Document:

<PAGE>   1
                                                         Exhibit 10.53

                                                         NET LEASE
                                                         MASTER LEASE FORM 05/99

                       STANDARD INDUSTRIAL LEASE AGREEMENT

               Landlord:   The Realty Associates Fund IV, L.P.,
                           a Delaware limited partnership

               Tenant:     Aviron,
                           a Delaware corporation

               Premises:   64,050 rentable square feet,
                           3600 Marshall Lane
                           Bensalem, Bucks County, Pennsylvania

               Date:       May 8, 2001

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Paragraph                                                               Page
---------                                                               ----
<S>     <C>                                                             <C>
Term Summary.........................................................     1

1.      Granting Clause................................................   2

        1.1.   Premises.................................................  2
        1.2.   Common Areas.............................................  2

2.      Premises.......................................................   2

        2.1.   Acceptance...............................................  2
        2.2.   Delay in Delivery........................................  2
        2.3.   Early Possession.........................................  3
        2.4.   Waiver...................................................  3

3.      Use............................................................   3

        3.1.   Permitted Use............................................  3
        3.2.   Compliance with Laws ....................................  3
        3.3.   Prohibited Use...........................................  3

4.      Base Rent .....................................................   3

        4.1.   Payment..................................................  3
        4.2.   Late Charge; No Offset...................................  3

5.      Security Deposit...............................................   4

6.      Operating Expense Payments.....................................   5

        6.1.   Estimated Payments.......................................  5
        6.2.   Actual Payments..........................................  6
        6.3.   Audit....................................................  7

7.      Utilities .....................................................   7

8.      Taxes..........................................................   7

9.      Insurance .....................................................   7

        9.1.   Landlord's Insurance.....................................  7
        9.2.   Tenant's Insurance.......................................  7
        9.3.   Waiver of Subrogation....................................  8

10.     Landlord's Repairs.............................................   8

11.     Tenant's Repairs...............................................   8
</TABLE>

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<TABLE>
<S>     <C>                                                             <C>
12.     Tenant Improvements and Trade Fixtures.........................   9

        12.1.  Tenant Improvements......................................  9
        12.2.  Trade Fixtures...........................................  9

13.     Signs..........................................................   9

14.     Parking........................................................  10

15.     Fire and Casualty Damage.......................................  10

        15.1.  Notice................................................... 10
        15.2.  Landlord's Repair........................................ 10
        15.3.  Base Rent Abatement...................................... 10
        15.4.  Tenant's Right to Terminate.............................. 10
        15.5.  Tenant's Right to Require Landlord to Rebuild............ 10

16.     Condemnation...................................................  11

17.     Assignment and Subletting......................................  11

        17.1.  General.................................................. 11
        17.2.  Affiliate Transfers...................................... 12
        17.3.  Termination.............................................. 12
        17.4.  Additional Compensation.................................. 12
        17.5.  No Release............................................... 12
        17.6.  Landlord Transfer........................................ 12

18.     Indemnification and Waiver.....................................  12

19.     Inspection and Access..........................................  13

20.     Quiet Enjoyment................................................  13

21.     Surrender......................................................  13

        21.1.  Removal/Repair........................................... 13
        21.2.  Survival................................................. 13

22.     Holding Over...................................................  13

23.     Events of Default..............................................  14

24.     Landlord's Remedies............................................  15

        24.1.  General.................................................. 15
        24.2.  Lease Termination........................................ 15
        24.3.  Possession Termination................................... 15
        24.4.  Reletting................................................ 15
        24.5   No Waiver................................................ 16

25.     Landlord's Default and Liability...............................  16

        25.1.  Landlord's Default....................................... 16
        25.2.  Landlord's Liability..................................... 16
        25.3.  No Waiver................................................ 16

26.     Waiver of Jury Trial...........................................  17

27.     Subordination..................................................  17

28.     Mechanic's Liens...............................................  17

29.     Landlord's Lien/Security Interest..............................  17

30.     Estoppel Certificates..........................................  17

31.     Environmental Requirements.....................................  17

        31.1.  General.................................................. 17
</TABLE>

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<TABLE>
<S>     <C>                                                             <C>
        31.2.  Indemnity................................................ 18
        31.3.  Assessments.............................................. 18

32.     Mortgagee's Requirements.......................................  18

33.     Rules and Regulations..........................................  18

34.     Security Service...............................................  19

35.     Force Majeure..................................................  19

36.     Entire Agreement...............................................  19

37.     Severability...................................................  19

38.     Brokers........................................................  19

39.     Limited Waiver.................................................  19

40.     Miscellaneous..................................................  19
</TABLE>

                                    EXHIBITS

                      Exhibit A  -  Legal Description
                      Exhibit B  -  Floor Plan
                      Exhibit C  -  Tenant Finish Work:  Allowance
                      Exhibit D  -  Renewal Option
                      Exhibit E  -  Letter of Credit

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<PAGE>   4

                                                         Net Lease
                                                         Master Lease Form 05/99

                       STANDARD INDUSTRIAL LEASE AGREEMENT

        THIS STANDARD INDUSTRIAL LEASE AGREEMENT (this "Lease") is made this
8th day of May, 2001, between The Realty Associates Fund IV, L.P., a
Delaware limited partnership ("Landlord"), and the Tenant named below.

<TABLE>
<S>                                 <C>
Tenant:                             Aviron,
                                    a Delaware corporation

Tenant's representative,            Lee Williams
address, and phone no.:             297 N. Bernardo Avenue
                                    Mountain View, California 94043
                                    Phone: (650) 919-6500; Fax (650) 919-6612

Project:                            The improvements located at 3600 Marshall
                                    Lane, Bensalem, Pennsylvania, and upon the
                                    land described on Exhibit A attached hereto.

Premises:                           The premises located within the single
                                    building (the "Building") in the Project
                                    containing approximately 64,050 rentable
                                    square feet of floor area and depicted on
                                    the floor plan attached as Exhibit B hereto.

Lease Term:                         Eighty-five (85) calendar months.

Commencement Date:                  Execution and delivery of the Lease by
                                    Landlord and Tenant.

Annual Base Rent PRSF:              During the period (a) Month 1* to Month 30,
                                    $5.00 per rentable square foot; (b) Month 31
                                    to Month 60, $5.25 per rentable square foot;
                                    and (c) Month 61 to Month 85, $5.50 per
                                    rentable square foot.

Monthly                             Base Rent: During the period (a) Month 1* to
                                    Month 30, $26,687.50 per month; (b) Month 31
                                    to Month 60, $28,021.88 per month; and (c)
                                    Month 61 to Month 85, $29,356.25 per month.

                                    * Landlord hereby abates the first
                                    consecutive full monthly installment of Base
                                    Rent described above. Tenant shall pay all
                                    Operating Expenses, utilities and all other
                                    obligations accruing during such month. If
                                    Tenant defaults under this Lease beyond any
                                    applicable period of notice and cure, any
                                    remaining rent abatement shall cease from
                                    the date of such default, and Tenant shall
                                    immediately pay to Landlord all sums
                                    previously abated hereunder.

Proportionate Share (i.e.,
64,050 divided by 64,050):          100%

Estimated First Monthly                 1. Common Area Charges:             None at this time.
Operating Expense Payments                                                  Landlord reserves
(estimates only and subject                                                 the right to charge
to adjustment to actual costs                                               therefor pursuant
and expenses according to the                                               to this Lease.
provisions of this Lease):
                                        2. Taxes:                           $1.03 per rentable
                                                                            square foot per
                                                                            annum

                                        3. Insurance Premiums:              $.02 per rentable
</TABLE>

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<TABLE>
<S>                                 <C>
                                                                            square foot per
                                                                            annum

                                                                            Equal to 3% of
                                        4. Others: Management Fee           gross revenues for
                                                                            the Project
                                                                            (currently $1.24
                                                                            per rentable square
                                                                            foot)

                                           Total Estimated                  $6,618.50
                                        Monthly
                                        First
                                           Monthly Operating
                                        Expense Payments:

Total First Monthly Base Rent                                               $33,306.00
and Operating Expense Payments:

Security Deposit:                   $218,000 in the form of a Letter of Credit,
                                    pursuant to Section 5 and Exhibit E attached
                                    hereto.

Landlord's Broker:                  The Flynn Company

Tenant's Broker:                    Binswanger Company
</TABLE>

        1.     GRANTING CLAUSE.

               1.1. Premises. In consideration of the obligation of Tenant to
pay rent as herein provided and in consideration of the other terms, covenants,
and conditions hereof, Landlord leases to Tenant, and Tenant takes from
Landlord, the Premises, to have and to hold for the Lease Term, subject to the
terms, covenants and conditions of this Lease.

               1.2. Common Areas. Landlord hereby grants Tenant for the benefit
of Tenant and its employees, suppliers, shippers, customers and invitees during
the Lease Term, the non-exclusive right to use, in common with Landlord or any
other pre-existing parties who have either licenses or easements over the
Project, the Common Areas (as hereinafter defined) as they exist from time to
time, subject to all rights reserved by Landlord hereunder and under the terms
of all reasonable rules and regulations promulgated by Landlord from
time-to-time with respect thereto. Landlord reserves the right from time to time
to (i) make changes in the Common Areas, including, without limitation, changes
in location, size, shape and number of driveways, entrances, parking spaces,
parking areas, loading and unloading areas, ingress, egress, direction of
traffic, landscaped areas and walkways; (ii) close temporarily any of the Common
Areas for maintenance purposes so long as reasonable access to the Premises
remains available; (iii) construct additional parking areas, loading dock
facilities and other improvements within the Common Areas (excluding additional
buildings); and (iv) do and perform such other acts and make such other changes
in, to or with respect to the Common Areas as Landlord may, in the exercise of
sound business judgment, deem appropriate. As used herein, the term "Common
Areas" means all areas and facilities outside the Building, within the exterior
land boundary lines of the Project that are provided and designated by Landlord
as parking areas, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways and landscaped areas.

        2.     PREMISES.

               2.1. Acceptance. Except as set forth in this Section 2.1, Tenant
accepts the Premises in its condition as of the Commencement Date, subject to
all applicable laws, ordinances, and regulations. Tenant acknowledges that
Landlord has made no representation or warranty as to the suitability of the
Premises for the conduct of Tenant's business, and Tenant waives any implied
warranty that the Premises are suitable for Tenant's intended purposes. The
taking of possession of the Premises shall be conclusive evidence that Tenant

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accepts the Premises and that the Premises were in good condition at the time
possession was taken. In no event shall Landlord be liable for any defects in
the Premises. In no event shall Landlord be liable for any limitation on the use
of the Premises. Landlord represents that the HVAC and electrical systems
servicing the Premises shall be in working order on the date Tenant takes
occupancy of the Premises. Landlord agrees to install a new roof over the
Building and shall use diligent, good faith efforts to do so within sixty (60)
days following the Commencement Date, subject to events of Force Majeure and
delays caused by Tenant.

               2.2. Commencement Date. The Commencement Date shall be upon
execution and delivery of this Lease by both Landlord and Tenant, regardless of
whether or not the Work described in Exhibit C is completed by Tenant. Tenant
shall execute and deliver to Landlord, within ten (10) business days after
Landlord's written request, a letter confirming the Commencement Date, that
Tenant has accepted the Premises and that Landlord has performed all of its
construction obligations, if any, with respect thereto (except for punch-list
items, if any, specified in any such letter).

               2.3. Early Possession. If Tenant occupies the Premises prior to
the Commencement Date, such occupancy shall be subject to all the provisions of
this Lease, such occupancy shall not advance the termination date and Tenant
shall pay all charges as set forth herein from the date of any such occupancy,
except Base Rent.

               2.4. WAIVER. LANDLORD AND TENANT EXPRESSLY WAIVE AND DISCLAIM ANY
IMPLIED WARRANTY THAT THE PREMISES ARE SUITABLE FOR TENANT'S INTENDED COMMERCIAL
PURPOSE. FURTHER, TENANT AGREES THAT TENANT'S OBLIGATION TO PAY BASE RENT AND
OTHER SUMS HEREUNDER IS NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE
PERFORMANCE BY LANDLORD OF ITS OBLIGATIONS HEREUNDER AND, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN, TENANT SHALL CONTINUE TO PAY BASE RENT AND SUCH OTHER
SUMS, WITHOUT ABATEMENT, SETOFF OR DEDUCTION, NOTWITHSTANDING ANY BREACH BY
LANDLORD OF SUCH OBLIGATIONS, WHETHER EXPRESS OR IMPLIED.

        3.     USE.

               3.1. Permitted Use. The Premises shall be used only for the
purpose of office use, receiving, storing, shipping and selling (but limited to
wholesale sales) products, materials and merchandise made and/or distributed by
Tenant and for such other lawful purposes as may be incidental thereto; provided
however, with Landlord's prior written consent, which shall not be unreasonably
withheld or delayed, Tenant may also use the Premises for light manufacturing.
Tenant acknowledges that Landlord makes no representation or warranty that any
use by Tenant of the Premises is permitted under applicable laws. Any use by
Tenant of the Premises shall be in compliance with all applicable laws and at
Tenant's sole risk. Tenant shall not conduct or give notice of any auction,
liquidation, or going out of business sale on the Premises. Tenant will use the
Premises in a careful, safe and proper manner and will not commit waste thereon.

               3.2. Compliance With Laws. Tenant, at its sole expense, shall
comply with all laws (including, without limitation, Environmental Requirements,
as defined herein, and laws regarding access for handicapped or disabled
persons), ordinances and regulations, and all declarations, covenants, and
restrictions, applicable to Tenant's use or occupation of the Project, and with
all governmental orders and directives of public officers which impose any duty
or restriction with respect to the use or occupation of the Project.

               3.3. Prohibited Use. Tenant shall not permit any objectionable or
unpleasant odors, smoke, dust, gas, noise, or vibrations to emanate from the
Premises, or take any other action that would constitute a nuisance or would
unreasonably disturb, unreasonably interfere with, or endanger Landlord. Tenant
will not use or permit the Premises to be used for any purpose or in any manner
that would void Tenant's or Landlord's insurance, increase the insurance risk,
or cause the disallowance of any sprinkler credits. If any increase in the cost
of any insurance on the Premises or the Project is caused by Tenant's use of the
Premises, or because Tenant vacates the Premises, then Tenant shall pay the
amount of such increase to Landlord. Outside storage, including without
limitation, storage of trucks and other vehicles, is

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prohibited without Landlord's prior written consent. Landlord consents and
Tenant shall be permitted to park overnight up to fourteen (14) 50 feet trailers
in locations designated by Landlord from time to time, provided such use is
permitted under applicable zoning laws, ordinances and codes. No use shall be
made of the Premises that would constitute the Premises as a place of public
accommodation under the Americans with Disabilities Act or similar state
statutes or local ordinances or any regulations promulgated thereunder, all as
may be amended from time to time.

        4.     BASE RENT.

               4.1. Payment. Tenant shall pay Base Rent in the amount set forth
on the first page of this Lease. The first month's Base Rent, the Security
Deposit, and the first monthly installment of estimated Operating Expenses (as
hereafter defined) shall be due and payable on the date hereof, and Tenant
promises to pay to Landlord in advance, without demand, deduction or set-off,
monthly installments of Base Rent on or before the first day of each calendar
month succeeding the Commencement Date. Payments of Base Rent for any fractional
calendar month shall be prorated based on the number of days in the month at
issue. All payments required to be made by Tenant to Landlord hereunder shall be
payable at such address as Landlord may specify from time to time by written
notice delivered in accordance herewith.

               4.2. Late Charge; No Offset. Subject to any applicable grace
period, if Tenant is delinquent in any monthly installment of Base Rent,
estimated Operating Expenses or any other sums due hereunder, Tenant shall pay
to Landlord on demand a late charge equal to 5 percent of such delinquent sum.
The provision for such late charge shall be in addition to all of Landlord's
other rights and remedies hereunder or at law and shall not be construed as a
penalty or as limiting Landlord's remedies in any manner. The obligation of
Tenant to pay Base Rent and other sums to Landlord and the obligations of
Landlord under this Lease are independent obligations. Tenant shall have no
right at any time to abate, reduce, or set-off any rent due hereunder except
where expressly provided in this Lease. Tenant waives and releases all statutory
liens and offset rights as to rent.

