<PAGE>   1

                                                                Stony Point Lake
BASIC LEASE
INFORMATION

                                                                   EXHIBIT 10.16

                      DATE        April 26, 1999

                  LANDLORD        Stony Point East,
                                  a California general partnership

                    TENANT        Advanced Telcom Group,
                                  a Delaware corporation

                  PREMISES        110 Stony Point Road
                                  Suite: 200 - Approximately 37,568 rentable
                                  square feet

             TYPE OF LEASE        Full service

                       USE        General office, including, without limitation,
                                  sales marketing and customer service, and for
                                  no other use or purpose

                      TERM        Ten (10) Years

                 ESTIMATED
         COMMENCEMENT DATE        January 15, 2000

         INITIAL BASE RENT        Monthly: [*] per rentable square foot
                                  Annually: [*] per rentable square foot

        OPERATING EXPENSES        Tenant's Percentage Share:  56.2%
                                  Base Year: 2000

          SECURITY DEPOSIT        Cash in the amount of [*]

        REAL ESTATE BROKER        None

       ADDRESS FOR NOTICES        Landlord:  131 Stony Circle, Suite 480
                                             Santa Rosa, CA 95401

                                  Tenant:    110 Stony Point Road, Suite 200
                                             Santa Rosa, CA 95401

       TENANT IMPROVEMENTS        Landlord will provide tenant improvements as
                                  shown on Exhibit B-3

                  EXHIBITS        A, B, B-1, B-2, B-3, C, D, E, F, G and
                                  Addendum

SIGNATURES:

 /s/ C.G. RANDOLPH                           /s/ JAMES BRECHT
-----------------------------------        -------------------------------------
Tenant                                     Landlord



-----------------------
[*]  Information redacted pursuant to a confidential treatment request
     throughout this exhibit.
<PAGE>   2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                          Page
-------                                                                          ----
<S>                                                                              <C>
    1.     Premises                                                                1
    2.     Term                                                                    1
    3.     Rent                                                                    1
    4.     Base Rent                                                               2
    5.     Additional Rent - Annual Rent Adjustments/Operating Expenses            2
    6.     Proration of Rent                                                       3
    7.     Tenant Improvements                                                     3
    8.     Use of the Premises                                                     3
    9.     Alterations                                                             4
    10.    Repairs                                                                 5
    11.    Damage or Destruction                                                   5
    12.    Eminent Domain                                                          5
    13.    Indemnity and Insurance                                                 6
    14.    Assignment or Sublet                                                    7
    15.    Default                                                                 7
    16.    Landlord's Right to Perform Tenant's Covenants                          8
    17.    Security Deposit                                                        8
    18.    Surrender of Premises                                                   8
    19.    Holding Over                                                            9
    20.    Access to Premises                                                      9
    21.    Signs                                                                   9
    22.    Waiver of Subrogation                                                   9
    23.    Subordination                                                           9
    24.    Transfer of the Property                                               10
    25.    Estoppel Certificates                                                  10
    26.    Mortgagee Protection                                                   10
    27.    Attorneys' Fees                                                        10
    28.    Brokers                                                                10
    29.    Parking                                                                10
    30.    Utilities and Services                                                 11
    31.    Tenant Placement                                                       11
    32.    Acceptance                                                             11
    33.    Use of Building Name                                                   11
    34.    Recording                                                              11
    35.    Quitclaim                                                              11
    36.    Notices                                                                11
    37.    Landlord's Exculpation                                                 12
    38.    Additional Structures                                                  12
    39.    General                                                                12
</TABLE>


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EXHIBITS

Exhibit A      Site Plan
Exhibit B      Work Letter
Exhibit B-1    Building Shell/Site Work Working Drawings
Exhibit B-2    Interior Improvement Working Drawings
Exhibit B-3    Tenant Preliminary Design and Tenant Improvement Specifications
Exhibit C      Commencement Date Memorandum
Exhibit D      Rules & Regulations
Exhibit E      Utilities and Services
Exhibit F      Hazardous Substance Disclosure
Addendum to Lease



<PAGE>   4

THIS LEASE, which is effective as of the date set forth in the Basic Lease
Information, is entered by Landlord and Tenant, as set forth in the Basic Lease
Information. Terms which are capitalized in this Lease shall have the meanings
set forth in the Basic Lease Information.

1.      PREMISES.

        Landlord leases to Tenant, and Tenant leases from Landlord, the Premises
        described in the Basic Lease Information, together with the right in
        common to use the Common Areas of the Building and the Property (as
        shown in Exhibit A). The Common Areas shall mean the areas and
        facilities within the Building and the Property provided and designated
        by Landlord for the general use, convenience or benefit of Tenant and
        other tenants and occupants of the Building (e.g., restroom's;
        janitorial, telephone and electrical closets; and unreserved parking
        areas). Landlord reserves the right to enlarge, reduce, change or
        otherwise alter the Common Areas of the Building and the Property at any
        time during the term of this Lease. In addition, Landlord shall have the
        right to close temporarily any portion of the Common Areas to make
        repairs or changes or to prevent the acquisition of public rights in the
        Common Areas. [SEE ADDENDUM]


2.      TERM.

        a.      Lease Term. The Term of this Lease shall commence on the
                Commencement Date (as defined in Subsection 2.b.) and, unless
                terminated on an earlier date in accordance with the terms of
                this Lease, shall extend for the period (i.e., Term) specified
                in the Basic Lease Information.

        b.      Commencement Date. The "Commencement Date" of this Lease shall
                be the earliest to occur of the following, as reasonably
                determined by Landlord: [Intentionally deleted] [SEE ADDENDUM]

        c.      Premises Not Delivered. If, for any reason, Landlord cannot
                deliver possession of the Premises to Tenant by the Estimated
                Commencement Date (as set forth in the Basic Lease Information),
                (i) Tenant shall not be obligated to pay Rent until the
                Commencement Date; (ii) the Term shall not be extended; (iii)
                the failure shall not affect the validity of this Lease, or the
                obligations of Tenant under this Lease; and (iv) Landlord shall
                not be subject to any liability.

        d.      Commencement Date Memorandum. When the Commencement Date is
                determined, the parties shall execute a Commencement Date
                Memorandum, in the form attached hereto as Exhibit C, setting
                forth the Commencement Date and the expiration date ("Expiration
                Date") of this Lease. [SEE ADDENDUM]

        e.      Early Entry. If Tenant is permitted to enter the Premises prior
                to the Commencement Date for the purposes of fixturing or any
                purpose other than occupancy permitted by Landlord, the entry
                shall be subject to all the terms and provisions of this Lease,
                except that the payment of Rent shall commence as of the
                Commencement Date.

        f.      Adjustment for Calendar Month. If the Commencement Date is not
                the first day of a calendar month, the Term shall be deemed to
                have commenced on the first day of the next succeeding calendar
                month, for purposes of determining any and all renewal dates,
                the Expiration Date, notice periods for any options, the
                effective date of any increases in Rent (defined in Section 3),
                and any other provisions relating to the Term.

3.      RENT.

        a.      Definitions. As used in this Lease, the term "Rent" shall
                include: (i) the Base Rent; (ii) Tenant's Percentage Share of
                the total dollar increase, if any, in the Operating Expenses
                paid or incurred by Landlord during the calendar year over the
                Operating Expenses paid or incurred by Landlord during the Base
                Year (as set forth in the Basic Lease Information), and (iii)
                all other amounts which Tenant is obligated to pay under the
                terms of this Lease. All amounts of money payable by Tenant to
                Landlord shall be paid without prior notice or demand, deduction
                or offset. If any installment of Rent is not paid by the fifth
                (5th) day of the month, Tenant shall pay to Landlord a late
                payment charge equal to five percent (5%) of the amount of the
                delinquent installment, in addition to the installment of Rent
                then owing, regardless of whether a notice of default or notice
                of termination has been given by Landlord. In addition to the
                five percent (5%) late charge, any Rent or other amounts owing
                hereunder which are not paid within five (5) days after the date
                they are due shall thereafter bear interest at the rate
                ("Interest Rate") which is the [*]. [SEE ADDENDUM]


-----------------------
[*]  Information redacted pursuant to a confidential treatment request
     throughout this exhibit.
                                        1
<PAGE>   5

        b.      Accord and Satisfaction. No payment by Tenant or receipt by
                Landlord of a lesser amount than any installment or payment of
                Rent due shall be deemed to be other than on account of the
                amount due, and no endorsement or statement on any check or
                payment of Rent shall be deemed an accord and satisfaction.
                Landlord may accept such check or payment without prejudice to
                Landlord's right to recover the balance of such installment or
                payment of Rent, or pursue any other remedies available to
                Landlord. [SEE ADDENDUM]

4.      BASE RENT.

        a.      Initial Base Rent. Tenant shall pay Base Rent to Landlord (or
                other entity designated by Landlord), in advance, on the first
                day of each calendar month of the Term, at Landlord's address
                for notices (as set forth in the Basic Lease Information) or at
                such other address as Landlord may designate. The Initial Base
                Rent shall be the amount set forth in the Basic Lease
                Information. Upon executing this Lease, Tenant shall pay an
                amount equal to the monthly Base Rent stated on the Basic Lease
                Information, which shall be credited against the Base Rent due
                at the beginning of the Term. [SEE ADDENDUM]

        b.      [Intentionally deleted] [SEE ADDENDUM]

5.      ADDITIONAL RENT - ANNUAL RENT ADJUSTMENTS/OPERATING EXPENSES.

        a.      Increase in Operating Expenses. Rent shall include Tenant's
                Percentage Share of the total dollar increase, if any, in the
                Operating Expenses paid or incurred by Landlord during the
                calendar year over the Operating Expenses paid or incurred by
                Landlord during the Base Year.

        b.      Operating Expenses. The term "Operating Expenses" shall include
                all reasonable expenses and costs of every kind and nature which
                Landlord shall pay or become obligated to pay because of or in
                connection with the ownership and operation of the Building,
                Common Areas and Premises, surrounding property and supporting
                facilities. Operating Expenses shall include, without
                limitation, the following: (i) all impositions relating to the
                Building, Common Areas and Premises, including the Real Property
                Taxes (as defined in Section 5.d.); (ii) premiums for insurance
                relating to the Building, Common Areas and Premises as set forth
                in Sections 13.b., 13.d. and 13.h.; (iii) wages, salaries and
                related expenses and benefits of all on-site and off-site
                employees engaged in operation, maintenance and security; (iv)
                all supplies, materials and equipment rental used in operations;
                (v) all maintenance, janitorial, security and service costs;
                (vi) a management fee; (vii) legal and accounting expenses,
                including the cost of audits by certified public accountants;
                (viii) repairs, replacements and general maintenance (excluding
                those paid for by proceeds of insurance or other parties, and
                alterations attributable solely to other tenants of the
                Buildings; (ix) all maintenance costs relating to the Building
                and Common Areas, including sidewalks, landscaping, service
                areas, mechanical rooms, parking areas, Building exterior and
                driveways; [Intentionally deleted] (xi) all other operating,
                management and other expenses incurred by Landlord in connection
                with operation of the Building and Common Areas; (xii) all
                charges for heat, water, gas, electricity and other utilities
                used or consumed in the Building and Common Areas, entranceways,
                sidewalks, etc.; and (xiii) ground rent payments, if any. [SEE
                ADDENDUM]

        c.      Monthly Increments; Adjustment. Prior to the commencement of
                each of Landlord's accounting years, Landlord shall estimate the
                amount of the Operating Expenses payable by Tenant for the next
                accounting year pursuant to


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<PAGE>   6
                this Section. Tenant shall pay to Landlord, on the first of each
                month, in advance, one-twelfth (1/12) of Landlord's estimate.
                Within ninety (90) days after (or as soon thereafter as
                possible) the close of each accounting year after which this
                Lease remains in effect, Landlord shall provide Tenant with a
                statement [Intentionally deleted]. Landlord, in Landlord's sole
                discretion, shall have the right to reduce the Operating
                Expenses to limit the impact (e.g., year to year fluctuations)
                resulting from extraordinary or unusual expenses or costs. If
                Tenant has overpaid the amount of Operating Expenses owing
                pursuant to this Section, Landlord shall credit the overpayment
                to Tenant within thirty (30) days after Tenant's receipt of
                Landlord's statement; provided, however, that the Rent owed by
                Tenant shall never be less than the Base Rent stated in Section
                4. If Tenant has underpaid the amount of Operating Expenses
                owing pursuant to this Section, Tenant shall pay the amount of
                the underpayment to Landlord, as Additional Rent, within thirty
                (30) days after Tenant's receipt of Landlord's statement. If
                less than one hundred percent (100%) of the rentable area of the
                Building is occupied, Operating Expenses shall be adjusted to
                equal Landlord's reasonable estimate of Operating Expenses if
                one hundred percent (100%) of the total rentable area of the
                Building were occupied. [SEE ADDENDUM]

        d.      Definition of Real Property Taxes. The term "Real Property
                Taxes" shall mean any ordinary or extraordinary form of
                assessment or special assessment, license fee, rent tax, levy,
                penalty (if a result of Tenant's delinquency), or tax, other
                than net income, estate, succession, inheritance, transfer or
                franchise taxes, imposed by any authority having the direct or
                indirect power to tax, or by any city, county, state or federal
                government for any maintenance or improvement or other district
                or division thereof. The term shall include all transit charges,
                housing fund assessments, real estate taxes and all other taxes
                relating to the Premises, Building and/or Property, all other
                taxes which may be levied in lieu of real estate taxes
                (including any increases resulting from changes of ownership),
                all assessments, assessment bonds, levies, fees, and other
                governmental charges (including, but not limited to, charges for
                traffic facilities, improvements, child care, water services
                studies and improvements, and fire services studies and
                improvements) for amounts necessary to be expended because of
                governmental orders, whether general or special, ordinary or
                extraordinary, unforeseen as well as foreseen, of any kind and
                nature for public improvement, services, benefits or any other
                purposes which are assessed, levied, confirmed, imposed or
                become a lien upon the Premises, Building or Property or become
                payable during the Term. [SEE ADDENDUM]

        e.      Taxes on Tenant Improvements and Personal Property.
                Notwithstanding any other provision hereof, Tenant shall pay the
                full amount of any increase in Real Property Taxes during the
                Term resulting from any and all alterations and tenant
                improvements of any kind whatsoever placed in, on or about the
                Premises [Intentionally deleted]. Tenant shall pay, prior to
                delinquency, all taxes assessed or levied against Tenant's
                personal property in, on or about the Premises. When possible,
                Tenant shall cause its personal property to be assessed and
                billed separately from the real or personal property of
                Landlord. [SEE ADDENDUM]

6.      PRORATION OF RENT.

                If the Commencement Date is not the first day of the month, Rent
                shall be prorated on a monthly basis for the fractional month
                during the month which this Lease commences. The termination of
                this Lease shall not affect the obligations of Landlord and
                Tenant pursuant to Subsection 5.c. which are to be performed
                after the termination.

7.      TENANT IMPROVEMENTS.

        [Intentionally deleted] [SEE ADDENDUM]

8.      USE OF THE PREMISES.

        a.      Use. The Premises shall be used solely for the use set forth in
                the Basic Lease Information and for no other use.

        b.      Rules and Regulations; CC&R's. Tenant shall comply with the
                Rules and Regulations attached hereto as Exhibit D. In addition,
                Tenant shall comply with [Intentionally deleted] covenants,
                conditions and restrictions ("CC&R's") applicable to the
                Building, and all rules, regulations and restrictions
                (collectively, "Rules") imposed by any association
                ("Association") formed pursuant to the CC&R's. [SEE ADDENDUM]

        c.      Compliance. Tenant, at its sole cost and expense, shall promptly
                comply with all laws, statutes, ordinances and governmental
                rules, regulations or requirements (including the Americans with
                Disabilities Act) now in force or which hereinafter may be in
                force, with the requirements of any board of fire underwriters
                or other similar board now or hereafter constituted, with any
                direction or occupancy certificate issued pursuant to any law by
                any public officer or officers, as well


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<PAGE>   7

                as the provisions of all recorded documents affecting the
                Premises, insofar as any thereof relate to or affect the
                condition, use or occupancy of the Premises. [SEE ADDENDUM]

        D.      HAZARDOUS SUBSTANCES.

                (i) Hazardous Substances. The term "Hazardous Substances" as
                used in this Lease shall mean any product, substance, chemical,
                material or waste whose presence, nature, quantity and/or
                intensity of existence, use manufacture, disposal,
                transportation, spill, release or effect, either by itself or in
                combination with other materials expected to be on the Premises,
                is either (A) potentially injurious to the public health, safety
                or welfare, the environment or the Premises, (B) regulated or
                monitored by any governmental authority, or (C) a basis for
                liability of Landlord to any governmental agency or third party
                under any applicable statute or common law theory. Hazard
                Substances include, but are not limited to, hydrocarbons,
                petroleum, gasoline, crude oil and any products, by-products or
                fractions thereof.

                (ii) Duty to Inform Landlord. If Tenant knows, or has reasonable
                cause to believe, that a Hazardous Substance, or a condition
                involving or resulting from same, has come to be located in, on,
                under or about the Premises, other than as previously consented
                to by Landlord, Tenant shall immediately give written notice of
                such fact to Landlord. Tenant shall also immediately give
                Landlord a copy of any statement, report, notice, registration,
                application, permit, business plan, license, claim, action or
                proceeding given to, or received from, any governmental
                authority or private party, or persons entering or occupying the
                Premises, concerning the presence, spill, release, discharge of,
                or exposure to, any Hazardous Substance or contamination in, on,
                under or about the Premises.

