<PAGE>   1
                                                                 EXHIBIT 10.24
                             OFFICE LEASE AGREEMENT
================================================================================
This Lease Agreement (this "Lease") is made this 7 day of November, 1998,
between B.O.III, LTD., (hereinafter called "Landlord"), and IXC COMMUNICATIONS
SERVICES, INC., a (hereinafter called ("Tenant"). Ibis Lease consists of this
paragraph, the Basic Lease Provisions, the Supplemental Lease Provisions and
each exhibit, rider, schedule and addendum attached to the Basic Lease
Provisions and Supplemental Lease Provisions. Each capitalized term used, but
not defined, in the Supplemental Lease Provisions shall have the meaning
assigned to such term in the Basic Lease Provisions.

                             BASIC LEASE PROVISIONS

1 .     Building:
        a.  Name:                    Barton Oaks III
            Address:                 901 South Mopac Expressway, Building 111,
                                     Austin, Texas 78746.
        b.  Agreed Rentable Area:    121,432 square feet.

2.      Premises:

        a.  Suite #:                 200
            Floors:                  Second Floor.
        b.  Agreed Rentable Area:    24,134 square feet. The number of rentable
                                     square feet in the Premises is determined
                                     by multiplying the number of usable square
                                     feet in the Premises (calculated in
                                     accordance with the BOMA Standard
                                     [hereinafter defined] by 1. 15). The term
                                     "BOMA Standard" shall mean the American
                                     National Standard method of measuring floor
                                     area in office buildings of the Building
                                     Owners and Managers Association (ANSI 265.1
                                     - 1996).

3.      a.     Basic Rent (See Article 2, Supplemental Lease Provisions):

<TABLE>
<CAPTION>
                                                  Basic           Basic
                       Rent Rate                  Annual          Monthly
  Period               Square Foot                Rent            Rent
  ------               -----------                ----            ----
<S>                    <C>                        <C>             <C>
1/15/99- 1/31/2002     $17.50 per square foot     $422,345.00     $35,195.42
</TABLE>

        b.     Each "Lease Year" shall be a twelve (12) month period commencing
               with the Commencement Date or any anniversary date of the
               Commencement Date and ending on but not including the next
               occurring anniversary date of the Commencement Date; provided,
               however, the last Lease Year shall mean the period of time from
               and including the anniversary date of the Commencement Date that
               immediately precedes the Expiration Date to and including the
               Expiration Date. Each "Lease Month" shall be a period of time
               commencing on the same numeric day as the Commencement Date and
               ending on (but not including) the day in the next calendar month
               that is the same numeric date as the Commencement Date.

4.      Tenant's Pro Rata Share Percentage: 19.87% (the Agreed Rentable Area of
        the Premises divided by the Agreed Rentable Area of the Building,
        expressed in a percentage).

5.      Term:               Three (3) years (see Article 1, Supplemental Lease
                            Provisions).

6.      Commencement Date:  January 15, 1999 (see Article 1, Supplemental Lease
                            Provisions).

7.      Expiration Date:    January 31, 2002 (see Article 1, Supplemental Lease
                            Provisions).

8.      Security Deposit:   $102,569.50 (see Article 3, Supplemental Lease
                            Provisions).

9.      Tenant's Broker:    CB Richard Ellis (such broker is represented by
                            Charles Dixon/Volney Campbell .

10.     Permitted Use:      General Office Purposes Only (see Article 4,
                            Supplemental Lease Provisions).

11.     All payments shall be sent to Landlord in care of Hill Partners
        Management Co., Inc. ("Property Manager") at 2800 Industrial Terrace,
        Austin, Texas 78758-7604 or such other place as Landlord may designate
        from time to time. All payments shall be in the form of check until
        otherwise designated by Landlord, provided that payment by check shall
        not be deemed made if the check is not duly honored with good funds.

12.     Parking:            SEE SECTION 15.17 and Exhibit F, if any, attached to
                            the Supplemental Lease Provisions.

13.     Addresses for notices due under this Lease (see Article 14, Supplemental
        Lease Provisions):

        LANDLORD:                             Tenant:
        B.O. III, LTD.                        IXC COMMUNICATIONS SERVICES, INC.
        By: Office/Industrial, Inc.,
            General Partner

        By: /s/ RICHARD S. HILL               By: /s/ STUART K. COPPENS
            ------------------------------        ------------------------------
        By: Richard S. Hill, President        By: Stuart K. Coppens
            c/o Hill Partners Management          Vice President
            Company, Inc.                         1122 S. Capital of TX Hwy
            2800 Industrial Terrace               Austin, TX  78746
            Austin, TX 78758                      Atten:
            Atten: BethAnn Signor                 Telephone:  512/427-3757
            Telephone: 512/719-3050               Fax:  512/329-8638
            Fax: 512/835-1222

Landlord and Tenant are initialing these Basic Lease Provisions in the
appropriate space provided below as an acknowledgment that they are a part of
this Lease.
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                                TABLE OF CONTENTS
                                       FOR
                          SUPPLEMENTAL LEASE PROVISIONS

Description:

ARTICLE I     TERM AND POSSESSION............................................1

ARTICLE 2     RENT...........................................................2

ARTICLE 3     SECURITY DEPOSIT...............................................5

ARTICLE 4     OCCUPANCY AND USE..............................................5

ARTICLE 5     UTILITIES AND SERVICES.........................................7

ARTICLE 6     MAINTENANCE, REPAIRS, ALTERATIONS AND IMPROVEMENTS.............9

ARTICLE 7     INSURANCE, FIRE AND CASUALTY..................................10

ARTICLE 8     CONDEMNATION..................................................13

ARTICLE 9     LIENS.........................................................13

ARTICLE 10    TAXES ON TENANT'S PROPERTY....................................13

ARTICLE 11    SUBLETTING AND ASSIGNING......................................14

ARTICLE 12    TRANSFERS BY LANDLORD, SUBORDINATION AND TENANT'S 
              ESTOPPEL CERTIFICATE..........................................16

ARTICLE 13    DEFAULT.......................................................16

ARTICLE 14    NOTICES.......................................................19

ARTICLE 15    MISCELLANEOUS PROVISIONS......................................19

                           LIST OF EXHIBITS AND RIDERS
                                       TO
                          SUPPLEMENTAL LEASE PROVISIONS

        Exhibit A      Floor Plan
        Exhibit B     Land Legal Description
        Exhibit C     Intentionally Omitted
        Exhibit D     Work Letter
        Exhibit E     Acceptance of Premises Memorandum
        Exhibit F     Parking Agreement

        Rider 1       Right to Audit
        Rider 2       Right to Sublease or Assign to Affiliate and Additional
                      Subleasing Rights
        Rider 3       Cap on Certain Operating Expenses
        Rider H- I    Tenant's Study, Testing and Inspection Rights


                                       ii

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                          SUPPLEMENTAL LEASE PROVISIONS

                                    ARTICLE I
                               TERM AND POSSESSION

SECTION 1.1 LEASE OF PREMISES, COMMENCEMENT AND EXPIRATION.

 1.101  Lease of Premises. In consideration of the mutual covenants herein,
        Landlord hereby leases to Tenant and Tenant hereby leases from Landlord,
        subject to all the terms and conditions of this Lease, the portion of
        the Building (as described in Item 1 of the Basic Lease Provisions)
        described as the Premises in Item 2 of the Basic Lease Provisions and
        that is more particularly described by the crosshatched area on Exhibit
        A attached hereto (hereinafter called the "Premises"). The Building, the
        land (the "Land") on which the Building is situated (which Land is more
        particularly described on Exhibit B attached hereto), the parking
        garage, if any, located on the Land and serving the Building (the
        "Garage") and all other improvements located on and appurtenances to the
        Building, the Garage and the Land are referred to collectively herein as
        the "Property".

 1.102  Agreed Rentable Area. The agreed rentable area of the Premises is hereby
        stipulated to be the "Agreed Rentable Area" of the Premises set forth in
        Item 2b of the Basic Lease Provisions. The agreed rentable area of the
        Building is hereby stipulated to be the "Agreed Rentable Area" of the
        Building set forth in Item lb of the Basic Lease Provisions.

 1.103  Initial Term and Commencement. The initial term of this Lease shall be
        the period of time specified in Item 5 of the Basic Lease Provisions.
        The initial term shall commence on the Commencement Date (herein so
        called) set forth in Item 6 of the Basic Lease Provisions (as such
        Commencement Date may be adjusted pursuant to Section 3 of the Work
        Letter attached hereto as Exhibit D) and, unless sooner terminated
        pursuant to the terms of this Lease, the initial term of this Lease
        shall expire, without notice to Tenant, on the Expiration Date (herein
        so called) set forth in Item 7 of the Basic Lease Provisions (as such
        Expiration Date may be adjusted pursuant to Section 3 of the Work
        Letter).

SECTION 1.2 INSPECTION AND DELIVERY OF PREMISES, CONSTRUCTION OF LEASE SPACE
            IMPROVEMENTS AND POSSESSION.

 1.201  Delivery. Tenant hereby accepts delivery of the Premises. Tenant
        acknowledges that Tenant has inspected the Premises and the Common Areas
        (as hereinafter defined) and, except for punch list items and latent
        defects discovered and reported to Landlord by Tenant within 180 days
        from the Commencement Date, hereby (a) accepts the Common Areas in "as
        is" condition for all purposes and (a) subject to Landlord's completion
        of its obligations under the Work Letter, Tenant hereby accepts the
        Premises (including the suitability of the Premises for the Permitted
        Use) for all purposes.

 1.202  Completion. Landlord will perform or cause to be performed the work
        and/or construction of Tenant's Improvements (as defined in the Work
        Letter) in accordance with the terms of the Work Letter and will use
        reasonable efforts to Substantially Complete (as defined in the Work
        Letter) Tenant's Improvements by the Commencement Date. If Tenant's
        Improvements are not Substantially Complete by the Commencement Date set
        forth in Item 6 of the Basic Lease Provisions for any reason whatsoever,
        Tenant's sole remedy shall be an adjustment of the Commencement Date and
        the Expiration Date to the extent permitted under Section 3 of the Work
        Letter.

 1.203  Acceptance of Premises Memorandum. Upon Substantial Completion (as
        defined in the Work Letter) of Tenant's Improvements, Landlord and
        Tenant shall execute the Acceptance of Premises Memorandum (herein so
        called) attached hereto as Exhibit E. If Tenant occupies the Premises
        without executing an Acceptance of Premises Memorandum, Tenant shall be
        deemed to have accepted the Premises for all purposes and Substantial
        Completion shall be deemed to have occurred on the earlier to occur of
        (i) actual occupancy or (ii) the Commencement Date set forth in Item 6
        of the Basic Lease Provisions.

SECTION 1.3 REDELIVERY OF THE PREMISES.

 1.301  Obligation to Redeliver. Upon the expiration or earlier termination of
        this Lease or upon the exercise by Landlord of its right to re-enter the
        Premises without terminating this Lease, Tenant shall immediately
        deliver to Landlord the Premises free of offensive odors and in a safe,
        clean, neat, sanitary and operational condition, ordinary wear and tear
        excepted, together with all keys and parking and access cards. Tenant
        shall, by the Expiration Date or, if this Lease is earlier terminated,
        within seven (7) days after the termination, at the sole expense of
        Tenant, remove from the Premises (unless Landlord is asserting its lien
        rights therein) any equipment, machinery, trade fixtures and personalty
        installed or placed in the Premises by or on behalf of Tenant. All
        removals and work described above shall be accomplished in a good and
        workmanlike manner and shall be conducted so as not to damage the
        Premises or the Building or the plumbing, electrical lines or other
        utilities serving the Building. Tenant shall, at its expense, promptly
        repair any damage caused by any such removal or work. If Tenant fails to
        deliver the Premises in the condition aforesaid, then Landlord may
        restore the Premises to such a condition at Tenant's expense. All
        property required to be removed pursuant to this Section not removed
        within time period required hereunder shall thereupon be conclusively
        presumed to have been abandoned by Tenant and Landlord may, at its
        option, take over possession of such property and either (a) declare the
        same to be the property of Landlord by written notice to Tenant at the
        address provided herein or (b) at the sole cost and expense of Tenant,
        remove and store and/or dispose of the same or any part thereof in any
        manner that Landlord shall choose without incurring liability to Tenant
        or any other person.

 1.302  Failure to Deliver. Notwithstanding any provision or inference to the
        contrary herein contained, in the event that Tenant fails to deliver to
        Landlord (and surrender possession of) all of the Premises upon the
        expiration or earlier termination of this Lease (or the applicable
        portion of the Premises if this Lease expires or terminates as to only a
        portion of the Premises) on the date of expiration or earlier
        termination, then Landlord may, without judicial process and without
        notice of any kind, immediately enter upon and take absolute possession
        of the Premises or applicable portion thereof, expel or remove Tenant
        and any other person or entity who may be occupying the Premises or
        applicable portion thereof, change the locks to the Premises or
        applicable portion


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        thereof (in which event, Tenant shall have no right to any key for the
        new locks), limit elevator access to the Premises or APPLICABLE portion
        thereof, and take any other actions as are necessary for Landlord to
        take absolute possession of the Premises or applicable portion thereof
        The foregoing rights are without prejudice and in addition to, and shall
        not in any way limit Landlord's rights under, Section 1.4 below.

SECTION 1.4 HOLDING OVER. In the event Tenant or any party under Tenant claiming
        rights to this Lease, retains possession of the Premises after the
        expiration or earlier termination of this Lease, such possession shall
        constitute and be construed as a tenancy at will only, subject, however,
        to all of the terms, provisions, covenants and agreements on the part of
        Tenant hereunder; such parties shall be subject to immediate eviction
        and removal and Tenant or any such party shall pay Landlord as rent for
        the period of such holdover an amount equal to one and one-half (I -
        1/2) times the Basic Annual Rent and Additional Rent (as hereinafter
        defined) in effect immediately preceding expiration or termination, as
        applicable, prorated on a daily basis. Tenant shall also pay any and all
        damages sustained by Landlord as a result of such holdover provided
        Landlord has notified Tenant, 30 days prior, of the potential damages
        that Landlord will incur. The rent during such holdover period shall be
        payable to Landlord from time to time on demand; provided, however, if
        no demand is made during a particular month, holdover rent accruing
        during such month shall be paid in accordance with the provisions of
        Article 2. Tenant will vacate the Premises and deliver same to Landlord
        within 15 days of Tenant's receipt of notice from Landlord to so vacate.
        No holding over by Tenant, whether with or without consent of Landlord,
        shall operate to extend the term of this Lease; no payments of money by
        Tenant to Landlord after the expiration or earlier termination of this
        Lease shall reinstate, continue or extend the term of this Lease; and no
        extension of this Lease after the expiration or earlier termination
        thereof shall be valid unless and until the same shall be reduced to
        writing and signed by both Landlord and, Tenant.

                                    ARTICLE 2
                                      RENT

SECTION 2.1 BASIC RENT. Tenant shall pay as annual rent for the Premises the
        applicable Basic Annual Rent shown in Item 3 of the Basic Lease
        Provisions. The Basic Annual Rent shall be payable in monthly
        installments equal to the applicable Basic Monthly Rent shown in Item 3
        of the Basic Lease Provisions in advance, without demand, offset or
        deduction except as provided in this Lease, which monthly installments
        shall commence on the Commencement Date and shall continue on the first
        (I st) day of each calendar month thereafter. If the Commencement Date
        occurs on a day other than the first day of a calendar month or the
        Expiration Date occurs on a day other than the last day of a calendar
        month, the Basic Monthly Rent for such partial month shall be prorated.

SECTION 2.2 ADDITIONAL RENT.

 2.201  Definitions. For purposes of this Lease, the following definitions shall
        apply:

        (a) "Additional Rent", for a particular calendar year, shall equal the
            sum of all (i) Operating Expenses (as hereinafter defined) for the
            applicable calendar year multiplied by Tenant's Pro Rata Share
            Percentage (as set forth in Item 4-.a 4 of the Basic Lease
            Provisions) plus (ii) Real Estate Taxes (as hereinafter defined) for
            the applicable calendar year multiplied by Tenant's Pro Rata Share
            Percentage plus (iii) Additional Pass Through Costs (as hereinafter
            defined) for the applicable calendar year multiplied by Tenant's Pro
            Rata Share Percentage.

        (b) "Operating Expenses" shall mean all of the costs and expenses
            Landlord incurs, pays or becomes obligated to pay in connection with
            operating, maintaining, insuring and managing the Property for a
            particular calendar year or portion thereof as determined by
            Landlord in accordance with generally accepted accounting
            principles, including, but not limited to, the following: (i)
            insurance premiums ("Insurance Premiums"); (ii) water, sewer,
            electrical and other utility charges ("Utility Expenses"); (iii)
            service, testing and other charges incurred in the operation and
            maintenance of the elevators and the plumbing, fire sprinkler,
            security, heating, ventilation and air conditioning system; (iv)
            cleaning and other janitorial services inclusive of window
            cleaning); (v) tools and supplies costs; (vi) repair costs; (vii)
            costs of landscaping, including landscape maintenance and sprinkler
            maintenance costs and rental and supply costs in connection
            therewith; (viii) security and alarm services; (ix) license, permit
            and inspection fees; (x) management fees; (xi) wages and related
            benefits payable to employees, including taxes and insurance
            relating thereto; (xii) accounting services; (xiii) legal services,
            unless incurred in connection with tenant defaults or lease
            negotiations; (xiv) trash removal; (xv) garage and parking
            maintenance, repair, repaving and operating costs; and (xvi) the
            charges assessed against the Property pursuant to any contractual
            covenants or recorded declaration of covenants or the covenants,
            conditions and restrictions of any other similar instrument
            affecting the Property. Notwithstanding the foregoing, Operating
            Expenses shall not include:

            (1) Real Estate Taxes;

            (2) Additional Pass Through Costs;

            (3) Repairs or other work occasioned by fire, windstorm or other
                casualty or condemnation;

            (4) Leasing commissions, attorneys' fees, costs and disbursements
                and other expenses incurred in connection with negotiations or
                disputes with tenants, other occupants, or prospective tenants
                or other occupants or legal fees incurred in connection with
                this Lease or the operation of the Property that are not for the
                benefit of all tenants in the Building;

            (5) Costs incurred in renovating or otherwise improving or
                decorating, painting, or redecorating space for tenants or other
                occupants or vacant space;

            (6) Depreciation and amortization;

            (7) Costs of a capital nature, including, but not limited to,
                capital improvements, capital replacements, capital repairs,
                capital equipment and capital tools, all in connection with
                generally accepted accounting principles consistently applied.
                In the event the Building is not in compliance at the time this
                Lease is executed with any Federal, State or local regulations
                or building codes, the expense to bring the Building into
                compliance with be considered capital and not an Operating
                Expense;


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            (8)  Costs (including penalties, fines and legal expenses) incurred
                 due to violation by Landlord of the terms and conditions of
                 this Lease or any other lease in the Building or any other
                 rental arrangement covering space in the Building or the Garage
                 or any portion thereof other than costs Landlord would be
                 permitted to include in Operating Expenses absent such
                 violation;

            (9)  Fees or other compensation paid to subsidiaries or affiliates
                 of Landlord for services on or to the Property, to the extent
                 that the costs of such services exceed competitive costs of
                 such services were they not so rendered by a subsidiary of
                 affiliate;

            (10) Interest on debt or amortization payments on any mortgage(s)
                 COVERING THE PROPERTY OR ANY PART thereof, rental concessions,
                 and rental under ground or underlying lease(s);

            (11) Landlord's general partnership or corporate overhead and
                 general administrative expenses for services not specifically
                 performed for the Building; or wages, salaries, or other
                 compensation of any kind or nature paid to any executive
                 employees above the grade of building manager;

            (12) Any compensation paid to clerks, attendants, or other persons
                 in commercial concessions operated by Landlord;

            (13) Rentals and other related expenses incurred in leasing air
                 conditioning systems, elevators, or other equipment ordinarily
                 considered to be of a capital nature, except equipment which is
                 used in providing janitorial services and which is not fixed to
                 the Building;

            (14) All items and services for which Tenant reimburses Landlord or
                 pays third persons other than through Operating Expense
                 reimbursements, or for or with respect to which Landlord
                 provides selectively to one or more tenants of the Building
                 other than Tenant, without reimbursement;

            (15) Advertising and promotional expenditures;

            (16) Any costs, fines, penalties, legal fees or costs of litigation
                 incurred due to violations by Landlord, its employees, agents,
                 contractors or assigns, of any governmental rule or authority,
                 other than costs Landlord would be permitted to include in
                 Operating Expenses absent such violation;

            (17) Costs for sculpture, paintings or other objects of art;

            (18) Repairs or replacements of the roof, foundation, structure,
                 exterior walls, equipment or components of the Building caused
                 by deficient design, selection of materials or construction or
                 grossly negligent conduct of Landlord;

            (19) Interest or penalties due to late payments of taxes, utility
                 bills and other costs;

            (20) Federal and state taxes on income; death, estate or inheritance
                 taxes; franchise taxes and any taxes imposed or measured on or
                 by the income of Landlord from the operation of the Building;

            (21) Any expense in excess of Landlord's actual operating costs
                 (consequently, Landlord may not pass on to the Tenant any cost
                 which Landlord did not actually incur);

            (22) Janitor and cleaning costs related to construction;

            (23) Costs of security provided for particular tenants which is not
                 available to Tenant;

            (24) Overtime HVAC charges paid by other tenants;

            (25) Management fees paid to an affiliate of Landlord in excess of
                 three percent (3%) of the gross rentals of the Building plus
                 escalations in any calendar year or, if higher, what is
                 considered market rate for first class office buildings in
                 Austin, Texas; and

            (26) Costs attributable to repairs and replacements for which the
                 Landlord is reimbursed pursuant to any warranty.