        5. SECURITY DEPOSIT. The Security Deposit (the "Security Deposit") shall
consist of an unconditional and irrevocable letter of credit delivered by Tenant
to Landlord to secure Tenant's obligations under this Lease in the amount
specified on Page 2 of this Lease (the "Letter of Credit"). Such Security
Deposit shall be held by Landlord without liability for interest and as security
for the performance by Tenant of its obligations under this Lease. The Security
Deposit is not an advance payment of Rent or a measure or limit of Landlord's
damages upon an Event of Default (defined below). Landlord may, from time to
time and without prejudice to any other remedy, use all or a part of the
Security Deposit to perform such obligation which Tenant was obligated, but
failed, to perform hereunder, and Landlord may, upon an Event of Default (after
the expiration of any applicable grace period), draw a portion of or the entire
Letter of Credit and apply it to any outstanding obligations of Tenant hereunder
in accordance with the requirements of this Lease. Following any draw of the
Security Deposit, Tenant shall reinstate within five (5) days following written
notification from the bank or Landlord the amount so drawn in order to restore
the Security Deposit to its prior amount, as may have been previously reduced
per the terms of this Lease, unless the amount of the Event of Default exceeds
$10,000, in which event Tenant shall fully reinstate the Security Deposit to its
Original Amount (i.e., $218,000). Failure of the Tenant to restore the Security
Deposit within such 5-day period will constitute a further Event of Default, in
which case the Landlord shall be permitted to draw down the entire balance of
the Letter of Credit and apply it to any current or future obligations of
Tenant. In the event Landlord draws down the entire amount of the Letter of
Credit and holds it as a cash Security Deposit and Landlord has not elected to
apply it at such time to Tenant's obligations under this Lease, at Landlord's
sole option, Tenant may replace such cash Security Deposit with a Letter of
Credit meeting the requirements of this Section 5, in an amount equal to (a)
such unapplied amount plus (b) any amount Tenant is required to reinstate
pursuant to this Section 5. Within thirty (30) days after the Lease Term ends,
provided Tenant has performed all of its obligations hereunder, Landlord shall
return to Tenant the balance of any Letter of Credit or any Security Deposit not
applied or otherwise released pursuant to this Section 5 to satisfy Tenant's
obligations. Landlord agrees that it will not assign the Letter of Credit to any
other entity except in connection with the transfer of its interest in the
Project to a third party. If Landlord transfers its interest in the Project,
then Landlord shall assign the Security Deposit to the transferee and Landlord
thereafter shall have no further liability for the

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return of the Security Deposit. Contemporaneously with the execution of this
Lease, Tenant shall deliver the Security Deposit to Landlord by delivering to
Landlord a Letter of Credit in the amount of $218,000 (the "Original Amount").
The Letter of Credit shall be in the form of an unconditional and irrevocable
letter of credit and in form and substance set forth on Exhibit E attached
hereto. Such Letter of Credit shall: (i) name Landlord as beneficiary, (ii) be
drawable on an FDIC-insured financial institution reasonably satisfactory to
Landlord (excluding Silicon Bank or its affiliates), (iii) be redeemable in a
state reasonably acceptable to Landlord, (iv) expressly allow Landlord to draw
upon it at any time and from time to time upon demand and (v) shall be for a
term commencing upon execution of this Lease by Tenant through and including
thirty (30) days following the expiration date of this Lease or provide for an
automatic annual renewal (an evergreen clause) unless Landlord is given sixty
(60) days prior notice of the issuer's election not to renew the same. If the
issuer of the Letter of Credit notifies Landlord of its election not to renew
prior to said sixty (60) day period and Tenant does not provide Landlord with a
substitute Letter of Credit complying with all of the requirements hereof and in
Exhibit E at least thirty (30) days before the stated expiration date of the
current Letter of Credit then Landlord shall have the right to draw upon the
current Letter of Credit and hold the funds drawn as part of the Security
Deposit. Notwithstanding the foregoing, Tenant may request Landlord in writing
to reduce the Letter of Credit to $80,000, provided that Tenant satisfies each
of the following conditions precedent, and subject to this Section 5: (a) no
Event of Default under the Lease at any time prior to Tenant's request for
reduction, (b) no set of circumstances in existence that with the passage of
time would create any Event of Default under the Lease, (c) Tenant's financial
statements delivered to Landlord reveal that Tenant has operated its business
for a period of four (4) consecutive calendar quarters at a net profit in excess
of $10,000,000 for each such quarter, and (d) Tenant certifies the foregoing
representations in (a), (b) and (c) above are true and correct as of the date of
such request. Subject to Landlord's reasonable determination that Tenant has
complied with the foregoing requirements and subject to the terms and conditions
set forth in this Section 5, the Letter of Credit shall be reduced to $80,000 by
Landlord's written direction to the institution issuing the Letter of Credit. In
the event Tenant commits any default and fails to cure within the grace period
set forth in this Lease, Tenant shall be entitled to no reduction and shall
reinstate the Letter of Credit to the Original Amount. During the Lease Term,
Tenant agrees to provide Landlord quarterly audited financial statements within
thirty (30) days after the end of each calendar quarter. If Tenant's financial
statements reveal for four (4) consecutive calendar quarters, on a consolidated
basis, that Tenant's net profit has dropped below $8,000,000, Tenant shall be
required to immediately reinstate the Letter of Credit to its Original Amount
within five (5) days. Any failure by Tenant to reinstate the Letter of Credit as
required in this Section 5 shall constitute an Event of Default without any
notice required on the part of Landlord.

        6.     OPERATING EXPENSE PAYMENTS.

               6.1. Estimated Payments. During each month of the Lease Term, on
the same date that Base Rent is due, Tenant shall pay Landlord an amount equal
to 1/12 of the annual cost, as estimated by Landlord from time to time, of
Tenant's Proportionate Share (hereinafter defined) of Operating Expenses for the
Project. Payments thereof for any fractional calendar month shall be prorated
based on the number of days in the month at issue. With respect to any calendar
year or partial calendar year in which the Project is not fully leased and
occupied, the Operating Expenses for such period shall, for the purposes hereof,
be increased to the amount which would have been incurred had the Project been
so fully leased and occupied. For the purposes of this Lease, the term
"Operating Expenses" shall mean all expenses and disbursements of every kind
(subject to the limitations set forth below) which Landlord incurs, pays or
becomes obligated to pay in connection with the ownership, operation, repair and
maintenance of the Project (including the associated Common Areas), including
but not limited to the following:

                      (a) wages and salaries (including management fees which
        shall be equal to three percent (3%) of the gross revenues for the
        Project) of all employees, agents, consultants and other individuals or
        entities at or below the grade of Property Manager engaged in the
        operation, repair, replacement, maintenance, and security of the
        Project, including taxes, insurance and benefits relating thereto;

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                      (b) all supplies and materials used in the operation,
        maintenance, repair, replacement, and security of the Project;

                      (c) annual cost of all capital improvements made to the
        Project which although capital in nature can reasonably be expected to
        reduce the normal operating costs of the Project, as well as all capital
        improvements made in order to comply with any law now or hereafter
        promulgated by any governmental authority, as amortized over the useful
        economic life of such improvements as determined by Landlord in its
        reasonable discretion in accordance with generally accepted accounting
        principles, consistently applied;

                      (d) cost of all utilities, other than the cost of
        utilities actually reimbursed to Landlord by the Tenant (or paid
        directly by Tenant to the service providers under paragraph 7 of this
        Lease);

                      (e) cost of any insurance or insurance related expense
        applicable to the Project and Landlord's personal property used in
        connection therewith;

                      (f) all taxes and assessments and governmental charges
        whether federal, state, county or municipal, and whether they be by
        taxing or management districts or authorities presently taxing or by
        others, subsequently created or otherwise, and any other taxes and
        assessments attributable to the Project (or its operation) and the
        Common Areas, excluding, however, gift, estate and inheritance taxes,
        federal and state taxes on income or rental income (unless imposed in
        lieu of all or part of the Taxes) (collectively, "Taxes"); if the
        present method of taxation changes so that in lieu of the whole or any
        part of any Taxes levied on the Land or the Project, there is levied on
        Landlord a capital tax directly on the rents received therefrom or a
        franchise tax, assessment, or charge based, in whole or in part, upon
        such rents for the Project, then all such taxes, assessments, or
        charges, or the part thereof so based, shall be deemed to be included
        within the term "Taxes" for the purposes hereof;

                      (g) subject to Section 11 below, if Landlord is performing
        such obligations, cost of repairs, replacements, and general maintenance
        of the Project (including all truck court areas, loading docks, paving
        and parking areas, rail spur areas, truck bumpers, levelers, and truck
        doors), other than costs necessary to assure the structural soundness of
        the roof, foundation and exterior walls of the Project which are payable
        solely by Landlord under Paragraph 10; and

                      (h) subject to Section 11 below, if Landlord is performing
        such obligations, cost of service or maintenance contracts with
        independent contractors for the operation, maintenance, repair,
        replacement, or security of the Project (including, without limitation,
        alarm service, window cleaning, exterior painting, mowing, trash
        collection, snow, ice, debris and waste removal, and landscape
        maintenance) and all expenses and costs (including legal fees and
        expenses) incurred for the general benefit of the Project (e.g., tax
        disputes).

There are specifically excluded from the definition of the term "Operating
Expenses" costs (1) for capital improvements made to the Project, other than
capital improvements described in subparagraph (c) above and except for items
which, though capital for accounting purposes, are properly considered
maintenance and repair items, such as painting of Common Areas and the like; (2)
for repair, replacements and general maintenance paid by proceeds of insurance
or by Tenant or other third parties, and alterations attributable solely to
tenants of the Project other than Tenant; (3) for interest, amortization or
other payments on loans to Landlord; (4) for depreciation of the Project; (5)
for leasing commissions; (6) for curing defaults by Landlord; (7) for performing
work expressly provided in this Lease to be borne at Landlord's expense; (8) for
federal and state income taxes imposed on or measured by the income of Landlord
from the operation of the Project; (9) to the extent covered by insurance
proceeds received by Landlord, the costs of repair, replacement or restoration
work occasioned by any

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casualty or condemnation (excluding any deductibles); (10) advertising expenses,
promotional expenses, attorneys' fees, disbursements and other costs and
expenses incurred in procuring prospective tenants or negotiating and executing
leases; (11) except for management fees, Landlord's general overhead and any
overhead of profit increment to any subsidiary or affiliate of Landlord for
services on or to the Project, Common Areas and/or land on which the Project is
situated, to the extent that the cost of such service exceeds competitive costs
for such services rendered by persons or entities of similar skill, competence
and experience other than a subsidiary or affiliate of Landlord; (12)
compensation paid to any employee of Landlord above the grade of Property
Manager, including officers and executives of Landlord; (13) except with respect
to Tenant, the costs and expenses incurred in resolving disputes with
prospective tenants, occupants of the Project or third parties, if any
(excluding tax protests); (14) costs of correcting latent defects in
construction of the Project (as opposed to the cost of normal repair,
maintenance and replacement expected with the construction materials and
equipment installed in the Project in light of their specifications); (15) the
costs of repairs or maintenance which are covered by warranties or service
contracts in existence on the Commencement Date and only to the extent such
maintenance and repairs are made at no cost to Landlord; (16) the costs of
repairs, alterations and general maintenance necessitated by the gross
negligence or willful misconduct of Landlord or its agent or employees; (17)
penalties (excluding any interest which is permissible with respect to
installment payments) due to the late payment of taxes, utility bills or other
such costs; (18) any amount payable by Landlord by way of indemnity or for
damages or which constitute a fine or penalty; and (19) costs related to
remediating Hazardous Materials, except to the extent caused by Tenant or
Tenant's employees, invitees, agents, contractors and affiliates in accordance
with Section 31 below.

               6.2. Actual Payments. Landlord shall use reasonable efforts to
give to Tenant as soon as reasonably practicable following the end of each
calendar year a statement (the "Statement") which shall state the Operating
Expenses incurred or accrued for such preceding calendar year and the amount
thereof allocated to Tenant, and which shall indicate the amount, if any, of
Tenant's Proportionate Share of Operating Expenses for the previous calendar
year. If Tenant's total payments for any such preceding calendar year are less
than Tenant's Proportionate Share of actual Operating Expenses for such year,
Tenant shall pay the difference to Landlord within 30 days after demand. If the
total payments of Tenant for any year are more than Tenant's Proportionate Share
of actual Operating Expenses for such year, Landlord shall retain such excess
and credit it against Tenant's next payments, or, if the calculation is made
after the expiration or earlier termination of this Lease and Tenant has
fulfilled all obligations under this Lease, Landlord shall refund such excess to
Tenant within thirty (30) days after the determination of such calculation. For
purposes of calculating Tenant's Proportionate Share of Operating Expenses, a
year shall mean a calendar year except the first year, which shall begin on the
Commencement Date, and the last year, which shall end on the expiration of this
Lease. Settlement of Tenant's obligation for Operating Expenses for the last
year of the Lease Term shall be made pursuant to Paragraph 21. Tenant's
"Proportionate Share" shall be a fraction having as its numerator the floor area
of the Premises and as its denominator the total floor area of the Building, all
as reasonably determined by Landlord. The estimated Operating Expenses for the
Premises set forth on the first page of this Lease are only estimates, and
Landlord makes no guaranty or warranty that such estimates will be accurate.
THIS IS A NET LEASE AND, EXCEPT AS SET FORTH IN PARAGRAPHS 2.1 AND 9.1 AND 10,
LANDLORD HAS NO OBLIGATION TO PAY ANY COST TO REPAIR, MAINTAIN, INSURE OR
OTHERWISE OPERATE THE PROJECT.

               6.3 Audit. Tenant and its certified public accountant shall have
the right to inspect Landlord's records at Landlord's office upon at least ten
(10) days prior notice during normal business hours during the ninety (90) days
following the respective delivery of any such Annual Cost Statement. The results
of any such inspection shall be kept strictly confidential by Tenant and its
agents, and Tenant and its certified public accountant must agree, in their
contract for such services, to such confidentiality restrictions and shall
specifically agree that the results shall not be made available to any other
tenant of the Project. Unless Tenant sends to Landlord any written exception to
either such report within said ninety (90) day period, such Statement shall be
deemed final and accepted by Tenant. Tenant shall pay the amount shown on the
Statement in the manner prescribed in the Lease, whether or not Tenant takes any
such written

                                      -7-
<PAGE>   11

exception, without any prejudice to such exception. If Tenant makes a timely
exception, Landlord shall cause a reasonably mutually acceptable independent
certified public accountant to issue a final and conclusive resolution of
Tenant's exception. Tenant shall pay the cost of such certification unless
Landlord's original determination of annual Operating Expenses overstated the
amounts thereof by more than five percent (5%).

        7. UTILITIES. Tenant shall pay for all water, gas, electricity, heat,
light, power, telephone, sewer, sprinkler services, refuse and trash collection,
and other utilities and services used on the Premises directly to the service
providers. Landlord shall not be liable for any interruption or failure of
utilities or any other service to the Premises and no such interruption or
failure shall result in the abatement of rent hereunder or otherwise permit
Tenant to terminate this Lease. Nothing herein contained shall impose upon
Landlord any duty to provide sewer or water usage for other than normal restroom
usage.

        8. TAXES. Landlord agrees to pay all Taxes that accrue against the
Project during the Lease Term, which shall be included as part of the Operating
Expenses charged to Tenant hereunder, provided Landlord shall have the right to
contest by appropriate legal proceedings the amount, validity, or application of
any Taxes or liens thereof. All capital levies or other taxes assessed or
imposed on Landlord upon the rents payable to Landlord under this Lease and any
franchise, tax, any excise, transaction, sales or privilege tax, assessment,
levy or charge measured by or based, in whole or in part, upon such rents from
the Premises and/or the Project or any portion thereof shall be paid by Tenant
to Landlord monthly in estimated installments or upon thirty (30) days prior
written demand by Landlord, at the option of Landlord, as additional rent. If
any such tax or excise is levied or assessed directly against Tenant, then
Tenant shall be responsible for and shall pay the same at such times and in such
manner as the taxing authority shall require. Tenant shall be liable for all
taxes levied or assessed against any personal property or fixtures placed in the
Premises, whether levied or assessed against Landlord or Tenant.