                (iii) Indemnification. Tenant shall indemnify, protect, defend
                and hold harmless Landlord, its agents, employees, and lenders,
                if any, and the Premises from and against all loss of rents
                and/or damages, liabilities, judgments, costs, claims, liens,
                expenses, penalties, permits and attorneys' and consultants'
                fees arising out of or involving any Hazardous Substances
                brought onto the Premises by or for Tenant or under Tenant's
                control. Tenant's obligations under this Section 8.d. shall
                include, but not be limited to, the effects of any contamination
                or injury to persons, property or the environment created or
                suffered by Tenant, and the cost of investigation (including
                consultants' and attorneys' fees and testing), removal,
                remediation, restoration and/or abatement thereof, or of any
                contamination therein involved, and shall survive the expiration
                or earlier termination of this Lease. No termination,
                cancellation or release agreement entered into by Landlord and
                Tenant shall release Tenant from its obligations under this
                Lease with respect to Hazardous Substances, unless specifically
                so agreed by Landlord in writing at the time of such agreement.
                [SEE ADDENDUM]

9.      ALTERATIONS.

        a.      Permitted Alterations. Tenant shall give Landlord not less than
                ten (10) days' prior written notice of any alteration Tenant
                desires to make to the Premises. Tenant shall not make any
                alteration in, on or about the Premises without the prior
                written consent of Landlord, which consent shall not be
                unreasonably withheld or delayed. Tenant shall comply with all
                rules, laws, ordinances and requirements at the time Tenant
                makes any alteration and shall deliver to Landlord a complete
                set of "as built" plans and specifications for each alteration.
                Tenant shall be solely responsible for maintenance and repair of
                all alterations made by Tenant. As used in this Section 9, the
                term "alteration" shall include any alteration, addition or
                improvement. [SEE ADDENDUM]

        b.      Liens. If, because of any act or omission of Tenant or anyone
                claiming by, through, or under Tenant, any mechanic's lien or
                other lien is filed against the Premises, the Building, the
                Property or against other property of Landlord (whether or not
                the lien is valid or enforceable), Tenant shall, at its own
                expense, cause it to be discharged of record within a reasonable
                time, not to exceed [intentionally deleted] days, after the date
                of the filing. In addition, Tenant shall defend and indemnify
                Landlord and hold it harmless from any and all claims, losses,
                damages, judgments, settlements, costs and expenses, including
                attorneys' fees, resulting from the lien. [SEE ADDENDUM]

        c.      Ownership of Alterations. Any alteration made by Tenant shall
                immediately become Landlord's property. Except as provided in
                Subsection 9.d., Landlord may require Tenant, at Tenant's sole
                expense and by the end of the Term, to remove any alterations
                made by Tenant and to restore the Premises to its condition
                prior to the alteration. [SEE ADDENDUM]

        d.      Request Regarding Removal Obligation. At the time that Tenant
                requests Landlord's consent to any alteration, Tenant may
                request that Landlord notify Tenant if Landlord will require
                Tenant, at Tenant's sole expense, to remove any or all of the
                alteration by the end of the Term, and to restore the Premises
                to its condition prior to the alteration.


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<PAGE>   8
10.     REPAIRS.

        Tenant, at all times during the Term and at Tenant's sole cost and
        expense, shall keep the Premises and every part thereof, including all
        telecommunication risers and cabling, in good condition and repair;
        ordinary wear and tear, damage by fire, earthquake, acts of God or the
        elements excepted. Tenant hereby waives all right to make repairs at the
        expense of Landlord or in lieu thereof to vacate the Premises as
        provided in California Civil Code Section 1942 or any other law, statute
        or ordinance now or hereafter in effect. [SEE ADDENDUM]

11.     DAMAGE OR DESTRUCTION.

        a.      Landlord's Obligation to Rebuild. If the Premises are damaged or
                destroyed, Landlord shall promptly and diligently repair the
                Premises unless Landlord has the option to terminate this Lease
                as provided herein, and Landlord elects to terminate.

        b.      Right to Terminate. Landlord shall have the option to terminate
                this Lease if the Premises or the Building is destroyed or
                damaged by fire or other casualty, regardless of whether the
                casualty is insured against under this Lease, if Landlord
                reasonably determines that the repair of the Premises or the
                Building cannot be completed within two hundred seventy (270)
                days after the [intentionally deleted] casualty. If Landlord
                desires to exercise the right to terminate this Lease as a
                result of a casualty, Landlord shall exercise the right by
                giving Tenant written notice of its election to terminate within
                thirty (30) days after the, in which event this Lease shall
                terminate fifteen (15) days after the date of the notice. If
                Landlord does not exercise the right to terminate this Lease,
                Landlord shall promptly commence the process of obtaining
                necessary permits and approvals, and shall commence repair of
                the Premises or the Building as soon as practicable and
                thereafter prosecute the repair diligently to completion, in
                which event this Lease shall continue in full force and effect.
                [SEE ADDENDUM]

        c.      Limited Obligation to Repair. Landlord's obligation, should
                Landlord elect or be obligated to repair or rebuild, shall be
                limited to the Building shell and any tenant improvements which
                are constructed and paid for by Landlord pursuant to Exhibit B.
                Tenant, at its option and expense, shall replace or fully repair
                all trade fixtures, equipment and other improvements, including
                all telecommunication risers and cabling, installed by Tenant
                and existing at the time of the damage or destruction.

        d.      Abatement of Rent. In the event of any damage or destruction to
                the Premises which does not result in termination of this Lease,
                the Base Rent shall be temporarily abated proportionately to the
                degree the Premises are untenantable as a result of the damage
                or destruction, commencing from the date of the damage or
                destruction and continuing during the period required by
                Landlord to substantially complete its repair and restoration of
                the Premises; provided, however, that nothing herein shall
                preclude Landlord from being entitled to collect the full amount
                of any rent loss insurance proceeds. Tenant shall not be
                entitled to any compensation or damages from Landlord for loss
                of the use of the Premises, damage to Tenant's personal property
                or any inconvenience occasioned by any damage, repair or
                restoration. Tenant hereby waives the provisions of Section
                1932, Subdivision 2, and Section 1933, Subdivision 4, of the
                California Civil Code, and the provisions of any similar law
                hereafter enacted.

        e.      Damage Near End of Term and Extensive Damage. In addition to the
                rights to termination under Subsection 11.b., Landlord shall
                have the right to cancel and terminate this Lease as of the date
                of the occurrence of destruction or damage if the Premises or
                the Building is [intentionally deleted] made untenantable during
                the last twelve (12) months of the Term. Landlord shall give
                notice of its election to terminate this Lease under this
                Subsection 11.e. within thirty (30) days after Landlord
                determines that the damage or destruction would require more
                than six (6) months to repair. If Landlord does not elect to
                terminate this Lease, the repair of the damage shall be governed
                by Subsection 11.a. or 11.b., as the case may be. [SEE ADDENDUM]

               f. Insurance Proceeds. If this Lease is terminated, Landlord may
               keep all the insurance proceeds resulting from the damage, except
               for those proceeds which specifically insured Tenant's personal
               property and trade fixtures. [SEE ADDENDUM]

12.     EMINENT DOMAIN.

        If all or any part of the Premises is taken for public or quasi-public
        use by a governmental authority under the power of eminent domain or is
        conveyed to a governmental authority in lieu of such taking, and if
        [intentionally deleted] the taking or conveyance causes the remaining
        part of the Premises to be untenantable and inadequate for use by Tenant
        for the purpose for which they were leased, then Tenant, at its option
        and by giving written notice within fifteen (15) days after the taking,
        may terminate this Lease as of the date Tenant is required to surrender
        possession of the Premises. If a part of the Premises is taken or
        conveyed but the remaining part is tenantable and


                                       5
<PAGE>   9

        adequate for Tenant's use, then this Lease shall be terminated as to the
        part taken or conveyed as of the date Tenant surrenders possession;
        Landlord shall make such repairs, alterations and improvements as may be
        necessary to render the part not taken or conveyed tenantable; and the
        Rent shall be reduced in proportion to the part of the Premises taken or
        conveyed. All compensation awarded for the taking or conveyance shall be
        the property of Landlord without any deduction therefrom for any estate
        of Tenant, and Tenant hereby assigns to Landlord all its right, title
        and interest in and to the award. Tenant shall have the right, however,
        to recover from the governmental authority, but not from Landlord, such
        compensation as may be awarded to Tenant on account of the interruption
        of Tenant's business, moving and relocation expenses and removal of
        Tenant's trade fixtures and personal property.

13.     INDEMNITY AND INSURANCE.

        a.      Indemnity. Tenant shall be responsible for, shall insure
                against, and shall indemnify Landlord and its constituent parts
                and hold them harmless from, any and all liability for any loss,
                damage or injury to person or property occurring in, on or about
                the Premises, and Tenant hereby releases Landlord and its
                constituent parts from any and all liability for the same.
                Tenant's obligation to indemnify Landlord and its constituent
                parts hereunder shall include the duty to defend against any
                claims asserted by reason of any loss, damage or injury, and to
                pay any judgments, settlements, costs, fees and expenses,
                including attorneys' fees, incurred in connection therewith with
                counsel reasonably acceptable to Landlord. [SEE ADDENDUM]

        b.      Fire and Extended Coverage. Landlord shall procure and maintain
                in full force and effect with respect to the Building a policy
                or policies of all risk or "Special Term" insurance for the full
                insurance replacement value thereof.

        c.      Public Liability. Tenant, at its own cost and expense, shall
                keep and maintain in full force and effect during the Term a
                policy or policies of commercial general public liability
                insurance, written by an insurance company approved by Landlord,
                in the form customary to the locality, insuring Tenant's
                activities with respect to the Premises and/or the Building
                against loss, damage or liability for personal injury or death
                of any person or loss or damage to property occurring in, upon
                or about the Premises, covering bodily injury in the amounts of
                Two Million Dollars ($2,000,000) per person and Two Million
                Dollars ($2,000,000) per occurrence, and covering property
                damage in the amount of One Million Dollars ($1,000,000);
                provided, however, that if, at any time during the Term, Tenant
                shall have in full force and effect a blanket policy of public
                liability insurance with the same coverage for the Premises as
                described above, as well as coverage of other premises and
                properties of Tenant, or in which Tenant has some interest, the
                blanket insurance shall satisfy the requirement hereof.

        d.      Rental Abatement Insurance. Landlord may keep and maintain in
                full force and effect during the Term rental abatement insurance
                against abatement or loss of Rent in case of fire or other
                casualty, in an amount at least equal to the amount of Rent
                payable by Tenant during one (1) year of the Term, as reasonably
                determined by Landlord.

        e.      Insurance Certificates. Tenant shall furnish to Landlord, upon
                the Commencement Date and thereafter within thirty (30) days
                prior to the expiration of each policy, a certificate of
                insurance issued by the insurance carrier of each policy of
                insurance carried by Tenant pursuant to this Section 13. The
                certificates shall expressly provide that the policies shall not
                be cancelable or subject to reduction of coverage or otherwise
                be subject to modification except after thirty (30) days' prior
                written notice to the parties named as additional insured.
                Landlord, its successors and assigns, and any nominee of
                Landlord holding any interest in the Premises, including,
                without limitation, any ground lessor or the holder of any fee
                or leasehold mortgage, shall be named as an additional insured
                under each policy of insurance maintained by Tenant pursuant to
                this Lease.

        f.      Tenant's Failure. Tenant's failure to maintain any insurance
                required by this Lease, shall be a default hereunder, and Tenant
                shall be liable for any loss or costs resulting from the
                failure.

        g.      Tenant's Property and Fixtures. Tenant shall assume the risk of
                theft or damage to any furniture, equipment, machinery, goods,
                supplies or fixtures which are or remain the property of Tenant,
                or as to which Tenant retains the right of removal from the
                Premises.

        h.      Earthquake and Flood Insurance. In addition to any other
                insurance policies carried by Landlord in connection with the
                Building, Landlord may elect to procure and maintain in full
                force and effect during the Term with respect to the Building a
                policy of earthquake/volcanic action and flood and/or surface
                water insurance, including rental value insurance against
                abatement or loss of rent in the case of damage or loss covered
                under the earthquake/volcanic and flood and/or surface water
                insurance, in an amount equal to one hundred percent (100%) of
                the full insurance replacement value (including debris removal
                and demolition) of the Building. [SEE ADDENDUM]


                                       6
<PAGE>   10

14.     ASSIGNMENT OR SUBLET.

        If Tenant desires to assign this Lease or to sublet the Premises, or any
        part thereof, Tenant shall give to Landlord written notice of its intent
        at least [Intentionally deleted] days in advance of the date on which
        Tenant desires to assign or sublet the Premises. Landlord shall have
        thirty (30) days after receipt of Tenant's written notice within which
        to notify Tenant in writing that Landlord elects to [Intentionally
        deleted] permit Tenant to assign this Lease or sublease the Premises,
        subject, however, to Landlord's prior written approval, which approval
        shall not be unreasonably withheld. Landlord and Tenant agree that it
        shall be reasonable for Landlord to withhold its consent if Landlord
        reasonably determines that the proposed assignee or sublessee (A) does
        not have the financial ability to fulfill all of the obligations of
        Tenant under this Lease, (B) is to use Hazardous Substances in type or
        quantity in excess of those used by Tenant, (C) will potentially
        increase the Operating Expenses, (D) is a governmental entity,
        [Intentionally deleted]. Upon any proposed assignment or sublet, Tenant
        shall enter into a written agreement with Landlord requiring that
        [Intentionally deleted] of the excess moneys due to Tenant under the
        assignment or sublet over the Rent to be required to be paid by Tenant
        hereunder shall be paid to Landlord. No consent by Landlord to any
        assignment or sublet shall be deemed to be a consent to a use not
        permitted under this Lease, to any act in violation of this Lease or to
        any subsequent assignment or sublet. No assignment or sublet by Tenant
        shall relieve Tenant of any obligation under this Lease. Any attempted
        assignment or sublet by Tenant in violation of the terms and covenants
        of this Section shall be void. [SEE ADDENDUM]


15.     DEFAULT.

        a.      Tenant's Default. At the option of Landlord, a material breach
                of this Lease by Tenant shall exist if any of the following
                events (severally, "Event of Default"; collectively, "Events of
                Default") shall occur: (i) if Tenant shall have failed to pay
                Rent, including Tenant's Percentage Share of increased Operating
                Expenses, or any other sum required to be paid hereunder
                [Intentionally deleted], together with interest at the Interest
                Rate, from the date the amount became due through the date of
                payment, inclusive; (ii) if Tenant shall have failed to perform
                any term, covenant or condition of this Lease except those
                requiring the payment of money, and Tenant shall have failed to
                cure the breach within [Intentionally deleted] days after
                written notice from Landlord if the breach could reasonably be
                cured within the [Intentionally deleted] day period; provided,
                however, if the failure could not reasonably be cured within the
                [Intentionally deleted] day period, then Tenant shall not be in
                default unless it has failed to promptly commence and thereafter
                continue to make diligent and reasonable efforts to cure the
                failure as soon as practicable as reasonably determined by
                Landlord; (iii) if Tenant shall have its assets for the benefit
                of its creditors; (iv) if the [Intentionally deleted]
                sequestration of, attachment of, or execution on, any material
                part of the property of Tenant or on any property essential to
                the conduct of Tenant's business shall have occurred, and Tenant
                shall have failed to obtain a return or release of the property
                within thirty (30) days thereafter, or prior to sale pursuant to
                any sequestration, attachment or levy, whichever is earlier; (v)
                if Tenant shall have [Intentionally deleted] abandoned
                [Intentionally deleted] the Premises; (vi) if a court shall have
                made or entered any decree or order adjudging Tenant to be
                insolvent, or approving as properly filed a petition seeking
                reorganization of Tenant, or directing the winding up or
                liquidation of Tenant, and the decree or order shall have
                continued for a period of thirty (30) days; (vii) if Tenant
                shall make or suffer any transfer which constitutes a fraudulent
                or otherwise avoidable transfer under any provision of the
                federal Bankruptcy Laws or any applicable state law; or (viii)
                if Tenant shall have failed to comply with the provisions of
                Sections 23 or 25 of this Lease. An Event of Default shall
                constitute a default under this Lease. [SEE ADDENDUM]

        b.      Remedies Upon Tenant's Default. Upon an Event of Default,
                Landlord shall have the following remedies, in addition to all
                other rights and remedies provided by law, equity, statute or
                otherwise provided in this Lease, to which Landlord may resort
                cumulatively or in the alternative:

                (i)     Landlord may continue this Lease in full force and
                        effect, and this Lease shall continue in full force and
                        effect as long as Landlord does not terminate Tenant's
                        right to possession, and Landlord shall have the right
                        to collect Rent when due [Intentionally deleted]. No act
                        by Landlord allowed by this Subsection (i) shall
                        terminate this Lease unless Landlord notifies Tenant in
                        writing that Landlord elects to terminate this Lease.
                        [SEE ADDENDUM]

                (ii)    Landlord may terminate Tenant's right to possession of
                        the Premises at any time by giving written notice to
                        that effect. No act by Landlord other than giving
                        written notice to Tenant shall terminate this Lease.
                        Acts of


                                       7
<PAGE>   11

                        maintenance, efforts to relet the Premises or the
                        appointment of a receiver on Landlord's initiative to
                        protect Landlord's interest under this Lease shall not
                        constitute a termination of Tenant's right to
                        possession. On termination, Landlord shall have the
                        right to remove all personal property of Tenant and
                        store it at Tenant's cost and to recover from Tenant as
                        damages: (a) the worth at the time of award of unpaid
                        Rent and other sums due and payable which had been
                        earned at the time of termination; plus (b) the worth at
                        the time of award of the amount by which the unpaid Rent
                        and other sums due and payable which would have been
                        payable after termination until the time of award
                        exceeds the amount of the Rent loss that Tenant proves
                        could have been reasonably avoided; plus (c) the worth
                        at the time of award of the amount by which the unpaid
                        Rent and other sums due and payable for the balance of
                        the Term after the time of award exceeds the amount of
                        the Rent loss that Tenant proves could be reasonably
                        avoided; plus (d) any other amount necessary to
                        compensate Landlord for all the detriment proximately
                        caused by Tenant's failure to perform Tenant's
                        obligations under this Lease, or which, in the ordinary
                        course of things, would be likely to result therefrom,
                        including, without limitation, any costs or expenses
                        incurred by Landlord: (1) in retaking possession of the
                        Premises, including reasonable attorneys' fees and costs
                        therefor; (2) maintaining or preserving the Premises for
                        reletting to a new tenant, including repairs or
                        alterations to the Premises for the reletting; (3)
                        leasing commissions; (4) any other costs necessary or
                        appropriate to relet the Premises; and (5) at Landlord's
                        election, such other amounts in addition to or in lieu
                        of the foregoing as may be permitted from time to time
                        by the laws of the State of California.