        (c) "Real Estate Taxes" shall mean (i) all real estate taxes and other
            taxes or assessments which are levied with respect to the Property
            or any portion thereof for each calendar year, (ii) any tax,
            surcharge or assessment which shall be levied as a supplement to or
            in lieu of real estate taxes, (iii) the reasonable expenses of a
            consultant, if any, or of contesting the validity or amount of such
            real estate or other taxes and (iv) any rental, excise, sales,
            transaction, privilege or other tax or levy, however denominated,
            imposed upon or measured by the rental received hereunder or on
            Landlord's business of leasing the Premises, excepting only
            Landlord's net income taxes.

        (d) "Additional Pass Through Costs" shall mean the following costs and
            expenses incurred by Landlord from and after the Commencement Date:
            (i) subject to the limitations of clause (ii), the cost of any
            improvement made to the Property by Landlord that is required under
            any governmental law or regulation which was not promulgated, or
            which was promulgated but was not applicable to the Building, at the
            time the Building was constructed, amortized on a straight line
            basis over the useful life of such improvements, together with an
            amount equal to interest at the rate of ten percent (10%) per annum
            (the "Amortization Rate") on the unamortized balance thereof; (ii)
            the cost of any improvement made to the Common Areas of the Property
            that is required under interpretations or regulations issued after
            the Commencement Date under, or amendments made after the
            Commencement Date to, the provisions of Tex. Rev. Civ. Stat. Ann.
            art. 9102 and the provisions of the Americans With Disabilities Act
            of 1990, 42 U.S.C. Sections 12101-12213 (collectively, the
            "Disability Acts"), amortized on a straight line basis over the
            useful life of such improvements, together with an amount equal to
            interest at the Amortization Rate on the unamortized balance
            thereof-, (iii) the cost of any labor-saving or energy-saving device
            or other equipment installed in the Building (provided Landlord
            reasonably anticipates that the installation thereof will reduce
            Operating Expenses), amortized on a straight line basis over the
            useful life of such improvements, together with an amount equal to
            interest at the Amortization Rate on the unamortized balance thereof
            to the extent such device actually reduces operating expenses; and
            (iv) all other expenses which would generally be regarded as
            operating, maintenance and management costs and expenses which would
            normally be amortized over a period not to exceed five (5) years.

 2.202  Gross-Up. After the initial term of this lease, Operating Expenses,
        which vary with levels of occupancy, shall be grossed up to include all
        additional costs and expenses of owning, operating, maintaining and
        managing the Building which Landlord determines that it would have
        incurred, paid or been obligated to pay during such year if the Building
        had been ninety-five (95 %) occupied.

 2.203  Payment Obligation. In addition to the Basic Rent specified in this
        Lease, Tenant shall pay to Landlord the Additional Rent, in each
        calendar year or partial calendar year during the term of this Lease,
        payable in monthly installments as hereinafter provided and subject to
        Rider 3. On or prior to the Commencement Date and at least thirty (30)
        days prior to each calendar year thereafter

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<PAGE>   6


        (or as soon thereafter as is reasonably possible), Landlord shall give
        Tenant written notice of Tenant's estimated Additional Rent for the
        applicable calendar year and the amount of the monthly installment due
        for each month during such year. Tenant acknowledges that Tenant's
        estimated Additional Rent for calendar year 1999 is $8.00 per square
        foot of Agreed Rentable Area of the Premises, and Tenant! s monthly
        installment due for each month during calendar year 1999 is $16,089.33.
        Tenant shall pay to Landlord on the Commencement Date and on the first
        day of each month thereafter the amount of the applicable monthly
        installment, without demand, offset or deduction except as provided in
        this Lease, provided, however, ifthe applicable installment covers a
        partial month, then such installment shall be prorated on a daily basis.
        Within ninety (90) days after the end of (i) each calendar year and (ii)
        the Expiration Date or as soon thereafter as is reasonably possible,
        Landlord shall prepare and deliver to Tenant a statement showing
        Tenant's actual Additional Rent for the applicable calendar year,
        provided that with respect to the calendar year in which the Expiration
        Date occurs, (iii) that calendar year shall be deemed to have commenced
        on January I of that year and ended on the Expiration Date (the "Final
        Calendar Year") and (iv) Landlord shall have the right to estimate the
        actual Operating Expenses allocable to the Final Calendar Year but which
        are not determinable within such ninety day period. If Tenant's total
        monthly payments of Additional Rent for the applicable year are less
        than Tenant's actual Additional Rent then Tenant shall pay to Landlord
        the amount of such underpayment. If Tenant's total monthly payments of
        Additional Rent for the applicable year are more than Tenant's actual
        Additional Rent, then Landlord shall credit against the next Additional
        Rent payment or payments due from Tenant the amount of such overpayment,
        provided, however, with respect to the Final Calendar Year, Landlord
        shall pay to Tenant within thirty (30) days following the Expiration
        Date or earlier termination date the amount of such excess payments,
        less any amounts then owed to Landlord. Unless Tenant takes written
        exception to any item within thirty (30) days after the furnishing of an
        annual statement, such statement shall be considered as final and
        accepted by Tenant. Any amount due Landlord as shown on any such
        statement shall be paid by Tenant within thirty (30) days after it is
        famished to Tenant.

 2.204  Billing Disputes. If there exists any dispute as to (i) the amount of
        Additional Rent, (ii) whether a particular expense is properly included
        in Additional Rent or (iii) Landlord's calculation of Additional Rent
        (each an "Additional Rent Dispute"), the events, errors, acts or
        omissions giving rise to such Additional Rent Dispute shall not
        constitute a breach or default by Landlord under this Lease and even if
        a judgment resolving the Additional Rent Dispute is entered against
        Landlord, this Lease shall remain in full force and effect.
        Notwithstanding the existence of an Additional Rent Dispute, Tenant
        shall pay timely the amount of Additional Rent which is in dispute and
        will continue to make all subsequent payments of Additional Rent as and
        when required under this Lease, provided that the payment of such
        disputed amount and other amounts shall be without prejudice to Tenant's
        s position. If an Additional Rent is resolved in favor of Tenant,
        Landlord shall forthwith pay to Tenant the amount of Tenant! s
        overpayment of Additional Rent, together with interest from the time of
        such overpayment at the annual rate of ten percent (10%).

 2.205  Revisions in Estimated Additional Rent. If Real Estate Taxes, Insurance
        Premiums, Utility Expenses or Additional Pass Through Costs increase
        once during a calendar year or if the number of square feet of rentable
        area in the Premises increases, Landlord may revise the estimated
        Additional Rent during such year by giving Tenant written notice to that
        effect and thereafter Tenant shall pay to Landlord, in each of the
        remaining months of such year, an additional amount equal to the amount
        of such increase in the estimated Additional Rent divided by the number
        of months remaining in such year.

 2.206  Real Estate Tax Protest. Section 41.413 of the Texas Property Tax Code
        may give Tenant the right to protest before the appropriate appraisal
        review board a determination of the appraised value of the Property if
        Landlord does not so protest and requires Landlord to deliver to Tenant
        a notice of any determination of the appraised value of the Property.
        Tenant acknowledges that the Property is a multi-tenant facility, that
        any filing of a protest of appraised value by Tenant will give the
        appraisal district discretion to increase or decrease the appraised
        value, that an increase in the appraised value will affect Landlord and
        the other tenants of the Property, and that an increase in the appraised
        value may increase the taxes not only for the year in question but for
        future years, potentially beyond expiration of the Lease Term.
        Accordingly, to the extent permitted by applicable law, Tenant hereby
        waives the provisions of Section 41.413 of the Texas Property Tax Code
        (or any successor thereto). In the alternative, if Section 41.413 of the
        Texas Property Tax Code may not be waived, Tenant agrees not to protest
        any valuation unless Tenant notifies Landlord in writing of Tenant's
        intent so to protest and Landlord fails to protest the valuation within
        fifteen (15) days after Landlord receives Tenant's written notice. If
        Tenant files a protest without giving the written notice required by the
        preceding sentence, such filing shall be an event of default under this
        Lease without the necessity of any notice from Landlord, regardless of
        the provisions of Section 13.102 of this Lease. Furthermore, if Tenant
        exercises the right of protest granted by Section 41.413 of the Texas
        Property Tax Code, Tenant shall be solely responsible for, and shall
        pay, all costs of such protest. If as a result of any protest filed by
        Tenant, the appraised value of the Property is increased by the
        appraisal board, Tenant shall be solely responsible for, and shall pay
        upon demand by Landlord, all taxes (not only Tenant's Pro Rata Share
        Percentage of Real Estate Taxes) assessed against the Property in excess
        of the taxes which would have been payable in the absence of the
        protest. Tenant shall continue to pay such excess taxes until the
        determination of appraised value of the Property is changed by the
        appraisal review board, regardless of whether the increased taxes are
        incurred during the term of the Lease or thereafter. Landlord agrees,
        upon request by Tenant, to provide to Tenant a copy of the determination
        of appraised value for any year. The payment obligations of Tenant under
        this Section 2.206 shall survive the expiration or other termination of
        this Lease.

SECTION 2.3 RENT DEFINED AND NO OFFSETS. Basic Annual Rent, Additional Rent and
        all other sums (whether or not expressly designated as rent) required to
        be paid to Landlord by Tenant under this Lease (including, without
        limitation, any sums payable to Landlord under any addendum, exhibit,
        rider or schedule attached hereto) shall constitute rent and are
        sometimes collectively referred to as "Rent". Each payment of Rent shall
        be paid by Tenant when due, without prior demand therefor and without
        deduction or setoff except as provided in this Lease.

SECTION 2.4 LATE CHARGES. If more than two installments in a 12 month period of
        Basic Annual Rent or Additional Rent or any other payment of Rent under
        this Lease shall not be paid within ten (10) days after due, a "Late
        Charge" of five cents ($.05) per dollar so overdue may be charged by
        Landlord to defray Landlord's administrative expense incident to the
        handling of such overdue payments. Each Late Charge shall be payable on
        demand.


                                       4

<PAGE>   7

                                    ARTICLE 3
                                SECURITY DEPOSIT

        Tenant will pay Landlord on the date this Lease is executed by Tenant
        the Security Deposit set forth in Item 8 of the Basic Lease Provisions
        as security for the performance of the terms hereof by Tenant. Tenant
        shall not be entitled to interest thereon and Landlord may commingle
        such Security Deposit with any other funds of Landlord. The Security
        Deposit shall not be considered an advance payment of rental or a
        measure of Landlord's damages in case of default by Tenant. If Tenant
        defaults with respect to any provision of this Lease and fails to cure
        such default within the applicable time period following notice from
        Landlord, Landlord may, but shall not be required to, from time to time,
        without prejudice to any other remedy, use, apply or retain all or any
        part of this Security Deposit for the payment of any Rent or any other
        sum in default or for the payment of any other amount which Landlord may
        spend or become obligated to spend by reason of Tenant's default or to
        compensate Landlord for any other loss or damage which Landlord may
        suffer by reason of Tenant's default, including, without limitation,
        costs and attorneys' fees incurred by Landlord to recover possession of
        the Premises. If Tenant shall fully and faithfully perform every
        provision of this Lease to be performed by it, the Security Deposit
        shall be returned to Tenant within thirty (30) days after the Expiration
        Date or earlier termination date. Tenant agrees that it will not assign
        or encumber or attempt to assign or encumber the monies deposited herein
        as the Security Deposit and that Landlord and its successors and assigns
        shall not be bound by any such actual or attempted assignment or
        encumbrance. Regardless of any assignment of this Lease by Tenant,
        Landlord may return the Security Deposit to the original Tenant, in the
        absence of evidence satisfactory to Landlord of an assignment of the
        right to receive the Security Deposit or any part of the balance
        thereof.

                                    ARTICLE 4
                                OCCUPANCY AND USE

SECTION 4.1 USE OF PREMISES.

 4.101  General. The Premises shall, subject to the remaining provisions of this
        Section, be used solely for the Permitted Use (herein so called)
        specified in Item 10 of the Basic Lease Provisions. Without in any way
        limiting the foregoing, Tenant will not use, occupy or permit the use or
        occupancy of the Premises for any purpose which is forbidden by or in
        violation of any law, ordinance or governmental or municipal regulation,
        order, or certificate of occupancy, or which may be dangerous to life,
        limb or property; or permit the maintenance of any public or private
        nuisance; or do or permit any other thing which may disturb the quiet
        enjoyment of any other tenant of the Property; or keep any substance or
        carry on or permit any operation which might emit offensive odors or
        conditions from the Premises; or commit or suffer or permit any waste in
        or upon the Premises; or use any apparatus which might make undue noise
        or set up vibrations in the Building; or permit anything to be done
        which would increase the fire and extended coverage insurance rate on
        the Building or Building contents and, if there is any increase in such
        rate by reason of acts of Tenant, then Tenant agrees to pay such
        increase upon demand therefor by LANDLORD. Payment by Tenant of any such
        rate increase shall not be a waiver of Tenant's duty to comply herewith.
        Tenant shall keep the Premises neat and clean at all times. Tenant shall
        comply with, and promptly correct any violation of, each and every
        governmental law, rule or regulation relating to the Premises; provided,
        however that Landlord shall deliver the Premises to Tenant in compliance
        with all governmental laws, rules and regulations, subject to 1.2 of the
        Work Letter.

 4.102  Hazardous and Toxic Materials.

        (a) For purposes of this Lease, hazardous or toxic materials shall mean
            asbestos containing materials ("ACM") and all other materials,
            substances, wastes and chemicals classified as hazardous or toxic
            substances, materials, wastes or chemicals under then-current
            applicable governmental laws, rules or regulations or that are
            subject to any right-to-know laws or requirements.

        (b) Tenant shall not knowingly incorporate into, or use or otherwise
            place or dispose of any hazardous or toxic materials at or on the
            Premises or the Property except for use and storage of cleaning and
            office supplies used in the ordinary course of Tenant's business and
            then only if (i) such materials are in small quantities, properly
            labeled and contained, (ii) such materials are handled and disposed
            of in accordance with the highest accepted industry standards for
            safety, storage, use and disposal, (iii) notice of and a copy of the
            current material safety data sheet is provided to Landlord for each
            such hazardous or toxic material and (iv) such materials are used,
            transported, stored, handled and disposed of in accordance with all
            applicable governmental laws, rules and regulations. Landlord shall
            have the right on reasonable notice to Tenant to periodically
            inspect, take samples for testing and otherwise investigate the
            Premises for the presence of hazardous or toxic materials. Landlord,
            has not, and shall not, knowingly dispose of any hazardous or toxic
            materials on the Property and shall otherwise deal with all
            hazardous or toxic materials at the Property in a manner that will
            not materially and adversely affect Tenant's access, use or
            occupancy of the Premises. If Landlord or Tenant ever has knowledge
            of the presence of hazardous or toxic materials on the Property that
            affect the Premises, the party having knowledge shall notify the
            other party thereof in writing promptly after obtaining such
            knowledge.

        (c) Prior to commencement of any tenant finish work to be performed by
            Landlord, Tenant shall have the right to make such studies and
            investigations and conduct such tests and surveys of the Premises
            from an environmental standpoint as permitted under Rider H-1
            attached hereto. If Tenant requests that Landlord commence
            construction of Tenant's Improvements prior to exercising such
            right, Tenant shall be deemed to have waived the termination right
            set forth in Rider H-1.

        (d) If Tenant or its employees, agents or contractors shall ever violate
            the provisions of paragraph (b) of this subsection 4.102 or
            otherwise contaminate the Premises or the Property with hazardous or
            toxic materials, then Tenant shall clean-up, remove and dispose of
            the material causing the violation, in compliance with all
            applicable governmental standards, laws, rules and regulations and
            then prevalent industry practice and standards and shall repair any
            damage to the Premises or Building within such period of time as may
            be reasonable under the circumstances after written notice by
            Landlord. Tenant shall notify Landlord of its method, time and
            procedure for any clean-up or removal and Landlord


                                       5

<PAGE>   8

            shall have the right to require reasonable changes in such method,
            time of procedure or to require the same to be done after normal
            business hours. Tenant's obligations under this subsection 4.102(d)
            shall survive the termination of this Lease. Tenant represents to
            Landlord that, except as has been disclosed to Landlord, Tenant has
            never been cited for or convicted of any hazardous or toxic
            materials violations under applicable laws, rules or regulations.

 4.103  Disability Acts. Landlord, at Landlord's expense, shall be obligated to
        see that all Common Areas comply with the Disability Act requirements
        that are in effect on the Commencement Date. From and after the
        Commencement Date, Tenant shall be obligated to see that the Premises
        comply with all existing requirements of and regulations issued under
        the Disability Acts for each of the following: (i) alterations or
        improvements to any portion of the Premises performed by or on behalf of
        Tenant after the Commencement Date; (ii) obligations or complaints
        arising under or out of Title I of the Americans With Disabilities Act
        or Tenant's employer-employee obligations; and (iii) obligations or
        complaints arising under or out of the conduct or operations of Tenant's
        business (if the Premises is used for other than office purposes),
        including any obligations or requirements for barrier removal to
        customers or invitees as a commercial facility or as a public
        accommodation (as defined in the Disability Acts); and (iv) any change
        in the nature of Tenant's business, or its employees, or financial net
        worth, or Tenant's business operations that triggers an obligation under
        the Disability Acts).Subject to Section 1.2 of the Work Letter, Landlord
        shall deliver the Premises to Tenant in compliance with the Disability
        Act requirements in effect on the Commencement Date.

SECTION 4.2 COMPLIANCE WITH LAWS.

 4.201  Tenant's Compliance Obligation.

        (a) Tenant shall comply with all laws, statutes, ordinances, orders,
            permits and regulations affecting (i) Tenant's use and occupancy of
            the Premises, (ii) any improvements constructed within the Building
            by or on behalf of Tenant and (iii) any equipment installed within
            the Building by Tenant or installed by a party other than Landlord
            on behalf of Tenant, provided, however, Tenant's compliance
            obligations with respect to the Disability Acts shall be governed by
            Section 4.103 above and the applicable provisions of the Work
            Letter.

        (b) If any law, statute, ordinance, order, permit or regulation with
            which Tenant is required to comply pursuant to this Lease is
            violated and Tenant is notified or otherwise has actual knowledge of
            such violation, Tenant shall take such corrective action as is
            necessary to cause compliance.

4.202   Landlord's Compliance Obligation.

        (a) Landlord shall comply with all laws, statutes, ordinances, orders
            and regulations (i) relating to the Property (exclusive, however, of
            those with which Tenant is obligated to comply by reason of
            subsection 4.103) and (ii) non-compliance with which would adversely
            affect Tenant's use or occupancy of the Premises or Tenant's rights
            under this Lease, provided, however, Landlord's compliance
            obligations with the Disability Acts shall be as provided in Section
            4.103 above and Section 4.202 (b) below.

        (b) From and after the Commencement Date, Landlord shall be responsible
            for compliance with the Disability Acts in the Common Areas;
            provided that Landlord shall not be obligated to Tenant to make any
            alterations to the Common Areas to effect such compliance.

SECTION 4.3 RULES AND REGULATIONS. Tenant will comply with such rules and
        regulations (the "Rules and Regulations") generally applying uniformly
        to tenants in the Building as may be reasonably adopted from time to
        time by Landlord for the management, safety, care and cleanliness of,
        and the preservation of good order and protection of property in, the
        Premises and the Building and at the Property. All such Rules and
        Regulations are hereby made a part hereof. The Rules and Regulations in
        effect on the date hereof are on file with the Property Manager. All
        changes and amendments to the Rules and Regulations sent by Landlord to
        Tenant in writing and conforming to the foregoing standards shall be
        carried out and observed by Tenant. Landlord hereby reserves all
        reasonable rights necessary to implement and enforce the Rules and
        Regulations and each and every provision of this Lease.

SECTION 4.4 ACCESS. Without being deemed guilty of an eviction of Tenant and
        without abatement of Rent, Landlord and its authorized agents shall have
        the right to enter the Premises, upon reasonable notice, to inspect the
        Premises, to show the Premises to prospective lenders, purchasers and
        during the last three (3) months of the Term to prospective tenants and
        to fulfill Landlord's obligations or exercise its rights (including
        without limitation Landlord's RESERVED RIGHT [AS HEREINAFTER DEFINED))
        UNDER THIS LEASE; PROVIDED that Landlord shall enter the Premises for
        showing the Premises to third parties only during the normal business
        hours of the Tenant, unless otherwise agreed by Tenant, and provided
        further THAT LANDLORD SHALL NOT UNREASONABLY INTERFERE with Tenant's use
        of the Premises in connection with any such entry. For each of the
        aforesaid purposes, Landlord shall at all times have and retain a key
        with which to unlock the doors to and within the Premises, excluding
        Tenant's vaults, files and safes. Landlord shall have the right to use
        any and all means which Landlord may deem proper to enter the Premises
        in an emergency without liability therefor other than for Landlord's
        gross negligence or willful misconduct.

SECTION 4.5 QUIET POSSESSION. Provided Tenant timely pays Rent and observes and
        performs all of the covenants, conditions and provisions on Tenant's
        part to be observed and performed hereunder, Tenant shall have the quiet
        possession of the Premises for the entire term hereof, subject to all of
        the provisions of this Lease and all laws and restrictive covenants to
        which the Property is subject.