        9.     INSURANCE.

               9.1. Landlord's Insurance. Landlord shall maintain such fire and
extended coverage insurance covering a minimum of eighty percent (80%) of the
replacement value of the Project and such additional coverage as Landlord deems
appropriate. Landlord may, but is not obligated to, maintain such other
insurance and additional coverages as it may deem necessary, including, but not
limited to, commercial liability insurance and rent loss insurance. All such
insurance shall be included as part of the Operating Expenses charged to Tenant
hereunder. The Project may be included in a blanket policy (in which case the
cost of such insurance allocable to the Project will be reasonably determined by
Landlord based upon the insurer's cost calculations). Tenant shall also
reimburse Landlord for any increased premiums or additional insurance which
Landlord deems reasonably necessary as a result of Tenant's use of the Premises.

               9.2. Tenant's Insurance. Tenant, at its own expense, shall
maintain during the Lease Term a policy or policies of: fire and extended
coverage insurance covering the replacement cost of all property and
improvements, installed or placed in the Premises by Tenant; worker's
compensation insurance with no less than the minimum limits required by law;
employer's liability insurance with such limits as required by law; commercial
liability insurance, with liability limits of not less than $5,000,000 combined
single limit per occurrence (together with such umbrella coverage as Landlord
may require) for property damage, personal injuries, or deaths of persons
occurring in or about the Premises; and, if appropriate for Tenant's operations,
pollution liability insurance with such limits as Landlord may reasonably
require; provided, however, that Landlord may from time to time, but not more
than once annually, require an increase in any such limits, if reasonably
advised by Landlord's insurance consultant. The commercial liability policies
shall name Landlord as an additional insured, be issued by insurance companies
which are reasonably acceptable to Landlord, not be cancelable unless 30 days
prior written notice shall have been given to Landlord, and provide primary
coverage to Landlord (any policy issued to Landlord providing duplicate or
similar coverage shall be deemed excess over

                                      -8-
<PAGE>   12

Tenant's policies). The commercial liability policies may insure on a claims
made basis provided that (1) throughout the Lease Term, Tenant is responsible
for maintaining continuous coverage through the same carrier and (2) all
coverage, terms, conditions and reporting periods shall remain in the identical
form as the original policies or certificates delivered to Landlord (the
"Original Policy"). In the event coverage is renewed with a different carrier,
coverage, terms, conditions and reporting periods shall be in substantially the
form of the Original Policy and the retroactive date shall be the same date as
the retroactive date in the Original Policy. If coverage is changed from a
"claims made basis" to "occurrence" or if a different retroactive date than the
retroactive date of the Original Policy is provided, Tenant shall be required to
purchase, in form acceptable to Landlord, tail coverage for an extended
reporting period of a minimum of six (6) years. Certificates of such insurance
policies shall be delivered to Landlord by Tenant upon commencement of the Lease
Term and upon each renewal of said insurance.

               9.3. Waiver of Subrogation. The fire and extended coverage
insurance obtained by Landlord and Tenant covering their respective property
shall include a waiver of subrogation by the insurers and all rights based upon
an assignment from its insured, against Landlord or Tenant, their officers,
directors, employees, managers, agents, invitees, and contractors, in connection
with any loss or damage thereby insured against. Neither party nor its officers,
directors, employees, managers, agents, invitees or contractors shall be liable
to the other for loss or damage caused by any risk covered by fire and extended
coverage property insurance, and each party waives any claims against the other
party, and its officers, directors, employees, managers, agents, invitees and
contractors for such loss or damage. The failure of a party to insure its
property shall not void this waiver.

        10. LANDLORD'S REPAIRS. Landlord shall maintain, at Landlord's expense
(without reimbursement by Tenant unless the repairs constitute a part of
Operating Expenses), only the structural soundness of the roof, foundation, and
exterior walls of the building of which the Premises are a part in good repair,
reasonable wear and tear and casualty losses and damages caused by Tenant
excluded. The term "walls" as used in this Paragraph 10 shall not include
windows, glass or plate glass, doors or overhead doors, special store fronts,
dock bumpers, dock plates or levelers, or office entries. Tenant shall promptly
give Landlord written notice of any repair required by Landlord pursuant to this
Paragraph 10, after which Landlord shall have a reasonable opportunity to
repair, subject to Section 25.1 below.

        11. TENANT'S REPAIRS. Except only those repairs for which Landlord is
responsible under Paragraph 10, Tenant, at Tenant's cost and expense, shall
maintain in good repair and condition all parts of the Premises and the parking
areas, driveways, alleys, spur tracks, and landscape and grounds surrounding the
Premises, including, without limitation, the heating and air conditioning and
other mechanical systems and components of the Premises, including lighting,
electrical systems and plumbing lines and equipment. In connection therewith
Tenant shall enter into and deliver to Landlord maintenance service contracts
reasonably acceptable to Landlord with contractors approved by Landlord for the
maintenance of the parking areas, driveways, alleys, spur track, landscaping and
the grounds surrounding the Premises, for hot water, heating and air
conditioning, and other mechanical systems and equipment within or serving the
Premises. At Landlord's request, Tenant shall also sign joint maintenance
agreement with the railroad company serving the Premises. The service and
maintenance contracts must include all services required by Landlord and must
become effective as of the Commencement Date. Notwithstanding the foregoing,
Landlord may at any time assume the maintenance and repair obligations set forth
in this Section 11 in the event Landlord determines, in its reasonable
discretion, that Tenant is not performing its obligations under this Section 11
to the standards reasonably required by Landlord and Tenant has failed to cure
the same to Landlord's satisfaction within ten (10) days following written
notice from Landlord (except in the event of an emergency, where no notice would
be necessary). Upon the occurrence of such event, Landlord may, but shall not be
obligated to, assume the maintenance and repair obligations set forth in this
Section 11. Additionally, in the event Tenant does not so deliver the service
contracts, Landlord shall have the right to contract for said service(s) with
notice to Tenant. In the event Landlord assumes any repair obligations,

                                      -9-
<PAGE>   13

Tenant shall reimburse Landlord for all such costs and expenses in accordance
with the provisions of Paragraph 6 above, except to the extent such repairs and
replacements are covered by insurance on the Project under policies naming
Landlord as the insured. Subject to the provisions of Paragraph 15, Tenant shall
repair and pay for any damage to the Premises or the Project caused by Tenant
and Tenant's employees, agents, or invitees, or caused by Tenant's default
hereunder.

        12.    TENANT IMPROVEMENTS AND TRADE FIXTURES.

               12.1. Tenant Improvements. Unless (a) the cost thereof is less
than $5,000 (and Tenant has not previously completed two (2) prior improvements
or alterations totaling in the aggregate more than $10,000), (b) such work does
not impact the base structural components or systems of the Project, (c) such
work will not impact any other tenant's premises, and (d) such Work is not
visible from outside the Premises, any alterations, additions, or improvements
made by or on behalf of Tenant to the Premises ("Tenant Improvements") shall be
subject to Landlord's prior written consent. All Tenant Improvements shall
comply with insurance requirements and with applicable law, ordinances, and
regulations, including, without limitation and to the extent applicable, laws
and regulations regarding removal or alteration of structural or architectural
barriers to handicapped or disabled persons (and Tenant shall construct at its
expense any alteration required by such laws or regulations, as they may be
amended). All Tenant Improvements shall be constructed in a good and workmanlike
manner and only good grades of materials shall be used. All plans and
specifications for any Tenant Improvements shall be submitted to Landlord for
its approval, which will not be unreasonably withheld or delayed, except if the
alterations impact the structure or the Building, the Building systems or are
visible from the outside of the Premises, in which case, such consent may be
withheld in Landlord's sole discretion. Landlord may thereafter monitor
construction; and Tenant shall reimburse Landlord for its actual and reasonable
costs in reviewing plans and documents and in monitoring construction not to
exceed $2,500 in each instance. Landlord may post on and about the Premises
notices and give notices that Landlord shall not be liable on account of any
damage or claim in connection with such construction, and Tenant shall provide
Landlord with the identities and mailing addresses of all persons performing
work or supplying materials, prior to beginning such construction. Landlord's
right to review plans and specifications and monitor construction shall be
solely for its own benefit, and Landlord shall have no duty to see that such
plans and specifications or construction comply with applicable laws, codes,
rules, or regulations. If Tenant's financial condition is not acceptable to
Landlord, in Landlord's reasonable judgment, at Landlord's election, Tenant
shall obtain payment and performance bonds for any Tenant Improvements which
bonds shall be delivered to Landlord prior to commencement of work on the Tenant
Improvements and shall be in form and substance satisfactory to Landlord. Upon
completion of any Tenant Improvements, Tenant shall deliver to Landlord sworn
statements setting forth the names of all contractors and subcontractors who did
work on the Tenant Improvements and final lien waivers from all such contractors
and subcontractors.

               12.2. Trade Fixtures. Tenant, at its own cost and expense, may
erect such shelves, bins, machinery and trade fixtures (collectively "Trade
Fixtures") as it desires provided that such items do not alter the basic
character of the Premises or the Project, do not overload or damage the same,
and may be removed without injury to the Premises, and provided that the
construction, erection, and installation thereof complies with all applicable
governmental laws, ordinances, regulations and with Landlord's reasonable
requirements. Upon the expiration of the Lease Term, Tenant shall remove its
Trade Fixtures and shall repair any damage caused by such removal, by the last
day of the Lease Term.

        13. SIGNS. Tenant shall not make any changes to the exterior of the
Premises, install any exterior lights, decorations, balloons, flags, pennants,
banners, or painting, or erect or install any signs, windows or door lettering,
placards, decorations, or advertising media or any type which can be viewed from
the exterior of the Premises, without Landlord's prior written consent, which
consent shall not be unreasonably withheld, provided that Tenant complies with
Landlord's reasonable sign criteria and local township codes. Upon vacation of
the Premises, Tenant shall remove all signs and repair, paint, and/or replace
the building facia surface to which its signs

                                      -10-
<PAGE>   14

are attached. Tenant shall obtain all applicable governmental permits and
approvals for sign and exterior treatments. All signs, decorations, advertising
media, blinds, draperies and other window treatment or bars or other security
installations visible from outside the Premises shall be subject to Landlord's
approval and conform in all respects to Landlord's reasonable requirements.

        14. PARKING. Tenant shall be entitled to park in those areas designated
for parking and subject to applicable zoning laws, ordinances and codes. Subject
to Section 1.2 above, Tenant shall have the exclusive right to the parking areas
associated with the Project. Additionally, Tenant may park trucks (not to exceed
the number and size permitted in Section 3.3) adjacent to the loading area next
to the Premises, provided such parking is permitted under applicable zoning
laws, ordinances and codes. Landlord shall not be responsible for enforcing
Tenant's parking rights against any third parties.

        15.    FIRE AND CASUALTY DAMAGE.

               15.1. Notice. If at any time during the Lease Term, the Premises
or the Building is damaged by fire or other casualty, Landlord may elect upon
notice to Tenant ("Landlord's Damage Notice") delivered as soon as practicable
but not later than 90 days after the date of such loss to terminate this Lease
or to repair and reconstruct the damaged improvements to substantially the same
condition in which they existed immediately before the damage, except that
Landlord shall not be required to repair and reconstruct any fixtures,
additions, or other improvements that Tenant is required to insure under
Paragraph 9.

               15.2. Landlord's Repair. If Landlord elects to repair and
reconstruct the damaged improvements, the repair and replacement will be made
within 6 months from the date of Landlord's election to repair and reconstruct,
subject to delays arising from the collection of insurance proceeds or from
Force Majeure events, and this Lease shall remain in full force and effect.
Tenant at Tenant's expense shall promptly perform, subject to delays arising
from the collection of insurance proceeds and Force Majeure events, all repairs
or restoration not required to be done by Landlord and shall promptly reenter
the Premises and commence doing business in accordance with this Lease. If
Landlord elects to repair and/or reconstruct the damaged improvements, Tenant
shall pay to Landlord the amount of the commercially reasonable deductible under
Landlord's insurance policy within 10 days after presentment of Landlord's
invoice.

               15.3. Base Rent Abatement. If the Building or a portion thereof
is not usable as a result of damage by fire or other casualty to the Building,
and Landlord elects to repair and/or reconstruct the damaged improvements, Rent
shall be abated for the period from the date of the damage and destruction to
the earlier to occur of: (i) the date of Landlord's termination or Tenant's
termination in the event Tenant is permitted to terminate and exercises its
termination right pursuant to Section 15.4 below, or (ii) the date of repair and
reconstruction in the proportion which the area of the Premises which is not
usable by Tenant bears to the total area of the Premises. Such abatement shall
be the sole remedy of Tenant, and to the extent permitted by applicable law, and
except as provided herein, Tenant waives any right to terminate the Lease by
reason of damage or casualty loss.

               15.4. Tenant's Right to Terminate. Notwithstanding anything to
the contrary contained in this Lease, Tenant shall have the right to terminate
this Lease as Tenant's sole and exclusive remedy upon the occurrence of the
following: (a) if the damage or destruction cannot be repaired within two
hundred seventy (270) days after the date of the damage or destruction, or (b)
if Landlord commences to repair and reconstruct the damage or destruction and
fails to complete the repairs within three hundred (300) days after the date of
the damage or destruction (whether or not Force Majeure events are involved), or
(c) if the Premises are completely destroyed within the last twelve (12) months
of the Lease Term (and Tenant has not elected to renew the Lease Term), Tenant
shall have the right to terminate this Lease upon prior written notice to
Landlord within ten (10) days of the expiration of the applicable periods
described in Section 15.4(a) or 15.4(b) above, or, in the event such termination
is based on the event in Section 15.4(c), within ten

                                      -11-
<PAGE>   15

(10) days following the date of Landlord's Damage Notice. Any such termination
will be effective as of the date of the damage or destruction.

               15.5. Tenant's Right to Require Landlord to Rebuild.
Notwithstanding the foregoing, in the event that each of the following are
satisfied: (a) less than fifty percent (50%) of the Building is damaged by fire
or other casualty, (b) Landlord does not elect to rebuild or Landlord elects to
terminate this Lease as indicated to Tenant in Landlord's Damage Notice and (c)
there are at least three (3) full years remaining on the Lease Term (with any
renewal period counting, provided Tenant has exercised Tenant's option to
renew), within ten (10) days of the date of Landlord's Damage Notice, Tenant may
by written notice to Landlord request that the Building and Premises be restored
by Landlord. In such event, Tenant agrees to pay to Landlord within twenty (20)
days following Landlord's invoice therefor the difference, reasonably determined
by Landlord, between (i) the cost of rebuilding the damaged improvements to
substantially the same condition in which they existed immediately before the
damage, except for fixtures, additions or other improvements that Tenant is
required to insure under Section 9 of this Lease and (ii) the actual amount of
insurance proceeds received by Landlord. Landlord shall not be required to
repair and reconstruct any fixtures, additions or other improvements that Tenant
is required to insure under Section 9 of this Lease. Tenant shall promptly
perform all repairs or restoration not required to be done by Landlord and shall
commence doing business in accordance with this Lease. In addition, Tenant shall
pay to Landlord the amount of the commercially reasonable deductible under
Landlord's insurance policy within twenty (20) days of presentment of Landlord's
invoice. Tenant shall not be entitled to any rental abatement provided in
Section 15.3 of this Lease unless Landlord recovers rent loss insurance from its
insurer. If Tenant exercises its option to require Landlord to rebuild the
Building in accordance with this Paragraph 15.5, such obligation of Landlord to
rebuild the Building shall be the sole remedy of Tenant and Tenant waives any
right to terminate the Lease by reason of such damage or casualty.

        16. CONDEMNATION. If the whole or any substantial part of the Premises
or the Project should be taken for any public or quasi-public use under
governmental law, ordinance or regulation, or by right of eminent domain, or by
private purchase in lieu thereof (a "Taking" or "Taken"), and the Taking would
prevent or materially interfere with the permitted use of the Premises or in
Landlord's reasonable judgment, would materially interfere with or impair its
ownership or operation of the Project, then upon written notice by Landlord,
this Lease shall terminate and Rent shall be apportioned as of said date. If
part of the Premises shall be Taken and this Lease is not terminated as provided
above, the Rent payable hereunder during the unexpired Lease Term shall be
reduced to such extent as may be fair and reasonable under the circumstances. In
the event of any such Taking, Landlord shall be entitled to receive the entire
price or award from any such Taking without any payment to Tenant, and Tenant
hereby assigns to Landlord Tenant's interest, if any, in such award. Tenant
shall have the right, to the extent that same shall not diminish Landlord's
award, to make a separate claim against the condemning authority (but not
Landlord) for such compensation as may be separately awarded or recovered by
Tenant for moving expenses and damage to Tenant's Trade Fixtures, or for any
other amounts the condemning authority is permitted to award, if a separate
award for such items is made to Tenant.