                        The "worth at the time of award" of the amounts referred
                        to in Subsections (ii)(a) and (ii)(b) is computed by
                        allowing interest at the lesser of [Intentionally
                        deleted] per annum or the maximum rate permitted by law,
                        on the unpaid Rent and other sums due and payable from
                        the termination date through the date of award. The
                        "worth at the time of award" of the amount referred to
                        in Subsection (ii)(c) is computed by discounting the
                        amount at the discount rate of the Federal Reserve Bank
                        of San Francisco at the time of award, plus one percent
                        (1%). Tenant waives redemption or relief from forfeiture
                        under California Code of Civil Procedure Sections 1174
                        and 1179, or under any other present or future law, if
                        Tenant is evicted or Landlord takes possession of the
                        Premises by reason of any default of Tenant hereunder.
                        [SEE ADDENDUM]

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

16.   LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS.

      If Tenant shall at any time fail to make any payment or perform any other
      act on its part to be made or performed under this Lease, Landlord may,
      but shall not be obligated to, make the payment or perform any other act
      to the extent Landlord may deem desirable and, in connection therewith,
      pay expenses and employ counsel. Any payment or performance by Landlord
      shall not waive or release Tenant from any obligations of Tenant under
      this Lease. All sums so paid by Landlord, and all penalties, interest and
      costs in connection therewith, shall be due and payable by Tenant on the
      next day after any payment by Landlord, together with interest thereon at
      the Interest Rate, from that date to the date of payment thereof by Tenant
      to Landlord, plus collection costs and attorneys' fees. Landlord shall
      have the same rights and remedies for the nonpayment thereof as in the
      case of default in the payment of Rent. [SEE ADDENDUM]

17.   SECURITY DEPOSIT.

      Tenant has deposited with Landlord the Security Deposit, in the amount
      specified in the Basic Lease Information, as security for the full and
      faithful performance of every provision of this Lease to be performed by
      Tenant. If Tenant defaults with respect to any provision of this Lease,
      Landlord may use, apply or retain all or any part of the Security Deposit
      for the payment of any Rent or other sum in default, for the payment of
      any amount which Landlord may expend or become obligated to expend by
      reason of Tenant's default, or to compensate Landlord for any loss or
      damage which Landlord may suffer by reason of Tenant's default. If any
      portion of the Security Deposit is used or applied, Tenant shall deposit
      with Landlord, within ten (10) days after written demand therefor, cash in
      an amount sufficient to restore the Security Deposit to its original
      amount. Landlord shall not be required to keep the Security Deposit
      separate from its general funds. [Intentionally deleted] [SEE ADDENDUM]


18.   SURRENDER OF PREMISES.

      By taking possession of the Premises, Tenant shall be deemed to have
      accepted the Premises, Building, and the Property in good, clean
      [Intentionally deleted] condition [Intentionally deleted]. On the
      expiration or early termination of this


                                       8
<PAGE>   12

      Lease, Tenant shall surrender the Premises to Landlord in its condition as
      of the Commencement Date, normal wear and tear excepted. Tenant shall
      remove from the Premises all of Tenant's personal property, trade fixtures
      and any alterations required to be removed pursuant to Section 9 of this
      Lease. Tenant shall repair damage or perform any restoration work required
      by the removal. If Tenant fails to remove any personal property, trade
      fixtures or alterations after the end of the Term, Landlord may remove the
      property and store it at Tenant's expense, including interest at the
      Interest Rate. If the Premises are not so surrendered at the termination
      of this Lease, Tenant shall indemnify Landlord against all loss or
      liability resulting from delay by Tenant in so surrendering the Premises,
      including, without limitation, any claims made by any succeeding tenant,
      losses to Landlord due to lost opportunities to lease to succeeding
      tenants, and attorneys' fees and costs. [SEE ADDENDUM]

19.   HOLDING OVER.

      If Tenant remains in possession of all or any part of the Premises after
      the expiration of the Term or the termination of this Lease, the tenancy
      shall be month-to-month only and shall not constitute a renewal or
      extension for any further term. In such event, Base Rent shall be
      increased in an amount equal to [*] of the Base Rent during the last month
      of the Term (including any extensions), and any other sums due under this
      Lease shall be payable in the amount, and at the times, specified in this
      Lease. The month-to-month tenancy shall be subject to every other term,
      condition, covenant and agreement contained in this Lease and Tenant shall
      vacate the Premises immediately upon Landlord's request. [SEE ADDENDUM]

20.   ACCESS TO PREMISES.

      Tenant shall permit Landlord and its agents to enter the Premises at all
      reasonable times, to inspect the Premises; to post Notices of
      Nonresponsibility and similar notices and to show the Premises to
      interested parties such as prospective mortgagors, purchasers and tenants;
      to make necessary alterations, additions, improvements or repairs either
      to the Premises, the Building, or other premises within the Building; and
      to discharge Tenant's obligations hereunder when Tenant has failed to do
      so within a reasonable time after written notice from Landlord. The above
      rights are subject to reasonable security regulations of Tenant, and to
      the requirement that Landlord shall at all times act in a manner to cause
      the least possible interference with Tenant's operations. [SEE ADDENDUM]

21.   SIGNS.

      The size, design, color, location and other physical aspects of any sign
      in or on the Building shall be subject to the CC&R's (if applicable),
      Rules, Landlord's approval prior to installation, and to any appropriate
      municipal or other governmental approvals. The costs of any permitted
      sign, and the costs of its installation, maintenance and removal, shall be
      at Tenant's sole expense and shall be paid within ten (10) days of
      Tenant's receipt of a bill from Landlord for the costs. [SEE ADDENDUM]

22.   WAIVER OF SUBROGATION.

      Anything in this Lease to the contrary notwithstanding, Landlord and
      Tenant each hereby waives and releases the other of and from any and all
      rights of recovery, claim, action or cause of action against the other,
      its subsidiaries, directors, agents, officers and employees, for any loss
      or damage that may occur in the Premises, the Building or the Property; to
      improvements to the Building or personal property (building contents)
      within the Building; or to any furniture, equipment, machinery, goods and
      supplies not covered by this Lease which Tenant may bring or obtain upon
      the Premises or any additional improvements which Tenant may construct on
      the Premises by reason of fire, the elements or any other cause which is
      required to be insured against under this Lease, regardless of cause or
      origin, including negligence of Landlord or Tenant and their agents,
      subsidiaries, directors, officers and employees, to the extent insured
      against under the terms of any insurance policies carried by Landlord or
      Tenant and in force at the time of any such damage, [Intentionally
      deleted]. Because this Section 22 will preclude the assignment of any
      claim mentioned in it by way of subrogation or otherwise to an insurance
      company or any other person, each party to this Lease agrees immediately
      to give to each of its insurance companies written notice of the terms of
      the mutual waivers contained in this Section 22 and to have the insurance
      policies properly endorsed, if necessary, to prevent the invalidation of
      the insurance coverages by reason of the mutual waivers contained in this
      Section 22.

23.   SUBORDINATION.

      a.    SUBORDINATE NATURE. Except as provided in Subsection b., this Lease
            is subject and subordinate to all ground and underlying leases,
            mortgages and deeds of trust which now or may hereafter affect the
            Property, the Building or the Premises, to the CC&R's, and to all
            renewals, modifications, consolidations, replacements and extensions
            thereof. Within [Intentionally deleted] days after Landlord's
            written request, Tenant shall execute any and all documents required
            by Landlord, the lessor under any ground or underlying lease
            ("Lessor"), or the holder or holders of any mortgage or deed of
            trust ("Holder") to make this Lease subordinate to the lien of any
            lease, mortgage or deed of trust, as the case may be. [SEE ADDENDUM]


-----------------------
[*]  Information redacted pursuant to a confidential treatment request
     throughout this exhibit.

                                       9
<PAGE>   13

      b.    POSSIBLE PRIORITY OF LEASE. If a Lessor or a Holder advises Landlord
            that it desires or requires this Lease to be prior and superior to a
            lease, mortgage or deed of trust, Landlord may notify Tenant. Within
            [Intentionally deleted] days of Landlord's notice, Tenant shall
            execute, have acknowledged and deliver to Landlord any and all
            documents or instruments, in the form presented to Tenant, which
            Landlord, Lessor or Holder deems necessary or desirable to make this
            Lease prior and superior to the lease, mortgage or deed of trust.
            [SEE ADDENDUM]

      c.    RECOGNITION OR ATTORNMENT AGREEMENT. If Landlord or Holder requests
            Tenant to execute a document subordinating this Lease, the document
            shall provide that, so long as Tenant is not in default, Lessor or
            Holder shall agree to enter into either a recognition or attornment
            agreement with Tenant, or a new lease with Tenant upon the same
            terms and conditions as to possession of the Premises, which shall
            provide that Tenant may continue to occupy the Premises so long as
            Tenant shall pay the Rent and observe and perform all the provisions
            of this Lease to be observed and performed by Tenant. [SEE ADDENDUM]

24.   TRANSFER OF THE PROPERTY.

      Upon transfer of the Property and assignment of this Lease, Landlord shall
      be entirely freed and relieved of all liability under any and all of its
      covenants and obligations contained in or derived from this Lease
      occurring after the consummation of the transfer and assignment, and from
      all liability for the Security Deposit. Tenant shall attorn to any entity
      purchasing or otherwise acquiring the Premises at any sale or other
      proceeding.


25.   ESTOPPEL CERTIFICATES.

      Within ten (10) days following written request by Landlord, Tenant shall
      execute and deliver to Landlord an estoppel certificate, in the form
      prepared by Landlord. The certificate shall: (i) certify that this Lease
      is unmodified and in full force and effect or, if modified, state the
      nature of the modification and certify that this Lease, as so modified, is
      in full force and effect, and the date to which the Rent and other charges
      are paid in advance, if any; (ii) acknowledge that there are not, to
      Tenant's knowledge, any uncured defaults on the part of Landlord
      hereunder, or if there are uncured defaults on the part of the Landlord,
      state the nature of the uncured defaults; (iii) evidence the status of
      this Lease as may be required either by a lender making a loan to Landlord
      to be secured by deed of trust or mortgage covering the Premises or a
      purchaser of the Property from Landlord and (iv) such other information
      that is reasonably requested.


26.   MORTGAGEE PROTECTION.

      In the event of any default on the part of Landlord, Tenant will give
      notice by registered or certified mail to the address provided by Landlord
      to any beneficiary of a deed of trust or mortgagee of a mortgage covering
      the Property and shall offer the beneficiary or mortgagee a reasonable
      opportunity to cure the default, [Intentionally deleted].


27.   ATTORNEYS' FEES.

      If either party shall bring any action or legal proceeding for damages for
      an alleged breach of any provision of this Lease, to recover rent or other
      sums due, to terminate the tenancy of the Premises or to enforce, protect
      or establish any term, condition or covenant of this Lease or right of
      either party, the prevailing party shall be entitled to recover, as a part
      of the action or proceedings, or in a separate action brought for that
      purpose, reasonable attorneys' fees and court costs as may be fixed by the
      court or jury. [Intentionally deleted] [SEE ADDENDUM]


28.   BROKERS.

      Tenant warrants and represents that it has had no dealings with any real
      estate broker or agent in connection with the negotiation of this Lease,
      except for any brokers(s) specified in the Basic Lease Information, and
      that it knows of no other real estate broker or agent who is or might be
      entitled to a commission in connection with this Lease. Tenant shall
      indemnify and hold harmless Landlord from and against any and all
      liabilities or expenses arising out of claims made by any other broker or
      individual for commissions or fees resulting from this Lease.
      [SEE ADDENDUM]

29.   PARKING.

      Tenant shall have the right to park in the Building's parking facilities,
      in common with other tenants of the Building, upon such terms and
      conditions as may from time to time be established by Landlord. There
      shall be no charge for any portion of the parking facilities which is not
      reserved. Tenant agrees not to use in excess of its proportionate share of
      parking facilities and agrees to cooperate with Landlord and other tenants
      in the use of the parking facilities. Landlord reserves the right, in its
      absolute discretion, to determine whether the parking


                                       10
<PAGE>   14

      facilities are becoming crowded and to allocate and assign parking spaces
      among Tenant and the other tenants. Landlord shall not be liable to
      Tenant, nor shall this Lease be affected, if any parking is impaired by
      moratorium, initiative, referendum, law, ordinance, regulation or order
      passed, issued or made by any governmental or quasi-governmental body.
      Tenant shall not park its vehicles in any parking areas designated by
      Landlord as areas for parking by visitors to the Building or other
      reserved parking spaces. Tenant shall not park vehicles in the Building
      parking areas other than automobiles, motorcycles, motor driven or
      non-motor driven bicycles, or four-wheeled trucks. Tenant shall not leave
      vehicles in the Building parking areas overnight without Landlord's prior
      approval. Tenant and its agents, employees and invitees shall not park any
      one vehicle in more than one parking space.


30.   UTILITIES AND SERVICES.

      [intentionally deleted] Landlord agrees to furnish, or cause to be
      furnished, to the Premises the utilities and services described in the
      standards for Utilities and Services, set forth in Exhibit E, subject to
      the conditions and in accordance with the standards set forth therein.
      Landlord shall not be liable for, and Tenant shall not be entitled to any
      abatement or reduction of Rent by reason of, no eviction of Tenant shall
      result from and, further, Tenant shall not be relieved from the
      performance of any covenant or agreement in this Lease because of,
      Landlord's failure to furnish any of the foregoing when the failure is
      caused by accident, breakage, or repairs, strikes, lockouts or other labor
      disturbance or labor dispute of any character, governmental regulation,
      moratorium or other governmental action, inability despite the exercise of
      reasonable diligence to obtain electricity, water or fuel, or by any other
      cause beyond Landlord's reasonable control. In the event of any failure,
      stoppage or interruption thereof, Landlord shall diligently attempt to
      resume service. [SEE ADDENDUM]

31.   TENANT PLACEMENT.

      [intentionally deleted]

32.   ACCEPTANCE.

      Delivery of this Lease, duly executed by Tenant, constitutes an offer to
      lease the Premises as set forth herein, and under no circumstances shall
      such delivery be deemed to create an option or reservation to lease the
      Premises for the benefit of Tenant. This Lease shall become effective and
      binding only upon execution hereof by Landlord and delivery of a signed
      copy to Tenant. [intentionally deleted] [SEE ADDENDUM]


33.   USE OF BUILDING NAME.

      Tenant shall not employ the name of the Building in the name or title of
      its business or occupation without Landlord's prior written consent, which
      consent Landlord may withhold in its sole discretion. Landlord reserves
      the right to change the name of the Building without Tenant's consent and
      without any liability to Landlord.


34.   RECORDING.

      Neither Landlord nor Tenant shall record this Lease, nor a short form
      memorandum of this Lease, without the prior written consent of the other.


35.   QUITCLAIM.

      Upon any termination or expiration of this Lease pursuant to its terms,
      Tenant, at Landlord's request, shall execute, have acknowledged and
      deliver to Landlord a quitclaim deed of all Tenant's interest in the
      Premises, Building and Property created by this Lease.


36.   NOTICES.

      Any notice or demand required or desired to be given under this Lease
      shall be in writing and shall be given by hand delivery, facsimile or the
      United States mail. Notices which are sent by facsimile shall be deemed to
      have been given upon receipt. Notices which are mailed


                                       11
<PAGE>   15

      shall be deemed to have been given when seventy-two (72) hours have
      elapsed after the notice was deposited in the United States mail,
      registered or certified, the postage prepaid, addressed to the party to be
      served. As of the date of execution of this Lease, the addresses of
      Landlord and Tenant are as specified in the Basic Lease Information.
      Either party may change its address by giving notice of the change in
      accordance with this Section.


37.   LANDLORD'S EXCULPATION.

      In the event of default, breach or violation by Landlord (which term
      includes Landlord's partners, co-venturers and co-tenants, and officers,
      directors, members, employees, agents and representatives of Landlord and
      Landlord's partners, co-venturers and co-tenants) of any of Landlord's
      obligations under this Lease, Landlord's liability to Tenant shall be
      limited to its ownership interest in the Building and Property or the
      proceeds of a public sale of the ownership interest pursuant to the
      foreclosure of a judgment against Landlord. Landlord shall not be
      personally liable, or liable in any event, for any deficiency beyond its
      ownership interest in the Building and Property.


38.   ADDITIONAL STRUCTURES.

      Any diminution or interference with light, air or view by any structure
      which may be erected on land adjacent to the Building shall in no way
      alter this Lease or impose any liability on Landlord.


39.   GENERAL.

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

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

      c.    SEVERABILITY. If any provision of this Lease is held to be invalid,
            illegal or unenforceable, the invalidity, illegality, or
            unenforceability shall not affect any other provision of this Lease,
            but this Lease shall be construed as if the invalid, illegal or
            unenforceable provision had not been contained herein.

      d.    CHOICE OF LAW; CONSTRUCTION. This Lease shall be construed and
            enforced in accordance with the laws of the State of California. The
            language in all parts of this Lease shall in all cases be construed
            as a whole according to its fair meaning and not strictly for or
            against either Landlord or Tenant.

      e.    GENDER; SINGULAR, PLURAL. When the context of this Lease requires,
            the neuter gender includes the masculine, the feminine, a
            partnership or corporation or joint venture, and the singular
            includes the plural.

      f.    BINDING EFFECT. The covenants and agreements contained in this Lease
            shall be binding on the parties hereto and on their respective
            successors and assigns (to the extent this Lease is assignable).

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

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

      i.    COUNTERPARTS. This Lease may be executed in counterparts, each of
            which shall be an original, but all counterparts shall constitute
            one (1) instrument.

      j.    EXHIBITS. The Basic Lease Information and all exhibits attached
            hereto are hereby incorporated herein and made an integral part
            hereof.

      k.    MULTIPLE ENTITIES COMPRISING TENANT. All persons and entities
            comprising Tenant, including all general partners (if any) of
            Tenant, are jointly and individually bound to perform each and every
            obligation of Tenant under this Lease and are jointly and
            individually liable to Landlord for Tenant's performance.


