judgments, damages, penalties, costs and expenses (including, without
limitation, reasonable attorneys' fees and court costs) arising from or asserted
in connection with the use or occupancy of the Premises by Tenant or any Tenant
Party, including, without limitation, by reason of any release of any Hazardous
Materials by Tenant or any Tenant Party in, under, on, or about the Project, or
any negligence or misconduct of Tenant or of any Tenant Party in or about the
Premises, or Tenant's breach of any of its covenants under this Lease, except in
each case to the extent arising from the negligence or willful misconduct of
Landlord or any Landlord Indemnitee. Except to the extent expressly provided in
this Lease, Tenant hereby waives all claims against and releases Landlord and
each Landlord Indemnitee for any injury to or death of persons, damage to
property or business loss in any manner related to (i) Tenant's use and
occupancy of the Premises, (ii) acts of God, (iii) acts of third parties, or
(iv) any matter outside of the reasonable control of Landlord. This Paragraph
10.3 shall survive termination or expiration of this Lease. Except to the extent
of Tenant's negligence or willful misconduct, Landlord shall indemnify, defend
and hold harmless Tenant from any loss, cost, liability, damage or expense
resulting from the negligence or willful misconduct of Landlord or its agents,
servants, employees, contractors or licensees in connection with Landlord's
activities with respect to the Project or from any default by Landlord under the
terms of this Lease (except for damage to the tenant improvements and Tenant's
personal property, fixtures, furniture and equipment in the Premises to the
extent such damage is covered by insurance Tenant is required to carry pursuant
to the terms of this Lease).

ll. SUBORDINATION; ATTORNMENT.

        11.1 SUBORDINATION. This Lease is subject and subordinate to all present
and future ground or master leases of the Project and to the lien of all
mortgages or deeds of trust (collectively, "SECURITY INSTRUMENTS") now or
hereafter encumbering the Project, 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 any such Security Instruments,
unless the holders of any such mortgages or deeds of trust, or the lessors under
such ground or master leases (such holders and lessors are sometimes
collectively referred to herein as "HOLDERS") require in writing that this Lease
be superior thereto. Notwithstanding the foregoing, Landlord represents and
warrants to Tenant that no deed of trust, mortgage or ground lease encumbers the
Building as of me date of this Lease. Notwithstanding any provision of this
Paragraph 11 to the contrary, any Holder of any Security Instrument may at any
time subordinate the lien of its Security Instrument to this Lease without
obtaining Tenant's consent by giving Tenant written notice of such
subordination, in which event this Lease shall be deemed to be senior to the
Security Instrument in question. Tenant shall, within fifteen (15) days of
request to do so by Landlord, execute, acknowledge and deliver to Landlord such
further commercially reasonable instruments or assurances as Landlord may deem
reasonably necessary or appropriate to evidence or confirm the subordination or
superiority of this Lease to any such Security Instrument; provided, however,
that Landlord agrees to provide Tenant with commercially reasonable
non-disturbance agreement(s) (each, an "SNDA") in favor of Tenant from any
ground lessors, mortgage holders or deed of trust holders of Landlord who later
come into existence at any time prior to the expiration of the Term of the Lease
in consideration of, and as a condition precedent to, Tenant's agreement to be
bound by this Paragraph 11. Tenant hereby irrevocably



                                      -11-
<PAGE>   13

authorizes Landlord to execute and deliver in the name of Tenant any instrument
or instruments required hereunder if Tenant fails to do so within said fifteen
(15) day period.

        11.2 ATTORNMENT. Subject to Tenant's receipt of the SNDA in accordance
with the terms of Paragraph 11.1, above, Tenant covenants and agrees that in the
event that any proceedings are brought for the foreclosure of any mortgage or
deed of trust, or if any ground or master lease is terminated, it shall attorn,
without any deductions or set-offs whatsoever, to the purchaser upon any such
foreclosure sale, or to the lessor of such ground or master 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 "Landlord" under this Lease. If requested, Tenant
shall enter into a new lease with that successor on the same terms and
conditions as are contained in this Lease (for the unexpired portion of the Term
then remaining).

12. RULES AND REGULATIONS. Tenant shall comply, and shall cause each Tenant
Party to comply, with the Rules and Regulations of the Building which are
attached hereto as EXHIBIT A, and all such reasonable nondiscriminatory
modifications, additions, deletions and amendments thereto as Landlord shall
adopt in good faith from time to time. Landlord shall not be responsible to
Tenant for the non-compliance by any other tenant or occupant of the Building or
Project with any of such rules and regulations, any other tenant's or occupant's
lease or any Regulations, provided that Landlord agrees to use its reasonable
efforts to enforce said rules and regulations in a uniform, non-discriminatory
manner against all tenants of the Project.

        Notwithstanding anything to the contrary contained in this Lease,
Landlord agrees that the rules and regulations for the Project shall not be (i)
modified or enforced in any way by Landlord so as to unreasonably and materially
interfere with the permitted use set forth in this Lease or Tenant's access to
the Premises, Building or Project parking facility, or (ii) discriminatorily
enforced against Tenant and not against other tenants of the Project. Landlord
agrees that none of the rules and regulations for the Project shall be used to
prohibit the conduct of any business from the Premises which Tenant is permitted
to conduct, unless said conduct constitutes a nuisance to other tenants of the
Project or materially injures or impairs the reputation or image of the Project
as a professional office building project. In the event any other tenant or
occupant fails to comply with the rules and regulations for the Project, and
such non-compliance unreasonably and materially interferes with Tenant's use of
the Premises, Landlord shall use its reasonable efforts to cause such other
tenants and/or occupants to comply with such rules and regulations.

13. CONDEMNATION. If the entire Project or Premises are taken by right of
eminent domain or conveyed by Landlord in lieu thereof (a "TAKING"), this Lease
shall terminate as of the date of the Taking. If any part of the Project becomes
subject to a Taking and such Taking will prevent Tenant from conducting its
business in the Premises in a manner reasonably comparable to that conducted
immediately before such Taking for a period of more than one hundred eighty
(180) days, then Tenant may terminate this Lease as of the date of such Taking
by giving written notice to Landlord within thirty (30) days after the Taking,
and all Rent paid or payable hereunder shall be apportioned between Landlord and
Tenant as of the date of such Taking. If any material portion, but less than
all, of the Project, Building or the Premises becomes subject to a Taking, or if
Landlord is required to pay any of the proceeds received for a Taking to any
Holder of any Security Instrument, then Landlord may terminate this Lease by
delivering written notice thereof to Tenant within thirty (30) days after such
Taking, and all Rent paid or payable hereunder shall be apportioned between
Landlord and Tenant as of the date of such Taking. If this Lease is not so
terminated, then Base Rent thereafter payable hereunder shall be abated for the
duration of the Taking in proportion to that portion of the Premises rendered
untenantable by such Taking. If any Taking occurs, then Landlord shall receive
the entire award or other compensation for the land on which the Project is
situated, the Project, and other improvements taken, and Tenant may pursue a
claim against the condemnor for the value of Tenant's personal property and
fixtures which Tenant is entitled to remove under this Lease and moving and
relocation costs. Landlord and Tenant agree that the provisions of this
Paragraph 13 and the remaining provisions of this Lease shall exclusively govern
the rights and obligations of the parties with respect to any Taking of any
portion of the Premises, the Building, the Project or the land on which the
Building is located, and Landlord and Tenant hereby waive and release each and
all of their respective common law and statutory rights inconsistent herewith,
whether now or hereinafter in effect (including, without limitation, Section
1265.130 of the California Code of Civil Procedure, as amended from time to
time).

