Document:

<PAGE>   1

                                                                   EXHIBIT 10.23

                            [BEYOND.COM LETTERHEAD]

October 26, 2000

Barry Shotts
3135 Pacific Avenue, No. 4
San Francisco, Ca 94115

Dear Barry:

This letter will confirm your promotion as well as outline your new compensation
package. These changes will be effective and retroactive October 1, 2000.
Details are as follows.

     1.   Title. Your new title will be Vice President of Business Development.

     2.   Annual Base Salary. Your annual base salary will be increased to
          $200,000.

     3.   Annual Bonus. Your annual bonus at target will be $75,000.00, paid
          quarterly with no cap, and based on the achievement of objectives
          which you and I will determine in good faith. A copy of Q4 2000
          Objectives is attached for your information.

     4.   Stock Option. The company intends to grant you a stock option to
          purchase 150,000 shares of the company's common stock. One quarter
          (1/4) of the option shares (37,500) will become exercisable after you
          have completed the next six (6) months of employment with the company,
          and, thereafter one twenty-forth (1/24) of the option shares
          (6,250.00) will become exercisable following each month you remain
          employed by the company. The grant of the stock options will be
          subject to the other terms and provisions of the company's stock
          option plan and stock option agreement and the satisfaction of all
          federal and state securities laws.

     5.   Severance. For purposes of this offer letter, any act by you involving
          fraud, willful malfeasance or similar wrongful acts, or willful and
          continuing neglect of your duties to the real and substantial
          prejudice of the company, after notice of such, shall be grounds for
          you to be "Terminated For Cause." If you are terminated for any other
          reason, you shall be deemed "Terminated Without Cause." In the event
          that you are terminated without cause, the Company will pay you as
          agreed upon severance a lump sum one-time payment amount equal to six
          (6) months of your then base salary and actual bonus.

<PAGE>   2

Barry Shotts (cont.)                   2                              Beyond.com

Once again, I congratulate you on the promotion and look forward to your
continued contributions.

Sincerely,

/s/ RON HULSE
-------------------------------------
Ron Hulse
Sr. Vice President, Sales & Marketing

Agreed and Accepted:

/s/ BARRY SHOTTS                        Date: 11/1/00
-------------------------                    --------
Barry Shotts<PAGE>   1

                                                                   EXHIBIT 10.24

                                LEASE AGREEMENT

                                    BETWEEN

                    WMP II REAL ESTATE LIMITED PARTNERSHIP,
                         A DELAWARE LIMITED PARTNERSHIP

                                  AS LANDLORD

                                      AND

                                  BEYOND.COM,
                             A DELAWARE CORPORATION

                                   AS TENANT

                             DATED AUGUST 27, 1999

                                   PROPERTY:

                            3200 PATRICK HENRY DRIVE
                         SANTA CLARA, CALIFORNIA 95054
<PAGE>   2

                            BASIC LEASE INFORMATION

LEASE DATE:              August 27, 1999

TENANT:                  BEYOND.COM, a Delaware corporation

LANDLORD:                WMP II REAL ESTATE LIMITED PARTNERSHIP, a Delaware
                         limited partnership

PREMISES:                Approximately 104,540 rentable square feet located in
                         the building (the "BUILDING") whose street address is
                         3200 Patrick Henry Drive, Santa Clara, California
                         95054. The Premises are outlined on the plan attached
                         to the Lease as Exhibit A. The land on which the
                         Building is located (the "LAND") is described on
                         Exhibit B. The term "Building" includes the Land and
                         the Building, together with all driveways, parking
                         facilities, and similar improvements thereon. The term
                         "PREMISES" includes the Land and the Building.

TERM:                    Approximately sixty (60) months, commencing on October
                         22, 1999 (the "COMMENCEMENT DATE") and ending at 5:00
                         p.m. on the last day of the sixtieth full calendar
                         month following the Commencement Date (the "TERM,"
                         which definition shall include all renewals of the
                         initial Term), subject to adjustment and earlier
                         termination as provided in the Lease.