                                       12
<PAGE>   16

      l.    ADDENDUM. The Addendum, if any, attached hereto is hereby
            incorporated herein and made an integral part hereof.

      m.    WAIVER OF JURY TRIAL. Landlord and Tenant waive the right to trial
            by jury in any action, proceeding or counterclaim brought by either
            of the parties to this Lease against the other on any matters
            whatsoever arising out of or in any way connecting with this Lease,
            the relationship of Landlord and Tenant, or Tenant's use or
            occupancy of the Premises. [SEE ADDENDUM]

IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS LEASE ON THE DATES SET FORTH
BELOW, EFFECTIVE AS OF THE DATE FIRST ABOVE WRITTEN.

                                         LANDLORD:
                                         STONY POINT EAST,
                                         A CALIFORNIA GENERAL PARTNERSHIP

DATE
EXECUTED: 4/26/99                        BY: /s/ JAMES BRECHT
         ---------------                    ------------------------------------
                                            NAME:
                                                 -------------------------------
                                            ITS:
                                                --------------------------------

                                         TENANT:
                                         ADVANCED TELCOM GROUP,
                                         A DELAWARE CORPORATION

DATE
EXECUTED: 4/26/99                        BY: /s/ C. G. RUDOLPH
         ---------------                    ------------------------------------
                                            NAME: C. G. Rudolph
                                                 -------------------------------
                                            ITS:  Chairman & CEO
                                                --------------------------------
DATE
EXECUTED:                                BY:
         ---------------                    ------------------------------------
                                            NAME:
                                                 -------------------------------
                                            ITS:
                                                --------------------------------



                                       13
<PAGE>   17



                                    EXHIBIT A

                                    SITE PLAN

                                     [MAP]


<PAGE>   18
                                                                       EXHIBIT B

                                  WORK LETTER

     This Work Letter states Landlord's and Tenant's responsibilities,
respectively, for the construction of the Building; and the Premises.

     1.   DEFINED TERMS. Unless provided to the contrary herein, the following
defined terms shall have the meanings set forth below and the remaining defined
terms shall have the meanings set forth in the Lease:

          Landlord's Representative:         James W. Brecht

          Tenant's Representative:
                                             --------------------------------

          Additional Allowance for
          Tenant Improvements:               [*]


     2.   LANDLORD'S WORK.

     2.1.  Building Shell/Site Work Interior Improvements and Tenant
Improvements. Landlord, at its sole cost and expense, shall arrange for the
construction by Landlord's contractor ("Landlord's Contractor") of (i) a
two-story building (the "Building Shell") consisting of approximately sixty-six
thousand eight hundred seventy-three (66,873) rentable square feet of space, in
accordance with the final working drawings and specifications (the "Building
Shell/Site Work Working Drawings), more particularly described in Exhibit B-1,
attached hereto and incorporated herein by reference; (ii) certain interior
improvements in the Building (the "Interior Improvements"), in accordance with
the final working drawings and specifications (the "Interior Improvements
Working Drawings"), listed on Exhibit B-2, attached hereto and incorporation
herein by reference, and (iii) certain tenant improvements in the Building (the
"Tenant Improvements") in accordance with the preliminary design (the "Tenant
Preliminary Design") and outline specifications (the "Tenant Improvement
Specifications"), each listed on Exhibit B-3, attached hereto and incorporated
herein by reference. The construction of the Building Shell/Site Work, the
Interior Improvements and the Tenant Improvements is hereinafter referred to as
"Landlord's Work."

     2.2.  Costs of Landlord's Work. Except as provided in Section 2.3 below,
Landlord shall pay for all fees incurred in connection with the construction of
Landlord's Work.

     2.3.  Tenant's Responsibility For Costs of Landlord's Work. Tenant shall
pay to Landlord, within ten (10) days after Landlord's written request therefor,
the positive difference between (i) Landlord's estimate of any additional costs
that Landlord anticipates it will incur in connection with the construction of
Landlord's Work as a result of any changes to Landlord's Work requested by
Tenant and approved by Landlord (which approval shall not be unreasonably


-----------------------
[*]  Information redacted pursuant to a confidential treatment request
     throughout this exhibit.
<PAGE>   19
withheld) and (ii) the amount of the Additional Allowance for Tenant
Improvements available to pay for such costs.

          2.4. Substantial Completion. The Building Shell/Site Work, the
Interior Improvements and the Tenant Improvements shall be deemed "Substantially
Complete" when (i) Landlord's Contractor has substantially completed the
Building Shell/Site Work, the Interior Improvements and the Tenant
Improvements, event though minor items may remain to be installed, finished or
corrected, provided such minor items do not have any material effect on the
ability of Tenant to utilize the Building Shell/Site Work, the Interior
Improvements and the Tenant Improvements for their intended purpose; and (ii)
Landlord delivers to Tenant a certificate from Landlord's architect ("Landlord's
Architect"), certifying (a) that the Building Shell/Site Work, the Interior
Improvements and the Tenant Improvements are "Substantially Complete" in
accordance with the terms of this Work Letter and (b) the date on which the
Building Shell/Site Work, the Interior Improvements and the Tenant Improvements
were Substantially Completed. Landlord shall use diligent efforts to obtain and
furnish Tenant with a "finaled" building permit with respect to the Building
Shell/Site Work, the Interior Improvements and the Tenant Improvements after
completing the Building Shell/Site Work, the Interior Improvements and the
Tenant Improvements. Substantial Completion shall have occurred notwithstanding
Tenant's submission of a punchlist to Landlord, which Tenant and Landlord shall
develop jointly within thirty (30) days after the Commencement Date. The
punchlist shall be based upon an inspection of the Premises by Landlord's
Representative and Tenant's Representative. Landlord shall commence and use
commercially reasonable efforts to complete any items of Landlord's Work not
completed as of the Commencement Date within thirty (30) days after the
Commencement Date.

          2.5.  Warranty.  Notwithstanding anything to the contrary in the
Lease, effective as of the date upon which Landlord delivers possession of the
Premises to Tenant, Landlord does hereby warrant that (a) the construction of
Landlord's Work was performed in accordance with all rules, regulations, codes,
statutes, ordinances, and laws of all governmental and quasi-governmental
authorities, in accordance with the Building Shell/Site Work Working Drawings
and the Tenant Improvement Specifications (collectively, the "Plans"), and in a
good and workman-like manner, (b) all material and equipment installed therein
conformed to the Plans and was new and otherwise of good quality, (c) the
electrical, plumbing, and mechanical systems servicing the Premises are in
working order and in good condition, and (d) the roof is in good condition and
water tight.

     3.   ADDITIONAL TENANT IMPROVEMENTS.

          3.1. Responsibility for Tenant Improvements.  Tenant shall be
responsible for all costs of any additional improvements to the Premises (the
"Additional Tenant Improvements"), including architectural, engineering,
consultant, utility, development, transaction and building permit and impact
fees (subject only to Landlord's obligation to provide the Additional Allowance
for Tenant Improvements and set forth below), and all trade fixtures, equipment,
furniture or other improvements installed by Tenant in the Premises. The
Additional Tenant Improvements shall be treated as alterations and shall be
subject to the terms of Section 9 of the Lease, as modified by this Work Letter.
The design, permitting and construction of the



                                       2
<PAGE>   20

Additional Tenant Improvements are hereinafter collectively referred to as the
"Additional Tenant Improvement Work."

     3.2.  Tenant's Architect and Contractor. If Tenant's architect is an
architect other than Simons & Brecht Inc., or Tenant's Contractor (as
hereinafter defined) is a contractor other than Landlord's Contractor, then,
prior to commencing the Additional Tenant Improvement Work, Tenant shall obtain
Landlord's prior written consent to Tenant's architect and contractor. Landlord
shall not unreasonably withhold its approval of any architect or contractor
selected by Tenant. Tenant's architect and contractor must each be licensed to
do business in California The architect and the contractor selected by Tenant
and approved by Landlord (as provided above) are hereinafter referred to as
"Tenant's Architect" and "Tenant's Contractor," respectively.

     3.3.  Changes. Tenant shall not make any material changes to the Building
Shell/Site Work Working Drawings, the Interior Improvements Working Drawings or
the Tenant Improvement Specifications described in Exhibit B-1, Exhibit B-2
and Exhibit B-3 respectively, without Landlord's prior written approval, which
approval shall not be unreasonably withheld or delayed. All material changes to
the Building Shell/Site Work Working Drawings, the Interior Improvements
Working Drawings or the Tenant Improvements Specifications must be in writing
and signed by both Landlord and Tenant prior to the change being made. Tenant
shall be responsible for all additional costs attributable to changes requested
by Tenant, including, without limitation, additional architectural fees and
increases in construction costs of Landlord's Work and the Additional Tenant
Improvements Work.

     3.4.  Notice. If Tenant's Contractor is not the same as Landlord's
Contractor, Tenant shall provide Landlord with not less than ten (10) days'
written notice prior to the commencement of any Additional Tenant Improvement
Work and permit Landlord to post on the Premises such notices of
nonresponsibility as may be required or otherwise available to Landlord.
Landlord, at its option, may require Tenant to provide to Landlord, at Tenant's
sole cost and expense, a lien and completion bond in an amount equal to the
estimated cost of the Additional Tenant Improvement Work (as reasonably
determined by Landlord) to insure Landlord against liability for mechanic's and
materialmen's liens and to insure completion of the Additional Tenant
Improvement Work.

     3.5.  Costs. Tenant shall promptly pay any and all costs and expenses in
connection with or arising out of the Additional Tenant Improvement Work and
shall furnish to Landlord evidence of such payment upon request. If the
Additional Improvement Work is to be performed by Tenant's Contractor, upon
completion of the Additional Tenant Improvement Work, Tenant shall deliver to
Landlord a release and waiver of lien executed by each contractor,
subcontractor and materialman concerned with the Additional Tenant Improvement
Work. In the event any lien is filed against the Premises or any portion
thereof or against Tenant's leasehold interest therein, Tenant shall record in
the Official Records of Sonoma County a release bond executed by an admitted
surety insurer authorized to issue surety bonds in the State of California with
respect to the lien or shall obtain the release and/or discharge of the lien
within seven (7) days after the filing thereof. In the event Tenant fails to do
so, Landlord may, after notice to Tenant, obtain release and/or discharge of the
lien and Tenant shall indemnify Landlord for the costs thereof, including
reasonable attorneys' fees, together with interest at the Interest Rate from
the date of demand.



                                       3
<PAGE>   21
          3.6.  Indemnity. Tenant shall indemnify, protect, defend (with counsel
satisfactory to Landlord) and hold harmless Landlord and its officers,
directors, employees, shareholders, partners and members from and against any
and all suits, claims, actions, loss, costs or expense (including claims for
workers' compensation, attorneys' fees and costs) based on personal injury or
property damage caused in, or contract claims (including, claims for breach of
warranty) arising from, the performance of the Additional Tenant Improvement
Work. Tenant shall repair or replace any portion of the Building or item of
Landlord's equipment or Landlord's Contractor's equipment or any of Landlord's
real or personal property damaged, lost or destroyed in the performance of the
Additional Tenant Improvement Work.

          3.7.  Insurance. Within fifteen (15) days after the approval of
Tenant's Contractor, Tenant and Tenant's Contractor shall obtain and provide
Landlord with certificates evidencing workers' compensation, public liability
and property damage insurance in amounts and forms and with companies reasonably
satisfactory to Landlord.

     4. COOPERATION. Tenant shall cooperate and diligently assist Landlord's
Architect and Landlord's Contractor in completing the preliminary plans and
working drawings and specifications for Landlord's Work. Tenant and Tenant's
Contractor shall not interfere with Landlord's construction of Landlord's Work.

     5. ADDITIONAL ALLOWANCE FOR TENANT IMPROVEMENTS.

          5.1.  Allowance. Landlord shall make available to Tenant upon the
terms and conditions set forth below an additional allowance for tenant
improvements (the "Additional Allowance for Tenant Improvements") in the amount
of [*]. Tenant may use the Additional Allowance for Tenant Improvements to pay
for Additional Tenant Improvement Allowance Items and any charges pursuant to
Section 2.3 of this Work Letter.

          5.2.  Additional Tenant Improvement Allowance Items. The term
"Additional Tenant Improvement Allowance Items" shall include work performed and
materials furnished in connection with the construction of the Additional Tenant
Improvements pursuant to this Work Letter and charges pursuant to Section 2.3 of
this Work Letter. If there is any Additional Allowance for Tenant Improvements
remaining after completion of, and payment of all amounts due in connection
with, all of the Additional Tenant Improvements and payment of all charges
pursuant to Section 2.3 of this Work Letter, Tenant shall have the right to use
the remaining amount of the Additional Allowance for Tenant Improvements for
trade fixtures, furniture, furnishings, equipment (except electrical, mechanical
and plumbing systems, including HVAC systems), or design, engineering,
architectural, utility and permit fees and/or the payment of rent under this
Lease.

     6. TENANT DELAYS.

          6.1.  Commencement Date. If Landlord fails to Substantially Complete
the Building Shell/Site Work, the Interior Improvements or the Tenant
Improvements on or before the Estimated Commencement Date, or thereafter, and if
the cause of the delay in Landlord delivering the Premises to Tenant by the
Estimated Commencement Date, or thereafter, is

-----------------------
[*]  Information redacted pursuant to a confidential treatment request
     throughout this exhibit.

                                       4
<PAGE>   22

attributable to Tenant, then the Commencement Date for all purposes under the
Lease will be the day on which the Building Shell/Site Work, the Interior
Improvements and the Tenant Improvements would have been Substantially Complete
absent such Tenant Delays (defined below).

            6.2.  Tenant Delays. Delays attributable to Tenant ("Tenant Delays")
shall include any interference with or delay in the completion of Landlord's
Work or the Additional Tenant Improvement Work (to the extent performed by
Landlord or Landlord's Contractor) caused by:

                  6.2.1. Tenant, Tenant's Architect, Tenant's Contractor or any
representative, employee, agent or subcontractor of any of the aforementioned
parties;

                  6.2.2. Tenant's early entry in the Premises or failure to
perform its obligations under this Lease;

                  6.2.3. Tenant's change requests that result in delays; or

                  6.2.4. Tenant's failure to provide approvals or disapprovals
in a timely manner, to the extent the approvals are necessary.

      7. REPRESENTATIVES.

            7.1. Tenant's Representative. Tenant has designated Tenant's
Representative as its sole representative with respect to the matters set forth
in this Work Letter, who shall have full authority and responsibility to act on
behalf of Tenant as required in this Work Letter. Tenant shall not change
Tenant's Representative without notice to Landlord.

            7.2. Landlord's Representative. Landlord has designated Landlord's
Representative as its sole representative with respect to the matters set forth
in this Work Letter, who shall have full authority and responsibility to act on
behalf of Landlord as required in this Work Letter. Landlord shall not change
Landlord's Representative without notice to Tenant.

      8. FORCE MAJEURE. Whenever a period of time or a specific date is
prescribed in this Work Letter or the Lease for action to be taken by Landlord,
Landlord shall not be liable or responsible for, and there shall be excluded
from the computation for any such period of time (or the specified date shall be
deferred by the number of days of) any delays in the obtaining of any permits
for and in the construction of the work to be performed by such party caused by
any action, claim, inaction, order, ruling, moratorium, regulation, statute,
condition or other decision of any governmental agency having jurisdiction over
any portion of the Property, over the construction anticipated to occur thereon
or over any uses thereof or by fire, flood, inclement weather (including rain),
strikes, lockouts or other labor or industrial disturbance, civil disturbance,
order of any government, court or regulatory body claiming jurisdiction or
otherwise, act of public enemy, war, riot, sabotage, blockage, embargo, failure
of inability to secure materials, supplies or labor through ordinary sources by
reason of shortages or priority or similar regulation, order of any government
or regulatory body, lightning, earthquake, storm, hurricane, tornado, washout,
explosion or any cause whatsoever beyond the reasonable control of the party
where performance is required, or any of its contractors or other
representatives,


                                       5


<PAGE>   23

whether or not similar to any of the causes hereinabove stated (each an "Event
of Force Majeure").



                                       6
<PAGE>   24

                                   EXHIBIT B-1

           BUILDING SHELL/SITE WORK WORKING DRAWINGS & SPECIFICATIONS

                 Attached hereto and made a part of this Lease.



<PAGE>   25

                                   EXHIBIT B-2

              LOBBY/CORRIDOR INTERIOR IMPROVEMENT WORKING DRAWINGS
                                       &
                                 SPECIFICATIONS

                 Attached hereto and made a part of this Lease.




<PAGE>   26

                                   EXHIBIT B-3

                            TENANT PRELIMINARY DESIGN
                                        &
                    OUTLINE TENANT IMPROVEMENT SPECIFICATIONS

                 Attached hereto and made a part of this Lease.




<PAGE>   27

                         TO BE COMPLETED UPON OCCUPANCY

                                    EXHIBIT C

                          COMMENCEMENT DATE MEMORANDUM


LANDLORD:
                            a
TENANT:
                            a
LEASE DATE:
PREMISES:
                         Santa Rosa, California  95401

Pursuant to Section 2.d. of the above-referenced Lease, the Commencement Date
hereby is established as ________________, and the Expiration Date hereby is
established as ________________.


                                    LANDLORD

                                        a


                                    By
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Its:
                                          --------------------------------------

                                    TENANT

                                        a


                                    By
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Its:
                                          --------------------------------------



<PAGE>   28

                                    EXHIBIT D
                              RULES AND REGULATIONS

1.  No sign, placard, picture, advertisement, name or notice shall be installed
    or displayed on any part of the outside or inside of the Building without
    the prior written consent of Landlord. Landlord shall have the right to
    remove, at Tenant's expense, any sign installed or displayed in violation of
    this rule. All approved signs or lettering on doors and walls shall be
    painted, affixed or inscribed at the expense of Tenant by a person chosen by
    Landlord.

2.  The directory of the Building will be provided exclusively for the display
    of the name and location of tenants, and Landlord reserves the right to
    exclude any other names therefrom. Tenant shall pay Landlord's standard
    charge for any changes by Tenant.

3.  Except as consented to in writing by Landlord or in accordance with Building
    standard improvements, no draperies, curtains, shades, screens or other
    devices shall be hung at or used in connection with any window or exterior
    door or doors on the Premises. No awning shall be permitted on any part of
    the Premises. Tenant shall not place anything against or near glass
    partitions or doors or windows which may appear unsightly from outside the
    Premises.