14. FIRE OR OTHER CASUALTY.

        14.1 REPAIR OF DAMAGE TO PREMISES BY LANDLORD. To the extent Landlord
does not have actual knowledge of same, Tenant shall promptly notify Landlord of
any damage to the Premises resulting from fire or any other casualty or any
condition existing in the Premises as a result of a fire or other casualty that
would give rise to the terms of this Paragraph 14. If the Premises, the Building
Structure, the Building Systems, or any common areas of the Project serving or
providing access to the Premises shall be damaged by fire or other casualty or
be subject to a condition existing as a result of a 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 Paragraph 14, restore the Building Structure
and Building Systems and such common areas to substantially the same condition
as existed prior to the casualty, except for modifications required by zoning
and building codes and other applicable Regulations or by the holder of a
mortgage on the Building or Project or any other modifications to the common
areas reasonably deemed desirable by Landlord, provided access to the Premises,
the Project's parking facility, and any common restrooms serving the Premises
shall not be materially impaired. Tenant shall be responsible for the repair of
damage to the Premises, and Tenant's insurance proceeds shall be disbursed for
all costs and expenses incurred in connection with the repair of any such damage
pursuant to a commercially reasonable disbursement procedure mutually approved
by Landlord and Tenant. As long as the tenant improvements in the Premises are
rebuilt to their previously existing condition, Tenant shall be entitled to
retain any portion of the proceeds of the insurance described in Section 1 of
Exhibit D to this Lease in excess of the cost of such restoration, or if this
Lease terminates, Tenant shall receive all such insurance proceeds less an
amount reasonably necessary to replace the improvements in the Premises existing
as of the Term Commencement Date (which shall be paid to Landlord). Prior to the
commencement of construction, if this Lease does not terminate pursuant to
Paragraph 14.2 below or for any other reason, Tenant shall submit to Landlord,
for Landlord's review and approval, all plans, specifications and working
drawings relating thereto, and Landlord shall select, subject to Tenant's
reasonable approval, non-affiliated independent third party contractors to
perform such improvement work. Such submittal of plans and construction of
improvements shall be performed in a commercially reasonable manner. Landlord
shall not be liable for any inconvenience or annoyance to Tenant or any Tenant
Party, 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 or common areas necessary for Tenant to reasonably
conduct Tenant's permitted use, Landlord shall, subject to the terms set forth
below, allow Tenant a proportionate abatement of rent, during the time and to
the extent the Premises-are unfit for occupancy for the permitted use under this
Lease, and not occupied by Tenant as a result thereof; provided, further, if the
Premises is damaged such that the remaining portion thereof is not sufficient to
allow Tenant to conduct its business operations from such remaining portion and
Tenant does not conduct its business operations therefrom, Landlord shall allow
Tenant a total abatement of rent during the time and to the extent the Premises
are unfit for occupancy for the Permitted Use, and not occupied by Tenant as a
result of the subject damage. Tenant's right to rent abatement pursuant to the
preceding sentences shall terminate as of the date Tenant should have completed
repairs to the Premises assuming Tenant used reasonable due diligence in
connection therewith.

        14.2 LANDLORD'S OPTION TO REPAIR. Notwithstanding the terms of Paragraph
14.1 of this Lease, Landlord may elect not to rebuild and/or restore the
Premises, the Building and/or the Project, and instead terminate this Lease by
notifying Tenant in writing of such termination within forty-five (45) days
after Landlord's discovery of the damage, such notice to include a termination
date giving Tenant one hundred twenty (120) days to vacate the Premises which
period will be extended by any Force Majeure on a day-for-day basis, but
Landlord may so elect only if (a) the Building or Project shall be damaged by
fire or other casualty or cause or be subject to a condition existing as a
result of such a fire or other casualty or cause, whether or not the Premises
are affected, and (b) one or more of the following conditions in (i), (ii),
(iii) or (iv), immediately below, is present: (i) in the reasonable judgment of
Landlord's licensed contractor, repairs cannot reasonably be completed within
two hundred forty (240) days of the date of discovery of the damage (when such
repairs are made without the payment of overtime or other premiums); (ii) the
holder of any mortgage on the Building and/or the Project, or ground lessor with
respect to the Project and/or the Building shall require that the insurance
proceeds or any portion thereof in excess of the "Landlord Contribution," as
that term is defined, below, be used to retire the mortgage debt, or shall



                                      -12-
<PAGE>   14

terminate the ground lease, as the case may be, and Landlord elects to terminate
the leases of all other tenants of the Project similarly affected by the damage
and destruction; or (iii) the damage is caused by an earthquake and is not fully
covered, except for the Landlord Contribution, by Landlord's insurance policies
(or by the insurance Landlord is required to carry under this Lease) and
Landlord elects to terminate the leases of all other tenants of the Project
similarly affected by the damage and destruction; provided, however, that if
Landlord does not elect to terminate this Lease pursuant to Landlord's
termination right as provided above, and the repairs cannot, in the reasonable
judgment of a licensed architect or contractor mutually and reasonably agreed
upon by Landlord and Tenant, be completed within two hundred forty (240) days
after the damage or destruction is discovered (which period shall not be subject
to extension as a result of any Force Majeure), Tenant may elect, no earlier
than forty-five (45) days after the date of the damage and not later than ninety
(90) days after the date of such damage, to terminate this Lease by written
notice to Landlord effective as of the date specified in the notice. At any
time, from time to time, after the date occurring forty-five (45) days after the
date the damage is discovered, Tenant may request that Landlord provide Tenant
with a certificate from the architect or contractor described above setting
forth such architect's or contractor's reasonable opinion of the date of
completion of the repairs and Landlord shall respond to such request within five
(5) business days. For purposes of this Paragraph 14.2, the "landlord
contribution" shall initially mean Two Hundred Thousand and No./100 Dollars
($200,000.00); provided, however, that such amount shall be reduced by an amount
equal to $3,333.33 on the first day of each month of the Term.