OPTION:                  Two (2) options for sixty (60) months each

BASIC RENT:              Basic Rent shall be the following amounts for the
                         following periods of time:

<TABLE>
<CAPTION>
                         LEASE MONTH              MONTHLY BASIC RENT
                         ------------             ------------------
                         <S>                      <C>
                         Months  1-12             $172,491.00
                         Months 13-24             $179,808.80
                         Months 25-36             $185,035.80
                         Months 37-48             $190,262.80
                         Months 49-60             $197,580.60
</TABLE>

                         As used herein, the term "LEASE MONTH" shall mean each
                         calendar month during the Term (and if the
                         Commencement Date does not occur on the first day of a
                         calendar month, the period from the Commencement Date
                         to the first day of the next calendar month shall be
                         included in the first Lease Month for purposes of
                         determining the duration of the Term and the monthly
                         Basic Rent rate applicable for such partial month).

SECURITY DEPOSIT:        $197,580.60; in addition thereto, Tenant shall provide
                         a Letter of Credit in the amount of $1,034,946.00, as
                         set forth in Section 6.2.

RENT:                    Basic Rent, Tenant's Proportionate Share of Taxes,
                         Tenant's share of Additional Rent, and all other sums

                                       i
<PAGE>   3

<TABLE>
<S>                                     <C>
                                        that Tenant may owe to Landlord or otherwise be
                                        required to pay under the Lease.

PERMITTED USE:                          General office use, research and development,
                                        marketing, sales, assembly, distribution, light
                                        manufacturing and warehousing, and, subject to this
                                        Lease, all other legally permitted uses.

TENANT'S PROPORTIONATE SHARE:           100%, which is the percentage obtained by dividing
                                        the 104,500 rentable square feet in the Premises by
                                        the 104,500 rentable square feet in the Building.
                                        Landlord and Tenant stipulate that the number of
                                        rentable square feet in the Premises and the Building
                                        set forth above shall be binding upon them.

INITIAL LIABILITY INSURANCE AMOUNT:     $3,000,000.00

MAXIMUM TENANT IMPROVEMENT ALLOWANCE:   N/A; See Exhibit D

GUARANTOR:                              None

TENANT'S ADDRESS:

     Following Commencement Date:
     beyond.com
     3200 Patrick Henry Drive
     Santa Clara, California 95054
     Attn: Mr. Garry Stauber
     Facsimile: _____________

LANDLORD'S ADDRESS:

For All Notices:                             With A Copy To:
WMP II Real Estate Limited Partnership       WMP II Real Estate Limited Partnership
c/o Archon Group                             c/o Insignia Commercial
Two California Plaza                         160 W. Santa Clara Street, Suite 1350
350 South Grand Avenue, 46th Floor           San Jose, California 95113-1735
Los Angeles, California 90071                Attn: Tod Rudee
Attn: Nancy M. Haag                          Facsimile: (408) 288-2909
Facsimile: (213) 633-5870

For Rent Payments:
WMP II Real Estate Limited Partnership
c/o Insignia Commercial
160 W. Santa Clara Street, Suite 1350
San Jose, California 95113-1735
Attn: Tod Rudee
</TABLE>
<PAGE>   4
THE FOREGOING BASIC LEASE INFORMATION IS INCORPORATED INTO AND MADE A PART OF
THE LEASE IDENTIFIED ABOVE. IF ANY CONFLICT EXISTS BETWEEN ANY BASIC LEASE
INFORMATION AND THE LEASE, THEN THE LEASE SHALL CONTROL.

LANDLORD:                                 WMP II REAL ESTATE LIMITED
                                          PARTNERSHIP, a Delaware limited
                                          partnership

                                          By:  WMP II GEN-PAR, INC., a Delaware
                                               corporation, its general partner

                                          By: /s/ NANCY M. HAAG
                                             ----------------------------------
                                          Name:   Nancy M. Haag
                                          Title:  Assistant Vice President

TENANT:                                   BEYOND.COM, a Delaware corporation

                                          By: /s/ GARRY STAUBER
                                             ----------------------------------
                                          Name:   Garry Stauber
                                          Title:  Human Resources Director

                                          By: /s/ MICHAEL J. PRAISNER
                                             ----------------------------------
                                          Name:   Michael J. Praisner
                                          Title:  CFO