4.  Tenant shall not obstruct any sidewalks, halls, lobbies, passages, exits,
    entrances, elevators or stairways of the Building. No tenant and no employee
    or invitee of any tenant shall go upon the roof of the Building or make any
    roof or terrace penetrations. Tenant shall not allow anything to be placed
    on the outside terraces or balconies without the prior written consent of
    Landlord.

5.  No Tenant shall invite to the Premises, or permit the visit of, persons in
    such numbers or under such conditions as to interfere with the use and
    enjoyment of the Common Areas of the Building by other tenants.

6.  All cleaning and janitorial services for the Building shall be provided
    exclusively through Landlord, and, except with the written consent of
    Landlord, no person or persons other than those approved by the Landlord
    shall be employed by Tenant or permitted to enter the Building for the
    purpose of cleaning. Tenant shall not cause any unnecessary labor by
    carelessness or indifference to the good order and cleanliness of the
    Premises. Landlord shall not in any way be responsible for any loss of
    property on the Premises, however occurring , or for any damage to any
    Tenant's property by the janitor or any other employee or person.

7.  Landlord will furnish Tenant, free of charge, one (1) key to Tenant's suite
    entrance for each two hundred fifty (250) rentable square feet of the
    Premises. Landlord may make a reasonable charge for any additional keys and
    for having any locks changed. Tenant shall not make or have made additional
    keys without Landlord's prior written consent, and Tenant shall not alter
    any lock or install a new additional lock or bolt on any door of its
    Premises without Landlord's prior written consent. Tenant shall deliver to
    Landlord, upon the termination of its tenancy, the keys to all locks for
    doors on the Premises. If Tenant loses any keys furnished by Landlord,
    Tenant shall pay Landlord the cost of rekeying the Premises.

8.  If Tenant requires telegraphic, telephonic, burglar alarm or similar
    services, it shall first obtain, and comply with, Landlord's instructions
    for their installation.

9.  The elevators shall be available for use by all tenants in the Building,
    subject to reasonable scheduling as Landlord in its discretion shall deem
    appropriate. No equipment, materials, furniture, packages, supplies,
    merchandise or other property will be received in the Building or carried in
    the elevators except between the hours, in the manner and in the elevators
    as may be designated by the Landlord.

10. Tenant shall not place a load upon any floor of the Premises which exceeds
    the maximum load per square foot which the floor was designed to carry and
    which is allowed by law. Tenant's business machines and mechanical equipment
    which cause noise or vibration which may be transmitted to the structure of
    the Building or to any space therein, and which is objectionable to Landlord
    or to any tenants in the Building shall be placed and maintained by the
    Tenant, at Tenant's expense, on vibration eliminators or other devices
    sufficient to eliminate noise or vibration.

11. Tenant shall not use or keep in the Premises any toxic or hazardous
    materials or any kerosene, gasoline or inflammable or combustible fluid or
    material other than those limited quantities necessary for the operation or
    maintenance of office equipment. Tenant shall not use or permit to be used
    in the Premises any foul or noxious gas or substance, or permit or allow the
    Premises to be occupied or used in a manner offensive or objectionable to
    Landlord or other occupants of the Building by reason of noise, odors or
    vibrations. No animal, except seeing eye dogs when in the company of their
    masters, may be brought into or kept in the Building.

12. Tenant shall not use any method of heating or air-conditioning other than
    that supplied by Landlord, unless Tenant receives the prior written consent
    of Landlord.


                                        1
<PAGE>   29

13. Tenant shall cooperate fully with Landlord to assure the most effective
    operation of the Building's heating and air-conditioning and to comply with
    any governmental energy-saving rules, laws or regulations of which Tenant
    has actual notice. Tenant shall refrain from attempting to adjust controls
    other than room thermostats installed for Tenant's use.

14. All entrance doors to the Premises shall be left locked when the Premises
    are not in use, and all doors opening to public corridors shall be kept
    closed except for normal ingress and egress to and from the Premises.

15. Landlord reserves the right, exercisable without notice and without
    liability to Tenant, to change the name and street address of the Building.

16. Landlord reserves the right to exclude any person from the Building after
    normal business hours, unless that person is known to the person or employee
    in charge of the Building or is properly identified. Tenant shall be
    responsible for all employees, clients or visitors and shall be liable to
    Landlord for all acts of those persons. Landlord shall not be liable for
    damages for any error in admitting or excluding any person from the
    Building. Landlord reserves the right to prevent access to the Building by
    closing the doors or by other appropriate action in case of invasion, mob,
    riot, public excitement or other commotion.

17. Tenant shall close and lock the door of its Premises, shut off all water
    faucets or other water apparatus and turn off all lights and other equipment
    which is not required to be continuously run. Tenant shall be responsible
    for any damage or injuries sustained by other tenants or occupants of the
    Building or Landlord for noncompliance with this Rule.

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

19. Tenant shall not install any radio or television antenna, loudspeaker or
    other device on the roof or exterior walls of the Building. Tenant shall not
    interfere with radio or television broadcasting or reception from or in the
    Building or elsewhere.

20. Tenant shall not cut or bore holes for wires in the partitions, woodwork or
    plaster of the Premises. Tenant shall not affix any floor covering to the
    floor of the Premises in any manner except as approved by Landlord. Landlord
    shall approve in writing the method of attachment of any objects affixed to
    walls, ceilings or doors in the Premises. Tenant shall repair, or be
    responsible for the cost of repair of, any damage resulting from
    noncompliance with this rule.

21. Tenant shall not install, maintain or operate upon the Premises any vending
    machine without the prior written consent of Landlord.

22. Canvassing, soliciting and distributing handbills or any other written
    material and peddling in the Building are prohibited, and each tenant shall
    cooperate to prevent these activities.

23. Landlord reserves the right to exclude or expel from the Building any person
    who, in the Landlord's judgment, is intoxicated or under the influence of
    liquor or drugs, or who is in violation of any of the Rules and Regulations
    of the Building.

24. Tenant shall store all its trash and garbage within its Premises. Tenant
    shall not place in any trash box or receptacle any material which cannot be
    disposed of in the ordinary and customary manner of trash and garbage
    disposal within the Building. All garbage and refuse disposal shall be made
    in accordance with directions issued from time to time by Landlord.

25. Use by Tenant of Underwriters' Laboratory approved equipment for brewing
    coffee, tea, hot chocolate and similar beverages and microwaving food shall
    be permitted, provided that the equipment and use is in accordance with all
    applicable federal, state, county and city laws, codes, ordinances, rules
    and regulations.

26. Tenant shall not use the name of the Building in connection with or in
    promoting or advertising the business of Tenant, except as Tenant's address,
    without the written consent of Landlord.

27. Tenant shall comply with all safety, fire protection and evacuation
    procedures and regulations established by Landlord or any governmental
    agency. Tenant shall be responsible for any increased insurance premiums
    attributable to Tenant's use of the Premises, Building or Property.

28. Tenant assumes any and all responsibility for protecting its Premises from
    theft and robbery, which responsibility includes keeping doors locked and
    other means of entry to the Premises closed.

29. Tenant shall not use the Premises, or suffer or permit anything to be done
    on, in or about the Premises, which may result in an increase to Landlord in
    the cost of insurance maintained by Landlord on the building and Common
    Areas.


                                       2
<PAGE>   30

30. Tenant's requests for assistance will be attended to only upon appropriate
    application to the office of the Building by an authorized individual.
    Employees of Landlord shall not perform any work or do anything outside of
    their regular duties unless under special instructions from Landlord, and no
    employee of Landlord will admit any person (Tenant or otherwise) to any
    office without specific instructions from Landlord.

31. Tenant shall not park its vehicles in any parking areas designated by
    Landlord as areas for parking by visitors to the Building or other reserved
    parking spaces. Tenant shall not leave vehicles in the Building parking
    areas other than automobiles, motorcycles, motor driven or non-motor driven
    bicycles or four-wheeled trucks. Tenant shall not leave vehicles in the
    Building parking areas overnight. Tenant, its agents, employees and invitees
    shall not park any one (1) vehicle in more than one (1) parking space.

32. The scheduling and manner of all Tenant move-ins and move-outs shall be
    subject to the discretion and approval of Landlord, and move-ins and
    move-outs shall take place only after 6:00 p.m. on weekdays, on weekends, or
    at other times as Landlord may designate. Landlord shall have the right to
    approve or disapprove the movers or moving company employed by Tenant, and
    Tenant shall cause the movers to use only the entry doors and elevators
    designated by the Landlord. If Tenant's movers damage the elevator or any
    other part of the Property, Tenant shall pay to Landlord the amount required
    to repair the damage.

33. No cooking shall be permitted on the Premises, except with a microwave oven,
    nor shall the Premises be used for the storage of merchandise, for washing
    clothes, for lodging or for any improper, objectionable or immoral purpose.

34. Landlord shall have the right to control and operate the public portions of
    the Building, and the public facilities, heating and air conditioning, as
    well as facilities furnished for the common use of the tenants, in such
    manner as it deems best for the benefit of the tenants generally.

35. Landlord may waive any one or more of these Rules and Regulations for the
    benefit of Tenant or any other tenant, but no waiver by Landlord shall be
    construed as a waiver of the Rules and Regulations in favor of Tenant or any
    other tenant, nor prevent Landlord from thereafter enforcing the Rules and
    Regulations against any or all of the tenants of the Building.

36. These Rules and Regulations are in addition to, and shall not be construed
    to in any way modify or amend, in whole or in part, the terms, covenants,
    agreements and conditions of any lease of premises in the building.

37. Landlord reserves the right to make other reasonable Rules and Regulations
    as, in its judgment, may from time to time be needed for safety and
    security, for care and cleanliness of the Building and for the preservations
    of good order therein. Tenant agrees to abide by all Rules and Regulations
    hereinabove stated and any additional rules and regulations which are
    adopted.

38. Tenant shall be responsible for the observance of all of the foregoing rules
    by Tenant's employees, agents, clients, customers, invitees and guests.



                                       3
<PAGE>   31

                                    EXHIBIT E
                             UTILITIES AND SERVICES

The standards set forth below for Utilities and Services are in effect. Landlord
reserves the right to adopt nondiscriminatory modifications and additions
hereto, which do not materially affect Tenant's rights. Landlord shall give
notice to Tenant, in accordance with provisions of this Lease, of material
modification and additions.


1.      PROVISION BY LANDLORD.

        As long as Tenant is not in default under any of the terms of this
        Lease, Landlord shall provide:

        a.      ELEVATOR. Where applicable, provide unattended automatic
                elevator facilities Monday through Friday, except holidays, from
                8:00 a.m. to 6:00 p.m., and have at least one elevator available
                at all other times.

        b.      VENTILATION. Ventilate the Premises and furnish air-conditioning
                or heating Monday through Friday, except holidays, from 8:00
                a.m. to 6:00 p.m. (and at other times for the additional charges
                described in Paragraph 2) to the extent required for the
                comfortable occupancy of the Premises, subject to governmental
                regulation. The air-conditioning system achieves maximum cooling
                when the window coverings and sliding glass doors are closed.
                Landlord shall not be responsible for room temperatures if
                Tenant does not keep all sliding glass doors in the Premises
                closed whenever the system is in operation. Tenant shall
                cooperate to the best of its ability at all times with Landlord
                and shall abide by all reasonable regulations and requirements
                which Landlord may prescribe for the proper functioning and
                protection of the air-conditioning system. Tenant shall not
                connect any apparatus, device, conduit or pipe to the Building's
                chilled and hot water air-conditioning supply lines. Tenant and
                Tenant's servants, employees, agents, visitors, licensees or
                contractors shall not enter at any time the mechanical
                installations or facilities of the Building, or adjust, tamper
                with, touch or otherwise in any manner affect the installations
                or facilities. If any installation of partitions, equipment or
                fixtures by Tenant necessitates the re-balancing of the climate
                control equipment in the Premises, the re-balancing shall be
                performed by Landlord at Tenant's expense.

        c.      ELECTRICITY. Subject to the provisions of Paragraph 2, furnish
                to the Premises electric current as required by the Building
                standard office lighting and fractional horsepower office
                business machines in the amount of approximately one and
                eight-tenths (1.8) watts per square foot. If Tenant's electrical
                installation or electrical consumption is in excess of the
                quantity described above, or extends beyond normal business
                hours, Tenant shall reimburse Landlord monthly for the measured
                consumption. Tenant shall not connect any apparatus or device
                with wires, conduits or pipes, or other means by which the
                services are supplied, for the purpose of using additional or
                unusual amounts of the services without the prior written
                consent of Landlord. At all times Tenant's use of electric
                current shall not exceed the capacity of the feeders to the
                Building or the risers or wiring installation, except as
                provided in working drawings approved by Landlord.

        d.      WATER. Make water available in public areas for drinking and
                lavatory purposes only.

        e.      JANITORIAL SERVICE. Provide building standard janitorial service
                to the Premises, provided the Premises are used exclusively as
                offices, and are kept reasonably in order by Tenant. Tenant
                shall pay to Landlord any cost incurred by Landlord for
                janitorial services in excess of those generally provided for
                other tenants in the Building.

2.      ADDITIONAL CHARGES.

        Landlord may impose a reasonable charge for any utilities and services,
        including air-conditioning, electric current, water and janitorial
        service, required to be provided by Landlord by reason of (i) any use of
        the Premises at any time other than between the hours of 8:00 a.m. and
        6:00 p.m. Monday through Friday, except holidays; (ii) any use beyond
        what Landlord agrees to furnish as described above; or (iii) special
        electrical, cooling and ventilating needs created in certain areas by
        hybrid telephone equipment, computers and other similar equipment or
        uses.

3.      RULES AND REGULATIONS.

        Tenant agrees to cooperate at all times with Landlord and to abide by
        all reasonable regulations and requirements which Landlord may prescribe
        for the use of the utilities and services. Any failure to pay any excess
        costs as described above with the next installment of Rent due after
        receipt of a statement for such services shall constitute a breach of
        the obligation to pay Rent under this Lease and shall entitle Landlord
        to the rights granted in this Lease for a breach.


                                        1
<PAGE>   32

4.      STOPPING OF SERVICE.

        Landlord reserves the right to stop services of the elevator, plumbing,
        ventilation, air-conditioning and electric systems when necessary by
        reason of accident or emergency, or for repairs, alterations or
        improvements, in the judgment of Landlord desirable or necessary to be
        made, until the repairs, alterations or improvements have been
        completed. Landlord shall have no responsibility or liability for
        failure to supply elevator facilities, plumbing, ventilating,
        air-conditioning or electric service when prevented by strike or
        accident or by any cause beyond Landlord's reasonable control, or by
        laws, rules, orders, ordinances, directions, regulations or requirements
        of any federal, state, county or municipal authority or failure of gas,
        oil or other suitable fuel supply or inability by exercise of reasonable
        diligence to obtain gas, oil or other suitable fuel. It is expressly
        understood and agreed that any covenants on Landlord's part to furnish
        any service pursuant to any of the terms, covenants, conditions,
        provisions or agreements of this Lease, or to perform any act or thing
        for the benefit of Tenant, shall not be deemed breached if Landlord is
        unable to furnish or perform the same by virtue of a strike or labor
        trouble or any other cause whatsoever beyond Landlord's reasonable
        control.

5.      NOTICE.

        To the extent practical, Landlord shall attempt to give Tenant notice of
        proposed shutdowns of services.

6.      TELECOMMUNICATIONS RISERS AND CABLING

        Landlord shall not be responsible for the installation , operation or
        maintenance of any telecommunication risers and cabling from the minimum
        point of entry to the Building and, except to the extent of the gross
        negligence or willful misconduct of Landlord and its agents or
        contractors, Landlord shall have no liability to Tenant if, for whatever
        reason, service to the telecommunication risers and/or cabling fails.

7.      AFTER HOURS UTILITIES

        After hours HVAC service is available at the following rate: $15.00 per
        unit per hour for an individual request (two hour minimum if not
        immediately following or preceding normal Building business hours); and
        $10.00 per hour if service is scheduled year round.

        Requests for after hours HVAC must be made during business hours no
        later than forty-eight (48) hours prior to start of additional service.
        Landlord shall use its best efforts to accommodate all requests for
        after hours HVAC whenever received.

8.      BUILDING HOLIDAYS

        New Years Day
        Memorial Day
        Independence Day
        Labor Day
        Thanksgiving Day
        Day After Thanksgiving
        Christmas Day

        On the above holidays, the Building is closed but Tenant keys will
        access the Premises. All utilities except HVAC (unless requested by
        Tenant) are provided. Janitorial service is not provided.

        When a holiday falls on a Sunday, the Building will normally observe the
        holiday the following Monday. When a holiday falls on a Saturday, the
        Building will normally observe the holiday the preceding Friday.


                                       2
<PAGE>   33
                                   EXHIBIT F


                     [HARDING LAWSON ASSOCIATES LETTERHEAD]


September 15, 1988

1872,002.02

Stony Point West
709 Second Street
Santa Rosa, California 95404

Attention: Mr. Albert Kovanis

Gentlemen:

HAZARDOUS MATERIALS SITE ASSESSMENT
STONEY POINT ROAD PARCELS
SANTA ROSA, CALIFORNIA

This letter presents the results of a hazardous materials site assessment
conducted by Harding Lawson Associates (HLA) for an approximate 20-acre site
located at the intersection of West 9th Street and Stony Point Road in Santa
Rosa, California (Plate 1). The purpose of the assessment was to evaluate
whether past or present generation, use, storage or disposal of hazardous
materials occurred on the site and/or adjacent properties and whether such
materials could impact site development and/or require mitigation.

SCOPE OF SERVICES

To evaluate the potential impact of hazardous materials on the site, HLA's
investigation consisted of the following:

-    Reviewing documents and aerial photographs related to historical
     development of the site and adjacent property.

-    Contacting appropriate regulatory agencies for hazardous materials
     information concerning the site and the surrounding area located
     approximately within one-quarter mile of site boundaries; inquiries were
     made regarding documentation of toxic spills, underground tanks, the use,
     storage, disposal and/or generation of hazardous materials, and violations
     of applicable environmental control standards.

-    Reviewing selected reports for information pertaining to soil and
     ground-water contamination.

<PAGE>   34
September 15, 1988
1872,002.02
Mr. Albert Kovanis
Stony Point West
Page 2


-    Conducting an on-site inspection and off-site reconnaissance to identify
     visible evidence of hazardous materials generation, use, storage, spills
     or disposal.