        17.    ASSIGNMENT AND SUBLETTING.

               17.1. General. Without Landlord's prior written consent, which
consent shall not be unreasonably withheld or delayed, Tenant shall not assign
this Lease or sublease the Premises or any part thereof or mortgage, pledge or
hypothecate its leasehold interest or grant any concession or license within the
Premises and any attempt to do any of the foregoing shall be void and of no
effect. This prohibition against assigning or subletting shall be construed to
include a prohibition against any assignment or subletting by operation of law
and shall bind any permitted assignee or sublessee. For purposes of this
paragraph, a transfer of the ownership interests controlling Tenant shall be
deemed an assignment of this Lease unless Tenant's ownership interests are
publicly traded. If Tenant requests Landlord's consent to any assignment,
subletting or other transfer, then Tenant shall provide Landlord with a written
description of all terms thereof, copies of the proposed

                                      -12-
<PAGE>   16

documentation and the following information about the proposed assignee,
sublessee or other transferee: name and address; reasonably satisfactory
information about its proposed business and business history; its proposed use
of the Premises; banking, financial and other credit information; and other
information sufficient to enable Landlord to determine the proposed transferee's
creditworthiness and character. If Landlord consents to a proposed assignment,
subletting or other transfer, then the proposed transferee shall deliver to
Landlord a written agreement whereby it assumes the Tenant's obligations
hereunder. Landlord's consent to any assignment, subletting or other transfer
shall not waive Landlord's rights as to any subsequent assignment, subletting or
transfer. Tenant shall reimburse Landlord for all of Landlord's reasonable
out-of-pocket expenses in connection with any assignment, sublease or other
transfer. It shall be reasonable for Landlord to withhold its consent to any
assignment or sublease if (i) Tenant is in default under this Lease beyond any
applicable grace and cure period, (ii) the financial responsibility, nature of
business, and character of the proposed assignee or subtenant are not all
reasonably satisfactory to Landlord, (iii) in the reasonable judgment of
Landlord the purpose for which the assignee or subtenant intends to use the
Premises (or a portion thereof) is not in keeping with Landlord's standards for
the Project or are in violation of the terms of this Lease, (iv) the proposed
assignee or subtenant is a government entity, or (v) the proposed assignment (as
opposed to a sublease) is for less than the entire Premises or for less than the
remaining Term of the Lease. The foregoing shall not exclude any other
reasonable basis for Landlord to withhold its consent.

               17.2. Affiliate Transfers. Notwithstanding subparagraph 17.1
above, Tenant may assign or sublet the Premises or any part thereof to an
entity: (a) controlling Tenant, controlled by Tenant or under common control
with Tenant or (b) in the event of a merger or consolidation; or (c) which
purchases all or substantially all of the assets or stock of Tenant (such
instances being referred to as a "Permitted Transfer" and such entity being a
"Permitted Transferee") without the prior written consent of Landlord for so
long as any such Permitted Transferee has the same or better financial strength
as Tenant had as of the date of this Lease, as evidenced in a manner reasonably
acceptable to Landlord. In such event, Tenant must give Landlord at least five
(5) days prior written notice, furnish appropriate financial documentation
concerning such Permitted Transferee and execute and deliver to Landlord such
instruments as Landlord may reasonably request with such respect to any such
assignment or subletting. Sections 17.3 and 17.4 below shall not apply to a
Permitted Transfer.

               17.3. Termination. Upon Landlord's receipt of Tenant's written
notice of a desire to assign this Lease or sublet the Premises, or any part
thereof (other than a Permitted Transferee), Landlord shall have the right to be
exercised by giving written notice to Tenant within twenty (20) days after
receipt of Tenant's notice, to terminate this Lease with respect to the space
described in Tenant's notice, as of the date specified in Tenant's notice for
the commencement of the proposed assignment or sublease.

               17.4. Additional Compensation. In the event that the rent due and
payable by a sublessee or assignee (or a combination of the rental payable under
such sublease or assignment plus any bonus or other consideration therefor or
incident thereto) exceeds the rental payable under this Lease, then Tenant shall
be bound and obligated to pay Landlord as additional rent hereunder seventy-five
percent (75%) of all such excess consideration (less Tenant's actual and
reasonable costs to effect such transfer, including brokerage fees, reasonable
legal fees and the amortized cost of any improvements paid for by Tenant, and
the fair market value of any personal property sold by Tenant to the sublessee
or assignee not included in the rent charged by Tenant) within ten (10) days
following receipt thereof by Tenant. All rentals paid to Tenant by an assignee
or sublessee shall be received by Tenant in trust for Landlord, to be forwarded
immediately to Landlord without offset or reduction of any kind, and upon
election by Landlord, such rentals shall be paid directly to Landlord.

               17.5. No Release. Notwithstanding any assignment, subletting or
other transfer, Tenant and any guarantor or surety of Tenant's obligations under
this Lease shall at all times remain fully responsible and liable for the
payment of the rent and for compliance with all of Tenant's other

                                      -13-
<PAGE>   17

obligations under this Lease (regardless of whether Landlord's approval has been
obtained for any such assignments or sublettings). If this Lease be assigned or
if the Premises be subleased (whether in whole or in part) or in the event of
the mortgage, pledge, or hypothecation of Tenant's leasehold interest or grant
of any concession or license within the Premises or if the Premises be occupied
in whole or in part by anyone other than Tenant, then upon a default by Tenant
hereunder Landlord may collect rent from the assignee, sublessee, mortgagee,
pledgee, party to whom the leasehold interest was hypothecated, concessionee or
licensee or other occupant and, except to the extent set forth in the preceding
paragraph, apply the amount collected to the next rent payable hereunder. No
such transaction or collection of rent or application thereof by Landlord,
however, shall be deemed a waiver of these provisions or a release of Tenant
from the further performance by Tenant of its covenants, duties, or obligations
hereunder.

               17.6. Landlord Transfer. Landlord may transfer, in whole or in
part, the Project and any of its rights under this Lease. If Landlord assigns
its rights under this Lease, then Landlord shall thereby be released from any
further obligations hereunder, provided Landlord transfers the Security Deposit
to such transferee.

        18. INDEMNIFICATION AND WAIVER. Except for Landlord's or Landlord's
employees' or agents' gross negligence or willful misconduct, Tenant agrees to
indemnify, defend and hold harmless Landlord, and Landlord's partners, officers,
directors, agents and employees, from and against any and all claims, demands,
actions, liabilities, damages, costs and expenses (including attorneys' fees)
for injuries to any person and damage to or theft or misappropriation or loss of
property occurring in or about the Project and arising from the use and
occupancy of the Premises or from any activity, work, or thing done, permitted
or suffered by Tenant in or about the Premises (including, without limitation,
any alteration by Tenant) or from any breach or default on the part of Tenant in
the performance of any covenant or agreement on the part of Tenant to be
performed under this Lease or due to any other act or omission of Tenant, its
subtenants, assignees, invitees, employees, contractors and agents. The
furnishing of insurance required hereunder shall not be deemed to limit Tenant's
obligations under the provisions of this Paragraph 18. Landlord and its
partners, officers, directors, agents and employees shall not be liable for, and
Tenant hereby waives all claims against such parties for, injury to persons or
damage to property sustained by Tenant or any person claiming through Tenant
resulting from any accident or occurrence in or upon the Premises or in or about
the Project from any cause whatsoever, except to the extent caused in whole by
Landlord's or Landlord's agents' or employees' gross negligence or willful
misconduct.

        19. INSPECTION AND ACCESS. Landlord and its agents, representatives, and
contractors shall have the right to enter the Premises at any reasonable time
and upon reasonable prior written notice (except in the event of an emergency,
where no notice is necessary) to inspect the Premises and to make such repairs
as may be required or permitted pursuant to this Lease and for any other
reasonable business purpose. Landlord and Landlord's representatives may enter
the Premises during business hours and upon prior reasonable notice for the
purpose of showing the Premises at any time to prospective lenders or purchasers
or, during the last nine (9) months of the Lease Term, to prospective tenants;
in addition, Landlord shall have the right at any time during the Term to erect
a reasonable sign stating the Project is available for sale or during the last
nine (9) months of the Lease Term, available to let.

        20. QUIET ENJOYMENT. If Tenant shall perform all of the covenants and
agreements herein required to be performed by Tenant, Tenant shall, subject to
the terms of this Lease, at all times during the Lease Term, have peaceful and
quiet enjoyment of the Premises against any person claiming by, through or under
Landlord, but not otherwise.

        21.    SURRENDER.

               21.1. Removal/Repair. Upon termination of the Lease Term or
earlier termination of Tenant's right of possession, Landlord may, by notice to
Tenant, require Tenant at Tenant's expense to remove any or all Trade

                                      -14-
<PAGE>   18

Fixtures and/or any or all Tenant Improvements, including, without limitation,
the Work described in Exhibit C, and to repair any damage caused by such
removal. Notwithstanding the foregoing, upon Tenant's submission to Landlord of
a request to approve alterations or improvements to the Premises, Tenant may
request Landlord to indicate to Tenant in writing whether or not Landlord will
require removal thereof. If Landlord fails to respond within ten (10) days after
Landlord's receipt of Tenant's request, Tenant shall be deemed to be required to
remove such improvements unless Landlord sends written notice to Tenant prior to
the expiration of the Lease Term that Landlord will not require removal thereof.
Any Trade Fixtures, Tenant Improvements, or other property not so removed by
Tenant as permitted or required herein shall be deemed abandoned and may be
stored, removed, and disposed of by Landlord at Tenant's expense, and Tenant
waives all claims against Landlord for any damages resulting from Landlord's
retention and disposition of such property. All Tenant Improvements except those
which Landlord requires Tenant to remove shall remain in the Premises as the
property of Landlord.

               21.2. Survival. All obligations of Tenant hereunder not fully
performed as of the termination of the Lease Term shall survive the termination
of the Lease Term, including without limitation, all payment obligations with
respect to Operating Expenses accruing during Tenant's occupancy of the Premises
and all obligations concerning the condition and repair of the Premises. Upon
the termination of the Lease Term, Tenant shall surrender the Premises to
Landlord in the condition received on the date of this Lease (or as hereafter
required with respect to improvements made thereon), normal wear and tear, acts
of God covered by insurance, casualty and condemnation excepted. Prior to Tenant
vacating the Premises, Tenant shall pay to Landlord any amount reasonably
estimated by Landlord as necessary to put the Premises, including without
limitation, all heating and air conditioning systems and equipment serving the
Premises, in good condition and repair, reasonable wear and tear excepted.
Tenant shall also, prior to vacating the Premises, pay to Landlord the amount,
as reasonably estimated by Landlord, of Tenant's obligation for Operating
Expenses for the year in which the Lease terminates, subject to Section 6.2
above. All such amounts shall be used and held by Landlord for payment of such
obligations, the Tenant being liable for any additional costs therefor within
twenty (20) days after Landlord's written demand.

        22. HOLDING OVER. If, for any reason, Tenant retains possession of the
Premises after the termination of the Lease Term, unless otherwise agreed in
writing, such possession shall be subject to immediate termination by Landlord
at any time, and all of the other terms and provisions of this Lease (excluding
any expansion or renewal option or other similar right or option) shall be
applicable during such holdover period, except that Tenant shall pay Landlord
from time to time, upon demand, as Base Rent for the holdover period, an amount
equal to one hundred fifty percent (150%) of the Base Rent in effect on the
termination date, computed on a monthly basis for each month or part thereof
during such holding over. All other payments shall continue under the terms of
this Lease. In addition, Tenant shall be liable for all damages incurred by
Landlord as a result of such holding over. No holding over by Tenant, whether
with or without consent of Landlord, shall operate to extend this Lease except
as otherwise expressly provided, and this Paragraph 22 shall not be construed as
consent for Tenant to retain possession of the Premises.

        23. EVENTS OF DEFAULT. Each of the following events shall be an event of
default ("Event of Default") by Tenant under this Lease:

                      (i) Tenant shall fail to pay any installment of Base Rent,
        Operating Expense Payment or any other payment required herein when due,
        and such failure shall continue for a period of ten (10) days from the
        date such payment was due.

                      (ii) Tenant or any guarantor or surety of Tenant's
        obligations hereunder shall (A) become insolvent; (B) admit in writing
        its inability to pay its debts; (C) make a general assignment for the
        benefit of creditors; (D) commence any case, proceeding or other action
        seeking to have an order for relief entered on its behalf as a debtor or
        to adjudicate it a bankrupt or insolvent, or seeking reorganization,
        arrangement, adjustment, liquidation, dissolution or composition of it
        or its debts under any law relating to bankruptcy, insolvency,

                                      -15-
<PAGE>   19

        reorganization or relief of debtors or seeking appointment of a
        receiver, trustee, custodian or other similar official for it or for all
        or of any substantial part of its property; or (E) take any action to
        authorize or in contemplation of any of the actions set forth above in
        this subparagraph 23(ii).

                      (iii) Any case, proceeding or other action against Tenant
        or any guarantor or surety of Tenant's obligations hereunder shall be
        commenced seeking (A) to have an order for relief entered against it as
        debtor or to adjudicate it a bankrupt or insolvent; (B) reorganization,
        arrangement, adjustment, liquidation, dissolution or composition of it
        or its debts under any law relating to bankruptcy, insolvency,
        reorganization or relief of debtors; or (C) appointment of a receiver,
        trustee, custodian or other similar official for it or for all or any
        substantial part of its property, and such case, proceeding or other
        action results in the entry of an order for relief against it which it
        is not dismissed within 60 days of its filing or entry.

                      (iv) Any insurance required to be maintained by Tenant
        pursuant to this Lease shall be cancelled or terminated or shall expire
        or shall be reduced or materially changed, except, in each case, as
        permitted in this Lease and not reinstated to Landlord's satisfaction
        within five (5) days after written demand by Landlord.

                      (v) Tenant shall not occupy or shall vacate the Premises
        or shall fail to continuously operate its business at the Premises for
        the permitted use set forth herein, whether or not Tenant is in monetary
        or other default under this Lease.

                      (vi) Tenant shall attempt or there shall occur any
        assignment, subleasing or other transfer of Tenant's interest in or with
        respect to this Lease except as otherwise permitted in this Lease.

                      (vii) Tenant shall fail to discharge any lien placed upon
        the Premises in violation of this Lease within ten (10) days after
        Tenant becomes aware that any such lien or encumbrance is filed against
        the Premises.

                      (viii) Tenant or any guarantor or surety of Tenant's
        obligations hereunder dies or suffers a legal disability (if Tenant,
        guarantor, or surety is an individual) or shall be dissolved or
        otherwise fail to maintain its legal existence (if Tenant, guarantor or
        surety is a corporation, partnership or other entity).

                      (ix) Tenant shall fail to comply with any provision of
        this Lease other than those specifically referred to in this Paragraph
        23, and except as otherwise expressly provided therein, such default
        shall continue for more than 30 days after Landlord shall have given
        Tenant written notice of such default; provided, that if Tenant
        commences the cure of such default within thirty (30) days and is
        diligently pursuing same, then Tenant shall have an additional thirty
        (30) days to cure such default, provided such default does not adversely
        affect Landlord, the Project, the Project's systems and/or other tenants
        at the Project or surrounding buildings owned by Landlord.

        24.    LANDLORD'S REMEDIES.

               24.1. General. Upon each occurrence of an Event of Default and so
long as such Event of Default shall be continuing, Landlord may at any time
thereafter at its election: (i) terminate this Lease or Tenant's right of
possession, but Tenant shall remain liable as hereinafter provided; (ii) alter
locks or other security devices at the Premises, with notice to Tenant as
required under applicable law, to deprive Tenant access thereto and Landlord
shall not be required to provide a new key or right of access to Tenant; and/or
(iii) pursue any remedies provided for under this Lease or at law or in equity.
Upon the termination of this Lease or termination of Tenant's right of
possession, it shall be lawful for Landlord, without formal demand or notice of
any kind, to re-enter the Premises by summary dispossession proceedings or any
other action or proceeding authorized by law and to remove Tenant and all
persons and property therefrom. If Landlord re-enters the

                                      -16-
<PAGE>   20

Premises, Landlord shall have the right to keep in place and use, or remove and
store, all of the furniture, fixtures and equipment at the Premises.