<PAGE>   5

                               TABLE OF CONTENTS

                                                                            PAGE
BASIC LEASE INFORMATION........................................................i
     1.  DEFINITIONS AND BASIC PROVISIONS......................................1
     2.  LEASE GRANT...........................................................1
     3.  TERM AND CONSTRUCTION.................................................1
         3.1  LEASE TERM.......................................................1
         3.3  LANDLORD'S CONSTRUCTION OBLIGATION...............................1
     4.  RENT..................................................................1
         4.1  PAYMENT..........................................................1
         4.2  OPERATING COSTS..................................................2
         4.3  TENANT'S INSPECTION RIGHT........................................3
     5.  DELINQUENT PAYMENT; HANDLING CHARGES..................................4
     6.  SECURITY..............................................................4
         6.1  SECURITY DEPOSIT.................................................4
         6.2  LETTER OF CREDIT.................................................4
     7.  LANDLORD'S MAINTENANCE OBLIGATIONS....................................5
         7.1  LANDLORD'S OBLIGATIONS...........................................5
         7.3  LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS.................7
     8.  IMPROVEMENTS; ALTERATIONS; REPAIRS; TENANT'S MAINTENANCE; UTILITIES...7
         8.1  IMPROVEMENTS; ALTERATIONS........................................7
         8.2  REPAIRS; MAINTENANCE.............................................7
         8.3  PERFORMANCE OF WORK..............................................8
         8.4  MECHANIC'S LIENS.................................................8
         8.5  UTILITIES........................................................8
     9.  USE...................................................................8
     10. ASSIGNMENT AND SUBLETTING.............................................8
         10.1  TRANSFERS.......................................................8
         10.2  CONSENT STANDARDS...............................................9
         10.3  REQUESTS FOR CONSENT............................................9
         10.4  CONDITIONS TO CONSENT...........................................9
         10.5  CANCELLATION....................................................9
         10.6  ADDITIONAL COMPENSATION.........................................9
         10.7  PERMITTED TRANSFERS............................................10
     11. INSURANCE: WAIVERS; SUBROGATION; INDEMNITY...........................10
         11.1  INSURANCE......................................................10
         11.2  WAIVER OF NEGLIGENCE; NO SUBROGATION...........................10
         11.3  INDEMNITY......................................................11
     12. SUBORDINATION ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE.............11
         12.1  SUBORDINATION..................................................11
         12.2  ATTORNMENT.....................................................11
         12.3  NOTICE TO LANDLORD'S MORTGAGE..................................12
         12.4  LANDLORD'S MORTGAGEE'S PROTECTION PROVISIONS...................12
     13. RULES AND REGULATIONS................................................12
     14. CONDEMNATION.........................................................12
         14.1  TOTAL TAKING...................................................12
         14.2  PARTIAL TAKING-TENANT'S RIGHTS.................................12
         14.3  PARTIAL TAKING-LANDLORD'S RIGHTS...............................12
         14.4  AWARD..........................................................13
     15. FIRE OR OTHER CASUALTY...............................................13
         15.1  REPAIR ESTIMATE................................................13
         15.2  TENANT'S TERMINATION OPTION....................................13
         15.3  LANDLORD'S TERMINATION OPTION..................................13
         15.4  REPAIR OBLIGATION..............................................13
         15.5  ABATEMENT OF RENT..............................................13
<PAGE>   6

     16. PERSONAL PROPERTY TAXES..............................................13
     17. EVENTS OF DEFAULT....................................................14
     18. REMEDIES.............................................................14
         18.1  TERMINATION....................................................14
         18.2  ENFORCEMENT OF LEASE...........................................15
         18.3  SUBLESSEES OF TENANT...........................................15
         18.4  EFFORTS TO RELET...............................................15
     19. PAYMENT BY TENANT; NON-WAIVER........................................15
         19.1  PAYMENT BY TENANT..............................................15
         10.1  NO WAIVER......................................................16
     20. [INTENTIONALLY DELETED]..............................................16
     21. SURRENDER OF PREMISES................................................16
     22. HOLDING OVER.........................................................16
     23. CERTAIN RIGHTS RESERVED BY LANDLORD..................................16
     24. [INTENTIONALLY DELETED]..............................................17
     25. MISCELLANEOUS........................................................17
         25.1  LANDLORD TRANSFER..............................................17
         25.2  LANDLORD'S LIABILITY...........................................17
         25.3  FORCE MAJEURE..................................................17
         25.4  BROKERAGE......................................................17
         25.5  ESTOPPEL CERTIFICATES..........................................17
         25.6  NOTICES........................................................18
         25.7  SEPARABILITY...................................................18
         25.8  AMENDMENTS; AND BINDING EFFECT.................................18
         25.9  QUIET ENJOYMENT................................................18
         25.10 NO MERGER......................................................18
         25.11 NO OFFER.......................................................18
         25.12 ENTIRE AGREEMENT...............................................18
         25.13 WAIVER OF JURY TRIAL...........................................18
         25.14 GOVERNING LAW..................................................18
         25.15 JOINT AND SEVERAL LIABILITY....................................19
         25.16 FINANCIAL REPORTS..............................................19
         25.17 LANDLORD'S FEES................................................19
         25.18 ATTORNEY FEES..................................................19
         25.19 TELECOMMUNICATIONS.............................................19
         25.20 CONFIDENTIALITY................................................19
         25.21 HAZARDOUS MATERIALS............................................20
         25.22 SIGNAGE........................................................20
         25.23 PARKING........................................................20
         25.26 LIST OF EXHIBITS...............................................20
     26. EXTENSION OPTION.....................................................21
         26.1  GRANT OF OPTION................................................21
         26.2  BASIC RENT.....................................................21
         26.3  TERMINATION OF OPTION..........................................22