SECTION 4.6 PERMITS. Landlord shall obtain the certificate of occupancy required
        for occupancy of the Premises following construction of Tenant's
        Improvements. Tenant shall pay for the cost of any such certificate of
        occupancy, provided that Tenant shall be entitled to have such cost
        funded from the Finish Allowance, if any, PROVIDED FOR IN THE WORK
        Letter. If any governmental license or permit shall be required for the
        proper and lawful conduct of Tenant's business in the Premises or any
        part thereof, Tenant, at its expense, shall procure and thereafter
        maintain such license or permit.


                                       6

<PAGE>   9

                                    ARTICLE 5
                             UTILITIES AND SERVICES

SECTION 5.1 SERVICES TO BE PROVIDED.

        Landlord agrees to furnish or cause to be famished to the Premises, the
        utilities and services described in subsections 5. 101 through 5.106
        below, subject to all other provisions of this Lease.

 5.101  Elevator Service. Except for holidays generally recognized by businesses
        and emergencies, Landlord shall provide automatic elevator facilities on
        generally accepted business days from 7:00 a.m. to 6:00 p.m. and on
        Saturdays from 8:00 a.m. to 1:00 p.m. and have at least one (1) elevator
        available for use at all other times.

 5.102  Heat and Air Conditioning. On generally accepted business days from 7:00
        a.m. to 6:00 p.m. and on Saturdays (other than holidays generally
        recognized by businesses) from 8:00 a.m. to 1:00 p.m., Landlord shall
        ventilate the Premises and furnish heat or air conditioning, at such
        temperatures and in such amounts as is customary in buildings of
        comparable size, quality and in the general vicinity of the Building,
        with such adjustments as Landlord reasonably deems necessary for the
        comfortable occupancy of the Premises, subject to events of force
        majeure and any governmental requirements, ordinances, rules,
        regulations, guidelines or standards relating to, among other things,
        energy conservation. Upon request, Landlord shall make available, at
        Tenant's expense, after hours heat or air conditioning. The charge and
        the hourly rate for the use of after hours heat or air conditioning
        shall be $25.00 per hour per floor.

 5.103  Electricity.

        (a) Landlord shall furnish to the Premises electric current in such
            capacity as is required by the office lighting and receptacles
            included in Tenant's Improvements, provided, however, Tenant shall
            be solely responsible for the costs of electrical consumption
            (without duplication) by equipment which requires a voltage GREATER
            THAN 208 VOLTS SINGLE PHASE (SUCH consumption is herein referred to
            as "Excess Consumption" and the costs of Excess Consumption are
            herein referred to as "Excess Consumption Costs").

        (b) Landlord may, from time to time, engage a reputable consultant to
            conduct a survey of electrical usage within the Premises or install
            one or more submeters to measure electrical usage within the
            Premises or a particular floor of the Premises. If the survey or
            submeters reflect Excess Consumption for a 60 day period, then (i)
            Tenant shall be responsible for the costs of any such surveys and
            submeters, (ii) Landlord shall have the right to install permanent
            submeters to measure the electrical consumption within the Premises
            (which permanent submeters shall constitute a part of Tenant's
            Submeters, as hereinafter defined), (iii) Tenant shall pay for the
            cost of acquiring, maintaining, repairing and reading such
            submeters, and (iv) Tenant shall pay the Excess Consumption Costs.

        (c) Tenant shall not (i) use electric current in excess of the capacity
            of the feeders or lines to the Building as of the Commencement Date
            or the risers or wiring installation of the Building or the Premises
            as of the Commencement Date, or (ii) install any electrical plugs,
            connections or outlets which supply a voltage greater than 208 volts
            single phase without first notifying Landlord and arranging for the
            installation of a permanent submeter (which shall be deemed to be
            part of Tenant's Submeters), at Tenant's expense, to measure the
            electrical power consumed by the equipment and/or machinery hooked
            or plugged into such plugs, connections or outlets. All submeters
            installed by Landlord or Tenant to measure electrical usage by
            certain pieces of equipment located within the Premises together
            with any submeters installed by Landlord pursuant to paragraph (b)
            of this subsection are herein collectively referred to as "Tenant's
            Submeters". Landlord will maintain and repair Tenant's Submeters, at
            Tenant's cost.

        (d) Upon the installation of Tenant's Submeters, if any, Landlord will,
            at Tenant's cost, on or about the first day of each month during the
            Term of this Lease, read Tenant's Submeters and record such readings
            for purposes of determining Metered Electrical Expenses (hereinafter
            defined). The cost of electricity consumed within each separately
            metered portion of the Premises and by each separately metered piece
            of equipment within the Premises ("Metered Electrical Expenses")
            shall be equal to the sum of (i) the kilowatts of electricity
            consumed within the separately metered portions of the Premises (as
            measured by the applicable Tenant's Submeters) during the applicable
            month (or other applicable period) and (ii) the kilowatts of
            electricity consumed by each separately metered equipment within the
            Premises (as measured by the applicable Tenant's Submeters),
            multiplied by (iii) the cost per kilowatt of electricity charged to
            Landlord by the public utility for electricity consumed within the
            Building during the applicable month (or other applicable period).
            Landlord may, from time to time, invoice Tenant for Metered
            Electrical Expenses (as well as any Excess Consumption Costs
            determined by a reputable consultant) and Tenant shall, within ten
            (10) days after receiving an invoice therefor, pay Landlord the
            amount of the Metered Electrical Expenses (and/or, as applicable,
            any Excess Consumption Costs determined by a reputable consultant)
            covered by such invoice. Each such invoice submitted by Landlord to
            Tenant shall include (i) the period of consumption covered by such
            invoice, (ii) the beginning and ending readings for each of Tenant's
            Submeters for such period, (iii) Landlord's calculations of the
            Metered Electrical Expenses covered by such invoice, and (iv) if
            applicable, the independent electrical consultant's calculations of
            Excess Consumption and the Excess Consumption Costs.

 5.104  Water. Landlord shall furnish water for drinking, cleaning and lavatory
        purposes only.

 5.105  Janitorial Services. Landlord shall provide janitorial services to the
        Premises, comparable to THAT PROVIDED IN OTHER OFFICE buildings of
        similar size, quality and in the general vicinity of the Building and
        generally in the MANNER SUITABLE FOR "CLASS A" office space, provided
        the Premises are used exclusively as offices and further provided Tenant
        complies with SUBSECTION 6.201 below.


                                       7

<PAGE>   10

 5.106  Common Areas. Landlord shall perform routine maintenance in the Common
        Areas (hereinafter defined).

 5.107  Bulbs and Ballasts. Landlord shall provide Building standard bulbs and
        ballasts as necessary in the Premises. Landlord shall also provide
        non-building standard bulbs and ballasts provided Tenant shall pay the
        cost thereof All amounts due under this subsection for such non-building
        standard bulbs shall be paid to Landlord within thirty (30) days after
        receipt of an invoice therefor.

 SECTION 5.2 ADDITIONAL SERVICES. Landlord may impose a reasonable charge for
        any utilities and services, including without limitation, air
        conditioning, electrical current and water, provided by Landlord by
        reason of any use of the services at any time other than the hours set
        forth in subsection 5.102 above or beyond the levels or quantities that
        Landlord agrees herein to famish or because of special electrical,
        cooling or ventilating needs created by Tenant's hybrid telephone
        equipment, computers or other equipment. In no event will Landlord be
        required to provide any additional services if Tenant is in breach of
        its obligation to pay any Rent hereunder as and when due and payable.

 SECTION 5.3 TENANT'S OBLIGATION. Tenant agrees to cooperate fully at all times
        with Landlord and to abide by all regulations and requirements which
        Landlord reasonably prescribes for the use of the above utilities and
        services.

 SECTION 5.4 SERVICE INTERRUPTION.

 5.401  SERVICE INTERRUPTIONIWAIVER OF LANDLORD LIABILITY. LANDLORD SHALL NOT BE
        LIABLE FOR AND, EXCEPT AS PROVIDED IN SUBSECTION 5.402 BELOW, TENANT
        SHALL NOT BE ENTITLED TO ANY ABATEMENT OR REDUCTION OF RENT BY REASON OF
        LANDLORD'S FAILURE TO MAINTAIN TEMPERATURE OR ELECTRICAL CONSTANCY
        LEVELS OR TO FURNISH ANY OF THE FOREGOING SERVICES when such failure is
        caused by accident, breakage, repairs, strikes, lockouts or other labor
        disturbance or labor dispute of any character, governmental regulation,
        moratorium or other governmental action, inability to obtain
        electricity, water or fuel, or by any cause beyond Landlord's reasonable
        control (collectively, "Uncontrollable Events"), NOR SHALL ANY SUCH
        UNCONTROLLABLE EVENT OR RESULTS OR EFFECTS THEREOF BE CONSTRUED AS AN
        EVICTION (CONSTRUCTIVE OF ACTUAL) OF TENANT OR AS A BREACH OF THE
        IMPLIED WARRANTY OF SUITABILITY, OR RELIEVE TENANT FROM THE OBLIGATION
        TO PERFORM ANY COVENANT OR AGREEMENT HEREIN AND IN NO EVENT SHALL
        LANDLORD BE LIABLE FOR DAMAGE TO PERSONS OR PROPERTY (INCLUDING, WITHOUT
        LIMITATION, BUSINESS INTERRUPTION) OR BE IN DEFAULT HEREUNDER, AS A
        RESULT OF ANY SUCH UNCONTROLLABLE EVENT OR RESULTS OR EFFECTS THEREOF.

 5.402  Limited Right to Abatement of Rent. If any portion of the Premises
        becomes unfit for occupancy because Landlord fails to deliver any
        service as required under Section 5. 101 through 5.104 above (each an
        "Essential Service") for any period (other than a reconstruction period
        conducted pursuant to Section 7.1 or Article 8 below) exceeding fifteen
        (15) consecutive days after written notice by Tenant to Landlord and
        provided such failure is not caused by Tenant, Tenant's Contractors or
        any of their respective agents or employees, Tenant shall be entitled to
        a fair partial abatement of Basic Annual Rent and Additional Rent for
        any such portion of the Premises from the occurrence until such portion
        is again fit for occupancy.

 5.403  Exclusive Remedy. Tenant's sole and exclusive remedy for a failure by
        Landlord to provide any Essential Service to the Premises shall be
        Tenant's remedy set forth in subsection 5.402.

SECTION 5.5 MODIFICATIONS. Notwithstanding anything herein to the contrary,
        Landlord reserves the right from time to time to make reasonable
        modifications to the above standards for utilities and services,
        provided that such modifications do not materially decrease the level of
        utilities and services available to Tenant, and provided further that
        such modifications apply equally or no more favorably to other tenants
        in the Building.

SECTION 5.6 TELECOMMUNICATION EQUIPMENT. In the event that Tenant wishes at any
        time to utilize the services of a telephone or telecommunications
        provider whose equipment is not then servicing the Building, no such
        provider shall be permitted to install its lines or other equipment
        within the Building without first securing the prior written approval of
        the Landlord, which approval shall include, without limitation, approval
        of the plans and specifications for the installation of the lines and/or
        other equipment within the Building. Landlord's approval shall not be
        deemed any kind of warranty or representation by Landlord, including,
        without limitation, any warranty or representation as to the
        suitability, competence, or financial strength of the provider. Without
        limitation of the foregoing standard, unless all of the following
        conditions are satisfied to Landlord's satisfaction, it shall be
        reasonable for Landlord to refuse to give its approval: (i) Landlord
        shall incur no expense whatsoever with respect to any aspect of the
        provider's provision of its services, including without limitation, the
        costs of installation, materials and services; (ii) prior to
        commencement of any work in or about the Building by the provider, the
        provider shall supply Landlord with such written indemnities, insurance,
        financial statements, and such other items as LANDLORD DETERMINES to be
        reasonably necessary to protect its financial interests and the
        interests of the Building relating to the proposed activities of the
        provider; (iii) the provider agrees to abide by such rules and
        regulations, building and other codes, job site rules and such other
        requirements as are determined by Landlord to be reasonably necessary to
        protect the interests of the Building, the tenants in the Building and
        Landlord, in the same or similar manner as Landlord has the right to
        protect itself AND THE BUILDING WITH RESPECT to proposed alterations as
        described in Section 6.303 of this Lease; (iv) Landlord determines that
        there is sufficient space in the Building for the placement of all of
        the provider's equipment and materials; (v) the provider agrees to abide
        by Landlord requirements, if any, that provider use existing Building
        conduits and pipes or use BUILDING CONTRACTORS (OR OTHER CONTRACTORS
        reasonably approved by Landlord); (vi) Landlord receives from the
        provider such compensation as is determined by Landlord to compensate it
        for space used in the Building for the storage and maintenance of the
        PROVIDER'S EQUIPMENT FOR THE FAIR MARKET value of a provider's access to
        the Building, and the costs which may reasonably be expected to be
        incurred by Landlord; (vii) the provider agrees to deliver to Landlord
        detailed "as built" plans immediately after the installation of the
        provider's equipment is complete; and (viii) all of the foregoing
        matters are documented in a written license agreement between Landlord
        and the provider, the form and content of which are reasonably
        satisfactory to Landlord.

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<PAGE>   11

                                    ARTICLE 6
               MAINTENANCE, REPAIRS, ALTERATIONS AND IMPROVEMENTS

 SECTION 6.1 LANDLORD'S OBLIGATION TO MAINTAIN AND REPAIR. Landlord shall
        (subject to Section 7. 1, Section 7.4, Article 8 below and Landlord's
        rights under Section 2.2 above and except for ordinary wear and tear),
        maintain the foundation, exterior walls and roof and load bearing
        elements of the Building. Except for load bearing elements of the
        Building located within the Premises, Landlord shall not be required to
        maintain or repair any portion of the Premises.

 SECTION 6.2 TENANT'S OBLIGATION TO MAINTAIN AND REPAIR.

 6.201  Tenant's Obligation.

        (a) Subject to Sections 5.107, 6.1, 7.1 and 7.4 and Article 8 of this
            Lease, Tenant shall, at Tenant's sole cost and expense, (i) maintain
            and keep the interior of the Premises (including, but not limited
            to, all fixtures, walls, ceilings, floors, doors, windows [except
            replacement of exterior plate glass], appliances and equipment which
            are a part of the Premises) in good repair and condition, (ii)
            repair or replace any damage or injury done to the Building or any
            other part of the Property caused by Tenant, Tenant's agents,
            employees, licensees, invitees or visitors or resulting from a
            breach of its obligations under this Section 6.2 and (iii) indemnify
            and hold Landlord harmless from, and reimburse Landlord for and with
            respect to, any and all costs, expenses (including reasonable
            attomeys'fees), claims and causes of action arising from or incurred
            by and/or asserted in connection with such maintenance, repairs,
            replacements, damage or injury. All repairs and replacements
            performed by or on behalf of Tenant shall be performed in a good and
            workmanlike manner and in accordance with the standards applicable
            to alterations or improvements performed by Tenant. Tenant shall
            continue to pay Rent, without abatement, during any period that
            repairs or replacements are performed or required to be performed by
            Tenant under this Section 6.2.

        (b) Subject to Sections 7.1 and 7.4 and Article 8 of this Lease, Tenant
            shall maintain and repair all supplemental HVAC units, data and
            phone cabling, and any and all other installations and equipment
            installed in the Premises, above the acoustical ceiling tiles of the
            Premises or elsewhere in the Building (such equipment and
            installations collectively referred to as the "Tenant Service
            Equipment") installed by or on behalf of Tenant and which service
            only the Premises. Tenant shall notify Landlord prior to performing
            any repair, maintenance or replacement of the Tenant Service
            Equipment and the same shall be performed in accordance with the
            standards and conditions applicable to maintenance, repairs and
            replacements performed by Tenant pursuant to subpart (a) of this
            Section 6.20 1. Except for damage caused by Landlord, Landlord shall
            have no liability for any repair, maintenance or replacement cost
            incurred in connection with the Tenant Service Equipment. All Tenant
            Service Equipment other than the LAN room HVAC supplement, shall
            become property of the Landlord if paid by Landlord or from the
            Tenant Improvement Allowance at the expiration or earlier
            termination of the Lease; provided that, if requested by Landlord at
            the time of installation of such Tenant Service Equipment, Tenant
            shall remove the Tenant Service Equipment on or before the
            Expiration Date or, if this Lease is terminated earlier, within
            seven (7) days after such termination. All removals shall be
            accomplished in accordance with the standards for removals under
            Section 1.301 hereof. Tenant shall indemnify and hold Landlord
            harmless from, and reimburse Landlord for and with respect to, any
            and all costs, expenses (including reasonable attorneys' fees),
            claims and causes of action arising from or incurred by and/or
            asserted in connection with the (i) maintenance, repair, replacement
            of the Tenant Service Equipment and (ii) any damage or injury
            arising out of or resulting from or in connection with the Tenant
            Service Equipment.

 6.202  Rights of Landlord. Landlord shall have the same rights with respect to
        repairs performed by Tenant as Landlord has with respect to improvements
        and alterations performed by Tenant under subsection 6.303 below. In the
        event Tenant fails, in the reasonable judgment of Landlord, to maintain
        the Premises in good order, condition and repair, or otherwise satisfy
        its repair and replacement obligations under subsection 6.201 above
        within ten (10) days following written notice to Tenant of reasonably
        necessary repairs, Landlord shall have the right to perform such
        maintenance, repairs and replacements at Tenant's expense. Tenant shall
        pay to Landlord within ten (10) days after demand any such cost or
        expense incurred by Landlord, together with interest thereon at the rate
        specified in Section 15. 10 below from the date of demand until paid.

SECTION 6.3 IMPROVEMENTS AND ALTERATIONS.

 6.301  Landlord's Construction Obligation. Landlord's sole construction
        obligation under this Lease is as set forth in the Work Letter.

 6.302  Alteration of Building. LANDLORD HEREBY RESERVES THE RIGHT AND AT ALL
        TIMES SHALL HAVE THE RIGHT TO REPAIR, CHANGE, REDECORATE, ALTER,
        IMPROVE, MODIFY, RENOVATE, ENCLOSE OR MAKE ADDITIONS TO ANY PART OF THE
        PROPERTY (INCLUDING, WITHOUT LIMITATION, STRUCTURAL ELEMENTS AND LOAD
        BEARING ELEMENTS WITHIN THE PREMISES) AND TO ENCLOSE AND/OR CHANGE THE
        ARRANGEMENT AND/OR LOCATION OF DRIVEWAYS OR PARKING AREAS OR LANDSCAPING
        OR OTHER COMMON AREAS OF THE PROPERTY, ALL WITHOUT BEING HELD GUILTY OF
        AN ACTUAL OR CONSTRUCTIVE EVICTION OF TENANT OR BREACH OFTHE IMPLIED
        WARRANTY OF SUITABILITY AND WITHOUT AN ABATEMENT OF RENT (THE "RESERVED
        RIGHT"). WITHOUT IN ANY WAY LIMITING THE GENERALITY OF THE FOREGOING,
        LANDLORD'S RESERVED RIGHT SHALL INCLUDE, BUT NOT BE LIMITED TO THE RIGHT
        TO DO ANY OF THE FOLLOWING: (i) erect and construct scaffolding, pipe,
        conduit and other structures on and within and outside of the Premises
        where reasonably required by the nature of the changes, alterations,
        improvements, modifications, renovations and/or additions being
        performed, (ii) perform within and outside of the Premises all work and
        other activities associated with such changes, alterations,
        improvements, modifications, renovations and/or additions being
        performed, (iii) repair, change, renovate, remodel, alter, improve,
        modify or make additions to the arrangement, appearance, location and/or
        size of entrances or passageways, doors and doorways, corridors,
        elevators, elevator lobbies, stairs, toilets or other Common Areas or
        Service Areas, (iv) temporarily close any Common Area and/or temporarily
        suspend Building services and facilities in connection with any repairs,
        changes, alterations, modifications, renovations or additions to any
        part of the Building, (v) repair, change, alter or improve plumbing,

                                       9

<PAGE>   12

        pipes and conduits located in the Building, including without
        limitation, those located within the Premises, the Common Areas, the
        Service Corridors or the Service Areas (hereinafter defined) of the
        Building and (vi) repair, change, modify, alter, improve, renovate or
        make additions to the Building central heating, ventilation, air
        conditioning, electrical, mechanical or plumbing systems. When
        exercising the Reserved Right, Landlord will interfere with Tenant's use
        and occupancy of the Premises as little as is reasonably practicable.
        Notwithstanding the foregoing, Landlord shall not make any material
        alterations to the Building or the Common Areas during the initial Term
        of this Lease unless such alterations are (i) required by applicable
        law, (ii) performed in connection with Landlord's obligations hereunder
        or in connection with any repair of the Building, or (iv) are necessary
        for the protection of the Property.