               24.2. Lease Termination. If Landlord terminates this Lease,
Landlord may recover from Tenant the sum of: all Base Rent and all other amounts
accrued hereunder to the date of such termination; the cost of reletting the
whole or any part of the Premises, including without limitation brokerage fees
and/or leasing commissions incurred by Landlord, and costs of removing and
storing Tenant's or any other occupant's property, repairing, altering,
remodeling, or otherwise putting the Premises into condition acceptable to a new
tenant or tenants, and all reasonable expenses incurred by Landlord in pursuing
its remedies, including reasonable attorneys' fees and court costs; and the
excess of the then present value of the Base Rent and other amounts payable by
Tenant under this Lease as would otherwise have been required to be paid by
Tenant to Landlord during the period following the termination of this Lease
measured from the date of such termination to the expiration date stated in this
Lease, over the present value of any net amounts which Tenant establishes
Landlord can reasonably expect to recover by reletting the Premises for such
period, taking into consideration the availability of acceptable tenants and
other market conditions then affecting leasing. Such present values shall be
calculated at a discount rate equal to the 90-day U.S. Treasury bill rate at the
date of such termination.

               24.3. Possession Termination. If Landlord terminates Tenant's
right of possession and this Lease, to the extent required under then applicable
law, Landlord shall use reasonable efforts to relet the Premises for the account
of Tenant for such rent and upon such terms as shall be satisfactory to Landlord
without thereby releasing Tenant from any liability hereunder and without demand
or notice of any kind to Tenant. For the purpose of such reletting Landlord is
authorized to make any repairs, changes, alterations, or additions in or to the
Premises as Landlord deems reasonably necessary or desirable. If the Premises
are not relet, then Tenant shall pay to Landlord as damages a sum equal to the
sum of the rental reserved in this Lease for such period or periods, plus the
cost of recovering possession of the Premises (including attorneys' fees and
costs of suit), the unpaid Base Rent and other amounts accrued hereunder at the
time of repossession, and the costs incurred in any attempt by Landlord to relet
the Premises. If the Premises are relet and a sufficient sum shall not be
realized from such reletting (after first deducting therefrom, for retention by
Landlord, the unpaid Base Rent and other amounts accrued hereunder at the time
of reletting, the cost of recovering possession (including without limitations
brokerage fees and leasing commissions, not to exceed the unamortized portion of
the commission remaining under this Lease), and the cost of collection of the
rent accruing therefrom) to satisfy the rent provided for in this Lease to be
paid, then Tenant shall immediately satisfy and pay any such deficiency. Any
such payments due Landlord shall be made upon demand therefor from time to time
and Tenant agrees that Landlord may file suit to recover any sums falling due
from time to time. Tenant shall not be entitled to the excess of any
consideration obtained by reletting over the Base Rent due hereunder.
Notwithstanding any such reletting without termination, Landlord may at any time
thereafter elect in writing to terminate this Lease for such previous breach.

               24.4. Reletting. Tenant acknowledges that Landlord has entered
into this Lease in reliance upon, among other matters, Tenant's agreement and
continuing obligation to pay all Rent due throughout the Term. However, if
Landlord exercises its rights under this Section 24 to terminate Tenant's
possession and this Lease, to the extent required under then applicable law,
Landlord agrees to use reasonable efforts to attempt to relet the Premises;
provided, however, Tenant agrees that Landlord has no obligation to: (i) relet
the Premises prior to leasing any other space within the Project; (ii) relet the
Premises (A) at a rental rate or otherwise on terms below market, as then
determined by Landlord in its sole discretion; (B) to any entity not satisfying
Landlord's then standard financial credit risk criteria; (C) for a use (1) not
consistent with Tenant's use prior to the Event of Default; (2) which would
violate then applicable law or any restrictive covenant or other lease affecting
the Project; (3) which would impose a greater burden upon the Project's parking,
HVAC or other facilities; and/or (4) which would involve any use of Hazardous
Materials; (iii) divide the Premises, install new demising walls or otherwise
reconfigure the Premises to make same more marketable; (iv) pay any leasing or
other commissions arising from such

                                      -17-
<PAGE>   21

reletting, unless Tenant unconditionally delivers Landlord, in good and
sufficient funds, the full amount thereof in advance; (v) pay, and/or grant any
allowance for, tenant finish or other costs associated with any new lease, even
though same may be amortized over the applicable lease term, unless Tenant
unconditionally delivers Landlord, in good and sufficient funds, the full amount
thereof in advance; and/or (vi) relet the Premises, if to do so, Landlord would
be required to alter other portions of the Project, make ADA-type modifications
or otherwise install or replace any sprinkler, security, safety, HVAC or other
Project operating systems.

               24.5. No Waiver. Exercise by Landlord of any one or more remedies
hereunder granted or otherwise available shall not be deemed to be an acceptance
of surrender of the Premises and/or a termination of this Lease by Landlord,
whether by agreement or by operation of law, it being understood that such
surrender and/or termination can be effected only by the written agreement of
Landlord. Any law, usage, or custom to the contrary notwithstanding, Landlord
shall have the right at all times to enforce the provisions of this Lease in
strict accordance with the terms hereof and applicable law; and the failure of
Landlord at any time to enforce its rights under this Lease strictly in
accordance with same shall not be construed as having created a custom in any
way or manner contrary to the specific terms, provisions, and covenants of this
Lease or as having modified the same. Tenant and Landlord further agree that
forbearance or waiver by Landlord to enforce its rights pursuant to this Lease
or at law or in equity, shall not be a waiver of Landlord's right to enforce one
or more of its rights in connection with any subsequent default. A receipt by
Landlord of rent or other payment with knowledge of the breach of any covenant
hereof shall not be deemed a waiver of such breach, and no waiver by Landlord of
any provision of this Lease shall be deemed to have been made unless expressed
in writing and signed by Landlord. To the greatest extent permitted by law,
Tenant waives the service of notice of Landlord's intention to re-enter as
provided for in any statute, or to institute legal proceedings to that end, and
also waives all right of redemption in case Tenant shall be dispossessed by a
judgment or by warrant of any court or judgment. The terms "enter," "re-enter,"
"entry" or "re-entry," as used in this Lease, are not restricted to their
technical legal meanings. Any reletting of the Premises shall be on such terms
and conditions as Landlord in its sole discretion may determine (including
without limitation a term different than the remaining Lease Term, rental
concessions, alterations and repair of the Premises, lease of less than the
entire Premises to any tenant and leasing any or all other portions of the
Project before reletting the Premises). Subject to Section 24.4 above, Landlord
shall not be liable, nor shall Tenant's obligations hereunder be diminished
because of, Landlord's failure to relet the Premises or collect rent due in
respect of such reletting.

        25.    LANDLORD'S DEFAULT AND LIABILITY.

               25.1. Landlord's Default. Landlord shall not be in default
hereunder and Tenant shall not have any remedy or cause of action unless
Landlord fails to perform any of its obligations hereunder within 30 days after
written notice from Tenant specifying such failure (unless such performance
will, due to the nature of the obligation, require a period of time in excess of
30 days, then after such period of time as is reasonably necessary). If Landlord
is in default hereunder, Tenant' exclusive remedy shall be an action for
damages. All obligation of Landlord hereunder shall be construed as covenants
not conditions; and all such obligations will be binding upon Landlord only
during the period of its ownership of the Premises and not thereafter.

               25.2. Landlord's Liability. The term "Landlord" in this Lease
shall mean only the owner, for the time being of the Premises, and in the event
of the transfer of such owner of its interests in the Premises, such owner shall
thereupon be released and discharged from all obligations of Landlord thereafter
accruing, but such obligations shall be binding during the Lease Term upon each
new owner for the duration of such owner's-ownership. Any liability of Landlord
under this Lease and/or with respect to the Project, the Common Areas, the
Premises or otherwise shall be limited solely to its interest in the Project
(and any proceeds thereof), and in no event shall any personal liability be
asserted against Landlord and/or its partners, officers, directors, agents or
employees in connection with this Lease nor shall any

                                      -18-
<PAGE>   22

recourse be had to any other property or assets of Landlord or such other
parties.

               25.3 No Waiver. Tenant and Landlord agree that the forbearance or
waiver by Tenant to enforce its rights pursuant to this Lease or at law or in
equity shall not be a waiver of Tenant's right to enforce one or more of its
rights in connection with any subsequent default of Landlord. No waiver by
Tenant of any provision of this Lease shall be deemed to have been made unless
expressed in writing and signed by Tenant.

        26. WAIVER OF JURY TRIAL. TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL
BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS
LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

        27. SUBORDINATION. This Lease and Tenant's interest and rights hereunder
are and shall be subject and subordinate at all times to the lien of any
mortgage, now existing or hereafter created on or against the Project or the
Premises, and all amendments, restatements, renewals, modifications,
consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant. Tenant agrees,
at the election of the holder of any such mortgage, to attorn to any such
holder. Tenant agrees that within ten (10) business days following demand to
execute, acknowledge and deliver such instruments, confirming such subordination
and such instruments of attornment as shall be requested by any such holder. As
of the date hereof, there is no current mortgage covering the Project. With
respect to any future mortgages and ground leases on or after the date hereof,
if requested by Tenant in writing, Landlord agrees to use commercially
reasonable efforts to cause such holder to enter into a non-disturbance
agreement with Tenant in the form provided by such holder. Notwithstanding the
foregoing, any such holder may at any time subordinate its mortgage to this
Lease, without Tenant's consent, and thereupon this Lease shall be deemed prior
to such mortgage without regard to their respective dates of execution, delivery
or recording and in that event such holder shall have the same rights with
respect to this Lease as though this Lease had been executed prior to the
execution, delivery and recording of such mortgage and had been assigned to such
holder. The term "mortgage" whenever used in this Lease shall be deemed to
include deeds of trust, security assignments and any other encumbrances, any
reference to the "holder" of a mortgage shall be deemed to include the
beneficiary under a deed of trust.

        28. MECHANIC'S LIENS. Tenant has no express or implied authority to
create or place any lien or encumbrance of any kind upon, or in any manner to
bind the interest of Landlord or Tenant in, the Premises or to charge the
rentals payable hereunder for any claim in favor of any person dealing with
Tenant, including those who may furnish materials or perform labor for any
construction or repairs. Tenant covenants and agrees that it will pay or cause
to be paid all sums legally due and payable by it on account of any labor
performed or materials furnished in connection with any work performed on the
Premises and that it will save and hold Landlord harmless from all loss, cost or
expense based on or arising out of asserted claims or liens against the
leasehold estate or against the interest of Landlord in the Premises or under
this Lease, Tenant shall give Landlord immediate written notice of the placing
of any lien or encumbrance against the Premises and cause such lien or
encumbrance to be discharged within ten (10) days of Tenant's knowledge of the
filing or recording thereof; provided, however, Tenant may contest such liens or
encumbrances as long as such contest prevents foreclosure of the lien or
encumbrance and Tenant causes such lien or encumbrance to be bonded or insured
over in a manner satisfactory to Landlord within such 30-day period.

        29. LANDLORD'S LIEN/SECURITY INTEREST. Intentionally Deleted.

        30. ESTOPPEL CERTIFICATES. Tenant agrees, from time to time, within ten
(10) business days after request of Landlord, to execute and deliver to
Landlord, or Landlord's designee, any estoppel certificate requested by
Landlord, stating that this Lease is in full force and effect (or specifying in
detail why not), the date to which rent has been paid, that Landlord is not in
default hereunder (or specifying in detail the nature of Landlord's

                                      -19-
<PAGE>   23

default), the termination date of this Lease and such other matters pertaining
to this Lease as may be reasonably requested by Landlord. It is understood and
agreed that Tenant's obligation to furnish each estoppel certificate in a timely
fashion is a material inducement for Landlord's execution of this Lease. No cure
or grace period provided in this Lease shall apply to Tenant's obligations to
timely deliver an estoppel certificate. If Tenant fails to timely provide any
estoppel certificate, the matters contained therein shall be deemed correct.

        31.    ENVIRONMENTAL REQUIREMENTS.

               31.1. General. Except for such incidental cleaning agents and
solutions or maintenance materials used in the ordinary course or materials and
goods stored as part of Tenant's warehouse operations (but such use and storage
shall be in compliance with all Environmental Requirements), Tenant shall not
permit or cause any party to bring any Hazardous Material upon the Premises or
store or use any Hazardous Material in or about the Premises without Landlord's
prior written consent. Tenant, at its sole cost and expense, shall operate its
business in the Premises in compliance with all Environmental Requirements, and
will obtain, comply with, and properly maintain all permits and licenses, or
applications required by Environmental Requirements for its operations. The term
"Environmental Requirements" means all applicable present and future statutes,
regulations, ordinances, rules, codes, or other similar enactments of any
governmental authority of agency, and any applicable judicial, administrative or
regulatory decrees, judgments, orders, or policies regulating or relating to any
Hazardous Materials or pertaining to health, safety, industrial hygiene, or the
environmental conditions on, under, or about the Premises or the environment,
including, without limitation, the following: the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"); the Resource Conservation
and Recovery Act; the Toxic Substances Control Act; the Clean Air Act; the
Federal Water Pollution Control Act; the Federal Hazardous Materials
Transportation Act; and all state and local counterparts, supplements or
additions thereto, and any regulations or policies promulgated or issued
thereunder. The term "Hazardous Materials" means and includes petroleum (as
defined in CERCLA), asbestos and any substance, material, waste, pollutant, or
contaminant listed or defined as hazardous or toxic, under any Environmental
Requirements.

               31.2. Indemnity. Tenant shall indemnify, defend, and hold
Landlord any its partners, officers, directors, agents and employees harmless
from and against any and all manner of losses (including, without limitation,
diminution in value of the Premises or the Project and loss of rental income
from the Project), claims, demands, actions, suits, damages (including, without
limitation, punitive damages), fines, penalties, administrative and judicial
proceedings, judgments, settlements, expenses (including, without limitation,
reasonable consultant fees, attorneys' fees, or expert fees) which arise during
or after the Lease Term which are brought or recoverable against, or suffered or
incurred by Landlord or such parties as a result of any breach of the
obligations under this Paragraph 31 or noncompliance with any Environmental
Requirement by Tenant, it agents, employees, contractors, subtenants, or
invitees, regardless of whether Tenant had knowledge of such noncompliance.
Tenant shall bear the burden of proof by a preponderance of the evidence that
the foregoing indemnification is inapplicable to any claim for indemnification
by Landlord. Notwithstanding anything contained in this Section to the contrary,
Tenant has no responsibility for any Hazardous Materials (a) existing prior to
the date of Tenant's occupancy or (b) brought upon, produced, stored, used,
discharged or disposed of in the Project, except by Tenant or its employees,
contractors, invitees, agents and affiliates. The indemnification and hold
harmless obligations of Tenant shall survive any termination of this Lease, any
renewal, expansion or amendment of this Lease and/or the execution and delivery
of any new lease with Tenant covering all or any portion of the Project.

               31.3. Assessments. Landlord shall have access to, and a right to
perform inspections and tests of, the Premises as it may require to determine
Tenant's compliance with Environmental Requirements and Tenant's obligations
under this Paragraph 31. Access shall be granted to Landlord upon Landlord's
reasonable prior notice to Tenant and at such reasonable times so as to
minimize, so far as may be reasonable under the circumstances, any disturbance
to Tenant's operations. At the expiration or earlier termination of the

                                      -20-
<PAGE>   24

Lease, Landlord shall have the right, at its option, to undertake an
environmental assessment of the Premises to determine Tenant's compliance with
all Environmental Requirements. All such inspections and tests shall be
conducted at Landlord's expense, unless such inspections or tests reveal the
presence of Hazardous Material stored, used or disposed of by Tenant, its
agents, affiliates, contractors, subtenants or invitees, or reveal, based on
Landlord's reasonable determination, that Tenant has not complied with all
Environmental Requirements, in which case Tenant shall within twenty (20) days
of Landlord's demand, reimburse Landlord for the cost of such inspection and
tests. Landlord and Tenant agree that Landlord's receipt of or satisfaction with
any environmental assessment in no way waives any rights that Landlord holds
against Tenant.