TABLE OF EXHIBITS
     EXHIBIT A      Outline of Premises
     EXHIBIT A-1    Building
     EXHIBIT B      Description of Land
     EXHIBIT C      Building Rules and Regulations
     EXHIBIT D      Work Letter Agreement
     EXHIBIT D-1    Space Plans
     EXHIBIT E      Amendment No.1
     EXHIBIT F      Form of Tenant Estoppel Certificate
<PAGE>   7

                             LIST OF DEFINED TERMS

Additional Rent ...............................................................2
Affiliate .....................................................................1
Basic Lease Information .......................................................1
Building ......................................................................i
Building's Structure...........................................................5
Casualty .....................................................................13
Commencement Date .............................................................i
Damage Notice ................................................................13
Event of Default .............................................................14
GAAP .........................................................................10
Hazardous Materials ..........................................................20
Including .....................................................................1
Land ..........................................................................i
Landlord ......................................................................1
Landlord's Mortgagee .........................................................11
Law ...........................................................................1
Laws ..........................................................................1
Lease .........................................................................1
Lease Month ...................................................................i
Loss .........................................................................11
Maximum Letter of Credit Amount ...............................................4
Operating Costs ...............................................................2
Operating Costs and Tax Statement .............................................3
Parking Area .................................................................20
Permitted Use .................................................................8
Rent ..........................................................................1
Security Deposit ..............................................................4
Taking .......................................................................12
Tangible Net Worth ...........................................................10
Taxes .........................................................................3
Tenant .....................................................................1,14
Tenant Party ..................................................................1
Term ..........................................................................i
Transfer ......................................................................9
<PAGE>   8
                                     LEASE

     THIS LEASE AGREEMENT (this "LEASE") is entered into as of August 27, 1999,
by and between WMP II REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited
partnership ("LANDLORD"), and beyond.com, a Delaware corporation ("TENANT").

     1.  DEFINITIONS AND BASIC PROVISIONS. The definitions and basic provisions
set forth in the Basic Lease Information (the "BASIC LEASE INFORMATION")
executed by Landlord and Tenant contemporaneously herewith are incorporated
herein by reference for all purposes. Additionally, the following terms shall
have the following meanings when used in this Lease: "LAWS" means all federal,
state, and local laws, rules and regulations, all court orders, governmental
directives, and governmental orders, and all restrictive covenants affecting
the Property, and "LAW" shall mean any of the foregoing; "AFFILIATE" means any
person or entity which, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
party in question; "TENANT PARTY" means any of the following persons: Tenant;
any assignees claiming by, through, or under Tenant; any subtenants claiming
by, through, or under Tenant; and any of their respective agents, contractors,
employees, and invitees; and "INCLUDING" means including, without limitation.

     2.  LEASE GRANT. Subject to the terms of this Lease, Landlord leases to
Tenant, and Tenant leases from Landlord, the Premises.