-    Evaluating findings and preparing this report.

SITE DESCRIPTION

The site consists of four adjacent parcels of land near the intersection of
West 9th Street and Stony Point Road. The southern most parcel, AP Number
10-320-22, is a triangular piece of property bounded by West 9th Street to the
northwest, Stoney Point Road to the southwest, and existing residential
developments to the east. The southern tip of this property is adjacent to
Santa Rosa Creek. The remaining three parcels, A.P. Numbers 10-320-25, 26, and
27 comprise on continuous, irregularly shaped property, which is bounded by West
9th Street to the southwest, Stony Point Road to the southwest, undeveloped City
of Santa Rosa owned property to the northwest, and residential developments to
the north and east. All parcels are currently undeveloped and covered with
dried, volunteer grasses. The parcels are relatively flat, with the exception of
an approximately 5 foot high beam constructed adjacent to Stony Point Road and
West 9th Street on the irregularly shaped property.

SITE HISTORY

The study area, which includes the site and the surrounding areas, were used
for agricultural endeavor until the 1960s. Agriculture activity included the
growing of annual crops and fruit orchards. Since the end of agricultural
activities in the mid-1960s, the site has remained vacant and unused.
Development of the surrounding areas began in the 1950s with the construction of
Santa Rosa's wastewater treatment facility on West College Avenue. Two storage
ponds, which store an approximate 55 acre feet of treated wastewater, were built
at this time. Further development in the surrounding areas occurred during the
late 1960s and early 1970s. During this time, Stony Point Road, which previously
ended south of Santa Rosa Creek, was continued to the intersection of West
College Avenue and Marlow Road, approximately 1/4-mile northwest of the site.
Construction of residential subdivisions east of the property commenced during
this time period and continued through the 1970s. Stony Point West Business
Park, located west of the site, was constructed in the early 1980s.

AERIAL PHOTOGRAPH REVIEW

Historical and current land uses of the site and adjacent areas were reviewed
by examining aerial photographs at the Sonoma County Assessor's Office and at
Pacific Aerial Surveys in Oakland. Aerial photographs were taken in 1961, 1971,
1980, and 1986.

<PAGE>   35

September 15, 1988
1872,002.02
Mr. Albert Kovanis
Stony Point West
Page 3

In the May 1961 photograph, the site and surrounding areas are either orchards
or plowed. The Santa Rosa Waste Water Plant is the only major development in
the area.

Photographs in May 1971 show Stony Point Road completed along the site's
southwest property line. Agricultural activities at the site and adjacent areas
appear to have ended by this time. Initial grading for the residential
development east of the site is also shown. Photographs taken in July 1980 and
April 1986 show continued development of the surrounding residential areas and
construction of Stony Point Business Park on the southwest side of Stony Point
Road.

ON-SITE INSPECTION

An on-site inspection was performed by an HLA representative on August 17,
1988, to identify visual signs of potential liability related to improper
dumping of hazardous materials, surface impoundments, abandoned drums, or the
presence of aboveground or underground storage tanks. No visual signs of
potential contamination of any consequence were noted.

Small quantities of landscaping debris, consisting mainly of lawn cuttings,
were present on the northern property. Additionally, stockpiles of soil were
also present in the same area. Conversations with Mr. James Brecht indicate
that this soil was placed during construction the Stony Point Business Park,
southwest of Stony Point Road.

OFF-SITE RECONNAISSANCE

Reconnaissance of the area within 1/4-mile of the site was performed on August
17, 1988. No sources of hazardous materials in the form of storage tanks,
spills, or manufacturing processes that use hazardous materials were
identified. No businesses that might generate significant quantities of toxic
or hazardous materials are within 1/4-mile of the site.

AGENCY DISCUSSIONS

The following agency representatives were contacted regarding their knowledge
of potential or known environmental concerns at the site or surrounding
properties.

-     Janet Naito
      California Department of Health Services (DOHS), Emeryville
      Phone No.: 415/540-2043        Date: August 25, 1988

-     Luis Rivera
      Regional Water Quality Control Board (RWQCB), North Coast Division
      Phone No.: 707/576-2220        Date: August 25, 1988

<PAGE>   36

September 15, 1988
1872,002.02
Mr. Albert Kovanis
Stony Point West
Page 5

Conversations with personnel from the RWQCB and SRU indicate that the
wastewater ponds west of the site do not contain hazardous materials. These
ponds contain treated sewage and serve as storage ponds for irrigation water.
Treatment of wastewater at this plant occurs only during times of heavy
rainfall. Such events create wastewater in-flows which exceed the capacity of
the main treatment plant on Liano Road and require the use of the west college
facility for wastewater treatment.

CONCLUSIONS

Based on review of agency records, conversations with agency personnel, review
of in-house documents, and the site visit, there is no indication of obvious
hazardous or industrial waste contamination which may impact site development.

We trust that this is the information you require at this time. If you have any
questions, please call.

Yours very truly,

HARDING LAWSON ASSOCIATES

/s/ MICHAEL D. THOMPSON
-----------------------------
Michael D. Thompson
Project Engineer


/s/ WILLIAM F. FRIZZELL
-----------------------------
William F. Frizzell, P.E.
Manager, Site Assessment and Mitigation

TFW/WLF/ljc/B5094-CT


<PAGE>   37





                                   [AREA MAP]



[HARDING LAWSON ASSOCIATES LOGO]     Area Map                            PLATE 1
                                     Hazardous Waste Site Assessment
                                     Stony Point Road Parcels
                                     Santa Rosa, California





<PAGE>   38
                                   EXHIBIT G

                    LANDLORD WAIVER AND ESTOPPEL CERTIFICATE


First Union National Bank,
  as Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, NC 38288-0608


Ladies and Gentlemen:

     This letter acknowledged that the undersigned (the "Landlord") have been
informed that _________________ (the "Tenant"), has entered into a Credit
Agreement dated as of ____________, 1999 (as amended, modified, restated or
replaced from time to time, the "Credit Agreement") among Advanced Telecom
Group, Inc. and certain of its Subsidiaries (collectively the "Borrowers"),
First Union National Bank, as administrative agent (the "Administrative
Agent"), J.P. Morgan Bank & Trust as syndication agent, General Electric
Capital Corporation, as documentation agent and the lenders party thereto (the
"Lenders"). As a precedent condition to the Lender's obligation to provide
loans and other financial accommodations to the Tenant under the Credit
Agreement (the "Loans"), the Lenders require, among other things, liens on the
Tenant's personal property, including, without limitation equipment, and trade
fixtures (the "Personal Property").

     To induce the Lenders to continue to make the Loans and provide financial
accommodations to the Tenant, and for other good and valuable considerations,
the receipt and sufficiency of which are hereby acknowledged, the Landlord
hereby represents and warrants to the Administrative Agent that as of the date
hereof:

     1.   The Landlord is the current landlord under the lease described in
Exhibit A attached hereto (the "Lease") with the Tenant;

     2.   The Lease is in full force and effect and there have been no
amendments, modifications or other agreements relating to the Lease except as
stated herein;

     3.   To Landlord's actual knowledge, Tenant is not in default under the
Lease, nor are there in existence any facts which with notice or passage of
time or both would constitute a default or a breach by Tenant of the terms and
conditions of the Lease; and

     4.   The Tenant is the tenant under the Lease, and, to the Landlord
actual knowledge, is in full compliance with the covenants, agreements and
obligations under the Lease.

     The Landlord agrees that: (a) the Tenant (or its representatives) is the
owner of the Personal Property located at or on the Premises (as defined in the
Lease) whether attached to the Premises or not; (b) the Administrative Agent's
lien upon or security interest in the Personal Property is prior and superior
to any interest, lien or claim of any nature the Landlord may now have or
hereafter

<PAGE>   39
obtain in the Personal Property whether by operation of law, contract or
otherwise; (c) either the Tenant or the Administrative Agent may remove the
Personal Property from the Premises without hindrance on the part of the
Landlord subject to the conditions set forth herein. Upon not less than ten (10)
days' written request, the Landlord will grant the Administrative Agent (or its
representatives) access to the Premises so that the Administrative Agent (or its
representatives) may remove the Personal Property, provided that (1) the
Administrative Agent, on its own behalf and on behalf of the Lenders,
indemnifies and holds Landlord harmless from any claims, losses, liability,
costs or damages (including reasonable attorneys' fees) incurred by Landlord in
connection with the removal of the Personal Property by the Administrative Agent
and the Administrative Agent's entry on the Premises or Landlord's property, (2)
the Administrative Agent shall restore the Premises to its condition existing
immediately prior to the installation of the Personal Property removed by the
Administrative Agent, (3) in no event shall the Administrative Agent commit, or
permit to be committed, any damage to the Premises or any improvement of which
the Premises are a part, and (4) the Administrative Agent shall not conduct any
sales or auctions on the Premises; and (d) the Personal Property shall remain
personal property (to the extent such Personal Property is not already a fixture
as of the date hereof) and shall not become fixtures, notwithstanding the manner
or mode of the attachment of the Personal Property to the land. Landlord may
require that the Administrative Agent be accompanied by a representative of
Landlord when entering the Premises. The Landlord hereby waives any rights it
may now or hereafter have in the Personal Property, including without
limitation, any lien rights available under applicable law.

     The Landlord understands that the Administrative Agent and the Lenders
will rely on this Landlord Waiver and Estoppel Certificate in continuing to make
Loans and provide financial accommodations to the Tenant.

     Executed and delivered this ___ day of ____________, 1999.




                                        LANDLORD:



                                        Name: ________________________________

                                        By:   ________________________________



                                      -2-
<PAGE>   40

                               ADDENDUM TO LEASE
                                    Suite 200
                                 110 Stony Point
                             Santa Rosa, California

1.      Page 1 - Section 1:

        Line 4, after the word "restroom's;", insert "lobbies;".

2.      Page 1 - Section 2.b:

        Line 2, in place of the deleted language, insert "(i) the date on which
(a) Landlord has substantially completed Landlord's Work in accordance with the
terms of this Lease (except for punchlist items), (b) Landlord has delivered
possession of the Premises to Tenant and (c) Landlord has obtained a final
signed-off building permit or certificate of occupancy with respect to
Landlord's Work, (ii) the date Tenant occupies the Premises or (iii) the date
the Commencement Date would have occurred but for Tenant Delays, as described in
Exhibit B. In the event the Commencement Date shall not have occurred by March
15, 2000 for any reason whatsoever other than an Event of Force Majeure or a
Tenant Delay (each as defined in Exhibit B), then the date Tenant is otherwise
obligated to commence payment of rent shall be delayed by one additional day for
each day that the Commencement Date is delayed beyond March 15, 2000. In
addition, if the Commencement Date shall not have occurred by June 15, 2000 for
any for any reason whatsoever other than an Event of Force Majeure or a Tenant
Delay, then Tenant shall have the right to terminate this Lease by written
notice to Landlord prior to June 31, 2000, whereupon any monies previously paid
by Tenant to Landlord shall be reimbursed to Tenant. If Tenant fails to
terminate this Lease pursuant to the foregoing sentence by written notice to
Landlord prior to June 31, 2000, Tenant's right to terminate this Lease pursuant
to this Section 2.b shall terminate and be of no further force or effect.

3.      Page 1 - Section 2.d:

        At the end of this Section, insert "Tenant's failure to execute and
deliver to Landlord the Commencement Date Memorandum within five (5) days after
Tenant's receipt of the Commencement Date Memorandum shall be conclusive upon
Tenant as to the matters set forth in the Commencement Date Memorandum."

4.      Page 1 - Section 3.a:

        Line 10, in place of the deleted percentage, insert [*].

5.      Page 2 - Section 3.c:

        Add the following Section:

-----------------------
[*]  Information redacted pursuant to a confidential treatment request
     throughout this exhibit.
<PAGE>   41

        "c. Condition of Building. Landlord warrants and represents to Tenant
        that, as of the Commencement Date, (i) the Premises and the Building
        will comply with all applicable laws, rules, regulations, codes,
        ordinances, underwriters' requirements, covenants, conditions and
        restrictions of record (collectively, "Laws"), (ii) the Premises will be
        in good and clean operating condition and repair, (iii) the electrical,
        mechanical, HVAC, plumbing, sewer, elevator and other systems serving
        the Premises and the Building will be in good operating condition and
        repair, and (iv) the roof of the Building will be in good condition and
        water tight. Landlord shall, promptly after receipt of notice from
        Tenant, remedy any non-compliance with such warranty at Landlord's sole
        cost and expense."

6.      Page 2 - Section 4.a:

        Line 3, after the word "designate", insert ", without any prior demand
therefor and without any deduction, abatement or setoff except as specifically
provided in this Lease."

7.      Page 2 - Section 4.b:

        The following is inserted as Sections 4.b and c:

        "b. Increases In Base Rent. The Base Rent during the Term shall be as
        follows:


<TABLE>
<CAPTION>
Period                             Monthly Base Rent /RSF      Annual Base Rent / RSF
------                             ----------------------      ----------------------
<S>                                <C>                         <C>
Commencement Date through the
end of the third (3rd) year of
the Term                                       [*]              [*]
Fourth (4th) year of the Term                  [*]              [*]
Fifth (5th) year of the Term                   [*]              [*]
Sixth (6th) year of the Term                   [*]              [*]
Seventh (7th) year of the Term                 [*]              [*]
Eighth (8th) year of the Term                  [*]              [*]
Ninth (9th) year of the Term                   [*]              [*]
Tenth (10th) year of the Term                  [*]              [*]
</TABLE>

-----------------------
[*]  Information redacted pursuant to a confidential treatment request
     throughout this exhibit.

                                       2
<PAGE>   42

        c. Rent Abatement. Provided that no Event of Default has occurred which
        is continuing, Landlord agrees to waive a portion of the monthly Base
        Rent due under this Lease in the amount and during the period listed
        below:


<TABLE>
<CAPTION>
          Amount of Monthly Base Rent Waived      Period
          ----------------------------------      ------
<S>                                               <C>
                               [*]                Commencement Date through the last day of
                                                  the sixth (6th) month of the Term
                               [*]                The first day of the seventh (7th) month of
                                                  the Term through the last day of the ninth
                                                  (9th) month of the Term
                               [*]                The first day of the tenth (10th) month of
                                                  the Term through the last day of the twelfth
                                                  (12th) month of the Term
                               [*]                The first day of the thirteenth (13th) month
                                                  of the Term through the last day of the
                                                  fifteenth (15th) month of the Term
</TABLE>


8.      Page 2 - Section 5.b:

        Line 10, after the word "replacements", insert ", uninsured damage or
deductibles on property insurance,".

        Line 13, in place of the deleted language, insert "(x) the cost of any
capital improvements made to the Building or the Property, amortized over such
reasonable period as Landlord shall determine, together with interest upon the
unamortized balance at ten percent (10%) or such other higher rate as may have
been paid by Landlord on funds borrowed for the purpose of constructing the
capital improvements".

        At the end of this Section, insert "Notwithstanding anything to the
contrary contained in this Lease, Operating Expenses shall not include the
following: (a) any costs or expenses occasioned by Landlord's gross negligence
or willful misconduct or due to Landlord's violation of any Laws in effect as of
the Commencement Date; (b) any costs or expenses incurred to correct any
construction defect in the Premises or the Building or to comply with any
covenants, conditions or restrictions or Laws applicable to the Premises or the
Building on the Commencement Date; (c) costs or expenses incurred in renovating,
improving, painting or redecorating any other space in the Building for lease to
other tenants; (d) costs or expenses incurred in connection with marketing or
advertising the Building for sale or lease; (e) any costs or expenses incurred
as a result of the violation by Landlord or any other occupant in the Building
(other than Tenant or any assignee or sublessee of Tenant) of the terms and
conditions of any lease or other agreement; (f) insurance deductibles to the
extent that Tenant's share exceeds Twenty Thousand Dollars ($20,000) for any
single event; (g) costs or expenses incurred to remove or remediate any
Hazardous Substances (defined in Section 8.d) in the Building or on or under the
Property, except to the extent the Hazardous Substances were brought on or
released on the Property by or are attributable to the acts of Tenant or
Tenant's employees, agents, representatives, contractors, assignees or
subtenants; (h) costs or expenses in the nature of depreciation or other cash
reserves; (i) costs or expenses incurred to repair or restore the Premises or
the Building due to an uninsured casualty to the extent Tenant's share exceeds

-----------------------
[*]  Information redacted pursuant to a confidential treatment request
     throughout this exhibit.


                                       3
<PAGE>   43

Twenty Thousand Dollars ($20,000.00); (j) costs for capital improvements except
as provided in (x) above; and (k) management fees in excess of the management
fees charged by landlords of comparable office buildings in the same vicinity as
the Building. In addition, if Landlord does not carry earthquake or floor
insurance during the Base Year and Landlord later obtains earthquake or flood
insurance, then the amount of Operating Expenses paid or incurred by Landlord
for the Base Year shall be adjusted to an amount equal to the amount of
Operating Expenses that Landlord would have paid or incurred during the Base
Year if Landlord had obtained such earthquake or flood insurance during the Base
Year as reasonable determined by Landlord."

9.      Page 3 - Section 5.c:

        Line 4, after the word "estimate", insert "; provided however, if
Landlord fails to notify Tenant of the estimated amount of Tenant's share of
Operating Expenses for the ensuing accounting year prior to the end of the
current accounting year, Tenant shall be required to continue to pay to Landlord
each month in advance Tenant's estimated share of Operating Expenses on the
basis of the amount due for the immediately prior month until ten (10) days
after Landlord notifies Tenant of the estimated amount of Tenant's share of
Operating Expenses for the ensuing accounting year. If at any time it appears to
Landlord that Tenant's share of Operating Expenses payable for the current
accounting year will vary from Landlord's estimate, Landlord may give notice to
Tenant of Landlord's revised estimate for the accounting year, and subsequent
payments by Tenant for the accounting year shall be based on the revised
estimate."

        Line 5, in place of the deleted language, insert "detailing actual
Operating Expenses for the previous year".

        Line 7, after the word "Expenses", insert "in any year other than the
Base Year".

        Line 13, after the word "Expenses", insert "(including Operating
Expenses during the Base Year".