        32. MORTGAGEE'S REQUIREMENTS. If any mortgagee should require that this
Lease be amended in any manner (other than in the description of the Premises,
the Lease Term, the purpose, or the rent hereunder) which amendment does not
materially adversely affect the interests, rights or obligations of Tenant
hereunder, Landlord shall give written notice thereof to Tenant, which notice
shall be accompanied by a lease supplement agreement embodying such amendments.
Tenant shall, within ten (10) business days after receipt of Landlord's notice,
consent to such amendments and execute the tendered lease supplement agreement,
subject to Tenant's reasonable approval.

        33. RULES AND REGULATIONS. Tenant shall, at all times during the Lease
Term and any extension thereof, comply with all reasonable rules and regulations
at any time or from time to time established by Landlord covering use of the
Premises, the Common Areas and/or the Project. In the event of any conflict
between said rules and regulations and other provisions of this Lease, the other
terms and provisions of this Lease shall control. Landlord shall not have any
liability or obligation for the breach of any rules or regulations by other
tenants in the Project.

        34. SECURITY SERVICE. Tenant acknowledges and agrees that Landlord is
not providing any security services with respect to the Premises and that
Landlord shall not be liable to Tenant for, and Tenant waives any claim against
Landlord with respect to, any loss by theft or any other injury (including
death) or damage suffered or incurred by Tenant or its employees or agents in
connection with any unauthorized entry into the Premises or any other breach of
security with respect to the Premises.

        35. FORCE MAJEURE. Except for Landlord's and Tenant's monetary
obligations hereunder, neither Landlord nor Tenant shall be held responsible for
delays in the performance of such party's respective obligations hereunder when
caused by strikes, lockouts, labor disputes, acts of God, inability to obtain
labor or materials or reasonable substitutes therefor, governmental
restrictions, governmental regulations, governmental controls, enemy or hostile
governmental actions, civil commotion, fire or other casualty, and any causes
beyond the reasonable control of such party ("Force Majeure").

        36. ENTIRE AGREEMENT. This Lease constitutes the entire understanding
and agreement of Landlord and Tenant with respect to the subject matter hereof,
and contains all of the covenants and agreements of Landlord and Tenant with
respect thereto. No representations, inducements, promises or agreements, oral
or written, have been made by Landlord or Tenant, or anyone acting on behalf of
Landlord or Tenant, which are not contained herein, and any prior letters of
intent, agreements, promises, negotiations, or representations not expressly set
forth in this Lease are of no force or effect. This Lease may not be altered,
changed or amended except by an instrument in writing signed by both parties
hereto.

        37. SEVERABILITY. If any clause or provisions of this Lease is illegal,
invalid or unenforceable under present or future laws, then and in that event,
it is the intention of the parties hereto that the remainder of this Lease shall
not be affected thereby. It is also the intention of the parties to this Lease
that in lieu of each clause or provision of this Lease that is illegal, invalid
or unenforceable, there be added, as a part of this Lease, a clause or provision
as similar in terms to such illegal, invalid or unenforceable clause or
provision as may be possible and be legal, valid and enforceable.

                                      -21-
<PAGE>   25

        38. BROKERS. Landlord and Tenant each represent and warrant to the other
that it has dealt with no broker, agent or other person in connection with this
transaction and that no broker, agent or other person brought about this
transaction, other than the broker, if any, set forth on the second page of this
Lease, and each party agrees to indemnify and hold the other harmless from and
against any claims by any other broker, agent or other person claiming a
commission or other form of compensation claiming the same by, through or under
the indemnifying party with regard to this leasing transaction.

        39. LIMITED WAIVER. Tenant represents and acknowledges that it has
knowledge and experience in financial and business matters sufficient to enable
Tenant to evaluate the merits and risks of business transactions generally and
the transactions contemplated by this Lease in particular; that Tenant is not in
a significantly disparate bargaining position with respect to Landlord or this
transaction; that Tenant has been or was afforded the opportunity to be
represented by counsel of its own selection in connection with this Lease; and
Tenant hereby waives the applicability of the provisions of any applicable
deceptive trade or similar laws with respect to this Lease and the transactions
contemplated hereby.

        40.    MISCELLANEOUS.

               (a) Any payments or charges due from Tenant to Landlord
hereunder, including, without limitation, all Operating Expense Payments, shall
be considered rent for all purposes of this Lease.

               (b) If and when included within the term "Tenant", as used in
this instrument, there is more than one person, firm or corporation, each shall
be jointly and severally liable for the obligations of Tenant.

               (c) All notices required or permitted to be given under this
Lease shall be in writing and shall be sent by registered or certified mail,
return receipt requested, or by a reputable national overnight courier service,
postage prepaid, or by hand delivery addressed to the parties at their addresses
below. Either party may by notice given as aforesaid change its address for all
subsequent notices. Except where otherwise expressly provided to the contrary,
notice shall be deemed given upon delivery.

               (d) Tenant hereby waives any claim for money damages or for
termination of this Lease based upon any claim or assertion by Tenant that
Landlord unreasonably or arbitrarily withheld or delayed its consent or approval
in any case where Landlord's consent or approval is required, except if Landlord
is expressly required in this Lease to be reasonable in granting its consent.
Except as otherwise expressly provided in this Lease, Landlord's granting or
withholding of any consent or approval shall be at its complete direction.

               (e) At Landlord's request from time to time Tenant shall furnish
Landlord with true and complete copies of its most recent annual and quarterly
financial statements prepared by Tenant or Tenant's accountants and any other
financial information or summaries that Tenant typically provides to its
lenders.

               (f) Neither this Lease nor a memorandum of lease shall be filed
or recorded by or on behalf of Tenant with any public official or recorder's
office. Landlord may prepare and file, and upon request by Landlord Tenant will
execute, a memorandum of lease.

               (g) The normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Lease or any exhibits or amendments hereto.

               (h) The submission by Landlord to Tenant of this Lease shall have
no binding force or effect, shall not constitute an option for the leasing of
the Premises, nor confer any right or impose any obligations upon either party
until execution of this Lease by both parties and, if applicable, any guarantor
of Tenant's obligations hereunder.

                                      -22-
<PAGE>   26

               (i) Words of any gender used in this Lease shall be held and
construed to include any other gender, and words in the singular number shall be
held to include the plural, unless the context otherwise requires. The captions
inserted in this Lease are for convenience only and in no way define, limit or
otherwise describe the scope or intent of this Lease, or any provisions hereof,
or in any way affect the interpretation of this Lease.

               (j) Any amount not paid by Tenant within 5 days after its due
date in accordance with the terms of this Lease shall bear interest from such
due date until paid in full at the lesser of the highest rate permitted by
applicable law or 15 percent per year. It is expressly the intent of Landlord
and Tenant at all times to comply with applicable law governing the maximum rate
or amount of any interest payable on or in connection with this Lease. If
applicable law is ever judicially interpreted so as to render usurious any
interest called for under this Lease, or contracted for, charged, taken,
reserved, or received with respect to this Lease, then it is Landlord's and
Tenant's express intent that all excess amounts theretofore collected by
Landlord be credited on the applicable obligation (or, if the obligation has
been or would thereby be paid in full, refunded to Tenant), and the provisions
of this Lease immediately shall be deemed reformed and the amounts thereafter
collectible hereunder reduced, without the necessity of the execution of any new
document, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder.

               (k) Construction and interpretation of this Lease shall be
governed by the laws of the state in which the Project is located, excluding any
principles of conflicts of law.

               (l) Time is of the essence as to the performance of Landlord's
and Tenant's obligations under this Lease.

               (m) All riders, exhibits and addendum attached hereto are hereby
incorporated into this Lease and made a part hereof. The following riders,
exhibits and addenda are attached hereto:

                      Exhibit A  -  Legal Description
                      Exhibit B  -  Floor Plan
                      Exhibit C  -  Tenant Finish Work:  Allowance
                      Exhibit D  -  Renewal Option
                      Exhibit E  -  Letter of Credit

               (n) Landlord reserves the following rights with respect to the
Project and the Premises: (i) to place upon the exterior walls of the Project
signs of Landlord's own choosing, indicating the name of the Project or as set
forth in Section 19 of this Lease; (ii) to change the name or address of the
Project or the Premises; (iii) to retain keys to the Premises so as to have
access thereto at all reasonable times, subject to the provisions of Section 19
above and upon reasonable prior notice, except in case of an emergency where no
notice is necessary; and (iv) to enter the Premises and show same to prospective
lenders, purchasers or tenants during Tenant's normal business hours, subject to
Section 19 above.

TENANT:                                LANDLORD:

AVIRON __________,                     The Realty Associates Fund IV, L.P.,
a Delaware corporation                 a Delaware limited partnership

                                       By: Realty Associates Fund IV LLC,
                                           a Massachusetts limited liability
By: FRED KURLAND                           company, general partner
    ---------------------
Name:
Title:                                     By: Realty Associates Advisors LLC,
                                               a Delaware limited liability
                                               company, Manager

                                               By: Realty Associates Advisors
                                                   Trust, a Massachusetts
                                                   business trust, sole member

                                                   By: /s/ JANENE P. BEHLER
                                                       -------------------------
                                                       Officer

                                                       JANENE P. BEHLER
                                                       REGIONAL DIRECTOR

                                      -23-
<PAGE>   27

                                           By: Realty Associates Fund IV Texas
                                               Corporation, a Texas corporation,
                                               general partner

                                                   By: /s/ JANENE P. BEHLER
                                                       -------------------------
                                                       Officer

                                                       JANENE P. BEHLER
                                                       REGIONAL DIRECTOR

Address:                                   Address:
-------                                    -------
297 N. Bernardo Avenue                     c/o TA Associates Realty
Mountain View, California 94043            28 State Street, 10th Floor
Attn: Lee Williams                         Boston, Massachusetts 02109
                                           Attention: Asset Manager

                                      -24-
<PAGE>   28
                         EXHIBIT "A" - Legal Description

The land referred to in this Commitment is described as follows:

ALL THAT CERTAIN lot or piece of ground with the buildings and improvements,
Situate in Bensalem Township, Bucks County, Pennsylvania, described in
accordance with certain Plan prepared by A.W. Martin Associates, Inc.,
Consulting Engineers, dated December 7, 1970, Plan No. 2135-4-7, Sheet #1, as
follows, to wit:

BEGINNING at a point on the title line in the bed of Meadow Lane (50 feet
wide), which point is at the distance of 356.08 feet measured South 60 degrees
32 minutes 09 seconds West, along said title line from its point of
intersection with the apparent center line of Winks Lane; thence extending from
said point of Beginning along said title line in the bed of Meadow Lane, South
60 degrees 32 minutes 09 seconds West, 882.29 feet to a point; thence leaving
said title line and extending through the bed of said Meadow Lane and crossing
the Northerly right-of-way line to same on the arc of a circle on a line
curving to the right having a radius of 459.28 feet, the arc distance of 549.74
feet to a point of tangency; thence extending North 53 degrees 22 minutes 59
seconds East, 60.00 feet to a point; thence extending North 60 degrees 32
minutes 09 seconds East, 434.83 feet to a point; thence extending South 29
degrees 27 minutes 51 seconds East, recrossing the aforesaid Northerly
right-of-way line of Meadow Lane and extending into the bed of the same, 350.00
feet to a point on the title line in the bed of said Meadow Lane, the first
mentioned point and place of BEGINNING.

PARCEL NUMBER: 2-75-77.

BEING the same premises which Kevin D. Flynn Development Corporation t/a The
Flynn Company, a Pennsylvania Corporation by Indenture dated May 16, 1990 and
recorded in the Office of the Recorder of Deeds in and for the County of Bucks
in Land Record Book 181 Page 988, granted and conveyed unto 3600 Meadow Lane
Partnership, a Pennsylvania Limited Partnership.

<PAGE>   29

                            EXHIBIT "B" - FLOOR PLAN

                             [PREMISES FLOOR PLAN]

<PAGE>   30

                                    EXHIBIT C

                         TENANT FINISH-WORK: ALLOWANCE

        1.     If the Premises have heretofore been occupied by any prior
tenant, then except as set forth in this Exhibit, Tenant accepts the Premises in
their "as is" condition on the date that this lease is entered into, subject to
the provisions of Paragraph 2.1 of the Lease.

        2.     On or before April __, 2001, Tenant shall provide to Landlord for
its approval final working drawings, prepared by an architect that has been
approved by Landlord (which approval shall not unreasonably be withheld or
delayed), of all improvements that Tenant proposes to install in the Premises;
such working drawings shall include the partition layout, ceiling plan,
electrical outlets and switches, telephone outlets, drawings for any
modifications to the mechanical and plumbing systems of the Project, and
detailed plans and specifications for the construction of the improvements
called for under this Exhibit in accordance with all applicable governmental
laws, codes, rules, and regulations. Further, if any of Tenant's proposed
construction work will affect the Project's HVAC, electrical, mechanical, or
plumbing systems, then the working drawings pertaining thereto shall be prepared
by an engineer who Tenant shall engage at its sole cost after obtaining written
approval from Landlord, such approval not to be unreasonably withheld.
Landlord's approval of such working drawings shall not be unreasonably withheld
and shall be provided to Tenant within five (5) business days after receipt
thereof from Tenant, provided that (a) they comply with all applicable
governmental laws, codes, rules, and regulations; (b) such working drawings are
sufficiently detailed to allow construction of the improvements in a good and
workmanlike manner; and (c) the improvements depicted thereon conform to the
reasonable rules and regulations promulgated from time to time by the Landlord
for the construction of tenant improvements (a copy of which has been delivered
to Tenant). As used herein, "Working Drawings" shall mean the final working
drawings approved by Landlord, as amended from time to time by any changes
thereto approved by Landlord and Tenant, and "Work" shall mean all improvements
to be constructed in accordance with and as indicated on the Working Drawings.
Approval by Landlord of the Working Drawings shall not be a representation or
warranty of Landlord that such drawings are adequate for any use, purpose, or
condition, or that such drawings comply with any applicable law or code, but
shall merely be the consent of Landlord to the performance of the Work. All
changes in the Work must receive the prior written approval of Landlord and
Tenant (which approvals shall not be unreasonably withheld or delayed), and in
the event of any such approved change Tenant shall, upon completion of the Work,
furnish Landlord with an accurate, reproducible "as-built" plan (e.g., sepia) of
the improvements as constructed, which plan shall be incorporated into this
Lease by this reference for all purposes.

        3.     The Work shall be performed only by contractors and
subcontractors approved in writing by Landlord, which approval shall not be
unreasonably withheld or delayed. All contractors and subcontractors shall be
required to procure and maintain (a) insurance against such risks, in such
amounts, and with such companies as Landlord may reasonably require; and (b) and
otherwise be reasonably satisfactory to Landlord. Certificates of such insurance
must be received by Landlord before the Work is commenced. The Work shall be
performed in a good and workmanlike manner that is free of defects and is in
strict conformance with the Working Drawings, and shall be performed in such a
manner and at such times as to maintain harmonious labor relations and not to
interfere with or delay Landlord's other contractors

        4.     The Commencement Date shall be upon execution and delivery of the
Lease by Landlord and Tenant, regardless of whether or not the Work is
completed.

        5.     Tenant shall bear the entire cost of performing the Work
(including, without limitation, design of the Work and preparation of the
Working Drawings, costs of construction labor and materials, electrical usage
during construction, additional janitorial services, general tenant signage,
related taxes and insurance costs, all of which costs are herein collectively

                             Exhibit C - Page 1 of 2
<PAGE>   31

called the "Total Construction Costs") in excess of the Construction Allowance
(hereinafter defined).

        6.     Landlord shall provide to Tenant a construction allowance (the
"Construction Allowance") equal to the lesser of (a) $75,000; or (b) the Total
Construction Costs, as adjusted for any approved changes to the Work; however,
since Tenant or its agent is managing the performance of the Work, then Tenant
shall not become entitled to full credit for the Construction Allowance until
the Work has been substantially completed and Tenant has caused to be delivered
to Landlord (i) all invoices from contractors, subcontractors, and suppliers
evidencing the cost of performing the Work, together with lien waivers from such
parties, and a consent of the surety to the finished Work (if applicable); and
(ii) a certificate of occupancy from the appropriate governmental authority, if
applicable to the Work, or evidence of governmental inspection and approval of
the Work. Any unspent portion of the Construction Allowance as of the date that
is one (1) year after the date of execution of the Lease by Landlord and Tenant
shall be retained by Landlord, without credit to Tenant.