        14.3 DAMAGE NEAR END OF TERM. In the event that the Premises or the
Building is destroyed or damaged to any substantial extent (i.e., the time
reasonably required for repair exceeds ninety (90) days) during the last twelve
(12) months of the Term, then notwithstanding anything contained in the
Paragraph 14, either Landlord or Tenant shall have the option to terminate this
Lease by giving written notice to the other party 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, Tenant shall pay
the Base Rent and additional rent, properly apportioned up to such date of
damage, 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
Term.

        14.4 WAIVER OF STATUTORY PROVISIONS. The provisions of this Lease,
including this Paragraph 14, 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 the Project, and any statute or
regulation of the State of California, 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 the Project.

15. PARKING.

                15.1 IN GENERAL. Tenant shall have the right, but not the
obligation, to utilize the number of parking passes set forth in the Basic Lease
Information. In connection with the foregoing, Tenant shall have nonexclusive
use of such portion of the parking facilities of the Project as are reasonably
designated by Landlord from time to time for such purpose for the parking of
passenger-size motor vehicles (including sport utility vehicles and pick-up
trucks) used by Tenant and Tenant Parties only (in accordance with the terms
hereof) and are not transferable without Landlord's approval (except in
connection with a Transfer permitted or approved pursuant to the terms of
Paragraph 9 of this Lease). Subject to the terms of this Lease, Tenant shall be
entitled to increase or decrease the number of parking passes rented by Tenant
upon not less than thirty (30) days notice to Landlord. Subject to availability
(as determined by Landlord), Tenant shall be entitled to lease parking passes in
addition to the number set forth in the Basic Lease Information. Tenant shall
pay the prevailing rate charged by Landlord from time to time for the parking
passes rented by Tenant pursuant to the terms hereof (the "PARKING CHARGE"),
provided that prior to the first (1") anniversary of the Term Commencement Date,
Landlord and Tenant hereby agree that the Parking Charge shall be $35.00 per
pass per month. In addition to the Parking Charge, Tenant shall be responsible
for all parking taxes applicable to the passes utilized by Tenant hereunder. The
use of such parking facilities shall be subject to the parking rules and
regulations attached hereto as EXHIBIT E, as such rules and regulations may be
modified by Landlord from time to time, for the use of such facilities.
Notwithstanding anything in the Basic Lease Information to the contrary, in no
event shall Landlord have any obligation to monitor Tenant's Visitor Spaces nor
shall Landlord have any liability in the event of any unauthorized use thereof.

                15.2 VALET SYSTEM. Tenant shall have the right to request
Landlord to supplement Tenant's parking by implementation of a stacked
parking/valet system (a "VALET SYSTEM"), which Valet System shall be subject in
all respects to Landlord's approval, in Landlord's reasonable discretion, and
shall also be subject to all applicable Regulations. Provided that Landlord
shall approve the nature, extent and all other aspects of the Valet System,
subject to all applicable Regulations, Landlord shall implement the Valet
System, if applicable, in accordance with the terms of this Paragraph 15.2, in
which event Tenant shall be solely and exclusively responsible for any and all
costs incurred by Landlord in the implementation and use of such Valet System
and for Landlord's prevailing charge for any supplemental parking provided to
Tenant.

                15.3 VISITOR PARKING. Reasonable visitor parking shall be
available at the Project. Visitor parking rates charged by Landlord shall be
reasonably comparable to the visitor parking rates being charged at the
"Comparable Buildings," as that term is defined in Paragraph 22.5, below.

        16. EVENTS of DEFAULT.

                16.1 TENANT DEFAULTS. Each of the following occurrences shall be
an "EVENT of DEFAULT" and shall constitute a material default and breach of this
Lease by Tenant: (a) any failure by Tenant to pay any installment of Base Rent
Additional Rent or to make any other payment required to be made by Tenant
hereunder within five (5) days following written notice that said amount was not
paid when due; (b) the abandonment or vacation of the Premises by Tenant,
provided, however, that unless Tenant is using the Premises for a retail use,
abandonment or vacation of the Premises shall not be an Event of Default so long
as no other Event of Default has occurred hereunder; (c) any failure by Tenant
to execute and deliver any estoppel certificate or other document or instrument
described in Paragraphs 10 (insurance), 11 (subordination) or 21.2 (estoppel
certificates) requested by Landlord, where such failure continues for five (5)
business days after delivery of written notice of such failure by Landlord to
Tenant; (d) any failure by Tenant to fully perform any other obligation of
Tenant under this Lease, where such failure continues for thirty (30) days
(except where a shorter period of time is specified in this Lease, in which case
such shorter time period shall apply) after delivery of written notice of such
failure by Landlord to Tenant, provided 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 (e) the voluntary or involuntary filing of a
petition by or against Tenant or any general partner of Tenant (i) in any
bankruptcy or other insolvency proceeding, (ii) seeking any relief under any
state or federal debtor relief law, (iii) for the appointment of a liquidator or
receiver for all or substantially all of Tenant's property or for Tenant's
interest in this Lease, or (iv) for the reorganization or modification of
Tenant's capital structure (provided, however, that if such a petition is filed
against Tenant, then such filing shall not be an Event of Default unless Tenant
fails to have the proceedings initiated by such petition dismissed within sixty
(60) days after the filing thereof). Any notice of any failure of Tenant
required under this Paragraph 16 shall be in lieu of, and not in addition to,
any notice required under Section 1161 et seq. of the California Code of Civil
Procedure.

        16.2 LANDLORD DEFAULTS.

                16.2.1 IN GENERAL. Landlord shall not be in default under this
Lease unless Landlord fails to perform obligations required of Landlord within
forty-five (45) days after written notice is delivered by Tenant to Landlord and
to the holder of any mortgages or deeds of trust (collectively, "LENDER")
covering the Premises whose name and address shall have theretofore been
furnished to Tenant in writing, specifying the obligation which Landlord has
failed to perform; provided, however, that if the nature of Landlord's
obligation is such that more than forty-five (45)



                                      -13-
<PAGE>   15

days are required for performance, then Landlord shall not be in default if
Landlord or Lender commences performance within such forty-five (45) day period
and thereafter diligently prosecutes the same to completion.