 6.303  Alterations, Additions, Improvements and Installations by Tenant. Tenant
        shall not, without the prior written consent of Landlord, make any
        changes, modifications, alterations, additions or improvements (other
        than Tenant's Improvements under the Work Letter) to, or install any
        equipment or machinery (other than office equipment and unattached
        personal property) on, the Premises (all such changes, modifications,
        alterations, additions, improvements (other than Tenant's Improvements
        under the Work Letter) and installations approved by Landlord are herein
        collectively referred to as "Installations") if any such Installations
        would (i) affect any structural or load bearing portions of the
        Building, (ii) result i n a material increase of electrical usage above
        the normal type and amount of electrical current to be provided by
        Landlord, (iii) result in an increase in Tenant's usage of heating or
        air conditioning, (iv) impact mechanical, electrical or plumbing systems
        in the Premises or the Building, (v) affect areas of the Premises which
        can be viewed from Common Areas, (vi) require greater or more difficult
        cleaning work (e.g., kitchens, reproduction rooms and interior glass
        partitions), (vii) adversely affect Landlord's ability to deliver
        Building services to other tenants of the Building or (viii) violate any
        provision in Article 4 above or Rider HI attached hereto. As to
        Installations not covered by the preceding sentence, Tenant will not
        perform same without the prior written consent of Landlord, which
        consent shall not be unreasonably withheld or delayed. All Installations
        shall be at Tenant's sole cost and expense. Without in any way limiting
        Landlord's consent rights, Landlord shall not be required to give its
        consent until (a) Landlord approves the contractor or person making such
        Installations and approves such contractor's insurance coverage to be
        provided in connection with the work, (b) Landlord approves final and
        complete plans and specifications for the work and (c) the appropriate
        governmental agency, if any, has approved the plans and specifications
        for such work. All work performed by Tenant or its contractor relating
        to the Installations shall conform to applicable governmental laws,
        rules and regulations, including, without limitation, the Disability
        Acts. Upon completion of the Installations, Tenant shall deliver to
        Landlord "as built" plans. Each payment shall be made to Landlord within
        ten (10) days after receipt of an invoice from Landlord. All
        Installations that constitute improvements constructed within the
        Premises shall be surrendered with the Premises at the expiration or
        earlier termination of this Lease, unless Landlord requests that same be
        removed pursuant to Section 1. 3 above. Tenant shall indemnify and hold
        Landlord harmless from and reimburse Landlord for and with respect to,
        any and all costs, expenses (including reasonable attorneys' fees),
        demands, claims, causes of action and liens, arising from or in
        connection with any Installations performed by or on behalf of Tenant,
        EVEN IF THE SAME IS CAUSED BY THE NEGLIGENCE OR OTHER TORTIOUS CONDUCT
        OF LANDLORD OR LANDLORD IS STRICTLY LIABLE FOR SUCH COSTS, EXPENSES OR
        CLAIMS. All Installations performed by or on behalf of Tenant will be
        performed diligently and in a first-class workmanlike manner and in
        compliance with all applicable laws, ordinances, regulations and rules
        of any public authority having jurisdiction over the BUILDING AND/OR
        TENANT'S AND LANDLORD'S insurance carriers. Landlord will have the
        right, but not the obligation, to inspect periodically the work on the
        Premises and may require changes in the method or quality of the work.

 6.304  Approvals. Any approval by Landlord (or Landlord's architect and/or
        engineers) of any of Tenant's contractors or Tenant's drawings, plans or
        specifications which are prepared in connection with any construction of
        improvements (including without limitation, Tenant's Improvements) in
        the Premises shall not in any way be construed as or constitute a
        representation or warranty of Landlord as to the abilities of the
        contractor or the adequacy or sufficiency of such drawings, plans or
        specifications or the improvements to which they relate, for any use,
        purpose or condition.

                                    ARTICLE 7
                          INSURANCE, FIRE AND CASUALTY

SECTION 7.1 TOTAL OR PARTIAL DESTRUCTION OF THE BUILDING OR THE PREMISES. In the
        event that the Building should be totally destroyed by fire or other
        casualty or in the event the Building (or any portion thereof) should be
        so damaged that rebuilding or repairs cannot be completed, in Landlord's
        reasonable opinion, within one hundred eighty (180) days after
        commencement of repairs to the Building, Landlord may, at its option,
        terminate this Lease, in which event Basic Annual Rent and Additional
        Rent shall be abated during the unexpired portion of this Lease
        effective with the date of such damage. Landlord shall exercise the
        termination right pursuant to the preceding sentence, if at all, by
        delivering written notice of termination to Tenant within sixty (60)
        days after the casualty. In the event that the Premises should be so
        damaged by fire or other casualty that rebuilding or repairs cannot be
        completed, in Landlord's reasonable opinion, within one hundred eighty
        (180) days after the commencement of repairs to the Premises, Landlord
        shall notify Tenant within 60 days after the casualty, and Tenant may,
        at its option terminate this Lease, in which event Basic Annual Rent and
        Additional RENT SHALL BE ABATED DURING THE UNEXPIRED portion of this
        Lease, effective the date of such damage. Tenant shall exercise the
        TERMINATION RIGHT PURSUANT TO the preceding sentence, if at all, by
        delivering written notice of termination to Landlord within ten (10)
        days after being advised by Landlord that the repairs cannot be
        completed within such one hundred eighty (180) day period. In the event
        the Building or the Premises should be damaged by fire or other casualty
        and, in Landlord's reasonable opinion, the rebuilding or repairs can be
        completed within one hundred. eighty (180) days after the commencement
        of repairs to the Building or Premises, as applicable, or if the damage
        should be more serious but neither Landlord nor Tenant elect to
        terminate this Lease pursuant to this Section, in either such event
        Landlord shall, within sixty (60) days after the date of such damage,
        commence (and thereafter pursue with reasonable diligence) repairing the
        Building and the Premises (including Tenant's Improvements), but only to
        the extent of insurance proceeds actually received by Landlord for such
        repairs, to substantially the same condition which existed immediately
        prior to the happening of the casualty. In no event shall Landlord be
        required to rebuild, repair or replace any part of the furniture,
        equipment, fixtures, inventory, supplies or any other personalty or any
        other improvements (except Tenant's Improvements to the extent set forth
        in the preceding sentence), which may have been placed by Tenant within
        the Building or at the Premises. If more than fifty percent (50%) of the
        Premises is rendered untenantable by fire or other CASUALTY, ALL RENT
        SHALL be abated until repairs to the Premises are completed; provided,
        however, if less than fifty percent (50%) of the Premises is rendered
        untenantable

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<PAGE>   13

        by fire or other casualty, the Refit required to be paid hereunder shall
        be abated in proportion to the portion of the Premises, if any, which is
        rendered untenantable by fire or other casualty hereunder until repairs
        of the Premises are completed, or if the Premises are not repaired,
        until the Expiration Date hereunder; provided, that if such casualty was
        caused by Tenant, its agents, employees, licensees or invitees, Basic
        Annual Rent and Additional Rent shall be abated only to the extent
        Landlord is compensated for such Basic Annual Rent and Additional Rent
        by loss of rents insurance, if any. Notwithstanding Landlord's
        restoration obligation, in the event any mortgagee under a deed of
        trust, security agreement or mortgage on the Building should require
        that the insurance proceeds be used to retire or reduce the mortgage
        debt or if the insurance company issuing Landlord's fire and casualty
        insurance policy fails or refuses to pay Landlord the proceeds under
        such policy, Landlord shall have no obligation to rebuild and this Lease
        shall terminate upon notice by Landlord to Tenant which notice must be
        delivered, if at all, within 10 days after Landlord is notified by its
        mortgagee, and if the Lease is so terminated, all Basic Annual Rent and
        Additional Rent shall be abated during the unexpired portion of this
        Lease effective from the date of such damage. Any insurance which may be
        carried by Landlord or Tenant against loss or damage to the Building or
        to the Premises shall be for the sole benefit of the party carrying such
        insurance and under its sole control.

SECTION 7.2 TENANTS INSURANCE.

 7.201  Types of Coverage. Tenant covenants and agrees that from and after the
        date of delivery of the Premises from Landlord to Tenant, Tenant will
        carry and maintain, at its sole cost and expense, the insurance set
        forth in paragraphs (a), (b) and (c) of this subsection.

        (a) Commercial General Liability Insurance. Commercial General Liability
            Insurance covering the Premises and Tenant's use thereof against
            claims for personal or bodily injury or death or property damage
            occurring upon, in or about the Premises (including contractual
            indemnity and liability coverage), such insurance to insure both
            Tenant and, as additional named insureds, Landlord and the Property
            Manager, and to afford protection to the limit of not less than $
            1,000,000.00, combined single limit, in respect to injury or death
            to any number of PERSONS AND ALL PROPERTY DAMAGE ARISING out of any
            one (1) occurrence, with a deductible acceptable to Landlord. IF THE
            AGREED RENTABLE AREA OF THE Premises is more than 30,000 square
            feet, then, in addition to and not in lieu of the above stated
            coverage, Tenant shall carry umbrella or so called excess coverage
            in an amount not less than $1,000,000.00 over Tenant's base coverage
            amount. All insurance coverage required under this subparagraph (a)
            shall extend to any liability of Tenant arising out of the
            indemnities provided for in this Lease. Additionally, each policy
            evidencing the insurance required under this subparagraph shall
            expressly insure Tenant; in addition, each such policy shall
            expressly provide that Landlord and Property Manager are named as
            additional insureds, IT BEING THE INTENT THAT SUCH POLICIES AFFORD
            INSURANCE COVERAGE TO LANDLORD AND THE PROPERTY MANAGER AGAINST
            CLAIMS FOR PERSONAL OR BODILY INJURY OR DEATH OR PROPERTY DAMAGE
            OCCURRING UPON, IN OR ABOUT THE PREMISES AS THE RESULT OF THE
            NEGLIGENCE OF LANDLORD OR THE PROPERTY MANAGER, whether or not
            required by the other provisions of this Lease.

        (b) Fire and Extended Coverage Insurance. Property insurance on an
            all-risk extended coverage basis (including coverage against fire,
            wind, tornado, vandalism, malicious mischief, water damage and
            sprinkler leakage) covering all fixtures, equipment and personalty
            located in the Premises and endorsed to provide one hundred percent
            (100%) replacement cost coverage. Such policy will be written in the
            names of Tenant, Landlord and any other parties reasonably
            designated by Landlord from time to time, as their respective
            interests may appear. The property insurance may, with the consent
            of the Landlord, provide for a reasonable deductible.

        (c) Workers Compensation and Employer's Liability Insurance. To the
            extent required by applicable law, Worker's compensation insurance
            insuring against and satisfying Tenant's obligations and liabilities
            under the worker's compensation laws of the State of Texas, together
            with employer's liability insurance in an amount not less than $
            1,000,000.00. The insurance required by this part (c) shall include
            provisions waiving all subrogation rights against Landlord.

 7.202  Other Requirements of Insurance. All such insurance will be issued and
        underwritten by companies reasonably acceptable to Landlord and will
        contain endorsements that (a) such insurance may not lapse with respect
        to Landlord or Property Manager or be canceled or amended with respect
        to Landlord or Property Manager without the insurance company giving
        Landlord and Property Manager at least thirty (30) days prior written
        notice of such cancellation or amendment, (b) Tenant will be solely
        responsible for payment of premiums, (c) in the event of payment of any
        loss covered by such policy, Landlord or Landlord's designees will be
        paid first by the insurance company for Landlord's loss and (d) Tenant's
        insurance is primary in the event of overlapping coverage which may be
        carried by Landlord.

 7.203  Proof of Insurance. Tenant shall deliver to Landlord within ten (10)
        days prior to the COMMENCEMENT OF CONSTRUCTION of Tenants Improvements,
        duplicate originals of all policies of insurance required by this
        Section 7.2 or duly executed originals of the evidence of such insurance
        (on ACORD Form 27 or a similar form) evidencing in-force coverage,
        stating that Landlord is an additional insured thereunder and agreeing
        to give Landlord at least thirty (30) days written notice prior to
        termination, cancellation or modification adversely affecting Landlord.
        Further, Tenant shall deliver to Landlord renewals thereof at least ten
        (10) days prior to the expiration of the respective policy terms.

SECTION 7.3 LANDLORD'S INSURANCE.

 7.301  Types of Coverage. Landlord covenants and agrees that throughout the
        Term of this Lease, Landlord will carry and maintain, at its sole cost
        and expense, the insurance set forth in paragraphs (a) and (b) of this
        subsection.

        (a) Commercial General Liability Insurance. Commercial General Liability
            Insurance covering the Building and all Common Areas, but excluding
            the Premises, insuring against claims for personal or BODILY INJURY
            OR DEATH OR PROPERTY damage occurring upon, in or about the Building
            or Common Areas to afford protection to the limit of not less than

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<PAGE>   14

            $2,000,000.00 combined single limit in respect to injury or death to
            any number of persons and property damage arising out of any one (1)
            occurrence. This insurance coverage shall extend to any liability of
            Landlord arising out of the indemnities provided for in this Lease.

        (b) Fire and Extended Coverage Insurance. Landlord shall at all times
            during the term hereof maintain in effect a policy or policies of
            all risk extended coverage insurance covering the Building
            (excluding property required to be insured by Tenant) endorsed to
            provide full replacement cost coverage and providing protection
            against perils included within the standard Texas form of fire and
            extended coverage insurance policy, together with insurance against
            sprinkler damage, vandalism, malicious mischief and such other risks
            as Landlord may from time to time determine and with any such
            deductibles as Landlord may from time to time determine.

 7.302  Self Insurance. Any insurance provided for in subsection 7.301 above may
        be effected by a policy or policies of blanket insurance covering
        additional items or locations or assureds, provided that the
        requirements of this Section 7.3 are otherwise satisfied. Tenant shall
        have no rights in any policy or policies maintained by Landlord,

SECTION 7.4 WAIVER OF SUBROGATION. Landlord and Tenant each hereby waives any
        rights it may have against the other (including, but not limited to, a
        direct action for damages) on account of any loss or damage occasioned
        to Landlord or Tenant, as the case may be (EVEN IF (i) SUCH LOSS OR
        DAMAGE IS CAUSED BY THE FAULT, NEGLIGENCE OR OTHER TORTIOUS CONDUCT,
        ACTS OR OMISSIONS OF THE RELEASED PARTY OR THE RELEASED PARTY'S
        DIRECTORS, EMPLOYEES, AGENTS OR INVITEES, OR (ii) THE RELEASED PARTY IS
        STRICTLY LIABLE FOR SUCH LOSS OR DAMAGE), TO THEIR RESPECTIVE PROPERTY,
        THE PREMISES, ITS CONTENTS OR TO ANY OTHER PORTION OF THE BUILDING OR
        THE PROPERTY ARISING FROM ANY RISK (WITHOUT REGARD TO THE AMOUNT OF
        COVERAGE OR THE AMOUNT OF DEDUCTIBLE) COVERED BY THE ALL RISK FULL
        REPLACEMENT COST PROPERTY INSURANCE REQUIRED TO BE CARRIED BY TENANT AND
        LANDLORD, RESPECTIVELY, UNDER SUBSECTIONS 7.201 (b) AND 7.301 (b) ABOVE.
        The foregoing waiver shall be effective even if either or both parties
        fail to carry the insurance required by sections 7.201(b) and 7.301(b)
        above. If a party waiving rights under this Section is carrying an all
        risk full replacement cost insurance policy in the promulgated form used
        in the State of Texas and an amendment to such promulgated form is
        passed, such amendment shall be deemed not a part of such promulgated
        form until it applies to the policy being carried by the waiving party.
        Without in any way limiting the foregoing waivers and to the extent
        permitted by applicable law, the parties hereto each, on behalf of their
        respective insurance companies insuring the property of either Landlord
        or Tenant against any such loss, waive any right of subrogation that
        Landlord or Tenant or their respective insurers may have against the
        other party or their respective officers, directors, employees, agents
        or invitees and all rights of their respective insurance companies based
        upon an assignment from its insured. Each party to this Lease agrees
        immediately to give to each such insurance company written notification
        of the terms of the MUTUAL WAIVERS CONTAINED IN THIS Section and to have
        said insurance policies properly endorsed, if necessary, to prevent the
        invalidation of said insurance coverage by reason of said waivers. The
        foregoing waiver shall be effective whether or not the parties maintain
        the required insurance.

SECTION 7.5 INDEMNITY.

 7.501  Tenant's Indemnity. Subject to the limitation and exclusions set forth
        below in this subsection, Tenant will indemnify and hold harmless
        Landlord, Property Manager, their respective officers, directors, and
        employees and any other parties for whom Landlord and/or Property
        Manager are responsible (each a "Landlord Indemnified Party") from, and
        shall reimburse each Landlord Indemnified Party for and with respect to,
        any and all costs, expenses (including, without limitation, reasonable
        attorneys' fees), claims, demands, actions, proceedings, judgments,
        hearings, damages, losses and liabilities brought or asserted by or
        payable to any third party, on account of personal injury, death,
        property damage or any other form of injury or damage (each a "Claim"
        and collectively, the "Claims") arising out of or relating to (A) an
        incident or event which occurred within or on the Premises, (B) any
        breach of this Lease by Tenant and which resulted in a Claim, EVEN IF
        THE CLAIM IS THE RESULT OF OR CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS
        OF ANY LANDLORD INDEMNIFIED PARTY OR THE LANDLORD INDEMNIFIED PARTY IS
        STRICTLY LIABLE FOR SUCH CLAIM. The indemnification and reimbursement
        obligations of Tenant under this subsection (i) shall be limited to the
        greater of the amount of Commercial General Liability Insurance required
        to be carried by such party under this Lease or $5,000,000 and (ii)
        shall not apply to a Claim (a) waived by Landlord under Section 7.4
        above or any other provision of this Lease, (b) related to hazardous or
        toxic materials and caused by an act or omission that does not
        constitute a breach by Tenant of the provisions of subsection 4.102
        above, (c) arising out of the gross negligence or intentional misconduct
        of the Landlord Indemnified Party or (d) resulting from host liquor
        liability. If a third party files a lawsuit or brings any other legal
        action asserting a Claim against a Landlord Indemnified Party and that
        is covered by Tenant's indemnity, then Tenant, upon notice from the
        Landlord Indemnified Party, shall resist and defend such Claim through
        counsel reasonably satisfactory to the Landlord Indemnified Party.
        Tenant's obligations under this subsection shall survive the termination
        of this Lease.

 7.502  Landlord's Indemnity. Subject to the limitation and exclusions set forth
        below in this subsection, Landlord will indemnify and hold harmless
        Tenant and its officers, directors, and employees and any other parties
        for whom Tenant is responsible (each a "Tenant Indemnified Party") from,
        and shall reimburse each Tenant Indemnified Party for and with respect
        to, any and all Claims (as defined in subsection 7.501 preceding)
        arising out of or relating to (a) an incident or event which occurred
        within or on the Common Areas, or (b) any breach of this Lease by
        Landlord and which resulted in a Claim, EVEN IF THE CLAIM IS THE RESULT
        OF OR CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS OF ANY TENANT
        INDEMNIFIED PARTY OR THE TENANT INDEMNIFIED PARTY IS STRICTLY LIABLE FOR
        SUCH CLAIM. The indemnification and reimbursement obligations of
        Landlord under this subsection (i) shall be limited to the greater of
        the amount of Commercial General Liability Insurance required to be
        carried by such party under this Lease or $5,000,000 and (ii) shall not
        apply to a Claim (a) waived by Tenant under Section 7.4 above or any
        other provision of this Lease, (b) related to hazardous or toxic
        materials and caused by an act or omission that does not constitute a
        breach by Landlord of the provisions of subsection 4.102

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<PAGE>   15

        above; (c) arising out of the gross negligence or intentional misconduct
        of the Tenant Indemnified Party or (d) resulting from host liquor
        liability. If a third party files a lawsuit or brings any other legal
        action asserting a Claim against a Tenant Indemnified Party and that is
        covered by Landlord's indemnity, then Landlord, upon notice from the
        Tenant Indemnified Party, shall resist and defend such Claim through
        counsel reasonably satisfactory to the Tenant Indemnified Party.
        Landlord's obligations under this subsection shall survive the
        termination of this Lease.

                                    ARTICLE 8
                                  CONDEMNATION

SECTION 8.1 CONDEMNATION RESULTING IN CONTINUED USE NOT FEASIBLE. If the
        Property or any portion thereof that, in Landlord's reasonable opinion,
        is necessary to the continued efficient and/or economically feasible use
        of the Property shall be taken or condemned in whole or in part for
        public purposes, or sold to a condemning authority in lieu of taking,
        then the term of this Lease shall, at the option of Landlord, forthwith
        cease and terminate.

SECTION 8.2 TOTAL CONDEMNATION OF PREMISES. In the event that any portion of the
        Property is taken or condemned or sold in lieu thereof and such taking
        or condemnation prevents Tenant from conducting its business in the
        Premises in a manner reasonably comparable to that conducted immediately
        before such taking or condemnation (including a significant reduction in
        the parking spaces available) or Tenant will be unable to use a
        substantial portion of the Premises for a period of one hundred eighty
        (180) consecutive days by reason of a temporary taking, either Landlord
        or Tenant may terminate this Lease by delivering written notice thereof
        to Landlord within ten (10) business days after the taking, condemnation
        or sale in lieu thereof.

SECTION 8.3 CONDEMNATION WITHOUT TERMINATION. If a taking or condemnation or
        sale in lieu of the taking of all or less than all of the Property does
        not give Landlord or Tenant the right to terminate, or gives either
        LANDLORD or Tenant the right to terminate this Lease pursuant to Section
        8.1 or 8.2 above and neither Landlord NOR TENANT ELECT TO exercise such
        termination right, then this Lease shall continue in full force and
        effect, provided that, if the taking, condemnation or sale includes any
        portion of the Premises, the Basic Annual Rent and Additional Rent shall
        be redetermined on the basis of the remaining square feet of Agreed
        Rentable Area of the Premises or if the taking or condemnation includes
        other portions of the Building or Land, the Basic Annual Rent and
        Additional Rent shall be adjusted on such equitable basis as is
        reasonable under the circumstances. Landlord, at Landlord's sole option
        and expense, shall restore and reconstruct the Building to substantially
        its former condition to the extent that the same may be reasonably
        feasible, but such work shall not be required to exceed the scope of the
        work done by Landlord in originally constructing the Building, nor shall
        Landlord in any event be required to spend for such work an amount in
        excess of the amount received by Landlord as compensation or damages
        (over and above amounts going to the mortgagee of the property taken)
        for the part of the Building or the Premises so taken.