        7.     Landlord or its affiliate shall supervise the Work, make
disbursements required to be made to the contractor, and act as a liaison
between the contractor and Tenant and coordinate the relationship between the
Work, the Project, and the Project's systems. In consideration for Landlord's
construction supervision services, Tenant shall pay to Landlord a construction
supervision fee equal to three (3%) of the Total Construction Costs, but in any
event not to exceed $5,000.00.

        8.     To the extent not inconsistent with this Exhibit, Section 12.1 of
this Lease shall govern the performance of the Work and the Landlord's and
Tenant's respective rights and obligations regarding the improvements installed
pursuant thereto.

                             Exhibit C - Page 2 of 2
<PAGE>   32

                                    EXHIBIT D

                                 RENEWAL OPTION

        Provided no Event of Default exists and Tenant (or a Permitted
Transferee) is occupying the entire Premises at the time of such election,
Tenant may renew this Lease for one (1) additional period of seven (7) years on
the same terms provided in this Lease (except as set forth below), by delivering
written notice (the "Renewal Notice") of the exercise thereof to Landlord not
later than twelve (12) months prior to the expiration of the initial Lease Term.
The Renewal Notice shall not be deemed delivered nor otherwise effective unless
the Renewal Notice includes the following statement: "Landlord must deliver a
written notice to Tenant within 60 days from the date of receipt hereof, which
sets the Base Rent to be paid by Tenant during the renewal term." On or before
the commencement date of such extended Lease Term, Landlord and Tenant shall
execute an amendment to this Lease extending the Lease Term on the same terms
provided in this Lease, except as follows:

        (1)    The Base Rent payable for each month during such extended Lease
               Term shall be the greater of (a) the prevailing rental rate for
               buildings comparable to the Project, at the commencement of such
               extended Lease Term, for space of equivalent quality, size,
               utility and location, with the length of the extended Lease Term
               and the credit standing of Tenant to be taken into account, or
               (b) the Base Rent which would otherwise be payable hereunder for
               the first full calendar month of such extended Lease Term, as
               adjusted in the manner provided in this Lease;

        (2)    Tenant shall have no further renewal options unless hereafter
               expressly granted by Landlord in writing; and

        (3)    Landlord shall lease to Tenant the Premises in their then-current
               condition, and Landlord shall not provide to Tenant any
               allowances (e.g., moving allowance, construction allowance, and
               the like) or other tenant inducements.

        Landlord shall deliver written notice (the "Landlord Notice") to Tenant,
within sixty (60) days after Landlord's receipt of a timely Renewal Notice,
which sets forth the Base Rent as reasonably determined by Landlord to be
payable during the renewal period after consideration of the factors set forth
under clause (1) above. Tenant shall have the right, within thirty (30) days
following the date of the Landlord Notice, to deliver written notice (the
"Revocation Notice") to Landlord that Tenant elects to revoke its exercise of
the renewal option. If Tenant delivers a Revocation Notice, Tenant shall have no
further rights under this Exhibit and this Lease shall terminate upon the
expiration of the initial term hereof. If Tenant timely delivers a Renewal
Notice but fails to timely deliver a Revocation Notice, this Lease shall be
extended on the terms set forth above and at the Base Rent specified in the
Landlord Notice.

        Tenant's rights under this Exhibit shall terminate if (i) this Lease or
Tenant's right to possession of the Premises is terminated, (ii) Tenant, at any
time during the Lease Term, assigns any of its interest in this Lease or sublets
any portion of the Premises (other than to a Permitted Transferee), (iii) Tenant
delivers a Revocation Notice, or (iv) Tenant fails to timely exercise its option
under this Exhibit, time being of the essence with respect to Tenant's exercise
thereof.

                             Exhibit D - Page 1 of 1
<PAGE>   33
                     [COMERICA BANK--CALIFORNIA LETTERHEAD]

                                    EXHIBIT E

BENEFICIARY:                     DATE OF ISSUE:

THE REALTY ASSOCIATES FUND IV L.P.
c/o TA ASSOCIATES REALTY
28 STATE STREET, 10TH FLOOR
BOSTON, MASSACHUSETTS 02109

WE HEREBY OPEN OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. _____ IN YOUR FAVOR
FOR ACCOUNT OF AVIRON, INC., 297 NORTH BERNARDO AVENUE, MOUNTAIN VIEW, CA 94043,
IN THE AMOUNT OF USD 218,000.00 (TWO HUNDRED EIGHTEEN THOUSAND AND 00/100's U.S.
DOLLARS) AVAILABLE UPON DEMAND BY YOUR DRAFT(S) AT SIGHT ON COMERICA
BANK-CALIFORNIA, IN THE FORM OF ANNEX A, ATTACHED HERETO, PURPORTEDLY SIGNED BY
YOUR AUTHORIZED OFFICER.

PARTIAL DRAWINGS ARE PERMITTED.

ANY DRAWING UNDER THIS LETTER OF CREDIT WILL BE PAID FROM OUR GENERAL FUNDS.

DOCUMENTS PRESENTED BY FACSIMILE TO 408-556-5216 ARE ACCEPTABLE AND SHALL BE
DEEMED RECEIVED UPON RECEIPT OF ISSUER. ORIGINAL DOCUMENTS ARE TO BE PRESENTED
BY COURIER OR OVERNIGHT DELIVERY TO COMERICA BANK-CALIFORNIA AT OUR OFFICE
LOCATED AT 333 W. SANTA CLARA STREET, 2ND FLOOR, SAN JOSE, CA 95133.

PAYMENT UNDER THIS LETTER OF CREDIT WILL BE MADE WITHIN THE SAME BUSINESS DAY
PROVIDED THAT THE CLAIM IS RECEIVED AT OUR OFFICE LOCATED AT 333 W. SANTA CLARA
STREET 2ND FLOOR, SAN JOSE, CA 95133 OR BY FACSIMILE AT 408-556-5216 PRIOR TO
10:00 A.M. PACIFIC STANDARD TIME, ON ANY BUSINESS DAY. IN THE EVENT THAT THE
CLAIM IS RECEIVED AFTER 10:00 A.M., PACIFIC STANDARD TIME, ON ANY BUSINESS DAY
IT SHALL BE HONORED AND PAID THE NEXT BUSINESS DAY.

IF A DEMAND FOR PAYMENT MADE HEREUNDER DOES NOT, IN ANY INSTANCE, COMPLY WITH
THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT, WE SHALL GIVE YOU NOTICE
WITHIN ONE BUSINESS DAY AFTER RECEIPT OF THE DOCUMENTS, THAT THE DEMAND FOR
PAYMENT WAS NOT EFFECTED IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS
LETTER OF CREDIT, STATING THE REASONS THEREFORE AND THAT WE WILL UPON YOUR
INSTRUCTIONS HOLD ANY DOCUMENTS AT YOUR DISPOSAL OR RETURN THE SAME TO YOU.

<PAGE>   34

                                                                          PAGE 2

UPON BEING NOTIFIED THAT THE DEMAND FOR PAYMENT WAS NOT EFFECTED IN CONFORMITY
WITH THIS LETTER OF CREDIT, YOU MAY ATTEMPT TO CORRECT ANY SUCH NON-CONFIRMING
DEMAND FOR PAYMENT TO THE EXTENT THAT YOU ARE ENTITLED TO DO SO AND WITHIN THE
VALIDITY OF THIS LETTER OF CREDIT.

IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE DEEMED
AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR ONE YEAR PERIODS FROM THE
EXPIRATION DATE HEREOF, OR ANY FUTURE EXPIRATION DATE, UNLESS AT LEAST SIXTY
(60) DAYS PRIOR TO ANY EXPIRATION DATE, WE SHALL NOTIFY YOU BY COURIER SERVICE
AT THE ABOVE LISTED ADDRESS THAT WE ELECT NOT TO CONSIDER THIS LETTER OF CREDIT
RENEWED FOR ANY SUCH ADDITIONAL PERIOD.

NOTWITHSTANDING THE ABOVE THE FINAL EXPIRY DATE IS APRIL 17, 2009.

THIS LETTER OF CREDIT IS TRANSFERABLE AND NOTWITHSTANDING ARTICLE 48G OF THE
UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDIT, ICC PUBLICATION 500, THIS
LETTER OF CREDIT MAY BE SUCCESSIVELY TRANSFERRED. TRANSFER OF THIS LETTER OF
LETTER OF CREDIT TO A TRANSFEREE SHALL BE EFFECTED ONLY UPON PRESENTATION TO US
THE ORIGINAL LETTER OF CREDIT __________ AND ORIGINAL AMENDMENT(S). IF ANY MUST
BE SURRENDERED TO US TOGETHER WITH OUR LETTER OF TRANSFER DOCUMENTATION (IN THE
FORM OF ANNEX B ATTACHED HERETO), AND PAYMENT OF OUR TRANSFER COMMISSION WHICH
IS 1/4% OR MINIMUM  USD250.00. UPON SUCH PRESENTATION, WE SHALL TRANSFER THE
SAME TO YOUR TRANSFEREE OR, IF SO REQUESTED BY YOUR TRANSFEREE, ISSUE A LETTER
OF CREDIT TO YOUR TRANSFEREE WITH PROVISIONS CONSISTENT WITH, AND SUBSTANTIALLY
THE SAME AS, THIS LETTER OF CREDIT.

ALL DOCUMENTS ARE TO BE FORWARDED TO US BY THE METHODS PROVIDED HEREIN AT
BENEFICIARY'S EXPENSE. OUR ADDRESS IS 333 W. SANTA CLARA STREET, ATTN:
INTERNATIONAL BANKING DEPARTMENT, 2ND FLOOR, SAN JOSE, CA 95113. DIRECT
INQUIRIES TO SWIFT ADDRESS MNBDUS6S, TELEX: 3774155 CMACAL, FAX NO: (408)
556-5216.

ALL DRAFTS DRAWN UNDER THIS CREDIT MUST BE MARKED "DRAWN UNDER COMERICA BANK
CALIFORNIA LETTER OF CREDIT NO.      ", AND BE IN THE FORM ATTACHED AS ANNEX A.

THIS LETTER OF CREDIT IS SUBJECT TO AND GOVERNED BY THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS OF THE INTERNATIONAL CHAMBER OF COMMERCE, 1993
REVISION, PUBLICATION 500. THIS LETTER OF CREDIT SHALL DEEMED TO BE ISSUED
UNDER THE LAWS OF THE STATE OF CALIFORNIA, AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA WITH RESPECT
TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS AND MATTERS ON WHICH THE UNIFORM
CUSTOMS AND THE LAWS OF THE STATE OF CALIFORNIA ARE INCONSISTENT.

<PAGE>   35

                                     ANNEX A

DATE:

TO:                                          RE: LETTER OF CREDIT NO:
                                                 ISSUED BY

GENTLEMEN:

THE UNDERSIGNED BENEFICIARY, HEREBY DEMANDS PAYMENT OF USD_____________ TO BE
PAID IN IMMEDIATELY AVAILABLE FUNDS, DRAWN UNDER COMERICA BANK-CALIFORNIA LETTER
OF CREDIT NO. __________ DATED ______________.

SINCERELY,

BENEFICIARY'S NAME

SIGNATURE OF BENEFICIARY

<PAGE>   36
Transfer Form
              -----------------------------------------------------------------
              THIS FORM IS TO BE USED WHERE A LETTER OF CREDIT IS TRANSFERRED
              IN ITS ENTIRETY AND NO SUBSTITUTION OF INVOICE IS INVOLVED.

                                     ANNEX B
Comerica Bank-California                               DATE ___________________
International Banking Department
333 W. Santa Clara Street, 2nd Floor
San Jose, California 95113

                                   Re: Credit No.______________________________
                                   Issued by __________________________________
                                   Your advice no. ____________________________

For value received, the undersigned beneficiary hereby irrevocably transfers to:

-------------------------------------------------------------------------------
                              (NAME OF TRANSFEREE)

-------------------------------------------------------------------------------
                                   (ADDRESS)

-------------------------------------------------------------------------------
                                (ADVISING BANK)

all rights to the undersigned beneficiary to draw under the above Letter of
Credit in its entirety.

By this transfer, all rights of the undersigned beneficiary in such Letter of
Credit are transferred to the transferee and the transferee shall have the sole
rights as beneficiary thereof, including sole rights relating to any
amendments, whether increases or extensions or other amendments and whether now
existing or hereafter made. All amendments are to be advised direct to the
transferee without necessity of any consent of or notice to the undersigned
beneficiary.

The advice of such Letter of Credit is returned herewith together with any and
all amendments, and we ask you to enter the transfer on the reverse of the
advice, and forward it direct to the transferee with your customary notice of
transfer.

Please charge our account number ___________________ for $__________________
representing your transfer commission and in addition thereto we agree to pay
to you on demand any expenses that may be incurred in connection with this
transfer.

SIGNATURE AND LEGAL CAPACITY GUARANTEED    Very truly yours,

--------------------------------------     ------------------------------------
             (BANK)                                 (BENEFICIARY)

--------------------------------------     ------------------------------------
    (AUTHORIZED SIGNATURE/TITLE)              (AUTHORIZED SIGNATURE/TITLE)<PAGE>   1

EXHIBIT 10.07

                       FIRST AMENDMENT TO CREDIT AGREEMENT

         This FIRST AMENDMENT TO CREDIT AGREEMENT is made and entered into as of
May 31, 2001, by and among ENTERCOM RADIO, LLC, a Delaware limited liability
company (the "Borrower"), ENTERCOM COMMUNICATIONS CORP., a Pennsylvania
corporation (the "Parent"), the FINANCIAL INSTITUTIONS listed on the signature
pages hereof (the "Lenders"), KEY CORPORATE CAPITAL INC., as Administrative
Agent and Co-Documentation Agent (the "Administrative Agent"), and BANK OF
AMERICA, N.A., as Syndication Agent and Co-Documentation Agent (the "Syndication
Agent").

                                    RECITALS

         A. The Borrower, the Parent, the Lenders, the Administrative Agent and
the Syndication Agent entered into a Credit Agreement dated as of December 16,
1999 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Original Agreement"), pursuant to which the Lenders
agreed to make available to the Borrower loans of up to $650,000,000 (subject to
increase under certain circumstances up to $1,000,000,000). The Original
Agreement, as amended hereby, may be referred to hereinafter as the "Credit
Agreement." Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to them in the Credit Agreement.

         B. The Borrower and the Parent desire to make certain changes to the
Original Agreement. Subject to the terms and conditions of this Amendment, the
Agents and the Lenders have agreed to such requests.

                                   AGREEMENTS

         In consideration of the foregoing Recitals and of the covenants and
representations contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Borrower, the
Parent, the Agents and the Lenders agree as follows:

         1. Amendments. Subject to the satisfaction of the conditions set forth
in Section 2 of this Amendment, the Original Agreement shall be amended as
follows:

                  (a) Section 1.1 of the Credit Agreement shall be amended by
adding thereto the following definition in the proper alphabetical order:

                   "First Amendment" means the First Amendment to Credit
         Agreement dated as of May 31, 2001, among the Borrower, the Parent, the
         Agents and the Lenders.

                  (b) The first sentence of subsection 2.16(a) shall be amended
by extending the date referenced therein from "December 31, 2001" to "December
31, 2002," and the sentence, as so amended, shall read as follows:

         At any time prior to December 31, 2002, the Borrower may solicit from
         the Lenders increases in the Commitments of up to an aggregate amount
         of $350,000,000; provided, however, that the Borrower may not request
         such increase at any time that a Possible Default or an Event of
         Default has occurred and is continuing; and provided, further, that
         each such increase shall be in an amount of at least $50,000,000.

                  (c) Subsection 6.9(a) of the Credit Agreement shall be amended
by increasing the amount referenced therein from "$25,000,000" to "100,000,000,"
and the subsection, as so amended, shall read as follows:

                 (a) Agreed Upon Procedures Report. On or prior to the date on
         which any Loan is made hereunder the proceeds of which will be used to
         pay any part of the purchase price of a Permitted Acquisition, the
         purchase price of which is in excess of $100,000,000, the Borrower
         shall have delivered to the

                                      -24-
<PAGE>   2

         Administrative Agent a report, in form and substance satisfactory to
         the Administrative Agent relating to the financial condition of the
         stations being acquired pursuant to such Permitted Acquisition, signed
         by an accounting or consulting firm acceptable to the Administrative
         Agent and prepared in accordance with the procedures reasonably
         requested by the Administrative Agent. The Administrative Agent hereby
         acknowledges that the information on the financial condition of the
         stations to be acquired under the Sinclair Purchase Agreements
         contained in the Form S-1 filed with the Securities and Exchange
         Commission on September 30, 1999, satisfies the provisions of this
         Section 6.9(a) with respect to the stations acquired under the Sinclair
         Purchase Agreements.