     3.  TERM AND CONSTRUCTION.

          3.1  LEASE TERM. The term of this Lease shall commence on the
Commencement Date. If the Premises are not ready for occupancy by Tenant on the
Commencement Date, then (1) Tenant's obligation to pay Basic Rent, Additional
Rent (as defined in Section 4.2) and Taxes shall be waived until Landlord
tenders possession of the Premises to Tenant and obtains any required
certificate of occupancy from the appropriate governmental authority, (2) the
Term shall be extended by the time between the scheduled Commencement Date and
the date on which Landlord tenders possession of the Premises to Tenant, (3)
Landlord shall not be in default hereunder or be liable for damages therefor,
and (4) Tenant shall accept possession of the Premises when Landlord tenders
possession thereof to Tenant. Notwithstanding the foregoing, if Landlord fails
to tender possession of the Premises to Tenant within one hundred twenty (120)
days after the scheduled Commencement Date, and if such failure to tender
possession of the Premises is not caused by a Tenant Party, then Tenant may, as
its exclusive remedy therefor, terminate this Lease by delivering written
notice thereof before Landlord tenders possession of the Premises to Tenant;
however, any such notice must be delivered to Landlord before the earlier of
(A) one hundred twenty (120) days after the scheduled Commencement Date, or (B)
the date on which Landlord tenders possession of the Premises to Tenant.

          3.2  EARLY OCCUPANCY. Tenant shall have the right to enter the
Premises on October 1, 1999 prior to the Commencement Date ("Early Occupancy
Period") to prepare the Premises for occupancy. Tenant's entry onto the
Premises during the Early Occupancy Period shall be pursuant to all the terms
and conditions of this Lease other than the obligation to pay Rent.

          3.3  LANDLORD'S CONSTRUCTION OBLIGATION. Landlord's obligation to
construct improvements in the Premises for Tenant's occupancy shall be limited
to those obligations, if any, specifically set forth in Exhibit D hereto.
Landlord shall construct all such improvements in accordance with all
applicable Laws.

     4.   RENT.

          4.1  PAYMENT. Tenant shall timely pay to Landlord Basic Rent and all
additional sums to be paid by Tenant to Landlord under this Lease
(collectively, the "RENT"), without deduction

                                       1
<PAGE>   9
or set-off, at Landlord's address provided for in this Lease or as otherwise
specified by Landlord. Basic Rent, adjusted as herein provided, shall be payable
monthly in advance. The first monthly installment of Basic Rent shall be payable
contemporaneously with the execution of this Lease; thereafter, Basic Rent shall
be payable on the first day of each month beginning on the first day of the
second full calendar month of the Term. The monthly Basic Rent for any partial
month at the beginning of the Term shall equal the product of 1/365 of the
annual Basic Rent in effect during the partial month and the number of days in
the partial month from and after the Commencement Date, and shall be due on the
Commencement Date.

          4.2  OPERATING COSTS.

               4.2.1 Tenant shall pay, as "ADDITIONAL RENT," its Proportionate
Share of Operating Costs (defined below). Landlord may make a good faith
estimate of the Additional Rent to be due by Tenant for any calendar year or
part thereof during the Term, and Tenant shall pay to Landlord, on the
Commencement Date and on the first day of each calendar month thereafter, an
amount equal to the estimated Additional Rent for such calendar year or part
thereof divided by the number of months therein. From time to time, Landlord may
estimate and re-estimate the Additional Rent to be due by Tenant and deliver a
copy of the estimate or re-estimate to Tenant. Thereafter, the monthly
installments of Additional Rent payable by Tenant shall be appropriately
adjusted in accordance with the estimations so that, by the end of the calendar
year in question, Tenant shall have paid all of the Additional Rent as
estimated by Landlord. Any amounts paid based on such an estimate shall be
subject to adjustment as herein provided when actual Operating Costs are
available for each calendar year.

               4.2.2 The term "OPERATING COSTS" shall mean all expenses and
disbursements (subject to the limitations set forth below) that Landlord incurs
in connection with the ownership, operation, and maintenance of the Building,
determined in accordance with sound accounting principles consistently applied,
including, but not limited to, the following costs: (A) wages and salaries
(including management fees) of all employees engaged in the operation,
maintenance, and security of the Building, including taxes, insurance and
benefits relating thereto; (B) all supplies and materials used in the operation,
maintenance, repair, replacement, and security of the Building; (C) costs for
improvements made to the Building which, although capital in nature, are
expected to reduce the normal operating costs of the Building, as well as
capital improvements made in order to comply with any law hereafter promulgated
by any governmental authority, as amortized over the useful economic life of
such improvements as determined by Landlord in accordance with generally
accepted accounting principles, to the extent applicable; (D) cost of all
utilities, except the cost of utilities reimbursable to Landlord by the
Building's tenants other than pursuant to a provision similar to this Section
4.2; (E) insurance expenses; (F) repairs, replacements, and general maintenance
of the Building (including the replacement of the roof covering, the cost of
which shall be amortized over the useful life of the roof covering as set forth
in 4.2.2(c) above, but excluding repairs, replacements and general maintenance
of the Building's Structure as defined in Section 7.1); and (G) service or
maintenance contracts with independent contractors for the operation,
maintenance, repair, replacement, or security of the Building (including,
without limitation, alarm service, window cleaning, and elevator maintenance).