                16.2.2 ABATEMENT OF RENT. In the event that Tenant is prevented
from using, and does not use, the Premises or any portion thereof, as a result
of (i) any repair, maintenance or alteration performed by Landlord (including
repairs, maintenance and alterations required or permitted by Landlord
hereunder), or which Landlord failed to perform, after the Term Commencement
Date and required by this Lease, which substantially interferes with Tenant's
use of or ingress to or egress from the Building, Project, or Premises or the
Project's parking facility; (ii) any failure to provide services, utilities or
ingress to and egress from the Building, Project, or Premises or the Project
parking facility as required by this Lease; (iii) damage and destruction of or
eminent domain proceedings in connection with the Premises, Building, the
Project or the Project's parking facility servicing the Project, or (iv) the
presence of hazardous materials (as defined by applicable law) (not brought on
the Premises by Tenant Parties) in violation of Regulations which poses a
material health risk to the environment or the Premises (any such set of
circumstances as set forth in items (i) through (iv), above, to be known as an
"ABATEMENT EVENT"), then Tenant shall give Landlord notice of such Abatement
Event, and if such Abatement Event continues for five (5) consecutive business
days after Landlord's receipt of any such notice, or occurs for ten (10)
nonconsecutive business days in a twelve (12) month period (provided Landlord is
sent a notice of each of such Abatement Event) (in either of such events, the
"ELIGIBILITY PERIOD"), then the Base Rent and Tenant's Proportionate Share of
Operating Expenses and Tenant's parking charges 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 ("UNUSABLE
AREA"), bears to the total rentable area of the Premises and Landlord shall pay
to Tenant, to the extent covered (except for any deductible amount) by insurance
retained by Landlord any incremental reasonable, out-of-pocket expense that the
Tenant incurs in relocating the functions previously performed in the Unusable
Area to a different location. For this purpose, an incremental expense shall be
any expense that the Tenant incurs in relocating from the Unusable Area to a
temporary location and then relocating back to the Unusable Area (after such
area has been made fit for Tenant's Permitted Use) that Tenant would not have
had to incur but for such relocation; provided, however, in the event that
Tenant is prevented from using, and does not use, the Unusable Area for a period
of time in excess of the Eligibility Period and the remaining portion of the
Premises is not sufficient to allow Tenant to effectively conduct its business
therein, and if Tenant does not conduct its business from such remaining
portion, then for such time after expiration of the Eligibility Period during
which Tenant is so prevented from effectively conducting its business therein,
the Base Rent and Tenant's Proportionate Share of Operating Expenses and
Tenant's parking charges for the entire Premises shall be abated for such time
as Tenant continues to be so prevented from using, and does not use, the
Premises. If, however, Tenant reoccupies any portion of the Premises during such
period, the rent allocable to such reoccupied portion, based on the proportion
that the rentable area of such reoccupied portion of the Premises bears to the
total rentable area of the Premises, shall be payable by Tenant from the date
Tenant reoccupies such portion of the Premises. Such right to abate Base Rent,
Tenant's Proportionate Share of Direct Expenses and Tenant's parking charges
shall be Tenant's sole and exclusive remedy at law or in equity for an Abatement
Event; provided, however, that (a) nothing in this Paragraph 16.2.2, shall
impair Tenant's rights under Paragraph 16.2.1, above, and (b) if Landlord has
not cured such Abatement Event within one hundred eighty (180) days after
receipt of notice from Tenant, Tenant shall have the right to terminate this
Lease during the first ten (10) business days of each calendar month following
the end of such 180-day period until such time as Landlord has cured the
Abatement Event, which right may be exercised only by delivery of thirty (30)
days' notice to Landlord (the "ABATEMENT EVENT TERMINATION NOTICE") during such
ten (10) business day period, and shall be effective as of a date set forth in
the Abatement Event Termination Notice (the "ABATEMENT EVENT TERMINATION DATE"),
which Abatement Event Termination Date shall not be less than thirty (30) days,
and not more than one (1) year, following the delivery of the Abatement Event
Termination Notice. Notwithstanding anything contained in this Paragraph 16.2.2
to the contrary, Tenant's Abatement Event Termination Notice shall be null and
void (but only in connection with the first notice sent by Tenant with respect
to each separate Abatement Event) if Landlord cures such Abatement Event within
such thirty (30) day period following receipt of the Abatement Event Termination
Notice. If Tenant's right to abatement occurs because of an eminent domain
taking, condemnation and/or because of damage or destruction to the Premises,
the Project's parking facility, and/or the Project, Tenant's abatement period
shall continue until Tenant has been given sufficient time, and sufficient
ingress to, and egress from the Premises, to rebuild such portion it is required
to rebuild, to install its property, furniture, fixtures, and equipment to the
extent the same shall have been removed as a result of such damage or
destruction or temporary taking and to move in over a weekend. To the extent
Tenant is entitled to abatement because of an event covered by Paragraphs 13 or
14 of this Lease, then the Eligibility Period shall not be applicable. Except as
provided in this Paragraph 16.2.2, nothing contained herein shall be interpreted
to mean that Tenant is excused from paying rent due hereunder.

17. REMEDIES. Upon the occurrence of any Event of Default by Tenant, Landlord
shall have, in addition to any other remedies available to Landlord at law or in
equity (all of which remedies shall be distinct, separate, and cumulative), the
option to pursue any one (1) or more of the following remedies, each and all of
which shall be cumulative and nonexclusive, without any notice or demand
whatsoever:

        (a) Terminate this Lease, and Landlord may recover from Tenant the
following: (i) the worth at the time 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 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; 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 Paragraph
17(a) 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 17(a)(i) and (ii), above, the "worth at the time
of award" shall be computed by allowing interest at the Interest Rate, but in no
case greater than the maximum amount of such interest permitted by law. As used
in Paragraph 17(a)(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%).

        (b) 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 Event of
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.

        (c) Landlord shall at all times have the rights and remedies (which
shall be cumulative with each other and cumulative and in addition to those
rights and remedies available under Paragraphs 17(a) and 17(b) above, or any law
or other provision of this Lease), without prior demand or notice except as
required by applicable law, to seek any declaratory, injunctive, or other
equitable relief, and specifically enforce this Lease, or restrain or enjoin a
violation or breach of any provision hereof.

        (d) Notwithstanding anything in this Lease to the contrary, (i) upon the
occurrence of an Event of Default by Tenant, if the Premises or any portion
thereof are sublet, Landlord may, at its option and in addition and without
prejudice to any other remedies herein provided or provided by law, collect
directly from the sublessee(s) all rentals becoming due to the Tenant and apply
such rentals against other sums due hereunder to Landlord; (ii) without
prejudice to any other right or remedy of Landlord, if Tenant shall be in
default under this Lease beyond any applicable notice and cure period, Landlord
may cure the same at the expense of Tenant (A) immediately and without notice in
the case (1) of emergency, (2) where such default unreasonably interferes with
any other tenant in the Building, or (3) where such default will result in the
violation of any Regulation or the cancellation of any insurance policy
maintained by landlord, and (B) in any other case if such default continues for
ten (10) business days following the receipt by Tenant of notice of such default
from Landlord and all costs incurred by Landlord in curing such default(s),
including, without limitation, attorneys' fees, shall be reimbursable by Tenant
as Rent hereunder within thirty (30) days following demand, together with
interest thereon, from the date such costs were incurred by Landlord, at the
Default Rate; and (iii) Tenant hereby waives for Tenant and for all those
claiming



                                      -14-
<PAGE>   16

under tenant all rights now and hereafter existing to redeem by order or
judgment of any court or by any legal process or writ, tenant's right of
occupancy of the Premises after any termination of this Lease.