                  (d) Subsection 6.9(c) of the Credit Agreement shall be amended
by increasing the amount referenced therein from "$10,000,000" to $25,000,000,"
and the subsection, as so amended, shall read as follows:

                  (c) Compliance Certificate. On, or one Banking Day prior to,
         the date of each borrowing hereunder of $25,000,000 or more and the
         date of each issuance of a Letter of Credit with a stated amount of
         $25,000,000 or more, the Borrower shall have delivered to the
         Administrative Agent a pro forma compliance certificate using the most
         recently available quarterly financial statements, in form and
         substance reasonably satisfactory to the Administrative Agent, showing
         the Leverage Ratio as the date of such borrowing or issuance of a
         Letter of Credit and the Borrower's compliance on a pro forma basis
         with the financial covenants set forth in Section 8.

                  (e) The first and second sentences of Section 7.3 of the
Credit Agreement shall be amended by deleting the phrase "including fire,
lightning, vandalism, flood (to the extent required by the Administrative Agent,
if any Loan Party's property is located in an identified flood hazard area, in
which insurance has been made available pursuant to the National Flood Insurance
Act of 1968) and other risks" from the first sentence and deleting the phrase
"which shall not exceed $500,000 (or, in the case of earthquake, flood and
windstorm coverage, $1,000,000)" from the second sentence and substituting
"$5,000,000" in lieu thereof, and the first and second sentences, as so amended,
shall read as follows:

         Each of the Parent and the Borrower shall, and shall cause each of the
         Borrower's Subsidiaries to, keep its insurable properties insured to
         the full replacement cost thereof at all times by financially sound and
         reputable insurers reasonably acceptable to the Administrative Agent,
         and maintain such other property insurance, to such extent and against
         such risks insured against by extended coverage, as is customary with
         companies in the broadcasting business. All such insurance shall be in
         amounts sufficient to prevent any Loan Party from becoming a coinsurer,
         shall name the Administrative Agent, for the benefit of the Lenders, as
         loss payee and may contain loss deductible provisions which shall not
         exceed $5,000,000.

                  (f) Subsection 7.6(f) of the Credit Agreement shall be amended
by deleting the phrase ", slow down or work stoppage due to a labor
disagreement," and the subsection, as so amended, shall read as follows:

                  (f) promptly after its Knowledge of the occurrence thereof, of
         any material strike or labor dispute (or any material development
         regarding any thereof) affecting any Loan Party.

                  (g) The second sentence of Section 7.9 of the Credit Agreement
shall be amended by deleting the phrase "or other material contract," and the
sentence, as so amended, shall read as follows:

         If any Loan Party enters into a new Operating Agreement which prohibits
         the assignment thereof or the granting of a security interest therein
         without the consent of the other party, the Loan Parties shall use
         their commercially reasonable efforts to obtain the written consent of
         such other party to the grant to the Administrative Agent, for the
         benefit of the Lenders, of a security interest therein pursuant to the
         Security Agreements; provided, however, that the Loan Parties shall not
         be obligated to accept any material adverse change in any such
         agreement or contract or expend a material amount in attempting to
         obtain such consent.

                  (h) Section 7.12 of the Credit Agreement shall be amended in
its entirety to read as follows:

                                      -25-
<PAGE>   3

                  7.12 Rate Hedging Obligations. The Borrower shall, at all
         times that the Leverage Ratio equals or exceeds 3.5 to 1.0, as
         reflected on the most recent compliance certificate delivered pursuant
         to Section 6.9(c) or 7.5(d), maintain in full force and effect
         agreements having an initial term of at least two years and in form and
         substance reasonably satisfactory to the Administrative Agent regarding
         Rate Hedging Obligations so that the sum of the notional amount subject
         to such agreements plus the outstanding principal amount of
         Indebtedness for Borrowed Money of the Borrower which bears interest at
         a fixed rate equals at all times at least 50% of the principal amount
         of Indebtedness for Borrowed Money then outstanding; provided, however,
         that the Borrower shall have a period of forty-five days, commencing
         with the delivery of any such compliance certificate that shows either
         (i) that the Leverage Ratio has increased since the date of the last
         compliance certificate to exceed 3.5 to 1.0 or (ii) the required
         percentage coverage is less than 50% and the Leverage Ratio exceeds 3.5
         to 1.0, to enter into agreements required by this Section to cause the
         percentage coverage to equal or exceed 50%.

                  (i) Subsection 8.10(a)(ii) shall be amended by increasing the
amount referenced therein from "10,000,000" to "$25,000,000," and the
subsection, as so amended, shall read as follows:

                  (ii) sell, lease, transfer or otherwise dispose of any
         material portion of its properties and assets to any Person (other than
         a wholly owned Subsidiary of the Borrower), except for (A) the
         disposition of assets in the ordinary course of business in an
         aggregate amount not to exceed $25,000,000 for all Loan Parties in any
         transaction or related series of transactions, (B) the disposition of
         any asset which, in the good faith exercise of its business judgment,
         the Borrower determines is no longer useful in the conduct of its or
         its Subsidiaries' business, (C) the exchange of a Station in connection
         with a Permitted Acquisition, subject to the satisfaction of the
         provisions of Section 2.7(b)(iii), (D) Capital Distributions permitted
         to be made pursuant to Section 8.9(a), and (E) the liquidation or
         merger into the Borrower of a wholly owned Subsidiary that has no
         material liabilities and no material assets other than the capital
         stock or other equity interests in a wholly owned Subsidiary of the
         Borrower;

                  (j) Subsection 8.10(b)(ii) shall be amended by adding the
phrase "(or such shorter period as the Administrative Agent may reasonably deem
acceptable under the circumstances)" and the subsection, as so amended, shall
read as follows:

                  (ii) the Borrower shall have given to the Administrative Agent
         notice of any such acquisition with a purchase price of $25,000,000 or
         more at least five days (or such shorter period as the Administrative
         Agent may reasonably deem acceptable under the circumstances) prior to
         executing any binding commitment with respect thereto, which notice
         shall state the additional amounts, if any, by which the Borrower
         proposes to increase the dollar limitations set forth in Sections 8.4,
         8.5 and 8.6;

                  (k) Subsection 8.11(g)(ii) shall be amended by increasing the
amount referenced therein from "$5,000,000" to "$10,000,000," and the
subsection, as so amended, shall read as follows:

                  (ii) the Borrower shall have given notice to the
         Administrative Agent of each such investment in excess of $10,000,000
         at least three Banking Days prior to making such investment,

                  2. Conditions to Effectiveness. The amendments set forth in
Section 1 shall be effective on such date on which all of the following
conditions are satisfied:

                           (a) The Borrower, the Parent, the Agents and the
Required Lenders shall have executed this Amendment and delivered counterpart
signature pages to the Administrative Agent or its counsel.

                           (b) The Borrower shall have delivered to the
Administrative Agent a certified copy of resolutions of the Members of the
Borrower evidencing approval of the execution, delivery and performance of this
Amendment.

                           (c) The Borrower and the Parent shall have delivered
to the Administrative Agent such other documents, instruments and opinions as
the Administrative Agent or any Lender may reasonably request.

                                      -26-
<PAGE>   4

                  3.  Representations, Warranties and Events of Default.

                           (a) Except as amended hereby, the terms, provisions,
conditions and agreements of the Original Agreement are hereby ratified and
confirmed and shall remain in full force and effect. Each and every
representation and warranty of the Borrower and the Parent set forth in the
Original Agreement (other than those which by their terms are limited to a
specific date) is hereby confirmed and ratified in all material respects, and
such representations and warranties as so confirmed and ratified shall be deemed
to have been made and undertaken as of the date of this Amendment as well as at
the time they were made and undertaken, except to the extent such
representations and warranties have been affected by events permitted pursuant
to the Credit Agreement.

                           (b) Each of the Borrower and the Parent represents
and warrants that:

                                    (i) No Event of Default or Possible Default
now exists or will exist immediately following the execution hereof.

                                    (ii) All necessary corporate, member,
stockholder or other actions on the part of the Borrower, the Members of the
Borrower, the Parent and the stockholders of the Parent to authorize the
execution, delivery and performance of this Amendment and all other documents or
instruments required pursuant hereto or thereto have been taken; this Amendment
and each such other document or instrument have been duly and validly executed
and delivered and are legally valid and binding upon the Borrower and the Parent
and enforceable in accordance with their respective terms, except to the extent
that the enforceability thereof may be limited by bankruptcy, insolvency or like
laws or by general equitable principles.

                                    (iii) The execution, delivery and
performance of this Amendment and all other documents and instruments required
pursuant hereto or thereto, and all actions and transactions contemplated hereby
and thereby will not (A) violate, be in conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under (I) any
provision of any Organizational Document of the Parent, the Borrower or any
Subsidiary, (II) any arbitration award or any order of any court or of any other
governmental agency or authority, (III) any license, permit or authorization
granted to the Parent, the Borrower or any Subsidiary or under which the Parent,
the Borrower or any Subsidiary operates, or (IV) any applicable law, rule, order
or regulation, indenture, agreement or other instrument to which the Parent, the
Borrower or any Subsidiary is a party or by which the Parent, the Borrower or
any Subsidiary or any of their respective properties is bound and which has not
been waived or consented to, or (B) result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever, except as expressly
permitted in the Credit Agreement, upon any of the properties of the Parent, the
Borrower or any Subsidiary.

                                    (iv) No consent, approval or authorization
of, or filing, registration or qualification with, any governmental authority
(including, without limitation, the FCC and any other Licensing Authority) is
required to be obtained by the Parent, the Borrower or any Subsidiary in
connection with the execution, delivery or performance of this Amendment or any
document or instrument required in connection herewith which has not already
been obtained or completed.

                  4. Affirmation of the Borrower and the Parent. Each of the
Borrower and the Parent has executed this Amendment to consent to the amendments
to the Original Agreement made pursuant hereto and to acknowledge that the
security interests and liens granted by the Borrower and the Parent to the
Administrative Agent, for the benefit of the Lenders, pursuant to the Parent
Security Agreement, the Parent Pledge Agreement, the Borrower Security
Agreement, the Borrower Pledge Agreement and the other Collateral Documents to
which the Borrower or the Parent is a party remain in full force and effect and
shall continue to secure all Obligations and are hereby ratified and reaffirmed.
The Parent, as a guarantor, ratifies and reaffirms all of its payment and
performance obligations, contingent or otherwise, under Section 11 of the Credit
Agreement. The execution of this Amendment shall not operate as a waiver of any
right, power or remedy of the Agents or the Lenders, constitute a waiver of any
provision of any of the Collateral Documents or serve to effect a novation of
the Obligations.

                                      -27-
<PAGE>   5

                  5. Fees and Expenses. As required under the Original
Agreement, the Borrower will reimburse the Administrative Agent upon demand for
all out-of-pocket costs, charges and expenses of the Administrative Agent
(including reasonable fees and disbursements of special counsel to the
Administrative Agent) in connection with the preparation, negotiation, execution
and delivery of this Amendment and the other agreements or documents relating
hereto or required hereby.

                  6. Counterparts. This Amendment may be executed in as many
counterparts as may be convenient and shall become binding when the Borrower,
the Parent, the Agents and each Lender have executed at least one counterpart.

                  7. Governing Law. This Amendment shall be a contract made
under and governed by the laws of the State of New York, without regard to the
conflicts of law provisions thereof.

                  8. Binding Effect. This Amendment shall be binding upon and
shall inure to the benefit of the Borrower, the Parent, the Agents, the Lenders
and their respective successors and assigns.

                  9. Reference to Original Agreement. Except as amended hereby,
the Original Agreement shall remain in full force and effect and is hereby
ratified and confirmed in all respects. On and after the effectiveness of the
amendments to the Original Agreement accomplished hereby, each reference in the
Original Agreement to "this Agreement", "hereunder", "hereof", "herein" or words
of like import, and each reference to the Original Agreement in any Note or
other Collateral Document, or other agreement, document or instrument executed
and delivered pursuant to the Original Agreement, shall be deemed a reference to
the Original Agreement, as amended hereby.

                            [SIGNATURE PAGES FOLLOW]

                                      -28-
<PAGE>   6

                  IN WITNESS WHEREOF, the parties have executed this First
Amendment to Credit Agreement as of the date first above written.

BORROWER:

ENTERCOM RADIO, LLC

By:___________________________
Name:_________________________
Title:________________________

PARENT:

ENTERCOM COMMUNICATIONS CORP.

By:___________________________
Name:_________________________
Title:________________________

LENDERS:

KEY CORPORATE CAPITAL INC.

By:___________________________
Name:_________________________
Title:________________________

ALLFIRST BANK

By: __________________________
Name:_________________________
Title:________________________

BANK OF AMERICA, N.A.

By:___________________________
Name:_________________________
Title:________________________

                                      -29-
<PAGE>   7

BANK OF MONTREAL

By: __________________________
Name:_________________________
Title:________________________

THE BANK OF NOVA SCOTIA

By: __________________________
Name:_________________________
Title:________________________

BANQUE NATIONALE DE PARIS

By: __________________________
Name:_________________________
Title:________________________

By: __________________________
Name:_________________________
Title:________________________

THE CHASE MANHATTAN BANK

By: __________________________
Name:_________________________
Title:________________________

CREDIT INDUSTRIEL ET COMMERCIAL

By:___________________________
Name:_________________________
Title:________________________

By:___________________________
Name:_________________________
Title:________________________

CREDIT SUISSE FIRST BOSTON

By: __________________________
Name:_________________________
Title:________________________

By: __________________________
Name:_________________________
Title:________________________

                                      -30-
<PAGE>   8

THE DAI-ICHI KANGYO BANK, LTD.

By: __________________________
Name:_________________________
Title:________________________

BANKERS TRUST COMPANY

By: __________________________
Name:_________________________
Title:________________________

ERSTE BANK

By: __________________________
Name:_________________________
Title:________________________

FIRST HAWAIIAN BANK

By: __________________________
Name:_________________________
Title:________________________

FLEET BANK, N.A.

By: __________________________
Name:_________________________
Title:________________________

THE INDUSTRIAL BANK OF JAPAN, LIMITED

By: __________________________
Name:_________________________
Title:________________________

ING (U.S.) CAPITAL LLC

By: __________________________
Name:_________________________
Title:________________________

                                      -31-
<PAGE>   9

THE MITSUBISHI TRUST AND BANKING CORPORATION

By: __________________________
Name:_________________________
Title:________________________

PNC BANK, NATIONAL ASSOCIATION

By: __________________________
Name:_________________________
Title:________________________

COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"Rabobank International", New York Branch

By: __________________________
Name:_________________________
Title:________________________

By: __________________________
Name:_________________________
Title:________________________

SUMMIT BANK

By: __________________________
Name:_________________________
Title:________________________

SUNTRUST BANK, F/K/A
SUNTRUST BANK, CENTRAL FLORIDA, N.A.

By: __________________________
Name:_________________________
Title:________________________

UNION BANK OF CALIFORNIA, N.A.

By: __________________________
Name:_________________________
Title:________________________

U.S. BANK NATIONAL ASSOCIATION

By: __________________________
Name:_________________________
Title:________________________

                                      -32-
<PAGE>   10

WEBSTER BANK

By: __________________________
Name:_________________________
Title:________________________

MICHIGAN NATIONAL BANK

By: __________________________
Name:_________________________
Title:________________________

THE FUJI BANK, LIMITED

By: __________________________
Name:_________________________
Title:________________________

CITIZENS BANK OF MASSACHUSETTS

By: __________________________
Name:_________________________
Title:________________________

ISSUING BANK:

KEY CORPORATE CAPITAL INC.

By:___________________________
Name:_________________________
Title:________________________

ADMINISTRATIVE AGENT:

KEY CORPORATE CAPITAL INC.

By:___________________________
Name:_________________________
Title:________________________

                                      -33-
<PAGE>   11

SYNDICATION AGENT:

BANK OF AMERICA, N.A.

By:___________________________
Name: ________________________
Title: _______________________

                                      -34-

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