SECTION 8.4 CONDEMNATION PROCEEDS. Landlord shall receive the entire award
        (which shall include sales proceeds) payable as a result of a
        condemnation, taking or sale in lieu thereof. Tenant hereby expressly
        assigns to Landlord any and all right title and interest of Tenant now
        or hereafter arising in and to any such award. Tenant shall, however,
        have the right to recover from such authority through a separate award
        which does not reduce Landlord's award, any compensation as may be
        awarded to Tenant on account of moving and relocation expenses and,
        depreciation to and removal of Tenant's physical property and the loss
        of Tenant's use of the Premises.

                                    ARTICLE 9
                                      LIENS

        Tenant shall keep the Premises and the Property free from all liens
        arising out of any work performed, materials furnished or obligations
        incurred by or for Tenant AND TENANT SHALL INDEMNIFY AND HOLD HARMLESS
        LANDLORD FROM AND AGAINST, AND REIMBURSE LANDLORD FOR AND WITH RESPECT
        TO, ANY AND ALL CLAIMS, CAUSES OF ACTION, DAMAGES, EXPENSES (INCLUDING
        REASONABLE ATTORNEYS' FEES), ARISING FROM OR IN CONNECTION WITH ANY SUCH
        LIENS. In the event that Tenant shall not, within thirty (30) days
        following notification to Tenant of the imposition of any such lien,
        cause the same to be released of record by payment or the posting of a
        bond in amount, form and substance acceptable to Landlord, Landlord
        shall have, in addition to all other remedies provided herein and by
        law, the right but not the obligation, to cause the same to be released
        by such means as it shall deem proper, including payment of or defense
        against the claim giving rise to such lien. All amounts paid or incurred
        by Landlord in connection therewith shall be paid by Tenant to Landlord
        on demand and shall bear interest from the date of demand until paid at
        the rate set forth in Section 15. 10 below. Nothing in this Lease shall
        be deemed or construed in any way as constituting the consent or request
        of Landlord, express or implied, by inference or otherwise, to any
        contractor, subcontractor, laborer or materialman for the performance of
        any labor or the furnishing of any materials for any specific
        IMPROVEMENT, ALTERATION OR REPAIR of or to the Building or the Premises
        or any part thereof, nor as giving Tenant any right, power or authority
        to CONTRACT FOR OR permit the rendering of any services or the
        furnishing of any materials that would give rise to the filing of any
        mechanic's or other liens against the interest of Landlord in the
        Property or the Premises.

                                   ARTICLE 10
                           TAXES ON TENANT'S PROPERTY

        Tenant shall be liable for and shall pay, prior to their becoming
        delinquent, any and all taxes and assessments levied against, and any
        increases in Real Estate Taxes as a result of, any personal property or
        trade or other fixtures placed by Tenant in or about the Premises and
        any improvements (other than Tenant's Improvements) constructed in the
        Premises by or on behalf of Tenant. In the event Landlord pays any such
        additional taxes or increases, Tenant will, within ten (10) days after
        demand, reimburse Landlord for the amount thereof.

                                       13

<PAGE>   16

                                   ARTICLE I I
                            SUBLETTING AND ASSIGNING

SECTION 11.1 SUBLEASE AND ASSIGNMENT. Except as provided below and as provided
        in Rider 2 to the Lease, Tenant shall not assign this Lease, or allow it
        to be assigned, in whole or in part, by operation of law or otherwise
        (it being agreed that for purposes of this Lease, assignment shall
        include, without limitation, the transfer of a majority interest of
        stock, PARTNERSHIP or other forms of ownership interests, merger or
        dissolution) or mortgage or pledge the same, or sublet the Premises or
        any part thereof or permit the Premises to be occupied by any firm,
        person, partnership or corporation or any combination thereof, other
        than Tenant, without the prior written consent of Landlord. In no event
        shall any assignment or sublease ever release Tenant from any obligation
        or liability hereunder. Without limiting Landlord's consent rights and
        as a condition to obtaining Landlord's consent, (i) each assignee must
        assume all obligations under this Lease and (ii) each sublessee must
        confirm that its sublease is subject and subordinate to this Lease. In
        addition, each assignee and sublessee shall agree to cause the Premises
        to comply at all times with all requirements of the Disability Acts (as
        amended), including, but not limited to, obligations arising out of or
        associated with such assignee's or subtenant's use of or activities or
        business operations conducted within the Premises to the extent Tenant
        would be required to so comply under this Lease. No assignee or
        sublessee of the Premises or any portion thereof may assign or sublet
        the Premises or any portion thereof. Consent by Landlord to one or more
        assignments or sublettings shall not operate as a waiver of Landlord's
        rights as to any subsequent assignments and/or sublettings. Tenant shall
        deliver to Landlord a copy of each assignment or sublease entered into
        by Tenant promptly after the execution thereof, whether or not
        Landlord's consent is required in connection therewith. Any assignment
        made by Tenant shall be in RECORDABLE FORM AND SHALL CONTAIN A covenant
        of assumption by the assignee running to Landlord. All reasonable legal
        fees and expenses INCURRED BY LANDLORD IN CONNECTION with any assignment
        or sublease proposed by Tenant will be the responsibility of Tenant and
        will be paid by Tenant within five (5) days of receipt of an invoice
        from Landlord. In addition, Tenant will pay to Landlord an
        administrative overhead fee of $500.00 in consideration for Landlord's
        review of any requested assignment or sublease.

SECTION 11.2 LANDLORD'S RIGHTS.

11.201  Landlord's Termination and Consent Rights.

        (a) If, at any time during the term of this Lease, Tenant determines
            that it desires to sublease more than fifty percent (50%) of the
            then existing Premises (other than to an Affiliate (as defined in
            Rider 2 to the Lease)) for a term equal to or greater than
            seventy-five percent (75%) of the remaining Term if one (1) or more
            years remains in the term of this Lease or for the remaining Term if
            less than one (1) year remains in the term of this Lease, Tenant
            may, prior to commencing any marketing efforts to locate a suitable
            subtenant, deliver notice to Landlord, specifying the portion of the
            Premises that Tenant desires to sublease (the "Proposed Sublease
            Space"), and the proposed effective date of such sublease ("Tenant's
            Preliminary Transfer Notice"). Landlord shall have a period of
            fifteen (15) business days following receipt of Tenant's Preliminary
            Transfer Notice (the "Exercise Period") in which to notify Tenant
            that it will terminate this Lease with respect to the Proposed
            Sublease Space pursuant to subsection 11. 20 1 (c) below or that it
            will not terminate this Lease with respect to the Proposed Sublease
            Space. If Landlord fails to notify Tenant of its election within the
            Exercise Period, Landlord shall be deemed to have elected not to
            terminate with Lease with respect to the Proposed Sublease Space,
            and Tenant shall be free to commence its marketing efforts in
            respect of the Proposed Sublease Space; provided that if Tenant has
            not executed a sublease agreement covering the Proposed Sublease
            Space within the one hundred fifty (150) day period following the
            expiration of the Exercise Period, Landlord's election not to
            terminate this Lease shall expire and Landlord shall be entitled,
            within twenty (20) business days following delivery of a second
            Preliminary Transfer Notice to exercise its recapture rights as
            provided above. The above procedure shall continue in the event that
            Tenant does not execute a sublease agreement covering the Proposed
            Sublease Space within any one hundred fifty (150) day period
            following the expiration of any Exercise Period, Landlord's election
            not to terminate this Lease shall expire and Landlord shall be
            entitled, within twenty (20) business days following delivery of
            another Preliminary Transfer Notice to exercise its recapture rights
            as provided above. The above PROCEDURE SHALL CONTINUE in the event
            that Tenant does not execute a sublease agreement covering the
            Proposed Sublease Space within any one hundred fifty (150) day
            period following the expiration of any Exercise Period.

        (b) If Tenant desires to sublease any portion of the Premises to any
            party other than as provided in Rider 2 or assign this Lease to any
            party other than an Affiliate, Tenant shall submit to Landlord (a)
            in writing the name of the proposed subtenant or assignee, the
            nature of the proposed subtenant's or assignee's business and, in
            the event of a sublease, the portion of the Premises which Tenant
            desires to sublease (if the proposed sublease space is less than all
            of the Premises, such portion is herein referred to as the "Proposed
            Sublease Space"), (b) a current balance sheet and income statement
            for such proposed subtenant or assignee, (c) a copy of the proposed
            form of sublease or assignment, and (d) such other information as
            Landlord may reasonably request (collectively, the "Required
            Information").

        (c) Landlord shall, within fifteen (15) days after Landlord's receipt of
            the Required Information deliver to Tenant a written notice (each
            such notice, a "Landlord Response") in which Landlord either (i)
            TERMINATES THIS LEASE, if Tenant desires to sublease all of the
            Premises or assign this Lease, unless Landlord has waived such right
            pursuant to subsection 11.20 1 (a) above, (ii) terminates this Lease
            only as to the Proposed Sublease Space, if the Proposed Sublease
            Space is less than the entire Premises, unless Landlord has waived
            such right pursuant to subsection 11.201(a) above, (iii) consents to
            the proposed sublease or assignment, or (iv) withholds its consent
            to the proposed sublease or assignment, which consent shall not be
            unreasonably withheld so long as Landlord does not elect to
            terminate this Lease under subparts (i) or (ii) above and so long as
            Landlord has received all Required Information. Notwithstanding the
            foregoing, Landlord shall not have the right to terminate this Lease
            with respect to any Proposed Sublease Space if the Agreed Rentable
            Area of such space, together with the Agreed Rentable Area of all
            other portions of the Premises then subject to a sublease, is less
            than fifty percent (50%) of the Agreed Rentable Area of the
            Premises. Landlord shall be deemed to have reasonably withheld its
            consent to any sublease or assignment if the refusal is based on (i)
            Landlord's determination (in its commercially reasonable discretion)
            that such subtenant or assignee is not of the character or quality
            of a tenant to whom Landlord would GENERALLY LEASE SPACE OF THE
            BUILDING, (II) THE fact that such sublease or assignment is not in
            form and of substance reasonably satisfactory to Landlord, (iii)
            such sublease or

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<PAGE>   17

            assignment conflicts in any material manner with this Lease,
            including, but not limited to, the Permitted Use under Item 10 of
            the Basic Lease Provisions or Section 4.1 of the Supplemental Lease
            Provisions, (iv) the proposed subtenant or assignee is a
            governmental entity or a medical office, (v) the proposed
            subtenant's or assignee's primary business is prohibited by any
            non-compete clause then affecting the Building, (vi) the proposed
            subtenant or assignee is a tenant of the Building or Landlord is
            negotiating with the proposed subtenant or assignee to become a
            tenant of the Building, (vii) the character of the business to be
            conducted within the Premises by the proposed subtenant or assignee
            is likely to substantially increase the expenses or costs or
            providing Building services, or the burden on parking, existing
            janitorial services or elevators in the Building, (viii) the
            sublease or assignment would cause Landlord to breach any recorded
            covenants or contractual obligations to which the Property or
            Landlord is subject or (ix) such sublessee or assignee has a net
            worth reasonably unsatisfactory to Landlord at the time Tenant
            submits the Required Information.

        (d) If Landlord does not timely exercise its termination right with
            respect to the proposed sublease or assignment within the required
            fifteen (15) days period, then Landlord shall be deemed to have
            waived its right, if any, to terminate this Lease with respect to
            the applicable assignment or sublease, but Landlord shall have the
            right to consent or withhold its consent to the applicable proposed
            assignment or sublease, by delivering written notice thereof to
            Tenant WITHIN SUCH FIFTEEN (15) DAY PERIOD. If Landlord does not
            exercise its right to consent or withhold its consent in respect of
            a proposed assignment or sublease within the required fifteen (15)
            day period, then Landlord shall be deemed to have consented to the
            proposed assignment or sublease.

11.202  Effect of Termination. If Landlord timely exercises its option to
        terminate this Lease as to the entire Premises as provided in subsection
        11.201, then this Lease shall terminate on a date specified by Landlord
        in the Landlord Response (the "Specified Termination Date"), which
        Specified Termination Date shall not be sooner than 30 days after the
        date of Landlord's Response, nor later than 90 days after the date of
        Landlord's Response, and the Basic Rent and Additional Rent shall be
        paid and apportioned to the Specified Termination Date. If Landlord
        timely exercises its option to terminate this Lease as to only the
        Proposed Sublease Space, then (i) this Lease shall end and expire with
        respect to the Proposed Sublease Space on the applicable Specified
        Termination Date, (ii) from and after the applicable Specified
        Termination Date, the Basic Rent shall be reduced by the amount of Basic
        Rent that was being paid in respect of the Proposed Sublease Space as of
        the applicable Specified Termination Date, (iii) Tenant's Pro Rata Share
        Percentage shall be recalculated based on the square feet of rentable
        area included in the Premises (exclusive of such Proposed Sublease
        Space), (iv) Tenant's estimated payments of Additional Rent shall be
        recalculated on the basis of the revised Tenant's Pro Rata Share
        Percentage, and (v) if the Proposed Sublease Space adjoins another
        portion of the Premises, Tenant shall, at Tenant's sole cost and
        expense, construct and finish such demising walls as are necessary to
        physically separate the Premises from the Proposed Sublease Space, and
        (vi) if the Proposed Sublease Space is part of a floor which is fully
        included in the Premises, then Landlord shall have the right, at Tenant!
        s sole cost and expense, (a) to construct and finish in accordance with
        Building standards or to cause Tenant to construct and finish in
        accordance with Building standards such demising walls as are necessary
        (x) to construct a public corridor so as to convert the floor to a
        multi-tenant floor and (y) to convert the restrooms on such floor
        (including access thereto) to restrooms, which will serve the entire
        floor, as opposed to only the Premises, and (b) to make such revisions,
        if any, are necessary, to properly light, heat, cool and ventilate the
        public corridor and public restrooms. The alterations performed by
        Tenant pursuant to this paragraph shall be deemed Installations and
        therefore subject to the provisions of subsection 6.303.

SECTION 11.3 LANDLORD'S RIGHTS RELATING TO ASSIGNEE OR SUBTENANT. To the extent
        the rentals or income derived from any sublease or assignment exceed the
        rentals due hereunder, one-half ('/2) of such excess rentals, after
        deducting Tenant's costs of entering into the sublease or assignment,
        (the "Excess Sublease Rentals") shall be the property of and paid over
        to Landlord in consideration for Landlord's consent to the applicable
        assignment or sublease. Landlord may at its option collect directly from
        such assignee or sublessee all rents becoming due to Tenant under such
        assignment or sublease Tenant hereby authorizes and directs any such
        assignee or sublessee to make such payments of rent direct to Landlord
        upon receipt of notice from Landlord and Tenant agrees that any such
        payments made by an assignee or sublessee to Landlord shall, to the
        extent of the payments so made, be a full and complete release and
        discharge of rent owed to Tenant by such assignee or sublessee. No
        direct collection by Landlord from any such assignee or sublessee shall
        be construed to constitute a novation or a release of Tenant or any
        guarantor of Tenant from the further performance of its obligations
        hereunder. Receipt by Landlord of rent from any assignee, sublessee or
        occupant of the Premises or any part thereof shall not be deemed a
        waiver of the above covenant in this Lease against assignment and
        subletting or a release of Tenant under this Lease. IN THE EVENT THAT,
        FOLLOWING AN ASSIGNMENT or subletting, this Lease or Tenant's right to
        possession of the Premises is TERMINATED BY LANDLORD FOR ANY REASON,
        INCLUDING WITHOUT limitation in connection with default by or bankruptcy
        of Tenant (which, for the purposes of this Section 11.2, shall include
        all persons or entities claiming by or through Tenant), Landlord may, at
        its SOLE OPTION, CONSIDER THIS LEASE TO BE THEREAFTER a direct lease to
        the assignee or subtenant of Tenant upon the terms and conditions
        contained in this Lease, in which event all rentals payable under such
        lease to which Landlord would otherwise be entitled after the
        termination of this Lease or Tenant's right to possession of the
        Premises shall be deemed the property of Landlord.

SECTION 11.4 ASSIGNMENT AND BANKRUPTCY.

11.401  Assignments after Bankruptcy. If, pursuant to applicable bankruptcy law
        (as hereinafter defined in Section 13.104), Tenant (or its successor in
        interest hereunder) is permitted to assign this Lease in disregard of
        the restrictions contained in this Article I I (or if this Lease shall
        be assumed by a trustee for such person), the trustee or assignee shall
        cure any default under this Lease and shall provide adequate assurance
        of future performance by the trustee or assignee, including (i) THE
        SOURCE OF PAYMENT of Basic Annual Rent and performance of other
        obligations under this Lease (for which ADEQUATE ASSURANCE SHALL MEAN
        THE DEPOSIT of cash security with Landlord in an amount equal to the sum
        of one (1) YEAR'S BASIC ANNUAL RENT, ADDITIONAL RENT AND OTHER RENT THEN
        RESERVED HEREUNDER FOR THE CALENDAR YEAR PRECEDING the year in which
        such ASSIGNMENT IS INTENDED TO BECOME EFFECTIVE, which deposit shall be
        held by Landlord, without interest, for the balance of THE TERM AS
        SECURITY FOR THE FULL AND FAITHFUL performance of all of the obligations
        under this Lease on the part of Tenant yet to be PERFORMED AND THAT ANY
        SUCH ASSIGNEE of this Lease shall have a net worth exclusive of good
        will, computed in accordance with the generally accepted accounting
        principles, equal to at least ten (10) times the aggregate of the Basic
        Annual Rent RESERVED HEREUNDER); AND (II) THAT THE USE OF the Premises
        shall be in accordance with the requirements of Article 4 hereof and,
        FURTHER, SHALL IN NO WAY DIMINISH THE REPUTATION of the Building as a
        first-class office building or impose any additional BURDEN UPON THE
        Building or increase the

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<PAGE>   18

        services to be provided by Lan - lord. If all defaults are not cured and
        such adequate ssurance is not provided within sixty (60) days after
        there has been an order for relief under applicable bankruptcy law, then
        this Lease shall be deemed rejected, Tenant or any other person in
        possession shall immediately vacate the Premises, and Landlord shall be
        entitled to retain any Basic Annual Rent, Additional Rent and any other
        Rent, together with any security deposit previously received from the
        Tenant, and shall have no further liability to Tenant or any person
        claiming through Tenant or any trustee.

11.402  Bankruptcy of Assignee. If Tenant assigns this Lease to any party and
        such party or its successors or representatives causes termination or
        rejection of this Lease pursuant to applicable bankruptcy law, then,
        notwithstanding any such termination or rejection, Tenant (i) shall
        remain fully liable for the performance of all covenants, agreements,
        terms, provisions and conditions contained in this Lease, as though the
        assignment never occurred and (ii) shall, without in any way limiting
        the foregoing, in writing ratify the terms of this Lease, as same
        existed immediately prior to the termination or rejection.

                                   ARTICLE 12
                    TRANSFERS BY LANDLORD, SUBORDINATION AND
                          TENANT'S ESTOPPEL CERTIFICATE

SECTION 12.1 SALE OF THE PROPERTY. In the event of any transfer of title to the
        Building, the transferor shall automatically be relieved and freed of
        all obligations of Landlord under this Lease accruing after such
        transfer, provided that if a Security Deposit has been made by Tenant,
        Landlord shall not be released from liability with respect thereto
        unless Landlord transfers the Security Deposit to the transferee and the
        transferee assumes in writing the obligations of the Landlord with
        respect to the Security Deposit.

SECTION 12.2 SUBORDINATION, ATTORNMENT AND NOTICE. This Lease is subject and
        subordinate to (i) any lease wherein Landlord is the tenant and to the
        liens of any and all mortgages and deeds of trust, regardless of whether
        such lease, mortgage or deed of trust now exists or may hereafter be
        created with regard to all or any part of the Property, (ii) any and all
        advances (including interest thereon) to be made under any such lease,
        mortgage or deed of trust and (iii) all modifications, consolidations,
        renewals, replacements and extensions of any such lease, mortgage or
        deed of trust; provided that the foregoing subordination in respect of
        any mortgage or deed of trust placed on the Property after the date
        hereof shall not become effective until and unless the holder of such
        mortgage or deed of trust delivers to Tenant a commercially reasonable
        non-disturbance agreement (which may include Tenant's agreement to
        attorn as set forth below) permitting Tenant, if Tenant is not then in
        default under, or in breach of any provision of, this Lease, to remain
        in occupancy of the Premises in the event of a foreclosure of any such
        mortgage or deed of trust. Tenant also agrees that any lessor, mortgagee
        or trustee may elect (which election shall be revocable) to have this
        Lease superior to any lease or lien of its mortgage or deed of trust
        and, in the event of such election and upon notification by such lessor,
        mortgagee or trustee to Tenant to that effect, this Lease shall be
        deemed superior to the said lease, mortgage or deed of trust, whether
        this Lease is dated prior to or subsequent to the date of said lease,
        mortgage or deed of trust. Tenant shall, in the event of the sale or
        assignment of Landlord's interest in the Premises (except in a
        sale-leaseback financing transaction), or in the event of the
        termination of any lease in a sale-leaseback financing transaction
        wherein Landlord is the lessee, attorn to and recognize such purchaser,
        assignee or mortgagee as Landlord under this Lease, provided that any
        purchaser or assignee assumes the obligations of Landlord under this
        Lease in writing, or any mortgagee provides Tenant with a nondisturbance
        agreement. Tenant shall, in the event of any proceedings brought for the
        foreclosure of, or in the event of the exercise of the power of sale
        under, any mortgage or deed of trust covering the Premises, attorn to
        and recognize purchaser at such sale, assignee or mortgagee, as the case
        may be, as Landlord under this Lease, PROVIDED THAT TENANT HAS received
        a nondisturbance agreement. 'Me above subordination and attornment
        clauses shall be self-operative and no further instruments of
        subordination or attornment need be required by any mortgagee, trustee,
        lessor, purchaser or assignee. In confirmation thereof, Tenant agrees
        that, upon the request of Landlord, or any such lessor, mortgagee,
        trustee, purchaser or assignee, Tenant shall execute and deliver
        whatever instruments may be reasonably required for such purposes and to
        carry out the intent of this Section 12.2.