18. SURRENDER OF PREMISES. No act by Landlord shall be deemed an acceptance of a
surrender of the Premises, and no agreement to accept a surrender of the
Premises shall be valid unless it is in writing and signed by Landlord. At the
expiration or earlier termination of this Lease, Tenant shall deliver to
Landlord all keys (including any electronic access devices and the like) to the
Premises that are in Tenant's possession, and Tenant shall deliver to Landlord
the Premises in the same condition as existed on the date Tenant originally took
possession thereof, ordinary wear and tear excepted, provided that ordinary wear
and tear shall not include repair and clean up items. In addition, prior to the
expiration of the Term or any sooner termination thereof, (a) Tenant shall
remove such Alterations as Landlord shall request (subject to the terms of
Paragraph 7.1.1 of this Lease) and shall restore the portion of the Premises
affected by such Alterations and such removal to its condition existing
immediately prior to the making of such Alterations, (b) Tenant shall remove
from the Premises all unattached trade fixtures, furniture, equipment and
personal property located in the Premises, including, without limitation, phone
equipment, wiring, cabling and all garbage, waste and debris, and (c) Tenant
shall repair all damage to the Premises or the Project caused by any such
removal including, without limitation, full restoration of all holes and gaps
resulting from any such removal and repainting required thereby. All personal
property and fixtures of Tenant not so removed shall, to the extent permitted
under applicable Regulations, be deemed to have been abandoned by Tenant and may
be appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord
without notice to Tenant and without any obligation to account for such items.

19. HOLDING OVER. If Tenant holds over after the expiration or earlier
termination of the Term hereof, with or without the express or implied consent
of Landlord, Tenant shall become and be only a tenant at sufferance at a daily
rent equal to the product of (i) a fraction, the numerator of which is one (1)
and the denominator of which is the number of days in the applicable calendar
month, and (ii) by 150% of the monthly installment of Base Rent payable by
Tenant immediately prior to such expiration or termination for the first one
hundred twenty (120) days of such holdover, and 200% thereof thereafter, and
otherwise upon the terms, covenants and conditions herein specified, so far as
applicable, as reasonably determined by Landlord. Neither any provision hereof
nor any acceptance by Landlord of any rent after any such expiration or earlier
termination (including, without limitation, through any "LOCKBOX") shall be
deemed a consent to any holdover hereunder or result in a renewal of this Lease
or an extension of the Term, or any waiver of any of Landlord's rights or
remedies with respect to such holdover. Notwithstanding any provision to the
contrary contained herein, (i) Landlord expressly reserves the right to require
Tenant to surrender possession of the Premises upon the expiration of the Term
or upon the earlier termination hereof or at any time during any holdover, and
the right to assert any remedy at law or in equity to evict Tenant and collect
damages in connection with any such holdover, and (ii) Tenant shall indemnify,
defend and hold Landlord harmless from and against any and all claims, demands,
actions, proceedings, losses, damages, liabilities, obligations, penalties,
costs and expenses, including, without limitation, all lost profits and other
consequential damages, attorneys' fees, consultants' fees and court costs
incurred or suffered by or asserted against Landlord by reason of Tenant's
failure to surrender the Premises on the expiration or earlier termination of
this Lease.

20. GOOD FAITH. 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 Building Structure or the Building Systems, or
which could affect the exterior appearance of the Building, or (iii) matters
covered by Paragraph 3 (Rent and Operating Expenses), Paragraph 10 (Insurance;
Waivers of Subrogation and Indemnity), or Paragraph 16 (Events of Default) 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.

21. MISCELLANEOUS.

        21.1 LANDLORD TRANSFERS AND LIABILITY; CONSEQUENTIAL DAMAGES. Landlord
may, without restriction, sell, assign or transfer in any manner all or any
portion of the Project, any interest therein or any of Landlord's rights under
this Lease, provided that the transferee assumes Landlord's obligations under
this Lease. If Landlord assigns its rights under this Lease, then Landlord shall
automatically be released from any further obligations thereafter arising
hereunder so long as the Landlord transfers to the transferee the LOC and the
security deposit, if any, provided that the assignee thereof assumes in writing
all of Landlord's obligations hereunder accruing after such assignment. The
liability of Landlord to Tenant for any default by Landlord under the terms of
this Lease or with respect to any obligation or liability related to the
Premises or the Project shall be recoverable only from the interest of Landlord
in the Project, and neither Landlord nor any affiliate thereof shall have any
personal liability with respect thereto. 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 incurred by Landlord in connection with a
holdover of the Premises by Tenant after the expiration or earlier termination
of this Lease.

        21.2 ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS. At any time and from
time to time during the Term, Tenant shall, without charge, execute, acknowledge
and deliver to Landlord within ten (10) business days after Landlord's request
therefor, an estoppel certificate in recordable form containing such factual
certifications and other provisions as are found in the estoppel certificate
forms reasonably requested by institutional lenders and purchasers. Tenant
agrees in any case that (a) the foregoing certificate may be relied on by anyone
holding or proposing to acquire any interest in the Project from or through
Landlord or by any mortgagee or lessor or prospective mortgagee or lessor of the
Project or of any interest therein and (b) the form of estoppel certificate
shall be in such commercially reasonable form as Landlord shall reasonably
select. If Tenant is not a public company reporting under applicable federal
securities Regulations, at the request of Landlord from time to time, Tenant
shall provide to Landlord within ten (10) days of Landlord's request therefor
tenant's and any guarantor's current financial statements.

        21.3 NOTICES. Notices, requests, consents or other communications
desired or required to be given by or on behalf of Landlord or Tenant under this
Lease shall be effective only if given in writing and sent by (a) registered or
certified United States mail, postage prepaid. return receipt requested, (b)
nationally recognized express mail courier that provides written evidence of
delivery, fees prepaid, or (c) Facsimile and addressed as set forth in the Basic
Lease Information, or at such other address in the State of California as may be
specified from time to time, in writing. Any such notice, request, consent, or
other communication shall only be deemed given (i) if sent by registered or
certified United States mail, on the day it is officially delivered to or
refused by the intended recipient, (ii) if sent by nationally recognized express
mail courier, on the date it is officially recorded by such courier, (iii) if
delivered by facsimile, on the date the sender obtains written telephonic
confirmation that the electronic transmission was received, or (iv) if delivered
personally, upon delivery or, if refused by the intended recipient, upon
attempted delivery.