     Operating Costs shall not include costs for (i) capital improvements made
to the Building, other than capital improvements described in Section 4.2.2(C)
and except for items which are generally considered maintenance and repair
items, such as painting of common areas, replacement of carpet in elevator
lobbies, and the like; (ii) repair, replacements and general maintenance paid by
proceeds of insurance or by Tenant or other third parties; (iii) interest,
amortization or other payments on loans to Landlord; (iv) depreciation; (v)
leasing commissions; (vi) legal expenses for services, other than those that
benefit the Building tenants generally (e.g., tax disputes); (vii) renovating
or otherwise improving space for occupants of the Building or vacant space in
the Building; (viii) Taxes (defined below), (ix) federal income taxes imposed on
or measured by the income of Landlord from the operation of the Building; (x)
Landlord's entity and internal expenses related to ownership of the Premises;
and (xi) any and all costs of Landlord in complying with Laws regarding
Hazardous Materials including, but not limited to, the costs and expenses of
clean-up, remediation, environmental surveys/assessments, compliance with
environmental Laws, consulting

                                       2
<PAGE>   10
fees, treatment and monitoring charges, transportation expenses and disposal
fees, except if such costs are a result of Tenant's use of or activities in or
on the Building.

                  4.2.3 Tenant shall also pay its Proportionate Share of the
Taxes for each year and partial year falling within the Term, in the same
manner as provided above for Additional Rent with regard to Operating Costs.
"TAXES" shall mean taxes, assessments , and governmental charges whether
federal, state, county or municipal, and whether they be by taxing districts or
authorities presently taxing or by others, subsequently created or otherwise,
and any other taxes and assessments attributable to the Building (or its
operation), excluding, however, penalties and interest thereon for late payment
and federal and state taxes on income (if the present method of taxation
changes so that in lieu of the whole or any part of any Taxes, 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 Building, then all such taxes, assessments, or charges, or the
part thereof so based, shall be deemed to be included within the term "Taxes"
for purposes hereof). Taxes shall include the costs of consultants retained in
an effort to lower taxes and all costs incurred in disputing any taxes or in
seeking to lower the tax valuation of the Building. At Tenant's sole cost, and
upon written notice to Landlord, Tenant may contest taxes allocable to the Term
and actually paid for by Tenant, which are imposed by governmental authorities
on the Premises. Tenant shall receive its Proportionate Share of any tax
reduction so obtained.

                  4.2.4 By April 1 of each calendar year, or as soon thereafter
as practicable, Landlord shall furnish to Tenant a statement of Operating Costs
for the previous year and of the Taxes for the previous year (the "OPERATING
COSTS AND TAX STATEMENT"). If the Operating Costs and Tax Statement reveals
that Tenant paid more for Operating Costs than the actual amount for the year
for which such statement was prepared, or more than its actual share of Taxes
for such year, then Landlord shall promptly credit or reimburse Tenant for such
excess; likewise, if Tenant paid less than Tenant's actual Proportionate Share
of Additional Rent or share of Taxes due, then Tenant shall promptly pay
Landlord such deficiency.