SECTION 12.3 TENANT'S ESTOPPEL CERTIFICATE. Tenant shall, upon the reasonable
        request of Landlord or any mortgagee of Landlord, without additional
        consideration, deliver an estoppel certificate, consisting of reasonable
        statements required by Landlord, any mortgagee or purchaser of any
        interest in the Property, which statements may include but shall not be
        limited to the following: this Lease is in full force and effect with
        rent paid through a specified date; this Lease has not been modified or
        amended; Landlord is not in default and Landlord has fully performed all
        of Landlord's obligations hereunder; and such other statements as may
        reasonably be required by the requesting party. If Tenant is unable to
        make any of the statements contained in the estoppel certificate because
        the same is untrue, Tenant shall with specificity state the reason why
        such statement is untrue. Tenant shall, if requested by Landlord or any
        such mortgagee, deliver to Landlord a fully executed instrument in form
        reasonably satisfactory to Landlord evidencing the agreement of Tenant
        to the mortgage or other hypothecation by Landlord of the interest of
        Landlord hereunder.

                                   ARTICLE 13
                                     DEFAULT

SECTION 13.1 DEFAULTS BY TENANT. The occurrence of any of the events described
        in subsections 13. 101 through 13.108 shall constitute a default by
        Tenant under this Lease.

13.101  Failure to Pay Rent. With respect to the first two payments of Rent not
        made by Tenant WHEN DUE IN ANY TWELVE (12) MONTH period, the failure by
        Tenant to make either such payment to Landlord within three (3) business
        days after Tenant receives written notice specifying that the payment
        was not made when due. With respect to any other payment of Rent, the
        failure by Tenant to make such payment of Rent to Landlord when due, no
        notice of any such failure being required.

13.102  Failure to Perform. Except for a failure covered by subsection 13. 101
        above or 13.103 below, any failure by Tenant to observe and perform any
        provision of this Lease to be observed or performed by Tenant where such
        failure continues for thirty (30) days after written notice to Tenant,
        provided that if such failure cannot be cured within said fifteen (15)
        day period, Tenant shall not

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<PAGE>   19

        be in default hereunder so long as Tenant commences curative action
        within such fifteen (15) day period, diligently and continuously pursues
        the curative action and fully and completely cures the failure within
        sixty (60) days after such written notice to Tenant.

13.103  Continual Failure to Perform. The third failure by Tenant in any twelve
        (12) month period to perform and observe a particular provision of this
        Lease to be observed or performed by Tenant (other than the failure to
        pay Rent, which in all instances will be covered by subsection 13. 101
        above), no notice being required for any such third failure.

13.104  Bankruptcy, Insolvency, Etc. Tenant or any guarantor of Tenant's
        obligations hereunder (hereinafter called "Guarantor", whether one (1)
        or more), (i) declared insolvent according to any law, (ii) makes a
        transfer in fraud of creditors according to any applicable law, (iii)
        assigns or conveys all or a substantial portion of its property for the
        benefit of creditors, or (iv) Tenant or Guarantor files a petition for
        relief under the Federal Bankruptcy Code or any other present or future
        federal or state insolvency, bankruptcy or similar law (collectively,
        "applicable bankruptcy law"); a receiver or trustee is appointed for
        Tenant or Guarantor or its property; the interest of Tenant or Guarantor
        under this Lease is levied on under execution or under other legal
        process; any involuntary petition is filed against Tenant or Guarantor
        under applicable bankruptcy law; or any action is taken in bankruptcy to
        reorganize or modify Tenant's or Guarantor's capital structure if either
        Tenant or Guarantor be a corporation or other entity (provided that no
        such levy, execution, legal process or petition filed against Tenant or
        Guarantor shall constitute a breach of this Lease if Tenant or Guarantor
        shall vigorously contest the same by appropriate proceedings and shall
        remove or vacate the same within ninety (90) days from the date of its
        creation, service or filing).

13.105  Intentionally Omitted.

13.106  Intentionally Omitted.

13.107  Loss of Right to do Business. If Tenant is a corporation or limited
        partnership, Tenant fails to maintain its right to do business in the
        State of Texas or fails to pay any applicable annual franchise taxes as
        and when same become finally due and payable, and Tenant fails to cure
        within thirty (30) days following notice of such failure.

13.108  Dissolution or Liquidation. If Tenant is a corporation or partnership,
        Tenant dissolves or liquidates or otherwise fails to maintain its
        corporate or partnership structure, as applicable, and Tenant fails to
        cure within thirty (30) days following notice of such failure.

        With respect to the defaults described in subsections 13.103 through
        13.108, Landlord shall not be obligated to give Tenant notices of
        default and Tenant shall have no right to cure such defaults.

SECTION 13.2 REMEDIES OF LANDLORD.

13.201  Termination. of the Lease. Upon the occurrence of a default by Tenant
        hereunder, Landlord may, without judicial process, terminate this Lease
        by giving written notice thereof to Tenant (whereupon all obligations
        and liabilities of Landlord hereunder shall terminate) and, without
        further notice and without liability, repossess the Premises. Landlord
        shall be entitled to recover all loss and damage Landlord may suffer by
        reason of such termination, whether through inability to relet the
        Premises on satisfactory terms or otherwise, including without
        limitation, the following (without duplication of any element of
        damages):

        (a) accrued Rent to the date of termination and Late Charges, plus
            interest thereon at the rate established under Section 15. 10 below
            from the date due through the date paid or date of any judgment or
            award by any court of competent jurisdiction, the unamortized cost
            of Tenant's Improvements, brokers' fees and commissions, attorneys'
            fees, moving allowances and any other costs incurred by Landlord in
            connection with making or executing this Lease, the cost of
            recovering the Premises and the reasonable costs of reletting the
            Premises (including, without limitation, advertising costs,
            brokerage fees, leasing commissions, reasonable attorneys' fees and
            refurbishing costs and other costs in readying the Premises for a
            new tenant);

        (b) the present value of the Rent (discounted at a rate of interest
            equal to eight percent [8%] per annum [the "Discount Rate"]) that
            would have accrued under this Lease for the balance of the Lease
            term but for such termination, reduced by the reasonable fair market
            rental value of the Premises for such balance of the Lease term
            (determined from the present value of the actual base rents,
            discounted at the Discount Rate, received and to be received from
            Landlord's reletting of the Premises or, if the Premises are not
            relet, the base rents, discounted at the Discount Rate, that with
            reasonable efforts could be collected by Landlord by reletting the
            Premises, calculated in accordance with subsection 13.206);

        (c) plus any other costs or amounts reasonably necessary to compensate
            Landlord for its damages.

13.202  Repossession and Re-Entry. Upon the occurrence of a default by Tenant
        hereunder, LANDLORD MAY, WITHOUT JUDICIAL PROCESS, immediately terminate
        Tenant's right of possession of the Premises (whereupon all OBLIGATIONS
        AND LIABILITY OF LANDLORD hereunder shall terminate), but not terminate
        this Lease, and, without notice, demand or liability, enter upon the
        Premises or any part thereof, take absolute possession of the same,
        expel or remove Tenant and any OTHER PERSON OR ENTITY WHO MAY BE
        OCCUPYING the Premises and change the locks. If Landlord terminates
        Tenant's possession of THE PREMISES UNDER THIS SUBSECTION 13.202, (i)
        Landlord shall have no obligation whatsoever to tender to Tenant a key
        for new LOCKS INSTALLED IN THE PREMISES, (ii) Tenant shall have no
        further right to possession of the Premises and (iii) Landlord will HAVE
        THE RIGHT TO RELET THE PREMISES or any PART THEREOF on such TERMS AS
        LANDLORD DEEMS advisable, taking into account the FACTORS DESCRIBED IN
        SUBSECTION 13.206. Any rent received by Landlord from reletting the
        Premises or a part thereof shall be applied first, to the payment of any
        indebtedness other than Rent due hereunder from Tenant to Landlord (in
        such order as Landlord shall designate), second, to the payment of any
        cost of such reletting, including, without limitation, refurbishing
        costs, reasonable attorneys' fees, advertising costs, brokerage fees and
        leasing commissions and third, to the payment of Rent due and unpaid
        hereunder (in such order as Landlord shall designate), and Tenant shall
        satisfy and pay to Landlord any deficiency upon demand therefor from
        time to time. Landlord shall not be responsible or liable for any
        failure to relet the Premises or any PART THEREOF OR FOR ANY FAILURE to
        collect

                                       17

<PAGE>   20

        any rent due upon any such reletting No such re-entry or taking of
        possession of the Premises by Landlord shall be construed as an election
        on Landlord's part to terminate this Lease unless a written notice of
        such termination is given to Tenant pursuant to subsection 13.201 above.
        If Landlord relets the Premises, either before or after the termination
        of this Lease, all such rentals received from such lease shall be and
        remain the exclusive property of Landlord and Tenant shall not be, at
        any time, entitled to recover any such rental. Any rents received shall
        be credited against amounts owed by Tenant. Landlord may at any time
        after a reletting elect to terminate this Lease.

13.203  Cure of Default. Upon the occurrence of a default hereunder by Tenant,
        Landlord may, without judicial process and without having any liability
        therefor, enter upon the Premises and do whatever Tenant is obligated to
        do under the terms of this Lease and Tenant agrees to reimburse Landlord
        on demand for any expenses which Landlord may incur in effecting
        compliance with Tenant's obligations under this Lease, and Tenant
        further agrees that Landlord shall not be liable for any damages
        resulting to Tenant from such action, WHETHER CAUSED BY THE NEGLIGENCE
        OF LANDLORD OR OTHERWISE, UNLESS CAUSED BY LANDLORD'S GROSS NEGLIGENCE
        OR WILLFUL MISCONDUCT.

13.204  Continuing Obligations. No repossession of or re-entering upon the
        Premises or any part thereof pursuant to subsection 13.202 or 13.203
        above or otherwise and no reletting of the Premises or any part thereof
        pursuant to subsection 13.202 above shall relieve Tenant or any
        Guarantor of its liabilities and obligations hereunder, all of which
        shall survive such repossession or re-entering. In the event of any such
        repossession of or re-entering upon the Premises or any part thereof by
        reason of the occurrence of a default, Tenant will continue to pay to
        Landlord Rent required to be paid by Tenant.

13.205  Cumulative Remedies. No right or remedy herein conferred upon or
        reserved to Landlord is intended to be exclusive of any other right or
        remedy set forth herein or otherwise available to Landlord at law or in
        equity and each and every right and remedy shall be cumulative and in
        addition to any other right or remedy given hereunder or now or
        hereafter existing at law or in equity or by statute. In addition to the
        other remedies provided in this Lease and without limiting the preceding
        sentence, Landlord shall be entitled, to the extent permitted by
        applicable law, to injunctive relief in case of the violation, or
        attempted or threatened violation, of ANY of the covenants, agreements,
        conditions or provisions of this Lease, or to a decree compelling
        performance of any of the covenants, agreements, conditions or
        provisions of this Lease, or to any other remedy allowed to Landlord at
        law or in equity.

13.206  Mitigation of Damages. For purposes of determining any recovery of rent
        or damages by Landlord that depends upon what Landlord could collect by
        using reasonable efforts to relet the Premises, whether the
        determination is required under subsections 13.201 or 13.202 or
        otherwise, it is understood and agreed that:

        (a) Landlord may reasonably elect to lease other comparable, available
            space in the Building, if any, before reletting the Premises.


        (b) Landlord may reasonably decline to incur out-of-pocket costs to
            relet the Premises, other than customary leasing commissions and
            legal fees for the negotiation of a lease with a new tenant.

        (c) Landlord may reasonably decline to relet the Premises at rental
            rates below then prevailing market rental rates, because of the
            negative impact lower rental rates would have on the value of the
            Building and because of the uncertainty of actually receiving from
            Tenant the greater damages that Landlord would suffer from and after
            reletting at the lower rates.

        (d) Before reletting the Premises to a prospective tenant, Landlord may
            reasonably require the prospective tenant to demonstrate the same
            financial wherewithal that Landlord would require as a condition to
            leasing other space in the Building to the prospective tenant.

        (e) Identifying a prospective tenant to relet the Premises, negotiating
            a new lease with such tenant and making the Premises ready for such
            tenant will take time, depending upon market conditions when the
            Premises first become available for reletting, and during such time
            Landlord cannot reasonably be expected to collect any revenue from
            reletting.

        (f) Listing the Premises with a broker in a manner consistent with parts
            (a) through (e) above constitutes reasonable efforts on the part of
            Landlord to relet the Premises.

SECTION 13.3 DEFAULTS BY LANDLORD. Landlord shall be in default under this Lease
        if Landlord fails to perform any of its obligations hereunder and said
        failure continues for a period of fifteen (15) days after Tenant
        delivers written notice thereof to Landlord (to each of the addresses
        required by this Section) and each mortgagee who has a lien against any
        portion of the Property and whose name and address has been provided to
        Tenant, provided that if such FAILURE CANNOT REASONABLY BE CURED WITHIN
        said fifteen (15) day period, Landlord shall not be in default hereunder
        if the curative action is commenced within said fifteen (15) day period
        and is thereafter diligently pursued until cured. In no event shall (i)
        Tenant claim a constructive or actual eviction or that the Premises have
        become unsuitable hereunder or (ii) a constructive or actual eviction or
        breach of the implied warranty of suitability be deemed to have occurred
        under this Lease, prior to the expiration of THE NOTICE AND CURE PERIODS
        PROVIDED under this Section 13.3. Any notice of a failure to perform by
        Landlord shall be sent to Landlord at the addresses and to the attention
        of the parties set forth in the Basic Lease Provisions. Any notice of a
        failure to perform by Landlord not sent to Landlord at all addresses
        and/or to the attention of all parties required under this Section and
        to each mortgagee who is entitled to notice or not sent in compliance
        with Article 14 below shall be of no force or effect.

SECTION 13.4 LANDLORD'S LIABILITY.

13.401  Tenant's Rights in Respect of Landlord Default. Tenant is granted no
        contractual right of termination by this Lease, except to the extent and
        only to the extent set forth in Sections 7.1 and 8.2 above and Rider H-
        I attached hereto If Landlord is in default, Tenant's exclusive remedy
        shall bean action for damages. If Tenant shall recover a money judgment
        against Landlord, such

                                       18

<PAGE>   21

        judgment shall be satisfied only out of the right, title and interest of
        Landlord in the Property as the same may then be encumbered and Landlord
        shall not be liable for any deficiency. If Landlord is found to be in
        default hereunder by reason of its failure to give a consent that it is
        required to give hereunder, Tenant's sole remedy will be an action for
        specific performance or injunction. The foregoing sentence shall in no
        event be construed as mandatorily requiring Landlord to give consents
        under this Lease. In no event shall Landlord be liable to Tenant for
        consequential or special damages by reason of a failure to perform (or a
        default) by Landlord hereunder or otherwise. In no event shall Tenant
        have the right to levy execution against any property of Landlord other
        than its interest in the Property as hereinbefore expressly provided.

13.402  Certain Limitations on Landlord's Liability. UNLESS COVERED BY
        SUBSECTION 7.502 ABOVE OR CAUSED BY LANDLORD'S GROSS NEGLIGENCE OR
        WILLFUL MISCONDUCT AND WITHOUT LIMITING THE PROVISIONS OF SECTION 7.4,
        LANDLORD SHALL NOT BE LIABLE TO TENANT FOR ANY CLAIMS, ACTIONS, DEMANDS,
        COSTS, EXPENSES, DAMAGE OR LIABILITY OF ANY KIND (i) arising out of the
        use, occupancy or enjoyment of the Premises by Tenant or any person
        therein or holding under Tenant or by or through the acts or omissions
        of any of their respective employees, officers, agents, invitees or
        contractors, (ii) caused by or arising out of fire, explosion, falling
        sheetrock, gas, electricity, water, rain, snow or dampness, or leaks in
        any part of the Premises, (iii) caused by or arising out of damage to
        the roof, pipes, appliances or plumbing works or any damage to or
        malfunction of heating, ventilation or air conditioning equipment, or
        (iv) caused by tenants or any persons either in the Premises or
        elsewhere in the Building (other than Common Areas) or by occupants of
        property adjacent to the Building or Common Areas or by the public or by
        the construction of any private, public or quasi-public work. In no
        event shall Landlord be liable to Tenant for any loss of or damage to
        property of Tenant or of others located in the Premises, the Building or
        any other part of the Property by reason of theft or burglary.

SECTION 13.5 WAIVER OF TEXAS DECEPTIVE TRADE PRACTICES ACT

TENANT HEREBY WAIVES ALL ITS RIGHTS UNDER THE TEXAS DECEPTIVE TRADE PRACTICES
- CONSUMER PROTECTION ACT, SECTION 17.41 ET. SEQ. OF THE TEXAS BUSINESS AND
COMMERCE CODE (THE "DTPA"), A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND
PROTECTIONS. AFTER CONSULTATION WITH AN AT-FORNEY OF TENANT'S OWN SELECTION,
TENANT VOLUNTARILY CONSENTS TO THIS WAIVER.

SECTION 13.6 LANDLORD'S LIEN. Intentionally Omitted.

                                   ARTICLE 14
                                     NOTICES

        Any notice or communication required or permitted in this Lease shall be
        given in writing, sent by (a) personal delivery, with proof of delivery,
        (b) expedited delivery service, with proof of delivery, (c) United
        States mail, postage prepaid, registered or certified mail, return
        receipt requested or (d) prepaid telegram (provided that such telegram
        is confirmed by expedited delivery service or by mail in the manner
        previously described), addressed as provided in Item 13 of the Basic
        Lease Provisions and Section 13.3 above or to such other address or to
        the attention of such other person as shall be designated from time to
        time in writing by the applicable party and sent in accordance herewith.
        Notice also may be given by telex or fax, provided each such
        transmission is confirmed (and such confirmation is supported by
        documented evidence) as received and further provided a telex or fax
        number, as the case may be, is set forth in Item 13 of the Basic Lease
        Provisions. Any such notice or communication shall be deemed to have
        been given either at the time of personal delivery or, in the case of
        delivery service or mail, as of the date of first attempted delivery at
        the address and in the manner provided herein, or in the case of
        telegram or telex or fax, upon receipt.

                                   ARTICLE 15
                            MISCELLANEOUS PROVISIONS

SECTION 15.1 BUILDING NAME AND ADDRESS. Tenant shall not, without the written
        consent of Landlord, use the name of the Building for any purpose other
        than as the address of the business to be conducted by Tenant in the
        Premises and in no event shall Tenant acquire any rights in or to such
        names. Landlord shall have the right at any time to change the name,
        number or designation by which the Building is known, upon reasonable
        notice to Tenant.

SECTION 15.2 SIGNAGE. Except as provided below, Tenant shall not inscribe,
        paint, affix or display any signs, advertisements or notices on or in
        the Building, except for such tenant identification information as
        Landlord permits to be included or shown on the directory in the main
        lobby and adjacent to the access door or doors to the Premises. Landlord
        agrees that Tenant may, at Tenant's expense, maintain a sign over its
        reception desk (or at such other location visible from the elevator
        lobby of the Building) bearing Tenant's name (subject to Landlord's
        reasonable approval of the size, DESIGN, FORM, CONTENT AND LOCATION of
        such sign) on each floor of the Building on which any part of the Leased
        Premises are located. Tenant shall be solely responsible for all costs
        of designing, installing and repairing such signage, diligently
        construct such building signage to completion in a good and workmanlike
        manner and maintain such signage in an attractive condition, and comply
        with all governmental codes and regulations. Landlord shall, at
        Landlord's expense, maintain a Building directory, and shall furnish
        Tenant with space on the directory identifying Tenant.