        21.4 PAYMENT BY TENANT; Non-Waiver. Landlord's acceptance of Rent
(including, without limitation, through any "lockbox") following an Event of
Default shall not waive Landlord's rights regarding such Event of Default. No
waiver by Landlord or Tenant of any violation or breach of any of the terms
contained herein shall waive Landlord's or Tenant's rights regarding any future
violation of such terms. Landlord's acceptance of any partial payment of Rent
shall not waive Landlord's rights with regard to the remaining portion of the
Rent that is due, regardless of any endorsement or other statement on any
instrument delivered in payment of Rent or any writing delivered in connection
therewith; accordingly, Landlord's acceptance of a partial payment of Rent shall
not constitute an accord and satisfaction of the full amount of the Rent that is
due. Payment by Tenant of any amount due and owing hereunder shall not
constitute a waiver of any preceding breach by Landlord of any term, covenant or
condition of this Lease.

        21.5 CERTAIN RIGHTS RESERVED BY LANDLORD. Landlord hereby reserves and
shall have the following rights with respect to the Premises and the Project:
(a) to decorate and to make inspections, repairs, alterations, additions,
changes, or improvements, whether structural or otherwise, in and about the
Project, the Building, the Premises or any part thereof; to enter upon the
Premises and, during the continuance of any such


                                      -15-
<PAGE>   17

work, to temporarily close doors, entryways, public space, and corridors in the
Project or the Building; to interrupt or suspend temporarily Building services
and facilities; to change the name of the Building or the Project; and to change
the arrangement and location of entrances or passageways, doors, and doorways,
corridors, elevators, stairs, restrooms, common areas, or other public parts of
the Building or the Project; (b) to take such measures as Landlord deems
advisable in good faith for the security of the Building and its occupants; to
temporarily deny access to the Building to any person; and to close the Building
after ordinary business hours and on Sundays and Holidays, subject, however, to
Tenant's right to enter when the Building is closed after ordinary business
hours under such rules and regulations as Landlord may reasonably prescribe from
time to time during the Term; and (c) to enter the Premises at reasonable hours
(or at any time in an emergency) to inspect the same, to perform repairs, to
take any action authorized hereunder, or to show the Premises to prospective
purchasers or lenders, or, during the last six (6) months of the Term,
prospective tenants. All of Landlord's entries and the performance of Landlord's
work pursuant to this Lease, shall be scheduled and performed, as applicable, so
as to use commercially reasonable efforts to minimize interference with Tenant's
use of and access to the Premises and parking facilities. Tenant may, subject to
Landlord's prior approval, designate certain areas of the Premises as "Security
Areas" should Tenant require such areas for the purpose of securing certain
valuable property or confidential information. Landlord may only enter such
Security Areas upon one (t) business days' notice to Tenant which notice shall
specify the date and time of such entry by Landlord; provided, however, that
Landlord may enter the Security Areas without notice to Tenant in the event of
an emergency, in which case Landlord shall provide Tenant with notice of such
entry promptly thereafter.

        21.6 MISCELLANEOUS. If any clause or provision of this Lease is illegal,
invalid, or unenforceable under present or future laws, then the remainder of
this Lease shall not be affected thereby. This Lease may not be amended except
by instrument in writing signed by Landlord and Tenant. No provision of this
Lease shall be deemed to have been waived by Landlord unless such waiver is in
writing signed by Landlord. The terms and conditions contained in this Lease
shall inure to the benefit of and be binding upon the parties hereto, and upon
their respective successors in interest and legal representatives, except as
otherwise herein expressly provided. This Lease constitutes the entire agreement
between Landlord and Tenant regarding the subject matter hereof and supersedes
all oral statements and prior writings relating thereto. If Tenant is comprised
of more than one party, each such party shall be jointly and severally liable
for Tenant's obligations under this Lease. All exhibits and attachments attached
hereto are incorporated herein by this reference. This Lease shall be governed
by and construed in accordance with the laws of the State of California. In any
action which Landlord or Tenant brings to enforce its respective rights
hereunder, the unsuccessful party shall pay all costs incurred by the prevailing
party, including without limitation, reasonable attorneys' fees and court costs.
Tenant shall not record this Lease or any memorandum hereof. TO THE MAXIMUM
EXTENT PERMITTED BY LAW, LANDLORD AND TENANT EACH WAIVE RIGHT TO TRIAL BY JURY
IN ANY LITIGATION ARISING OUT OF OR WITH RESPECT TO THIS LEASE. Submission of
this Lease to Tenant does not constitute an option or offer to lease and this
Lease is not effective otherwise until execution and delivery by both Landlord
and Tenant. This Lease may be executed in any number of counterparts, each of
which shall be deemed an original. Time is of the essence as to the performance
of each covenant hereunder in which time of performance is a factor.

22. OPTION TERM.

        22.1 ORATION RIGHT. Landlord hereby grants the Original Tenant or an
Affiliate one (1) option to extend the Term for a period of five (5) years (the
"OPTION TERM"), which option shall be exercisable only by written notice
delivered by Tenant to Landlord as provided below, provided that, as of the date
of delivery of such notice, Tenant is not in default under this Lease after the
expiration of any applicable cure period. Upon the proper exercise of such
option to extend, and provided that, at Landlord's option, as of the end of the
initial Term, Tenant is not then in default under this Lease after the
expiration of any applicable cure period, the Term, for the entire Premises,
shall be extended for a period of five (5) years. The rights contained in this
Paragraph 22 shall be personal to the Original Tenant or an Affiliate, as
applicable, and may only be exercised by the Original Tenant or an Affiliate, as
applicable (and not any other assignee, sublessee or other transferee of the
Original Tenant's interest in this Lease) if the Original Tenant or an
Affiliate, as applicable, occupies at least seventy-five percent (75%) of the
Premises.

        22.2 ORATION RENT. The rent payable by Tenant during the Option Term
(the "Option Rent") shall be equal to the "Fair Market Rental Rate," as that
term is defined in Paragraph 22.5, below.

        22.3 EXERCISE OF OPTION.

                22.3.1 WITH AN ORATION INTEREST NOTICE. The option contained in
this PARAGRAPH 22 shall be exercised by Tenant, if at all, only in the following
manner or as set forth in Paragraph 22.3.2, below: (i) Tenant shall deliver
written notice to Landlord (the "Option Interest Notice") not more than fourteen
(14) months nor less than twelve (12) months prior to the expiration of the
initial Term, 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 Term, setting forth the Option Rent; and (iii) if
Tenant wishes to exercise such option, Tenant shall, on or before the date
occurring nine (9) months prior to the expiration of the initial Term (the
"Option Deadline Date"), exercise the option by delivering written notice
thereof to Landlord, and upon, and concurrent with, such exercise, Tenant may,
at its option, accept or reject the Option Rent contained in the Option Rent
Notice. In the event Tenant objects to the Option Rent or is deemed to object to
the Option Rent as set forth in Paragraph 22.3.3, below, the parties shall
follow the procedure, and the Option Rent shall be determined, as set forth in
Paragraph 22.4, below.