            4.3   TENANT'S INSPECTION RIGHT. After giving Landlord thirty (30)
days prior written notice thereof, Tenant may reasonably inspect or audit
Landlord's records relating to Operating Costs and Taxes for any periods of
time within one (1) year before the audit or inspection; however, no audit or
inspection shall extend to periods of time before the Commencement Date. If
Tenant fails to object to the calculation of Operating Costs and Taxes on an
annual Operating Costs and Tax Statement within one hundred eighty (180) days
after the statement has been delivered to Tenant, then Tenant shall have waived
its right to object to the calculation of Operating Costs and Taxes for the
year in question and the calculation of Operating Costs and Taxes set forth on
such statement shall be final. Tenant's audit or inspection shall be conducted
only during business hours reasonably designated by Landlord. Tenant shall pay
the cost of such audit or inspection unless the total Operating Costs and Taxes
for the time period in question is determined to be in error by more than five
percent (5%) in the aggregate, in which case Landlord shall pay the audit cost.
Tenant may not conduct an inspection or have an audit performed more than once
during any calendar year. If such inspection or audit reveals that an error was
made in the Operating Costs and Taxes previously charged to Tenant, then
Landlord shall refund to Tenant any overpayment of any such costs, or Tenant
shall pay to Landlord any underpayment of any such costs, as the case may be,
within thirty (30) days after notification thereof. Provided Landlord's
accounting for Operating Costs and Taxes is consistent with the terms of this
Agreement, Landlord's good faith judgment regarding the proper interpretation
of this Agreement and the proper accounting for Operating Costs and Taxes shall
be binding on Tenant in connection with any such audit or inspection. Tenant
shall maintain the results of each such audit or inspection confidential and
shall not be permitted to use any third party to perform such audit or
inspection, other than an independent firm of certified public accountants (A)
reasonably acceptable to Landlord, (B) which is not compensated on a
contingency fee basis or in any other manner which is dependent upon the
results of such audit or inspection (and Tenant shall deliver the fee agreement
or other similar evidence of such fee arrangement to Landlord upon request),
and (C) which agrees with Landlord in writing to maintain the results of such
audit or inspection confidential.

                                       3
<PAGE>   11
     5.   DELINQUENT PAYMENT; HANDLING CHARGES. All past due payments required
of Tenant hereunder shall bear interest from the date due until paid at the
lesser of ten percent (10%) per annum or the maximum lawful rate of interest;
additionally, Landlord may charge Tenant a fee equal to five percent (5%) of the
delinquent payment to reimburse Landlord for its cost and inconvenience incurred
as a consequence of Tenant's delinquency. In no event, however, shall the
charges permitted under this Section 5 or elsewhere in this Lease, to the extent
they are considered to be interest under applicable Law, exceed the maximum
lawful rate of interest.

     6.   SECURITY.

          6.1  SECURITY DEPOSIT. Contemporaneously with the execution of this
Lease, Tenant shall pay to Landlord the Security Deposit, which shall be held
by Landlord to secure Tenant's performance 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 in Section 17). Landlord
may, from time to time and without prejudice to any other remedy, use all or a
part of the Security Deposit to perform any obligation Tenant fails to perform
hereunder. Following any such application of the Security Deposit, Tenant shall
pay to Landlord on demand the amount so applied in order to restore the
Security Deposit to its original amount. Provided that Tenant has performed all
of its obligations hereunder, Landlord shall, within thirty (30) days after the
Term ends, return to Tenant the portion of the Security Deposit which was not
applied to satisfy Tenant's obligations. The Security deposit may be commingled
with other funds, and no interest shall be paid thereon. If Landlord transfers
its interest in the Premises and the transferee assumes Landlord's obligations
under this Lease, then Landlord may assign the Security Deposit to the
transferee and Landlord thereafter shall have no further liability for the
return of the Security Deposit.

          6.2  LETTER OF CREDIT. In addition to the Security Deposit referenced
above, concurrently with the execution of this Lease, Tenant shall deliver to
Landlord an irrevocable letter of credit as hereinafter described (the "Letter
of Credit"). The Letter of Credit shall (i) be an irrevocable standby letter of
credit, (ii) be issued by a reputable bank reasonably approved by Landlord,
(iii) name Landlord as beneficiary, (iv) be payable on sight draft accompanied
only by Landlord's statement that it is entitled to payment thereon because an
Event of Default under this Lease has occurred, (v) be for an initial term of
at least twelve (12) months and, subject to the terms set forth below, shall be
renewed thereafter no later than thirty (30) days prior to any expiration date
thereof so that the Letter of Credit remains in effect during the entire period
ending thirty (30) days after the expiration of the initial Term and any
renewal term of this Lease, (vi) assure payment in the total amount of
$1,034,946.00 (subject to Section 6.2.2 below), and (vii) be otherwise in form
reasonably acceptable to Landlord. If Tenant fails timely to renew its Letter
of Credit, then Landlord shall have the right to draw thereon, and retain the
amounts so drawn as the Security Deposit. The following provisions shall govern
the parties' rights and obligations with respect to the Letter of Credit.