SECTION 15.3 NO WAIVER. No waiver by Landlord or by Tenant of any provision of
        this Lease shall be deemed to be a waiver by either party of any other
        provision of this Lease. No waiver by Landlord of any breach by Tenant
        shall be deemed a waiver of any subsequent breach by Tenant of the same
        or any other provision. No waiver by Tenant of any breach by Landlord
        shall be deemed a waiver of any subsequent breach by Landlord of the
        same or any other provision. The failure of Landlord or Tenant to insist
        at any time upon the strict performance of any covenant or agreement or
        to exercise any option, right, power or remedy contained in this Lease
        shall not be construed as a waiver or a relinquishment THEREOF FOR THE
        FUTURE. Landlord's consent to or approval of any act by Tenant requiring
        Landlord's consent or approval shall not be deemed to render unnecessary
        the obtaining of Landlord's consent to or approval of any subsequent act
        of Tenant. Tenant s consent to or approval of any act by Landlord
        requiring Tenant's consent or approval shall not be deemed to render
        unnecessary the obtaining of Tenant's consent

                                       19

<PAGE>   22

        to or approval of any subsequent act of Landlord. No act or thing done
        by Landlord or Landlord's agents during the term of this Lease shall be
        deemed an acceptance of a surrender of the Premises, unless done in
        writing signed by Landlord. The delivery of the keys to any employee or
        agent of Landlord shall not operate as a termination of this Lease or a
        surrender of the Premises. The acceptance of any Rent by Landlord
        following a breach of this Lease by Tenant shall not constitute a waiver
        by Landlord of such breach or any other breach. The payment of Rent by
        Tenant following a breach of this Lease by Landlord shall not constitute
        a waiver by Tenant of any such breach or any other breach. No waiver by
        Landlord or Tenant of any provision of this Lease shall be deemed to
        have been made unless such waiver is expressly stated in writing signed
        by the waiving party. No payment by Tenant or receipt by Landlord of a
        lesser amount than the monthly installment of Rent due under this Lease
        shall be deemed to be other than on account of the earliest Rent due
        hereunder, nor shall any endorsement or statement on any check or any
        letter accompanying any check or payment as Rent be deemed an accord and
        satisfaction and Landlord may accept such check or payment without
        'prejudice to Landlord's right to recover the balance of such rent or
        pursue any other remedy which may be available to Landlord.

SECTION 15.4 APPLICABLE LAW. This Lease shall be governed by and construed in
        accordance with the laws of the State of Texas.

SECTION 15.5 COMMON AREAS. "Common Areas" will mean all areas, spaces,
        facilities and equipment (whether or not located within the Building)
        made available by Landlord for the common and joint use of Landlord,
        Tenant and others designated by Landlord using or occupying space in the
        Building, including but not limited to, tunnels, walkways, sidewalks and
        driveways necessary for access to the Building, Building lobbies,
        landscaped areas, public corridors, public rest rooms, Building stairs,
        elevators open to the public, service elevators (provided that such
        service elevators shall be available only for TENANTS OF the Building
        and others designated by Landlord), drinking fountains and any such
        other areas and facilities, if any, as are designated by Landlord from
        time to time as Common Areas. "Service Corridors" shall mean all loading
        docks, loading areas and all corridors that are not open to the public
        but which are available for use by Tenant and others designated by
        Landlord. "Service Areas" will refer to areas, spaces, facilities and
        equipment serving the Building (whether or not located within the
        Building) but to which Tenant and other occupants of the Building will
        not have access, including, but not limited to, mechanical, telephone,
        electrical and similar rooms and air and water refrigeration equipment.
        Tenant is hereby granted a nonexclusive right to use the Common Areas
        and Service Corridors during the term of this Lease for their intended
        purposes, in common with others designated by Landlord, subject to the
        terms and conditions of this Lease, including, without limitation, the
        Rules and Regulations. The Building, Common Areas, Service Corridors and
        Service Areas will be at all times under the exclusive control,
        management and operation of the Landlord. Tenant agrees and acknowledges
        that the Premises (whether consisting of less than one floor or
        consisting of one or more full floors within the Building) do not
        include, and Landlord hereby expressly reserves for its sole and
        exclusive use, any and all mechanical, electrical, telephone and similar
        rooms, janitor closets, elevator, pipe and other vertical shafts and
        ducts, flues, stairwells, any area above the acoustical ceiling and any
        other areas not specifically shown on Exhibit A as being part of the
        Premises.

SECTION 15.6 SUCCESSORS AND ASSIGNS. Subject to Article I I hereof, all of the
        covenants, conditions and provisions of this Lease shall be binding upon
        and shall inure to the benefit of the parties hereto and their
        respective heirs, personal representatives, successors and assigns.

SECTION 15.7 BROKERS. Tenant warrants that it has had no dealings with any real
        estate broker or agent in connection with the negotiation of this Lease,
        excepting only the broker named in Item 9 of the Basic Lease Provisions
        and that it knows of no other real estate brokers or agents who are or
        might be entitled to a commission in connection with this Lease. Tenant
        agrees to indemnify and hold harmless Landlord from and against any
        liability or claim, whether meritorious or not, arising in respect to
        brokers and/or agents not so named. Landlord has agreed to pay the fees
        of the broker (but only the broker) named in Item 9 of the Basic Lease
        Provisions to the extent that Landlord has agreed to do so pursuant to a
        written agreement with such broker.

SECTION 15.8 SEVERABILITY. If any provision of this Lease or the application
        thereof to any person or circumstances shall be invalid or unenforceable
        to any extent, the application of such provisions to other persons or
        circumstances and the remainder of this Lease shall not be affected
        thereby and shall be enforced to the greatest extent permitted by law.

SECTION 15.9 EXAMINATION OF LEASE. Submission by Landlord of this instrument to
        Tenant for examination or signature does not constitute a reservation of
        or option for lease. This Lease will be effective as a lease or
        otherwise only upon execution by and delivery to both Landlord and
        Tenant.

SECTION 15.10 INTEREST ON TENANT'S OBLIGATIONS. Any amount due from Tenant to
        Landlord which is not paid within thirty (30) days after the date due
        shall bear interest at the lower of (i) ten percent (10%) per annum or
        (ii) the highest rate from time to time allowed by applicable law, from
        the date such payment is due until paid, but the payment of such
        interest shall not excuse or cure the default.

SECTION 15.11 TIME. Time is of the essence in this Lease and in each and all of
        the provisions hereof. Whenever a period of days is specified in this
        Lease, such period shall refer to calendar days unless otherwise
        expressly stated in this Lease.

SECTION 15.12 DEFINED TERMS AND MARGINAL HEADINGS. The words "Landlord" and
        "Tenant" as used herein shall include the plural as well as singular. If
        more than one person is named as Tenant, the obligations of such persons
        are joint and several. The headings and titles to the articles, sections
        and subsections of this Lease are not a part of this Lease and shall
        have no effect upon the construction or interpretation of any part of
        this Lease.

SECTION 15.13 AUTHORITY OF TENANT. Tenant and each person signing this Lease on
        behalf of Tenant represents to Landlord as follows: Tenant, if a
        corporation, is duly incorporated and legally existing under the laws of
        the state of its incorporation and is duly qualified to do business in
        the State of Texas. Tenant, if a partnership or joint venture, is duly
        organized under the Texas Uniform Partnership Act. Tenant, if a limited
        partnership, is duly organized under the applicable limited partnership
        act of the State of Texas or, if organized under the laws of a state
        other than Texas, is qualified under said Texas limited partnership act.
        Tenant has all requisite power and all governmental certificates of
        authority, licenses, permits,

                                       20

<PAGE>   23

        qualifications and other documentation to lease the Premises and to
        carry on its business as now conducted and as contemplated to be
        conducted. Each person signing on behalf of Tenant is authorized to do
        so. The foregoing representations in this Section 15.13 shall also apply
        to any corporation, partnership, joint venture or limited partnership
        which is a general partner or joint venturer of Tenant.

SECTION 15.14 FORCE MAJEURE. Whenever a period of time is herein prescribed for
        action to be taken by Landlord or Tenant, the party taking the action
        shall not be liable or responsible for, and there shall be excluded from
        the computation for any such period of time, any delays due to strikes,
        riots, acts of God, shortages of labor or materials, war, governmental
        laws, regulations or restrictions or any other causes of any kind
        whatsoever which are beyond the reasonable control of such party;
        provided, however, in no event shall the foregoing apply to the
        financial obligations of either Landlord or Tenant to the other under
        this Lease, including Tenant's obligation to pay Basic Annual Rent,
        Additional Rent or any other amount payable to Landlord hereunder.

SECTION 15.15 RECORDING. This Lease shall not be recorded. However, Landlord
        shall have the right to record a short form or memorandum hereof, at
        Landlord's expense, at any time during the term hereof and, if
        requested, Tenant agrees (without charge to Landlord) to join in the
        execution thereof.

SECTION 15.16 NO REPRESENTATIONS. Landlord and Landlord's agents have made no
        warranties, representations or promises (express or implied) with
        respect to the Premises, the Building or any other part of the Property
        (including, without limitation, the condition, use or suitability of the
        Premises, the Building or the Property), except as herein expressly set
        forth and no rights, easements or licenses are acquired by Tenant by
        implication or otherwise except as expressly set forth in the provisions
        of this Lease.

SECTION 15.17 PARKING. If the Property includes a Garage, there shall be an
        Exhibit F. If there is no Garage included in the Property, then the
        remaining provisions of this Section shall be applicable with respect to
        parking. The parking areas shall be designated for automobile parking on
        a non-exclusive basis for all Property tenants (including Tenant) and
        their respective employees, customers, invitees and visitors. Parking
        and delivery areas for all vehicles shall be in accordance with parking
        regulations established from time to time by Landlord, with which Tenant
        agrees to conform. Tenant shall only permit parking by its employees,
        customers and agents of automobiles in appropriate designated parking
        areas.

SECTION 15.18 ATTORNEYS' FEES. In the event of any legal action or proceeding
        brought by either party against the other arising out of this Lease, the
        prevailing party shall be entitled to recover reasonable attorneys' fees
        and costs incurred in such action (including, without limitation, all
        costs of appeal) and such amount shall be included in any judgment
        rendered in such proceeding.

SECTION 15.19 NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of
        light, air or view by any structure which may be erected on the Property
        or lands adjacent to the Property shall in no way affect this Lease or
        impose any liability on Landlord (even if Landlord is the adjacent land
        owner).

SECTION 15.20 SURVIVAL OF INDEMNITIES. Each indemnity agreement and hold
        harmless agreement contained herein shall survive the expiration or
        termination of this Lease.

SECTION 15.21 ENTIRE AGREEMENT. This Lease contains all of the agreements of the
        parties hereto with respect to any matter covered or mentioned in this
        Lease and no prior agreement, understanding or representation pertaining
        to any such matter shall be effective for any purpose. No provision of
        this Lease may be amended or added to except by an agreement in writing
        signed by the parties hereto or their respective successors in interest.

        IN WITNESS WHEREOF, the parties hereto have executed and delivered this
        Lease, as of the date first written in this Lease.


                                              LANDLORD:
                                              B.0. 111, LTD.
                                              By: Office/Industrial, Inc.,
                                                  General Partner

                                              By: /s/ RICHARD S. HILL
                                                  ----------------------------
                                              Name: Richard S. Hill
                                              Title: President


                                              TENANT: 
                                              IXC COMMUNICATIONS SERVICES, INC.

                                              By: /s/ STUART K. COPPENS
                                                  ----------------------------
                                              Name: Stuart K. Coppens
                                              Title: VP

                                       21

<PAGE>   24

                                   EXHIBIT A

                          FLOOR PLAN FOR THE PREMISES





                                      A-1


<PAGE>   25


                                   EXHIBIT B

                             LAND LEGAL DESCRIPTION

BUILDING:             Barton Oaks III

LEGAL DESCRIPTION:    Building C, Unit No. 3, Barton Oaks Plaza Condominium, a
                      condominium project in Travis County, Texas, according to
                      the second Amended and Restated Declaration of Condominium
                      for Barton Oaks Plaza Condominium and amendments thereto,
                      recorded in Volume 12236, Page 567 of the Real Property
                      Records of Travis County, Texas, together with an
                      undivided interest in and to the common elements 
                      appurtenant thereto. 

ADDRESS:              901 South Mopac Expressway, Suite 200
                      Austin, Texas 78746



                                      B-1

<PAGE>   26

                                    EXHIBIT C

                              INTENTIONALLY OMITTED





                                      C-1

<PAGE>   27

                                    EXHIBIT D

                                   WORK LETTER
                    PLANS TO BE AGREED UPON/FINISH ALLOWANCE

        This Exhibit is attached to and apart of that certain Lease Agreement
dated as of December 7, 1998, executed by and between B. 0. 111, LTD.,
("Landlord") and IXC COMMUNICATIONS SERVICES, INC. ("Tenant"). Any capitalized
term used but not defined herein shall have the meaning assigned to it in the
provisions designated in the Lease as the Supplemental Lease Provisions.
Landlord and Tenant mutually agree as follows:

I . Plans.

1.1 Space Plan. On or before November 7 , 1998 , Landlord's designated space
planner, at Tenant's expense, shall prepare and deliver to Tenant a space plan
for the Premises showing, regardless of the quantities of such items, the
location of all partitions and doors and the lay-out of the Premises. Tenant
will at all times cooperate with Landlord's space planner, furnishing all
reasonable information and material concerning Tenant's organization, staffing,
growth expectations, physical facility needs (including, without limitation,
needs arising by reason of the Disability Acts), equipment, inventory, etc.,
necessary for the space planner to efficiently and expeditiously arrive at an
acceptable lay-out of the Premises. Tenant will approve or disapprove in writing
the space plan within five (5) business days after receipt from Landlord and if
disapproved, Tenant shall provide Landlord and Landlord's space planner with
specific reasons for disapproval. If Tenant fails to approve or disapprove the
space plan on or before the end of such five (5) business day period, Tenant
shall be deemed to have approved the last submitted space plan. The foregoing
process shall be repeated until Tenant has approved (which shall include deemed
approval) the space plan (such space plan, when approved by Landlord and Tenant,
is herein referred to as the "Space Plan").

1.2 Compliance With Disability Acts. Tenant shall promptly provide Landlord and
Landlord's space planner and/or architect as applicable, with all information
needed to cause the construction of Tenant's Improvements to be completed such
that Tenant, the Premises and Tenant's Improvements (as constructed) will be in
compliance with the Disability Acts. TENANT SHALL BE RESPONSIBLE FOR AND SHALL
INDEMNIFY AND HOLD HARMLESS LANDLORD FROM AND AGAINST ANY AND ALL CLAIMS,
LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION REASONABLE ATTORNEYS'
FEES AND EXPENSES) INCURRED BY OR ASSERTED AGAINST LANDLORD BY REASON OF OR IN
CONNECTION WITH ANY VIOLATION OF THE DISABILITY ACTS ARISING FROM OR OUT OF (x)
information or design and space plans furnished to Landlord by Tenant (or the
lack of complete and accurate information so furnished) concerning Tenant's
Improvements, (y) Tenant's employer-employee obligations, or (z) after the
Commencement Date, violations by Tenant and/or Tenant's Improvements or the
Premises not being in compliance with the Disability Acts as the result of
changes in regulations or law or interpretations thereof not in effect on the
Commencement Date. The foregoing indemnity shall not include any claims,
liabilities or expenses (including reasonable attorneys' fees and expenses)
arising out of the negligence or gross negligence of Landlord or Landlord's
employees, agents or contractors. Without limiting the foregoing, if Landlord
constructs Tenant's Improvements based on any special requirements or
improvements required by Tenant, or upon information furnished by Tenant that
later proves to be inaccurate or incomplete resulting in any violation of the
Disability Acts, Tenant shall be solely liable to correct such violations and to
bring the improvements into compliance with the Disability Acts as promptly as
is practicable.

1.3 Construction Plans. On or before fifteen (15) days after approval of the
Space Plan, the Design and Color Scheme and the Above Standard Product
Specification List by Landlord and Tenant, Landlord's space planner and
engineer, at Tenant's expense, will prepare construction plans (such
construction plans, when approved, and all changes and amendments thereto agreed
to by Landlord and Tenant in writing, are herein called the "Construction
Plans") for all of Tenant's improvements requested pursuant to the Space Plan,
the Design and Color Scheme and the Above Standard Product Specification List
(all improvements required by the Construction Plans are herein called "Tenant's
Improvements"), including complete detail and finish drawings for partitions,
doors, reflected ceiling, telephone outlets, electrical switches and outlets and
Building standard heating, ventilation and air conditioning equipment and
controls. Within ten (10) business days after construction plans are delivered
to Tenant, Tenant shall approve (which approval shall not be unreasonably
withheld) or disapprove same in writing and if disapproved, Tenant shall provide
Landlord and Landlord's space planner and engineer specific reasons for
disapproval. The foregoing process shall continue until the construction plans
are approved by Tenant; provided that if Tenant fails to respond in any ten (10)
business day period, Tenant shall be deemed to have approved the last submitted
construction plans.

1.4 Changes to Approve Plans. If any re-drawing or re-drafting of either the
Space Plan or the Construction Plans is necessitated by Tenant's requested
changes (all of which shall be subject to approval by Landlord and, if
applicable, the Texas Department of Licensing & Regulation and any other
governmental agency or authority to which the plans and specifications are
required to be submitted), the expense of any such re-drawing or re-drafting
required in connection therewith and the expense of any work and improvements
necessitated by such re-drawing or re-drafting will be charged to Tenant.

1.5 Coordination of Planners and Designers. If Tenant shall arrange for interior
design services, whether with Landlord's space planner or any other planner or
designer, it shall be Tenant's responsibility to cause necessary coordination of
its agents' efforts with Landlord's agents to ensure that no delays are caused
to either the planning or construction of the Tenant's Improvements.

1.6 Building Shell. Landlord shall perform the following Building shell work at
Landlord's sole cost and expense:

     (a) Building standard VAV system, rigid duct work, perimeter slot diffusers
         (excluding internal zone flex duct and supply grills).

     (b) Building standard window treatments.

     (c) Building standard ceiling grid installed with 2 x 4 ceiling tile
         stacked on the floor and 2 x 4 parabolic light fixtures at a ratio of 1
         per 90 useable square feet stacked on the floor.

     (d) Sprinkler heads installed at 1 per 225 useable square feet.

     (e) All Building common areas installed.


                                      D-1

<PAGE>   28

2.       Construction and Costs of Tenant's Improvements.

2.1      Construction Obligatio and Finish Allowance.

     (a) Landlord agrees to construct Tenant's Improvements, at Tenant's cost
         and expense; provided, however, Landlord shall provide Tenant with an
         allowance of $15.00 per rentable square foot in the Premises (the
         "Finish Allowance"), which allowance shall be disbursed by Landlord,
         from time to time, for payment of (in the following priority) (i) the
         contract sum required to be paid to the general contractor engaged to
         construct Tenant's Improvements, which contract sum shall include
         without limitation, the costs of any and all payment and performance
         bonds required by Landlord in connection with the construction of
         Tenant's Improvements and any other costs incurred by such general
         contractor to comply with the construction requirements applicable to
         the Building (THE "CONTRACT SUM"), (II) THE FEES of the preparer of the
         Construction Plans, (iii) payment of the Construction Management Fee
         (hereinafter defined), and (iv) such other costs related to the
         leasehold improvements (such as equipment, appliances and furnishings)
         as Tenant shall specify. Upon completion of Tenant's Improvements and
         in consideration of Landlord administering the construction of Tenant's
         Improvements, Tenant agrees to pay Landlord a fee equal to four percent
         (4%) of the Contract Sum to construct Tenant's Improvements (the
         "Construction Management Fee") (the foregoing costs are collectively
         referred to as the "Permitted Costs").

     (b) Title to any equipment, appliances, furnishings or personalty installed
         in the Premises and purchased with any portion of the Finish Allowance
         shall pass to Landlord upon payment of the invoice cost thereof and
         Tenant shall not remove any such equipment, appliances, furnishings or
         personalty from the Premises without Landlord's express, prior written
         consent or unless requested by Landlord in connection with the
         expiration or earlier termination of the Lease.

2.2 Excess Costs. If the sum of the Permitted Costs exceeds the Finish
Allowance, then Tenant shall pay all such excess costs ("Excess Costs"),
provided, however, Landlord will, prior to the commencement of construction of
Tenant's Improvements, advise Tenant of the Excess Costs, if any, and the
Contract Sum. Tenant shall have five (5) business days from and after the
receipt of such advice within which to approve or disapprove the Contract Sum
and Excess Costs. If Tenant fails to approve same by the expiration of the
second such business day, then Tenant shall be deemed to have approved the
Proposed Contract Sum and Excess Costs. If Tenant disapproves the Contract Sum
and Excess Costs within such five (5) business day period, then Tenant shall
either reduce the scope of Tenant's Improvements such that there shall be no
Excess Costs or, at Tenant's option, Landlord shall obtain two (2) additional
bids, provided that each day beyond such five (5) business day period and until
the rebid is accepted by Tenant shall constitute a Tenant Delay hereunder.
Subject to the last sentence of this subsection, the foregoing process shall
continue until a Contract Sum and resulting Excess Costs, if any, are accepted
or deemed accepted by Tenant. Landlord and Tenant must approve (or be deemed to
have approved) the Contract Sum for the construction of Tenant's Improvements in
writing prior to the commencement of construction. If Tenant fails to accept a
Contract Sum by December 15, 1998, Tenant will be in Tenant delays. If Landlord
does not complete the premises within sixty (60) days after the later to occur
of (i) the date Tenant approves the contract sum and (ii) the date a building
permit for the construction of the Tenant's Improvement is issued. Landlord
shall incur a $ 1,000.00 per day penalty for each day delay.

2.3 Liens Arising from Excess Costs. Tenant agrees to keep the Premises free
from any liens arising out of nonpayment of Excess Costs. In the event that any
such lien is filed and Tenant, within thirty (30) days following such filing
fails to cause same to be released of record by payment or posting of a proper
bond, Landlord shall have, in addition to all other remedies provided herein and
by law, the right, but not the obligation, to cause the same to be released by
such means as it in its sole discretion deems proper, including payment of or
defense against the claim giving rise to such lien. All sums paid by Landlord in
connection therewith shall constitute Rent under the Lease and a demand
obligation of Tenant to Landlord and such obligation shall bear interest at the
rate provided for in Section 15. 10 of the Supplemental Lease Provisions from
the date of payment by Landlord until the date paid by Tenant.