        At the end of this Section, insert "Tenant shall have ninety (90) days
after Tenant receives the year end statement of the Operating Expenses for the
prior calendar year to notify Landlord in writing of Tenant's desire to conduct,
at Tenant's sole cost and expense, an audit of Landlord's books and records
relating to the applicable calendar year. Any such audit must be conducted by
Tenant or its agent during regular business hours at the offices of Landlord or
the offices of Landlord's designated agent and must be completed within sixty
(60) days after Tenant notifies Landlord in writing of its election to audit the
applicable year end statement. The person or entity performing the audit or
review of Landlord's books and records on Tenant's behalf or at Tenant's request
may not be compensated for the audit or review on a contingency basis. If
Landlord objects to the findings of Tenant's audit, Landlord and Tenant shall
attempt to resolve their disagreement concerning the amount of Tenant's
proportionate share of Operating Expenses within the next thirty (30) days. If
Landlord and Tenant are unable to agree upon the amount of Tenant's
proportionate share of Operating Expenses (after Tenant has completed its
audit), the parties shall submit the matter to binding arbitration before a
single neutral arbitrator having experience in real estate valuation, property
management or accounting or, alternatively,



                                       4
<PAGE>   44

the arbitrator may be a retired judge or justice of a California Superior Court
or Court of Appeal. The matter shall be decided by arbitration in accordance
with the applicable arbitration statutes and the then existing Commercial
Arbitration Rules of the American Arbitration Association. Any party may
initiate the arbitration procedure by delivering a written notice of demand for
arbitration to the other party. Within thirty (30) days after the other party's
receipt of the written notice of demand for arbitration, the parties shall
attempt to select a qualified arbitrator who is acceptable to all parties. If
the parties are unable to agree upon an arbitrator who is acceptable to all
parties, either party may request the American Arbitration Association to
appoint the arbitrator in accordance with its Commercial Arbitration Rules. The
provisions of California Code of Civil Procedure Section 1283.05 or its
successor section(s) are incorporated in and made a part of this Lease with
respect to any arbitration requested in accordance with the provisions contained
in this Section. Depositions may be taken and discovery may be obtained in any
arbitration proceeding requested pursuant to this Section in accordance with the
provisions of California Code of Civil Procedure Section 1283.05 or its
successor section(s). Arbitration hearing(s) shall be conducted in Sonoma
County, California. Any relevant evidence, including hearsay, shall be admitted
by the arbitrator if it is the sort of evidence upon which responsible persons
are accustomed to rely in the conduct of serious affairs, regardless of the
admissibility of such evidence in a court of law; however, the arbitrator shall
apply California law relating to privileges and work product. In rendering his
or her award, the arbitrator shall set forth the reasons for his or her
decision. The fees and expenses of the arbitrator shall be paid in the manner
allocated by the arbitrator. This agreement to arbitrate any dispute concerning
the findings of Tenant's audit shall be specifically enforceable under the
prevailing arbitration law. Judgment on the award rendered by the award may be
entered in any court having jurisdiction thereof. If, as a result of Tenant's
audit, the parties determine that Landlord has overstated Tenant's percentage
share of the Operating Expenses by more than five percent (5%) during the
applicable calendar year, Landlord shall reimburse Tenant for the reasonable
cost of the audit."

10.     Page 3 - Section 5.d:

        At the end of this Section, insert "Notwithstanding anything to the
contrary contained in this Section, to the extent Real Property Taxes for the
Base Year are not based on a full-improved, fully-assessed Building, then, at
the time the Building is fully-improved and fully-assessed, the Real Property
Taxes for the Base Year shall be adjusted to reflect a fully-improved,
fully-assessed Building."

11.     Page 3 - Section 5.e:

        Line 3, after the word "Premises", insert ", Building or Property and
paid for by Tenant".

12.     Page 3 - Section 7:

        In place of the deleted language, insert "Landlord agrees to perform
certain work and construct certain tenant improvements in the Premises
(collectively, "Landlord's Work") pursuant to the terms of Exhibit B".



                                       5
<PAGE>   45

13.     Page 3 - Section 8.b:

        Line 2, after "Exhibit D", insert "and all reasonable amendments or
modifications thereto".

        Line 2, in place of the deleted word, insert "all present and future".

14.     Page 4 - Section 8.c:

        At the end of this Section, insert "Notwithstanding anything to the
contrary contained in this Lease, Tenant shall not be required to make any
capital improvements to the Premises in order to comply with or cause the
Premises to comply with any Laws unless such compliance is necessitated as a
result of Tenant's particular use of the Premises."

15.     Page 4 - Section 8.d:

        Add the following subsections:

             "(iv) Except as disclose in the documents listed on Exhibit F,
        attached hereto, to Landlord's actual knowledge, (a) there are no
        Hazardous Substances in the Building or on or under the Property in
        violation of any environmental Law; (b) there are no underground storage
        tanks under the Property; and (c) no action, proceeding or claim is
        pending or threatened regarding the Building or the Property concerning
        any Hazardous Substances or pursuant to any environmental Law.


             (v) Notwithstanding anything to the contrary contained in this
        Lease, Tenant shall have no obligation to pay for or to remediate any
        Hazardous Substances on, in or under the Premises or the Building,
        except to the extent the Hazardous Substances were brought or released
        on the Property or the Premises by Tenant or Tenant's agents,
        representatives, contractors, invitees, subtenants, successors or
        assigns.

16.     Page 4 - Section 9.a:

        At the end of this Section, insert "Tenant shall deliver to Landlord
full and complete plans and specifications of all alterations, and no work shall
be commenced by Tenant until Landlord has given its written approval of the
plans and specifications. Landlord does not expressly or implicitly covenant or
warrant that any plans or specifications submitted by Tenant are safe or comply
with all applicable laws and ordinances. Further, Tenant shall indemnify and
hold harmless Landlord from any loss, cost or expense, including attorneys' fees
and costs, incurred by Landlord as a result of any defects in design, materials
or workmanship resulting from Tenant's alterations to the Premises. All
alterations performed by Tenant shall be done in a good and workmanlike manner,
incorporating materials of quality equal to or better than those



                                       6
<PAGE>   46

replaced, with finishes comparable to and compatible with adjacent finishes
within the Premises and the Building. In addition, all of Tenant's alterations
shall be constructed in such a manner so as to (i) not unreasonably disturb or
otherwise interfere with the use and occupancy of any other tenant of the
Building, (ii) protect by appropriate means and measures all components of the
Premises and the Building from soiling or damage associated with Tenant's work,
and (iii) not impose any additional expense or delay upon Landlord in the
construction of improvements to, or maintenance or operation of, the Building or
the Property. Tenant shall reimburse Landlord for Landlord's reasonable charges
for reviewing and approving or disapproving plans and specifications for any
alterations proposed by Tenant (which reasonable charges may include the cost of
architectural services provided by Landlord)."

17.     Page 4 - Section 9.b:

        Line 4, in place of the deleted number, insert "ten (10)".

        Line 4, after the word "date", insert "on which Tenant is notified or
        becomes aware".

        At the end of this Section, insert "If Tenant fails to have the lien
discharged within the ten (10) day period referenced above, then Landlord may,
but shall not be required to, take such action or pay such amount as may be
necessary to remove such lien; and, Tenant shall pay to Landlord any amounts
expended by Landlord within five (5) days after Tenant receives Landlord's
written request for payment."

18.     Page 4 - Section 9.c:

        At the end of this Section, insert "Notwithstanding the foregoing, all
trade fixtures, furniture, equipment and other personal property installed or
placed in the Premises by Tenant ("Tenant's Property") shall at all times be and
remain Tenant's property. Tenant may at any time during the term of this Lease
remove Tenant's Property from the Premises, provided that Tenant repairs all
damage caused by such removal and restores the Premises to its condition
existing immediately prior to the installation of Tenant's Property in the
Premises."

19.     Page 5 - Section 10:

        At the end of this Section, insert "Landlord shall repair and maintain
the structural portions of the Premises and the Building (including the roof and
foundation), the Common Areas, and the Building's heating, ventilating, air
conditioning, electrical, water, sewer and plumbing systems; provided, however,
Landlord shall not be required to repair and maintain the electrical, sewer and
plumbing systems in the Premises."

20.     Page 5 - Section 11.b:

        Line 6, in place of the deleted language, insert "Landlord notifies
Tenant in writing of the estimated time period required to complete the repair
of the Premises or the Building".



                                       7
<PAGE>   47

        At the end of this Section, insert "In addition, Landlord shall have the
option to terminate this Lease if the Premises or the Building is destroyed or
damaged by fire or other casualty, regardless of whether the casualty is insured
against under this Lease, and Landlord reasonably determines that the total cost
of repairing or restoring the premises or the Building, as applicable, is at
least One Hundred Thousand Dollars ($100,000) more than the sum of the amount
insurance proceeds actually received by Landlord and the amount of any
applicable deductible."

21.     Page 5 - Section 11.e:

        Line 5, after the word "Term," insert "; provided, however, if Tenant
has an option to extend the term of this Lease, Landlord may not terminate this
Lease following a casualty pursuant to this Section 11.e if Tenant exercises
such option within ten (10) days after Landlord notifies Tenant in writing of
Landlord's election to terminate this Lease."

        Line 7, after the first occurrence of the word "repair", insert ", but
in no event more than ninety (90) days after the date of the casualty".

22.     Page 5 - Section 11.g:

        Add the following subsection:

        "g. Tenant's Right to Terminate. If the Premises are condemned or
        damaged by any peril and Landlord does not elect to terminate this Lease
        or is not entitled to terminate this Lease pursuant to the terms hereof,
        then Tenant shall have the option to terminate this Lease if the
        Premises are damaged or destroyed and Landlord reasonably determines
        that it would require more than two hundred seventy (270) days to repair
        or restore the Premises from after the date on which Tenant notifies
        Landlord in writing of the casualty. Landlord shall notify Tenant in
        writing within ninety (90) days after Tenant notifies Landlord of the
        casualty of Landlord's estimate as to the length of time required in
        order to repair or restore the Premises."

23.     Page 6 - Section 13.a:

        Line 1, before the word "Tenant", insert "Except to the extent caused by
Landlord's or Landlord's agents' or contractors' gross negligence or willful
misconduct,".

24.     Page 6 - Section 13.i:

        At the end of Section 13, add the following Section:

        "i. Tenant's Indemnity. Landlord shall indemnify, defend, protect and
        hold harmless Tenant from all losses, damages, liabilities, judgments,
        actions, claims, payments, costs and expenses, including reasonable
        attorneys' and consultants'



                                       8
<PAGE>   48

fees, arising from the negligence or willful misconduct of Landlord or its
agents, contractors, licensees or invitees, or Landlord's breach of any its
obligations under this Lease."

25.     Page 7 - Section 14:

        Line 1, before the word "If", insert:

        "a. CONSENT REQUIRED. Tenant shall not assign, mortgage, pledge or
        otherwise transfer this Lease, in whole or in part (each hereinafter
        referred to as an "assignment"), nor sublet or permit occupancy by any
        party other than Tenant of all or any part of the Premises (each
        hereinafter referred to as a "sublet" or "subletting"), without the
        prior written consent of Landlord in each instance, which consent shall
        not be unreasonably withheld. Landlord may consent to any subsequent
        assignment or subletting, or any amendment to or modification of this
        Lease with the assignees of Tenant, without notifying Tenant or any
        successor of Tenant, and without obtaining its or their consent thereto,
        and such action shall not relieve Tenant or any successor of Tenant of
        any liability under this Lease. Tenant shall reimburse Landlord for all
        reasonable legal fees and other expenses incurred by Landlord in
        connection with any request by Tenant for consent to an assignment or
        subletting.

        b.    NOTICE OF INTENT TO ASSIGN OR SUBLET."

        Line 2, in place of the deleted number, insert "thirty (30)".

        Lines 10 and 11, in place of the deleted percentage, insert [*].

        Line 11, after the word "sublet", insert "(after subtracting Tenant's
reasonable costs for attorneys' fees, brokerage commissions and improvements
constructed or paid for by Tenant in connection with the assignment or
subletting)".

        At the end of this Section, insert:

        "c. WITHHOLDING CONSENT. Without limiting other situations in which it
        may be reasonable for Landlord to withhold its consent to any proposed
        assignment or sublease, Landlord and Tenant agree that it shall be
        reasonable for Landlord to withhold its consent in any one (1) or more
        of the following situations: (1) in Landlord's reasonable judgment, the
        proposed subtenant or assignee or the proposed use of the Premises would
        detract from the status of the Building, generate vehicle or foot
        traffic, parking or occupancy density materially in excess of the amount
        customary for the Building or result in a materially greater use of the
        elevator, janitorial, security or other Building services (e.g., HVAC,
        trash disposal and sanitary sewer flows) than is customary for the
        Building; (2) in Landlord's reasonable judgment, the creditworthiness of
        the proposed subtenant or assignee does not meet the credit standards
        applied by Landlord in considering other tenants for the lease of space
        in the Building on comparable terms, or

-----------------------
[*]  Information redacted pursuant to a confidential treatment request
     throughout this exhibit.


                                       9
<PAGE>   49

        Tenant has failed to provide Landlord with reasonable proof of the
        creditworthiness of the proposed subtenant or assignee; (3) in
        Landlord's reasonable judgment, the business history, experience or
        reputation in the community of the proposed subtenant or assignee does
        not meet the standards applied by Landlord in considering other tenants
        for occupancy in the Building; (4) the proposed assignee or subtenant is
        a governmental entity, agency or department or the United States Post
        Office; or (5) the proposed subtenant or assignee is a then existing or
        prospective tenant of the Building.

        d. EXECUTED AGREEMENT. No sublease or assignment shall be valid, nor
        shall any subtenant or assignee take possession of the Premises, until a
        fully executed counterpart of the sublease or assignment has been
        delivered to Landlord and Landlord, Tenant and the applicable assignee
        or subtenant have entered into a consent to assignment or sublease in a
        form reasonably acceptable to Landlord.

        e. WAIVER. Notwithstanding any assignment or sublease, or any
        indulgences, waivers or extensions of time granted by Landlord to any
        assignee or sublessee, or failure by Landlord to take action against any
        assignee or sublessee, Tenant waives notice of any default of any
        assignee or sublessee and agrees that Landlord may, at its option,
        proceed against Tenant without having taken action against or joined
        such assignee or subleases, except that Tenant shall have the benefit of
        any indulgences, waivers and extensions of time granted to any such
        assignee or sublessee.

        f. NO CONSENT REQUIRED. Notwithstanding anything to the contrary
        contained in this Lease, Tenant may, without Landlord's prior written
        consent, and without being subject to any bonus rent provisions, sublet
        the Premises or assign the Lease to (i) a subsidiary or parent
        corporation controlling, controlled by or under common control with
        Tenant, (ii) a successor corporation by merger, consolidation,
        nonbankruptcy reorganization or government action, or (iii) a purchaser
        of all or substantially all of Tenant's assets. In addition, the sale of
        Tenant's capital stock through a private or public offering shall not be
        deemed to be an assignment for purposes of this Lease."

26.     Page 7 - Section 15.a:

        Line 4, in place of the deleted language, insert "within five (5) days
        after Tenant receives written notice of nonpayment".

        Lines 6, 7 and 8, in place of the deleted language, insert "thirty
        (30)".

        Line 10, in place of the deleted word, insert "made a general assignment
        of".



                                       10
<PAGE>   50

27.     Page 7 - Section 15.b(i):

        Line 3, in place of the deleted language, insert "In such event,
Landlord shall have the remedy described in California Civil Code Section 1951.4
(Landlord may continue this Lease in effect after Tenant's breach and
abandonment and recover Rent as it becomes due, if Tenant has the right to
sublet or assign, subject only to reasonable limitations), or any successor
statute."

28.     Page 7 - Section 15.b(ii):

        Paragraph 2, line 2, in place of the deleted percentage, insert "ten
percent (10%)".

29.     Page 8 - Section 16:

        Line 1, after the word "Lease", insert "beyond applicable notice and
cure periods".

        Line 3, after the word "Lease", insert "beyond applicable notice and
cure periods".

30.     Page 8 - Section 17:

        At the end of this Section, insert "Within seven (7) days after Landlord
receives Security Deposit from Tenant, as defined in Basic Lease Information,
Landlord shall deposit initial Security Deposit into an interest bearing money
market account. All interest shall be added to and become a part of Tenant's
Security Deposit. Any amount not applied in accordance with this Section 17
shall be refunded to Tenant, with all accrued but unpaid interest thereon,
within fifteen (15) days after the expiration or termination of this Lease."

31.     Page 9 - Section 18:

        Line 3, after the word "tear", insert "and casualty not caused by Tenant
or Tenant's employees, agents, representatives, contractors, assignees or
subtenants".

32.     Page 9 - Section 19:

        At the end of this Section, insert "In addition, Tenant shall indemnify,
protect, defend and hold harmless Landlord for all losses, expenses and damages,
including any consequential damages incurred by Landlord, as a result of Tenant
failing to surrender the Premises to Landlord and vacate the Premises by the end
of the Term."

33.     Page 9 - Section 20:

        Line 1, after the word "times", insert "upon twenty-four (24) hours'
prior notice (except in an emergency whereupon no prior notice shall be
required)".



                                       11
<PAGE>   51

34.     Page 9 - Section 21:

        At the end of this Section, insert "Tenant shall not install any sign in
or on the Premises, Building, or Property without the prior written consent of
Landlord. Landlord shall not unreasonably withhold its consent with respect to
interior signs that are not visible from the outside of the Building. With
respect to all other signs, Landlord may withhold or grant its consent in its
sole discretion. Landlord, at Tenant's cost and expense, shall provide Tenant
with signage on Tenant's suite and identify Tenant in the Building's directory,
all in accordance with Landlord's signage program for the Building. Subject to
(i) the approval of Landlord (which approval shall not be unreasonably withheld,
and the City, and (ii) Tenant obtaining all other necessary approvals, Tenant
shall have the exclusive right to the exterior signage on the Building;
provided, however, that Tenant's right to exterior signage shall terminate if at
any time during the Term Tenant to leases less than 37,500 rentable square feet
of space in the Building and occupies less than 24,000 rentable square feet of
space in the Building. If Tenant installs any signs in or on the Building or the
Property, Tenant shall remove all of Tenant's signs prior to the expiration of
the Term or earlier termination of this Lease and shall return the Premises,
Building, and Property to their condition existing immediately prior to the
placement or erection of Tenant's sign or signs."