                22.3.2 WITHOUT AN OPTION INTEREST NOTICE. Notwithstanding
anything in Paragraph 22.3.1 to the contrary, in the event that Tenant shall
fail to timely deliver the Option Interest Notice, Tenant shall nevertheless be
permitted to exercise its right to lease the Premises during the Option Term by
delivery of irrevocable notice of such election on or before the Option Deadline
Date, in which event (i) Landlord shall deliver to Tenant the Option Rent Notice
within thirty (30) days following receipt of such notice, and (ii) Tenant may,
within fifteen (15) days following receipt of such Option Rent Notice, accept or
reject the Option Rent set forth in the Option Rent Notice. In the event Tenant
objects to the Option Rent or is deemed to object to the Option Rent as set
forth in Paragraph 22.3.3, below, the parties shall follow the procedure and the
Option Rent shall be determined pursuant to the terms of Paragraph 22.4, below.

                22.3.3 OTHER TERMS. In the event that, in exercising its right
to lease the Premises during the Option Term in accordance with the terms of
this Paragraph 22.3, Tenant shall fail to affirmatively accept the Option Rent
contained in the Option Rent Notice, then Tenant shall be deemed to have
rejected the same, and the Option Rent shall be determined in accordance with
the remaining terms of this Paragraph 22.4.

        22.4 DETERMINATION OF OPTION RENT. In the event Tenant timely and
appropriately objects to the Option Rent or is deemed to have rejected the
Option Rent, Landlord and Tenant shall attempt to agree upon the Fair Market
Rental Rate for the Premises, using reasonable good-faith efforts. If Landlord
and Tenant fail to reach agreement within thirty (30) days following Tenant's
objection or deemed objection to the Option Rent (the "OUTSIDE AGREEMENT DATE"),
then each party shall make a separate determination of the Option Rend as the
case may be, within five (5) business days after the Outside Agreement Date, and
such determinations shall be submitted to arbitration in accordance with
Paragraphs 22.4.1 through 22.4.7, below.

        22.4.1 Landlord and Tenant shall each appoint one arbitrator who shall
by profession be a real estate broker, appraiser or attorney 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 first class office properties
in the Los Angeles County, California. The determination of the arbitrators
shall be limited solely to the issue area of whether Landlord's or Tenant's
submitted Fair Market Rental Rate, is the closest to the actual Fair Market
Rental Rate as determined by the arbitrators, taking into account the
requirements of Paragraph 22.5 of this Lease. Each such arbitrator shall be
appointed within fifteen (15) days after the applicable Outside Agreement Date.
Landlord and Tenant may consult with their selected arbitrators prior to
appointment and may select an



                                      -16-
<PAGE>   18

arbitrator who is favorable to their respective positions. The arbitrators so
selected by Landlord and Tenant shall be deemed "Advocate Arbitrators."

                22.4.2 The two Advocate Arbitrators so appointed shall be
specifically required pursuant to an engagement letter within ten (10) days of
the date of me appointment of the last appointed Advocate Arbitrator to agree
upon and appoint a third arbitrator(" Neutral Arbitrator") who shall be
qualified under the same criteria set forth hereinabove for qualification of the
two Advocate Arbitrators, except that neither the Landlord or Tenant or either
patties Advocate Arbitrator may, directly or indirectly, consult with the
Neutral Arbitrator prior or subsequent to his or her appearance. The Neutral
Arbitrator shall be retained via 4n engagement letter jointly prepared by
Landlord's counsel and Tenant's counsel.

                22.4.3 The three arbitrators shall within thirty (30) days of
the appointment of the Neutral Arbitrator reach a decision as to Fair Market
Rental Rate and determine whether the Landlord's or Tenant's determination of
Fair Market Rental Rate as submitted pursuant to Paragraph 22.4, above, is
closest to Fair Market Rental Rate as determined by the arbitrators and
simultaneously publish a ruling ("Award") indicating whether Landlord's or
Tenant's submitted Fair Market Rental Rate is closest to the Fair Market Rental
Rate as determined by the arbitrators. Following notification of the Award, the
Landlord's or Tenant's submitted Fair Market Rental Rate determination,
whichever is selected by the arbitrators as being closest to Fair Market Rental
Rate, shall become the then applicable Fair Market Rental Rate.

                22.4.4 The Award issued by the majority of the three arbitrators
shall be binding upon Landlord and Tenant.

                22.4.5 If either Landlord or Tenant fail to appoint an Advocate
Arbitrator within fifteen (15) days after the applicable Outside Agreement Date,
either party may petition the presiding judge of the Superior Court of Los
Angeles County to appoint such Advocate Arbitrator subject to the criteria in
Paragraph 22.4.1 of this Lease, or if he or she refuses to act, either party may
petition any judge having jurisdiction over the parties to appoint such Advocate
Arbitrator.

                22.4.6 If the two Advocate Arbitrators fail to agree upon and
appoint the Neutral Arbitrator, then either party may petition the presiding
judge of the Superior Court of Los Angeles County to appoint the Neutral
Arbitrator, subject to criteria in Paragraph 22.4.1 of this Lease, or if he or
she refuses to act, either party may petition any judge having jurisdiction over
the parties to appoint such arbitrator.