2.4 Construction Deposi . Tenant shall remit to Landlord an amount (the
"Prepayment") equal to fifty percent (50%) of the projected Excess Costs, if
any, within five (5) working days after commencement of construction by
Landlord. On or prior to the Commencement Date, Tenant shall deliver to Landlord
the actual Excess Costs, minus the Prepayment previously paid. FAILURE BY TENANT
TO TIMELY TENDER to Landlord the full Prepayment shall permit Landlord to stop
all work until the Prepayment is received. All sums due Landlord under this
Section 2.4 shall be considered Rent under the terms of the Lease and nonpayment
shall constitute a DEFAULT UNDER THE LEASE AND entitle Landlord to any and all
remedies specified in the Lease.

3. Delays. Delays in the completion of construction of Tenant's Improvements or
in obtaining a certificate of occupancy, if required by the applicable
governmental authority, caused by Tenant, Tenant's Contractors (hereinafter
defined) or any person, firm or corporation employed by Tenant or Tenant's
Contractors shall constitute "Tenant Delays". In the event THAT TENANT'S
IMPROVEMENTS ARE not Substantially Complete by the Commencement Date referenced
in Item 6 of the Basic Lease Provisions, then the Commencement Date referenced
in Item 6 shall be amended to be the Adjusted Substantial Completion Date
(hereinafter defined) and the Expiration Date referenced in Item 7 of the Basic
Lease Provisions shall be adjusted forward by the same number of days as is the
Commencement Date, so that the term of the Lease will be the term set forth in
Item 5 of the Basic Lease Provisions. The Adjusted Substantial Completion Date
shall be the date Tenant's Improvements are Substantially Complete, adjusted
backward, however, by one day for each day of Tenant Delays, if any. The
foregoing adjustments in the Commencement Date and the Expiration Date shall be
Tenant's sole and exclusive remedy in the event Tenant's Improvements are not
Substantially Complete by the initial Commencement Date set FORTH IN ITEM 6 OF
the Basic Lease Provisions.

4. Substantial Completio and Punch List. The terms "Substantial Completion" and
"SUBSTANTIALLY COMPLETE," AS APPLICABLE, SHALL mean ten (10) days after the date
when Tenant's Improvements are sufficiently completed in accordance with the
Construction Plans and a certificate of occupancy has been issued for the
Premises so that Tenant can reasonably use the Premises for the Permitted Use
(as described in Item 10 of the Basic Lease Provisions). When Landlord considers
Tenant's Improvements to be SUBSTANTIALLY COMPLETE,

                                      D-2

<PAGE>   29

Landlord will notify Tenant and within two (2) business days thereafter,
Landlord's representative and Tenant's representative shall conduct a
walk-through of the Premises and identify any necessary touch-up work, repairs
and minor completion items as are necessary FOR FINAL COMPLETION ofTenant's
Improvements. Neither Landlord's representative nor Tenant's representative
shall unreasonably withhold his agreement on punch list items. Landlord will use
reasonable efforts to cause the contractor to complete all punch list items
within thirty (30) days after agreement thereon.

5. Tenant's Contractors. If Tenant should desire to enter the Premises or
authorize its agent to do so prior to the Commencement Date of the Lease, to
perform approved work not requested of the Landlord, Landlord shall permit such
entry if

     (a) Tenant shall use only such contractors which Landlord shall approve in
         its reasonable discretion and Landlord shall have approved the plans to
         be utilized by Tenant, which approval will not be unreasonably
         withheld; and

     (b) Tenant, its contractors, workmen, mechanics, engineers, space planners
         or such others as may enter the Premises (collectively, "Tenant's
         Contractors"), work in harmony with and do not in any way disturb or
         interfere with Landlord's space planners, architects, engineers,
         contractors, workmen, mechanics or other agents or independent
         contractors in the performance of their work (collectively, "Landlord's
         Contractors"), it being understood and agreed that if entry of Tenant
         or Tenant's Contractors would cause, has caused or is causing a
         material disturbance to Landlord or Landlord's Contractors, then
         Landlord may, with notice, refuse admittance to Tenant or Tenant's
         Contractors causing such disturbance; and

     (c) Tenant (notwithstanding the first sentence of subsection 7.201 of the
         Supplemental Lease Provisions), Tenant's Contractors and other agents
         shall provide Landlord sufficient evidence that each is covered under
         such Worker's Compensation, public liability and property damage
         insurance as Landlord may reasonably request for its protection.

Landlord shall not be liable for any injury, loss or damage to any of Tenant's
installations or decorations made prior to the Commencement Date and not
installed by Landlord. Tenant shall indemnify and hold harmless Landlord and
Landlord's Contractors from and against any and all costs, expenses, claims,
liabilities and causes of action arising out of or in connection with work
performed in the Premises by or on behalf of Tenant (but excluding work
performed by Landlord or Landlord's Contractors). Landlord is not responsible
for the function and maintenance of Tenant's Improvements which are different
than Landlord's standard improvements at the Property or improvements,
equipment, cabinets or fixtures not installed by Landlord. Such entry by Tenant
and Tenant's Contractors pursuant to this Section 5 shall be deemed to be under
all of the terms, covenants, provisions and conditions of the Lease except the
covenant to pay Rent,

6. Construction Representatives. Landlord's and Tenant's representatives for
coordination of construction and approval of change orders will be as follows,
provided that either party may change its representative upon written notice to
the other:

LANDLORD'S REPRESENTATIVE:

NAME:          Sam J. Houston Ben Greider
ADDRESS:       2800 Industrial Terrace
               Austin, Texas 78758-7604
PHONE:         512.835.4455

TENANTS REPRESENTATIVE:

NAME: ADDRESS:__________________________
              __________________________
PHONE:__________________________________
      __________________________________

                                      D-3

<PAGE>   30

                                   EXHIBIT E

                       ACCEPTANCE OF PREMISES MEMORANDUM

       THIS Acceptance of Premises Memorandum is being executed pursuant to that
certain Lease Agreement (the "Lease") between B. 0. 111, LTD., ("Landlord"), and
IXC COMMUNICATIONS SERVICES, INC., ("Tenant"), pursuant to which Landlord leased
to Tenant and Tenant leased from Landlord certain space in the office building
located at 901 S. Mopac Expressway Building III in Austin, Texas (the
"Building"). Landlord and Tenant hereby agree that:

1.   Except for the Punch List Items (as shown on the attached Punch List),
     Landlord has fully completed the construction work required under the terms
     of the Lease and the Work Letter attached thereto.

2.   The Premises are tenantable, Landlord has no further obligation for
     construction (except with respect to Punch List Items) and Tenant
     acknowledges that the Building, the Premises and Tenant's Improvements are
     satisfactory in all respects, except for the Punch List Items and are
     suitable for the Permitted Use.

3.   The Commencement Date of the Lease is ______________. If the date set forth
     in Item 6 of the Basic Lease Provisions is different than the date set
     forth in the preceding sentence, then Item 6 of the Basic Lease Provisions
     is hereby amended to be the Commencement Date set forth in the preceding
     sentence.

4.   The Expiration Date of the Lease is ________________ If the date set forth
     in Item 7 of the Basic Lease Provisions is different than the date set
     forth in the preceding sentence, then Item 7 of the Basic Lease Provisions
     is hereby amended to be the Expiration Date set forth in the preceding
     sentence.

5.   Tenant acknowledges receipt of the current Rules and Regulations for the
     Building.

6.   Tenant represents to Landlord that Tenant has obtained a Certificate of
     Occupancy covering the Premises.

7.   Tenant's telephone number at the Premises is ____________________. Tenant's
     facsimile number at the Premises is ______________.

8.   All capitalized terms not defined herein shall have the meaning assigned to
     them in the Lease.

     AGREED and EXECUTED this ____________day of ___________________, ________.


                                        LANDLORD:
                                        B.O. III, LTD.
                                        By: Office/Industrial, Inc., 
                                            General Partner

                                        Name: Richard S. Hill
                                              ----------------------------------
                                        Title: President
                                        Address: 2800 Industrial Terrace
                                                 Austin, TX 78758

                                        TENANT:
                                        IXC COMMUNICATIONS SERVICES, INC.

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________
                                        Address: _______________________________
                                        ________________________________________


                                      E-1


<PAGE>   31

                                   EXHIBIT F

                            GARAGE PARKING AGREEMENT
                    RESERVED AND NON-RESERVED PARKING SPACES

        This Exhibit is attached to and apart of that certain Lease Agreement
dated as of December 7, 1998, executed by and between B. 0. 111, LTD.,
("Landlord") and IXC COMMUNICATIONS SERVICES, INC. ("Tenant"). Any capitalized
term used but not defined herein shall have the meaning assigned to it in the
provisions designated in the Lease as the Supplemental Lease Provisions.
Landlord and Tenant mutually agree as follows:

1.      PARKING Spaces. So long as the Lease remains in effect, Tenant or
        persons designated by Tenant shall have the right (but not the
        obligation) to rent in the Garage on (i) a reserved basis up to five (5)
        parking spaces in the Garage during the term of this Lease and (ii) an
        unreserved and non-exclusive basis up to 84 parking spaces in the Garage
        during the term of this Lease.

2.      Parking RENTAL. On the execution date of the Lease, the monthly rate for
        each unreserved parking space is $0.00 plus applicable sales tax and the
        monthly rate for each reserved parking space is $0.00 plus applicable
        sales tax. Landlord shall provide Tenant at least thirty (30) days
        notice of any change in the parking rates at the Garage and the giving
        of such notice shall be deemed an amendment to this Agreement and Tenant
        shall thereafter pay the adjusted rent. All payments of rent for parking
        spaces shallbe made (i) at the same time as Basic Monthly Rent is due
        under the Lease and (ii) to Landlord or to such persons (for example but
        without limitation, the manager of the Garage) as Landlord may direct
        from time to time.

3.      LOST PARKIN CARDS. There will be a replacement charge payable by Tenant
        equal to the amount posted from time to time by Landlord for loss of any
        magnetic parking card or parking sticker issued by Landlord.

4.      VALIDATION. Tenant may validate visitor parking, by such method or
        methods as Landlord or the Garage operator may approve, at the
        validation rate from time to time generally applicable to visitor
        parking. Landlord expressly reserves the right to redesignate parking
        areas and to modify the parking structure for other uses or to any
        extent.

5.      PARKING STICKERS AND CARDS. Parking stickers or any other device or form
        of identification supplied by Landlord shall remain the property of
        Landlord and shall not be transferable.

6.      DAMAGE TO OR CONDEMNATION OF GARAGE. If Landlord fails or is unable to
        provide any parking space to Tenant in the Garage because of damage or
        condemnation, such failure or inability shall never be deemed to be a
        default by Landlord as to permit Tenant to terminate the Lease, either
        in whole or in part, but Tenant's obligation to pay rent for any such
        parking space which is not provided by Landlord shall be abated for so
        long as Tenant does not have the use of such parking space and such
        abatement shall constitute full settlement of all claims that Tenant
        might otherwise have against Landlord by reason of such failure or
        inability to provide Tenant with such parking space.

7.      RULES AND REGULATIONS. A condition of any parking shall be compliance by
        the parker with Garage rules and regulations, including any sticker or
        other identification system established by Landlord. Garage managers or
        attendants are not authorized to make or allow any exceptions to these
        Rules and Regulations. The following rules and regulations are in effect
        until notice is given to Tenant of any change. Landlord reserves the
        right to modify and/or adopt such other reasonable and generally
        applicable rules and regulations for the Garage as it deems necessary
        for the operation of the Garage.

        (a) Cars must be parked entirely within the stall lines painted on the
            floor.

        (b) All directional signs and arrows must be observed,

        (c) The speed limit shall be five (5) miles per hour.

        (d) Parking is prohibited in areas not striped for parking, aisles,
            areas where "no parking" signs are posted, in cross hatched areas
            and in such other areas as may be designated by Landlord or
            Landlord's agent(s) including, but not limited to, areas designated
            as "Visitor Parking" or reserved spaces not rented under this
            Agreement.

        (e) Every parker is required to park and lock his own car. All
            responsibility for damage to cars or persons or loss of personal
            possessions is assumed by the parker.

        (f) Spaces which are designated for small, intermediate or full-sized
            cars shall be so used. No intermediate or full-size cars shall be
            parked in parking spaces limited to compact cars.

8.      DEFAULT. Failure to promptly pay the rent required hereunder shall
        constitute a default under the Lease and Landlord, may, at
        its option and in addition to all other remedies provided for in the
        Lease, terminate Tenant's rights to use the Garage. Landlord may refuse
        to permit any person who violates the rules to park in the Garage and
        any violation of the rules shall subject the car to removal at the car
        owner's expense. No such refusal or removal shall create any liability
        on Landlord or be deemed to interfere with Tenant's right to quiet
        possession of the Premises.


                                      F-1

<PAGE>   32

                                     RIDER 1

                                 RIGHT TO AUDIT

        This Exhibit is attached to and a part of that certain Lease Agreement
dated as of December 7, 1998 executed by and between B. 0. 111, LTD.
("Landlord") and IXC COMMUNICATIONS SERVICES, INC. ("Tenant"). ANY CAPITALIZED
TERM USED BUT NOT DEFINED herein shall have the meaning assigned to it in the
provisions designated in the Lease as the Supplemental Lease Provisions.
Landlord and Tenant mutually agree as follows:

        Tenant shall have the right to perform an annual audit at Tenant's
expense on Landlord's books and records to the extent necessary to verify
Landlord's calculation of actual Additional Rent for the prior calendar year,
provided the auditor's report reflecting the results of such audit shall be
promptly delivered to Landlord. Any such audit shall be conducted, if at all,
(i) within sixty (60) days after the receipt of the annual statement of actual
Additional Rent from Landlord, (ii) during Landlord's normal business hours,
(iii) at the place where Landlord maintains its records (or such other place as
Landlord shall deliver the appropriate records) and (iv) only after Landlord has
received ten (10) days prior written notice. If the audit report reflects that
estimated Additional Rent was overcharged or undercharged in the audited
calendar year and provided Landlord does not successfully dispute such audit,
Tenant shall within thirty (30) days following receipt of thereof report pay to
Landlord the amount of any underpayment or, if applicable, Landlord shall allow
Tenant a credit against the next accruing installments of Additional Rent in the
amount of any overpayment or if the Term has expired, or is about to expire,
Landlord shall pay such overpayment to Tenant within thirty (30) days after the
audit. Landlord shall reimburse Tenant for one-half (1/2) the reasonable cost of
any audit which results in a five percent (5 %) or greater reduction of Tenant's
pro rata share of Operating Expenses.




                                    Rider 1

<PAGE>   33

                                    RIDER 2

                    RIGHT TO SUBLEASE OR ASSIGN TO AFFILIATE
                        AND ADDITIONAL SUBLEASING RIGHTS

        This Exhibit is attached to and a part of that certain Lease Agreement
dated as of December 7, 1998. executed by and between B.O. III, LTD ("Landlord")
and IXC COMMUNICATIONS SERVICES, INC ("Tenant"). Any capitalized term used but
not defined herein shall have the meaning assigned to it in the provisions
designated in the Lease as the Supplemental Lease Provisions. Landlord and
Tenant mutually agree as follows:

        Notwithstanding the restrictions against assignment and subleasing
contained in Sections 11. 1 and 11.2 of the Supplemental Lease Provisions,
Tenant may, without the prior written consent of Landlord, but only after giving
Landlord at least thirty (30) days prior written notice (Which notice shall
include the identity of the Affiliate (hereinafter defined) and the relationship
of the Affiliate to Tenant), sublet the Premises or any put thereto or any part
thereof to an Affiliate or assign this Lease to an Affiliate or permit occupancy
of any portion of the Premises by an Affiliate. If Tenant is a partnership, the
term "Affiliate" shall mean (i) any entity which, directly or indirectly,
controls or is controlled by or is under common control with the general partner
of Tenant (ii) any entity not less than fifty percent (50%) of whose outstanding
stock shall, at the firm be owned directly or indirectly by Tenant's general
partner or (iii) any partnership or joint venture in which Tenant or the general
partner of Tenant is a general partner or joint venturer (with joint and several
liability for all of the partnership's or venture's obligations). If Tenant is a
corporation, limited liability company or individual, the term "Affiliate" shall
mean (i) any entity which, directly or indirectly, controls or is controlled by
or is under common control with Tenant or (ii) any corporation or limited
liability company not less than fifty percent (50%) of whose outstanding stock
or interests shall, at the time, be owned directly or indirectly by Tenant or
Tenant's parent corporation or limited liability company. For purposes of this
Rider, "control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such entity,
whether through the ownership of voting securities or by contract or otherwise
and ownership of the liabilities, losses, profits and tax benefits for such
entity.

        In addition, Tenant shall have the right to assign or otherwise transfer
this Lease Agreement to any parent subsidiary or affiliate of itself or any
corporation into which it may be merged or consolidated or which purchases all
or substantially all of its assets; provided, however, that any such assignment
or transfer shall be subject to Landlord's rights under THIS Lease Agreement and
any assignee or transferee shall commit to perform Tenant's obligations to
Landlord under THIS Lease Agreement Further, notwithstanding the restrictions
against subleasing contained in Sections 11. 1 and 11.2 of the Supplemental
Lease Provisions, Tenant may, without the prior written consent of Landlord,
permit the occupancy by or sublease up to forty-five percent (45%) of the Agreed
Rentable Area of office space within the Premises to an entity related to
Tenant; provided that the portion of the Premises subject to such occupancy or
sublease shall not be separately demised from the remaining Premises. It is the
intent of the Landlord and Tenant that the right described in the foregoing
sentence is to be used by Tenant in connection with permitting the occupancy of
or subleasing a particular office or offices within the Premises to a third
party, but not to permit the related entity to occupy separate space which is
directly accessible without entering the Premises. In the event Tenant grants
any occupancy rights or executes any sublease pursuant to the provisions of THIS
paragraph, then notwithstanding anything to the contrary in Article I I of the
Lease, Landlord shall not be entitled to cancel the Lem with respect to such
space and Landlord shall not be entitled to any compensation in connection
therewith.


                                    Rider 2
<PAGE>   34

                                    RIDER 3

                       CAP ON CERTAIN OPERATING EXPENSES

        This Rider is attached to and a part of that certain Lease Agreement
dated as of December 7, 1998, executed by and between B.0. 111, LTD.
("Landlord"), and, IXC COMMUNICATIONS SERVICES, INC. ("Tenant"). Any capitalized
term used but not defined herein shall have the meaning assigned to it in the
provisions designated in the Lease as the Supplemental Lease Provisions.
Landlord and Tenant mutually agree as follows:

        For the purpose of determining Additional Rent, Operating Expenses
(exclusive of the Non-Capped Operating Expenses, as hereinafter defined) for any
calendar year shall not be increased over the amount of Operating Expenses
(exclusive of Non-Capped Operating Expenses) during the calendar year in which
the term of this Lease commences by more than EIGHT percent (8%) per year on a
cumulative basis, compounded annually. For example, if Operating Expenses
(exclusive of Non-Capped Operating Expenses) during the calendar year in which
the term of this Lease commences were $ 100,000, the cap on Operating Expenses
(exclusive of Non-Capped Operating Expenses) for the fourth full calendar year
would be $ , 136,048.89 ($ 100,000 times 1.08 times 1.08 times 1.08 times 1.28).
It is understood and agreed that there shall be no cap on Non-Capped Operating
Expenses, which are hereby defined to mean all Utility Expenses and Insurance
Premiums.


                                    Rider 3
<PAGE>   35

                                   RIDER H-1

                 TENANT'S STUDY, TESTING AND INSPECTION RIGHTS

        This Exhibit is attached to and a part of that certain Lease Agreement
dated as of December 7, 1998 executed by and between B.0. 111, LTD. ("Landlord")
and IXC COMMUNICATIONS SERVICES- INC. ("Tenant"). Any capitalized term used but
not defined herein shall have the meaning assigned to it in the provisions
designated in the Lease as the Supplemental Lease Provisions. Landlord and
Tenant mutually agree as follows:

        Prior to commencement of any tenant finish work to be performed by
Landlord, Tenant shall have the right to make such studies and investigations
and conduct such tests and surveys of the Premises from an environmental
standpoint as Tenant deems necessary or appropriate, subject to the condition
that all such studies and investigations shall be completed prior to the
commencement of any tenant finish work to be performed by Landlord. TENANT SHALL
INDEMNIFY AND HOLD HARMLESS LANDLORD FROM, AND REIMBURSE LANDLORD FOR AND WITH
RESPECT TO, ANY AND ALL LOSS, DAMAGES, AND CLAIMS RESULTING FROM OR RELATING TO
TENANT'S STUDIES, TESTS AND INVESTIGATIONS. If such study, test, investigation
or survey evidences hazardous or toxic materials which affect the Premises,
Tenant shall have the right to terminate this Lease provided such right shall be
exercised, if at all, prior to the commencement of any tenant finish work to be
performed by Landlord and, in any event, within five (5) days after Tenant
receives the evidence of hazardous or toxic materials. If Tenant does not
exercise such right prior to commencement of any such tenant finish work and
within such five (5) day period, Tenant's right to terminate this Lease shall be
null and void and of no further force or effect.