35.     Page 9 - Section 23.a:

        Line 4, in place of the deleted language, insert "twenty (20)"

        Line 4, after the word "all", insert "commercially reasonable".

36.     Page 10 - Section 23.b:

        Line 2, in place of the deleted language, insert "twenty (20)".

37.     Page 10 - Section 23.c:

        At the end of this Section, insert "Notwithstanding anything to the
contrary in this Section 23, the subordination of Tenant's rights and interest
under the Lease to any mortgage or deed of trust hereafter affecting the
Property, the Building or the Premises, shall be contingent upon Tenant's having
received from any such mortgagee or beneficiary the mortgagee's or beneficiary's
standard form of recognition agreement which provides, among other things, that,
so long as Tenant is not in default under the terms of this Lease beyond any
applicable notice and cure periods, Tenant's rights under and interest in this
Lease shall not be disturbed in the event of any foreclosure of any such
mortgage or deed of trust and Tenant shall receive all of the rights and
services provided for under this Lease. Landlord shall, prior to the
Commencement Date, use commercially reasonable efforts to obtain from all ground
lessors or mortgagees holding a security interest in the Property, the Building
or the Property, a commercially reasonable form of recognition agreement which
provides, among other things, that, so long as Tenant is not in default under
the terms of this Lease beyond any applicable notice and cure periods, Tenant's
rights under and interest in this Lease shall not be disturbed in the event of
any foreclosure of



                                       12
<PAGE>   52

any such mortgage or other security instrument and Tenant shall receive all of
the rights and services provided for under this Lease."

38.     Page 10 - Section 27:

        Line 4, in place of the deleted language, insert "A party shall be
deemed to have prevailed in any action (without limiting the definition of
prevailing party) if such action is dismissed upon the payment by the other
party of the amounts allegedly due or the performance of obligations which were
allegedly not performed, or if such party obtains substantially the relief
sought by such party in the action, regardless or whether such action is
prosecuted to judgment."

39.     Page 10 - Section 28:

        Line 5, after the word "Lease", insert "as a result of Tenant's dealing
with such other broker or individual".

40.     Page 11 - Section 30:

        At the end of this Section, insert "If Tenant is unable to use the
Premises for the permitted use hereunder as a result of any interruption,
failure or stoppage of utilities to the Premises (except to the extent caused by
Tenant or its agents, representatives or invitees), and such interruption
continues for fifteen (15) consecutive calendar days, then Tenant shall be
entitled to an equitable abatement of rent to the extent of the interference
with Tenant' s use of the Premises occasioned thereby. If the interference
persists for more than ninety (90) consecutive calendar days, then Tenant shall
have the right to terminate the Lease by written notice to Landlord within ten
(10) days after the expiration of the ninety (90) day period referenced above."

41.     Page 11 - Section 32:

        Line 3, after the word "Landlord", insert "and Tenant".

42.     Sections 40 - 44:

        The following Sections are incorporated into this Lease:

        "40. Option to Lease Additional Space.

        a. Grant of Option. Provided that Tenant is not in default under the
        terms of this Lease beyond any applicable notice and cure period, during
        the period commencing on the date of this Lease and ending on the
        Commencement Date (the "Option Term"), Landlord grants to Tenant the
        option (the "Option") to lease



                                       13
<PAGE>   53

        additional space on the ground floor of the Building subject to the
        terms and conditions provided below.

        b. Commencement of Option. If at any time during the Option Term
        Landlord proposes to lease to a bona-fide third party (i) more than
        fifty percent (50%) of the total rentable square footage of space on the
        ground floor of the Building or (ii) a portion of the rentable square
        footage of space on the ground floor of the Building which, when added
        to the rentable square footage of space on the ground floor of the
        Building previously leased by Landlord to a third party other than
        Tenant, would equal fifty percent (50%) or more of the total rentable
        square footage of space on the ground floor of the Building, Landlord
        shall notify Tenant in writing ("Landlord's Option Notice") of such
        event. Landlord's Option Notice shall state both (i) the amount of space
        which Landlord proposes to lease to the third party (the "Offered
        Space") and (ii) the total amount of space which is then available for
        lease on the ground floor of the Building (the "Aggregate Available
        Space").

        c. Exercise of Right. Tenant shall have ten (10) days after Landlord
        delivers to Tenant Landlord's Option Notice in which to notify Landlord
        in writing of Tenant's election to lease either the Offered Space or the
        Aggregate Available Space on all of the terms and conditions set forth
        in this Lease, except (i) the term of Tenant's lease of the Offered
        Space or the Aggregate Available Space, as applicable, shall commence on
        the date Landlord delivers possession of the Offered Space or Aggregate
        Available Space to Tenant and shall expire on the date upon which the
        term of this Lease expires, (ii) Landlord shall not be obligated to
        perform any work in the Offered Space or the Aggregate Available Space,
        and (iii) Landlord shall not be obligated to construct any tenant
        improvements in the Offered Space or the Aggregate Available Space, and
        (iv) Landlord shall provide Tenant with a tenant improvement allowance
        in an amount equal to [*] per rentable square foot for general purpose
        office improvements constructed in the Offered Space or the Aggregate
        Available Space. If Tenant fails to notify Landlord in writing of its
        election to lease either the Offered Space or the Aggregate Available
        Space within the ten (10) day period referenced above, then (a) Tenant's
        Option shall terminate and be of no further force or effect and (b)
        Landlord shall have the right to lease the Offered Space or the
        Aggregate Available Space to any person or entity other than Tenant.

        d. Amendment. Within fourteen (14) days after Tenant exercises its
        Option, Landlord and Tenant shall amend this Lease to include the
        Offered Space or the Aggregate Available Space, as applicable, as part
        of the Premises.

        41.   Right of First Offer.

        a. Right of Tenant. Provided that Tenant is not in default under the
        terms of this Lease beyond any applicable notice and cure period, during
        the period commencing on September 1, 1999 and continuing until the
        expiration (and not


-----------------------
[*]  Information redacted pursuant to a confidential treatment request
     throughout this exhibit.

                                       14
<PAGE>   54

        including any extensions) or earlier termination of this Lease (the
        "Right of First Offer Term"), Tenant shall have a right of first offer
        to lease any Additional Space Increment. The Additional Space Increments
        subject to this right of first offer shall not include any space which
        is subject to expansion or extension rights of then existing tenants.

        b. Commencement of Right. If at any time during the Right of First Offer
        Term Landlord desires to offer to lease an Additional Space Increment to
        a third party tenant, Landlord shall notify Tenant in writing
        ("Landlord's Offer Notice") of Landlord's intent to lease the Additional
        Space Increment which notice shall specify all of the terms upon which
        Landlord proposes to lease the Additional Space Increment to Tenant
        (with the remainder of the terms to be those set forth in this Lease,
        but excluding any obligation for Landlord to perform any work in the
        Additional Space Increment, construct any tenant improvements or provide
        Tenant with any tenant improvement allowance).

        c. Exercise of Right. Tenant shall have ten (10) days after Tenant's
        receipt of Landlord's Offer Notice in which to notify Landlord in
        writing ("Tenant's Offer Notice") of its election to lease the
        Additional Space Increment on the terms set forth in Landlord's Offer
        Notice. If Tenant accepts Landlord's offer, the parties shall amend this
        Lease to add the Additional Space Increment as part of the Premises
        within fourteen (14) days after Tenant accepts Landlord's offer. If
        Tenant fails to deliver Tenant's Offer Notice to Landlord within the ten
        (10) day period referenced above, or Landlord and Tenant fail to enter
        into a lease for the Additional Space Increment within fourteen (14)
        days after Tenant delivers Tenant's Offer Notice to Landlord, then
        Tenant's rights under this Section 41 with respect to the Additional
        Space Increment shall terminate and be of no further force or effect.

        42. Right to Extend Term.

        a. Grant. Landlord hereby grants to Tenant one (1) option (the "Option")
        to extend the term of this Lease, for an additional period of five (5)
        years (the "Option Term"), commencing when the original Term expires,
        upon the terms and conditions set forth in this Section 43. Tenant shall
        exercise the Option (if at all) by giving Landlord written notice of its
        election no earlier than three hundred sixty-five (365) days prior to
        the expiration of the original Term and no later than one hundred eighty
        (180) days' prior to the expiration of the original Term. Tenant shall
        not have the right to exercise the Option if Tenant is in default under
        the terms of this Lease. In addition, at Landlord's election, Tenant's
        exercise of the Option shall be null and void if Tenant is in default
        under the terms of this Lease as of the commencement of the Option Term.

        b. Base Rent. If this Option is exercised, the Base Rent for the
        Premises shall be [*] of the then current fair market monthly rent
        ("Fair Market Rent") for the Premises as of the commencement date of the
        Option Term, as determined by the agreement of the parties or, if the
        parties cannot agree


-----------------------
[*]  Information redacted pursuant to a confidential treatment request
     throughout this exhibit.

                                       15
<PAGE>   55

        within one hundred twenty (120) days prior to the commencement of the
        Option Term, then by an appraisal. All other terms and conditions
        contained in the Lease and this Addendum, as the same may be amended
        from time to time by the parties in accordance with the provisions of
        the Lease, shall remain in full force and effect and shall apply during
        the Option Term (except that Tenant shall have no further options to
        extend the Term).

        c. Appraisal. If it becomes necessary to determine the Base Rent for the
        Premises during the Option Term by appraisal, then, on or before the one
        hundred tenth (110th) day prior to the expiration of the original Term,
        Landlord and Tenant shall each deliver to the other party a written
        notice setting forth its good faith estimate of the Base Rent for the
        Premises during the Option Term (collectively referred to as the
        "Estimates"). If the higher of such Estimates is not more than one
        hundred five percent (105%) of the lower of such Estimates, then the
        Base Rent for the Premises during the Option Term shall be the average
        of the two (2) Estimates. If the Base Rent for the Premises during the
        Option Term is not resolved by the exchange of Estimates, Landlord and
        Tenant, within ten (10) days after the exchange of Estimates, shall each
        select an appraiser to determine which of the two (2) Estimates most
        closely reflects a Base Rent that is [*] of the Fair Market Rent. Each
        appraiser so selected shall be certified as an MAI appraiser or as an
        ASA appraiser and shall have had at least five (5) years experience
        within the previous ten (10) years as a real estate appraiser working in
        the Santa Rosa area, with working knowledge of current rental rates and
        practices. For purposes of this Lease, an "MAI" appraiser means an
        individual who holds an MAI designation conferred by, and is an
        independent member of, the American Institute of Real Estate Appraisers
        (or its successor organization, or in the event the is no successor
        organization, the organization and designation most similar), and an
        "ASA" appraiser means an individual who holds the Senior Member
        designation conferred by, and is an independent member of, the American
        Society of Appraisers (or its successor organization, or in the event
        there is no successor organization, the organization and designation
        most similar). Upon selection, Landlord's and Tenant's appraisers shall
        work together in good faith to agree upon which of the two (2) Estimates
        most closely reflects a Base Rent that is [*] of the Fair Market Rent.
        The Estimate chosen by such appraisers shall be binding on both Landlord
        and Tenant. If either Landlord or Tenant fails to appoint an appraiser
        within the ten (10) day period referred to above, the appraiser
        appointed by the other party shall be the sole appraiser for the
        purposes hereof. If the two (2) appraisers cannot agree upon which of
        the two (2) Estimates most closely reflects a Base Rent that is [*] of
        the Fair Market Rent within the twenty (20) days after their
        appointment, then, within ten (10) days after the expiration of such
        twenty (20) day period, the two (2) appraisers shall select a third
        appraiser meeting the aforementioned criteria. Once the third appraiser
        has been selected as provided for above, then, as soon thereafter as
        practicable but in any case within fourteen (14) days thereafter, the
        appraiser shall make a determination of which of the two (2) Estimates
        most closely reflects a Base Rent that is [*] of the Fair Market Rent
        and such Estimate shall be binding on both Landlord and

-----------------------
[*]  Information redacted pursuant to a confidential treatment request
     throughout this exhibit.

                                       16
<PAGE>   56

        Tenant. The parties shall share equally in the costs of the third
        arbitrator and of any experts retained by the third arbitrator. Any fees
        of any appraiser, counsel or experts engaged directly by Landlord or
        Tenant, however, shall be borne by the party retaining such appraiser,
        counsel or expert. In the event that the Base Rent for the Option Term
        has not been determined by the commencement of the Option Term, Tenant
        shall pay Base Rent upon the same terms and conditions in effect
        immediately prior to the Option Term until such time as the Base Rent
        for the Option Term has been determined. Upon such determination, the
        Base Rent for the Premises during the Option Term shall be retroactively
        adjusted to commencement of the Option Term. Upon the determination of
        the Base Rent for the Premises for the Option Term, Landlord and Tenant
        shall enter into a letter agreement to memorialize the agreement. If
        such adjustment results in an underpayment of Base Rent by Tenant,
        Tenant shall pay Landlord the amount of such underpayment within thirty
        (30) days after the determination thereof.

        d. Fair Market Rent. For purposes hereof, "Fair Market Rent" shall mean
        the arms length fair market annual rental rate per rentable square foot
        under new leases (excluding renewals) entered into on or about the date
        on which the Fair Market Rent is being determined hereunder for space
        comparable to the Premises in the Building and office buildings
        comparable to the Building. The determination of Fair Market Rent shall
        take into account any material economic differences between the terms of
        this Lease and any comparison lease, such as rent abatements,
        construction costs, tenant improvement allowances, brokerage commissions
        (or the absence thereof), and different base years, and other
        concessions, and the manner, if any, in which the Landlord, under any
        such lease is reimbursed for operating expenses and taxes. The
        determination of Fair Market Rent shall take into consideration any
        reasonably anticipated changes in the Fair Market Rent from the time
        such Fair Market Rent is being determined and the time such Fair Market
        Rent will become effective under this Lease.

        43. Dish/Antenna.

        a. Right to Install. During the term of this Lease, Tenant shall have
        the right to install, maintain and operate a satellite dish or roof-top
        antenna (the "Dish/Antenna") on the roof of the Building subject to
        Landlord's and Landlord's architect's and/or engineer's approval of
        Tenant's plans and specifications for the Dish/Antenna, the manner in
        which the Dish/Antenna is to be attached to the roof of the Building,
        and the manner in which any cables are run to and from the Dish/Antenna,
        such approval not to be unreasonably withheld. Landlord shall designate
        the exact location on the roof where the Dish/Antenna is to be located.
        Landlord, at its sole cost and expense, reserves the right to relocate
        the Dish/Antenna to another location on the roof of the Building at any
        time during the term of this Lease. Tenant shall be solely responsible
        for obtaining all of the necessary governmental and regulatory approvals
        with respect to the installation and operation of the Dish/Antenna and
        for the cost of installing, operating, maintaining and removing the
        Dish/Antenna.



                                       17
<PAGE>   57

        b. Interference. Tenant agrees to only install equipment of types and
        frequencies which will not cause unreasonable interference to Landlord
        or any other tenants of the Building. If Tenant's equipment causes such
        interference, Tenant will change the frequency on which it transmits
        and/or receives and take any other steps necessary to eliminate the
        interference. If the interference cannot be eliminated within a
        reasonable period of time in Landlord's reasonable judgment, Tenant
        shall remove the Dish/Antenna from the Building.

        c. Maintenance. Tenant shall, at its sole cost and expense and at its
        sole risk, install, operate and maintain the Dish/Antenna in a good and
        workmanlike manner, and in compliance with all Building electric,
        communication and safety codes, laws, ordinances, standards, regulations
        and requirements, now in effect or hereafter promulgated.

        d. Removal. Tenant shall remove the Dish/Antenna at its own expense at
        the expiration or earlier termination of this Lease. Tenant shall repair
        any damage caused by Tenant's removal of the Dish/Antenna, including the
        patching of any holes to match, as closely as possible, the color
        surrounding the area where the equipment and appurtenances were
        attached.

        e. Exclusive Right. Provided that Tenant is not in default under the
        terms of this Lease beyond any applicable notice and cure period,
        Landlord shall not lease space on the roof of the Building to a provider
        of telecommunication, video, data or related services ("Communication
        Services") who is not a tenant in the Building for the purposes of
        providing Communication Services to unaffiliated tenants, occupants or
        licensees of another building.

        44. Landlord Estoppel. Within ten (10) days after Tenant's written
        request, Landlord shall execute the Landlord Waiver and Estoppel
        Certificate attached hereto as Exhibit G or such other documents
        reasonably acceptable to Landlord to evidence Landlord's waiver of any
        right, title, lien or interest in Tenant's personal property, equipment
        and trade fixtures (collectively, "Tenant's Personal Property") and give
        Tenant's lenders holding a security interest or lien on Tenant's
        Personal Property reasonable rights or access to the Premises to remove
        such personal property; provided, however, Landlord's waiver of its lien
        and grant of access to Tenant's lenders shall be subject to and
        conditioned upon the lender agreeing in writing (i) to indemnify, defend
        and hold harmless Landlord from any and all claims, losses, liability,
        costs or damages (including reasonable attorneys' fees) incurred by
        Landlord in connection with the lender's removal of Tenant's Personal
        Property and entry on the Premises or Landlord's property, (ii) to
        restore any portion of the Premises damaged by such lender's removal of
        Tenant's Personal Property to its condition existing immediately prior
        to the installation of the Tenant's Personal Property, (3) not to damage
        any portion of the Premises or any improvement of which the Premises are
        a part, and (4) not to conduct any sales or auctions on the Premises.



                                       18
<PAGE>   58

IN WITNESS WHEREOF, the parties have executed this Addendum to Lease on the
date(s) set forth below, as of the day and year first above written.


                                       LANDLORD:
                                       Stony Point East,
                                          a California general partnership

                                       By:  /s/  JAMES BRECHT
                                          ------------------------------------
                                          James Brecht
                                          Its Authorized Representative
Date  4/26/99
     ---------


                                       TENANT:
                                       Advanced TelCom Group,
                                           a Delaware corporation

                                       By:   /s/  C. G. RUDOLPH
                                          ------------------------------------

                                       Its:       Chairman & CEO
                                           -----------------------------------

Date  4/26/99
     ---------



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