                22.4.7 The cost of arbitration shall be paid by Landlord and
Tenant equally.

        22.5 FAIR MARKET RENTAL RATE. The "FAIR MARKET RENTAL RATE" shall be
equal to the rent (including additional rent and considering any "base year" or
"expense stop" applicable thereto), including all escalations, at which tenants,
are leasing non-sublease, non-encumbered, nonequity space comparable in size,
location and quality to the Premises, for a similar lease term, in an arms
length transaction, which comparable space is located in the Project and in
"Comparable Buildings," as that term is defined, below ("Comparable
Transactions") during the twelve (12) month period immediately preceding the
exercise by Tenant of the Option Term, in either case taking into consideration
the following concessions (the "Concessions"): (a) rental abatement concessions,
if any, being granted such tenants in connection with such comparable space,
(b) tenant improvements or allowances provided or to be provided for such
comparable space, taking into account, and deducting the value of, the existing
improvements in the Premises, such value to be based upon the age, design,
quality of finishes, and layout of the improvements and the extent to which the
same could be utilized by a general office user as contrasted with this specific
Tenant, and (c) all other monetary and non-monetary concessions, if any, being
granted such tenants in connection with such comparable space; provided,
however, that notwithstanding anything to the contrary herein, no consideration
shall be given to (i) the fact that Landlord is or is not required to pay a real
estate brokerage commission or the fact that the Comparable Transactions do or
do not involve the payment of real estate brokerage commissions, and (II) 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. In analyzing such comparable
spaces, the arbitrators shall give due consideration to the method by which the
square footage of such space has been calculated. The Fair Market Rental Rate
shall additionally include a determination as to whether, and if so to what
extent, Tenant must provide Landlord with financial security, such as a letter
of credit or guaranty, for Tenant's rent obligations during the Option Term.
Such determination shall be made by reviewing the extent of financial security
then generally being imposed in Comparable Transactions from tenants of
comparable financial condition and credit history to the then existing financial
condition and credit history of Tenant (with appropriate adjustments to account
for differences in the then-existing financial condition of Tenant and such
other tenants). If in determining the Fair Market Rental Rate, Tenant is deemed
to be entitled to a tenant improvement or comparable allowance for the
improvement of the Premises (the total dollar value of such allowance, the
"OPTION TERM TI ALLOWANCE"), Landlord may, at Landlord's sole option, elect any
or a portion of the following: (A) to grant some or all of the Option Term TI
Allowance to Tenant as a lump sum payment to Tenant, and/or (B) in lieu of
making a lump sum payment (or portion thereof) to Tenant, to reduce the rental
rate component of the Fair Market Rental Rate to be an effective rental rate
which takes into consideration that Tenant will not receive a payment of such
Option Term TI Allowance, or portion thereof (in which case the Option Term TI
Allowance, or portion thereof, evidenced in the effective rental rate shall not
be paid to Tenant). For purposes of this Lease, the "Comparable Buildings" shall
mean comparable first-class, mid-rise office buildings located in "West Los
Angeles" (which shall include all of its submarkets as set forth in applicable
BOMA-Los Angeles publications).

23. TELECOMMUNICATIONS EQUIPMENT.

        23.1 IN GENERAL. At any time during the Lease Term, subject to
applicable regulations and the terms of this Paragraph 23, Tenant may install,
at Tenant's sole cost and expense, one (1) satellite dish (which shall not
exceed thirty-six (36) inches in diameter) (the "Telecommunications Equipment")
upon the roof of the Building; provided, however, that such Telecommunications
Equipment may only be installed for the purpose of exclusively servicing Tenant
and/or any subtenants or assignees permitted or approved pursuant to the terms
of this Lease. The physical appearance, the size and all other specifications
relating to the Telecommunications Equipment shall be subject to Landlord's
reasonable approval. Tenant shall not change the location of, or alter or
install additional Telecommunications Equipment or paint any of the other
Equipment without Landlord's reasonable prior written consent. Landlord may
require Tenant to install screening around such Telecommunications Equipment, at
Tenant's sole cost and expense, as reasonably designated by Landlord. In the
event Tenant elects to exercise its right to install the Telecommunication
Equipment, then Tenant shall give Landlord prior notice thereof and landlord and
tenant shall execute an amendment to this Lease covering the payment for
installation costs, if any, the Telecommunications Equipment, the installation
and maintenance of such Telecommunications Equipment, Tenant's indemnification
of Landlord with respect thereto, Tenant's obligation to remove such
Telecommunications Equipment upon the expiration or earlier termination of this
Lease, and other related matters.

        23.2 RENT/TAXES. Tenant shall pay, as additional rent, an amount equal
to the "Rooftop Fee," as that term is defined, below, for each month of the Term
in which the Telecommunications Equipment is located on the roof of the
Building. In addition, Tenant shall be responsible for and promptly shall pay
all taxes, assessments, charges, fees and other governmental impositions levied
or assessed on the Telecommunications Equipment or based on the operation
thereof. For purposes of this Lease, the "Rooftop Fee" shall mean (i) $250.00
per month in the event that the Telecommunications Equipment consists of a
satellite dish which is less than or equal to 18 inches in diameter, and (ii;
$500.00 per month in the event that the Telecommunications Equipment exceeds 18
inches in diameter (provided that in no event shall the Telecommunications
Equipment exceed 36 inches in diameter).

        23.3 LOCATION OF TELECOMMUNICATIONS EQUIPMENT. The location of the
Telecommunications Equipment shall be reasonably designated by Landlord.
Landlord may during the Term require Tenant, at Landlord's sole cost and
expense, relocate the Telecommunications Equipment.



                                      -17-
<PAGE>   19

        23.4 OPERATION OF TELECOMMUNICATIONS EQUIPMENT. Operation of the
Telecommunications Equipment shall not interfere in any manner with equipment
systems or utility systems of other tenants of the Project, including without
limitation, telephones, dictation equipment, lighting, heat and air
conditioning, computers, electrical systems and elevators. If operation of the
Telecommunications Equipment causes such interference, as determined by Landlord
in Landlord's reasonable discretion, Tenant immediately shall suspend operation
of the Telecommunications Equipment until Tenant eliminates such interference.

        23.5 MAINTENANCE OF TELECOMMUNICATIONS EQUIPMENT. Tenant shall maintain
the Telecommunications Equipment in good condition and repair, at Tenant's sole
cost and expense. Landlord may from time to time require that Tenant repaint the
Telecommunications Equipment at Tenant's expense, to keep the same in an
attractive condition. In the event that Tenant fails to repair and maintain the
Telecommunications Equipment in accordance with the terms of this Lease,
Landlord may, upon ten (10) business days notice to Tenant (provided that no
such notice shall be required in the case of an emergency) but shall not be
obligated to, make any such repairs or perform any maintenance to the
Telecommunications Equipment and Tenant shall reimburse Landlord within thirty
(30) days following demand for all costs and expenses incurred by Landlord in
connection therewith, plus a reasonable administrative fee.

        23.6 ROOF ACCESS. Tenant may access the roof for repair and maintenance
of the Telecommunications Equipment, only during normal business hours, on
reasonable prior written notice to Landlord. Tenant shall designate in writing
to Landlord all persons whom Tenant authorizes to have access to the roof for
such purposes. Upon such designation and prior identification to Landlords'
building security personnel, such authorized persons shall be granted access to
the roof by Landlord's Building engineer. Tenant shall be responsible for all
reasonable costs and expenses incurred by Landlord in connection with Tenant's
access to the roof pursuant to this Paragraph. Landlord or Landlord's agent may
accompany Tenant during such access.

        24. FORCE MAJEURE. Except with respect to the terms of Paragraph 14 of
this Lease, any prevention, delay or stoppage due to strikes, lockouts, labor
disputes, acts of God, inability to obtain permits, 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 (collectively, the "FORCE MAJEURE"),
except with respect to the obligations imposed upon Tenant with regard to rent
or other charges to be paid by Tenant or Landlord pursuant to this Lease, and
except as to Tenant's obligations under Paragraph 8 of this Lease
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.



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