               6.2.1  Landlord shall be entitled to recourse against the Letter
of Credit to recover any loss or damage it may suffer as a result of any Event
of Default by Tenant under this Lease. Partial and multiple draws shall be
permitted under the Letter of Credit.

               6.2.2  Provided a monetary Event of Default has not occurred
during the twelve (12) month period prior to the reduction, Landlord shall
reduce the required amount of the Letter of Credit as follows:

<TABLE>
<S>                                          <C>
          LEASE MONTH                        LETTER OF CREDIT AMOUNT
          -----------                        -----------------------

          1-12                               $1,034,946.00
          13-24                              $776,209.50
          25-36                              $517,473.00
          37-48                              $344,982.00
          49-60                              $172,491.00
          60-end of Term as extended
               per Section 26                $0.00
</TABLE>

                                       4

<PAGE>   12
Subject to the above, Tenant's failure to keep the Letter of Credit in effect
during the entire initial Term of the Lease, or Tenant's failure to furnish
written evidence to Landlord of the yearly renewal of the Letter of Credit,
shall be an Event of Default hereunder.

               6.2.3     Tenant shall pay, as Additional Rent under this Lease,
any and all costs or fees charged in connection with the Letter of Credit that
arise due to: (i) Landlord's sale or transfer of all or a portion of the
Building; or (ii) the addition, deletion or modification of any beneficiaries
under the Letter of Credit.

     7.   LANDLORD'S MAINTENANCE OBLIGATIONS.

          7.1  LANDLORD'S OBLIGATIONS. Subject to reimbursement to the extent
allowed pursuant to Section 4.2, and except as expressly provided in this
Section 7.1 and in Section 7.2, Landlord shall repair and replace the
Building's structural elements (including, without limitation, the structural
portion of the roof, the foundation and the structural members of exterior
walls) (the "BUILDING'S STRUCTURE"); Landlord shall not be responsible (1) for
any such work until Tenant notifies Landlord of the need therefor in writing,
or (2) for alterations to the Building's Structure required by applicable Law
because of Tenant's use of the Premises (which alterations shall be Tenant's
responsibility). The Building's Structure does not include skylights, windows,
glass or plate glass, doors, special fronts, or office entries, all of which
shall be maintained by Tenant. Tenant shall be entitled to any manufacturer
warranties applicable to the Work constructed pursuant to Exhibit D for the
Term of this Lease. Subject to Section 25.22, Tenant may erect one (1) exterior
sign on the Building and one (1) monument sign, each in a location designated
by Landlord, at Tenant's sole cost, provided such exterior sign complies with
all applicable Laws. Landlord's liability for any defects, repairs,
replacement or maintenance for which Landlord is specifically responsible for
under this Lease shall be limited to the cost of performing the work. Landlord
shall deliver the Premises to Tenant with all Building systems, including roof,
plumbing, HVAC, sprinklers, electrical (panels and outlets), doors (personnel
and shipping), lighting, ceiling tiles, and window coverings, in good working
order and condition. Landlord hereby warrants that all such Building systems
and the Premises shall be in good working order and condition for the first
sixty (60) days of the Term and shall, upon receipt of written notice from
Tenant outlining a problem with the condition of such Building systems or the
Premises (which problem is not caused by Tenant's use or occupancy of the
Premises), promptly remedy same at its sole cost and expense. The cost of any
such repairs made during the above sixty (60) day period shall not be included
in Operating Costs.

          7.2  LANDLORD'S HVAC OBLIGATIONS. The Premises are serviced by
multiple HVAC units located on the roof of the Building (the "HVAC Units").
According to the Inspection Report prepared by Air Systems and dated August 3,
1999 (the "Report"), a number of the Units are over twenty years old. A prior
occupant of the Premises may have installed new Units, but the Report does not
indicate whether any such Units were in addition to, or were replacements of,
the older Units. In any event, the Report identifies repair work (including
replacement of components of existing Units) that Air Systems recommends in
order to maximize the efficiency and life of HVAC Units. In recognition of the
concerns that Tenant has expressed regarding the condition of the HVAC Units,
Landlord and Tenant have agreed (i) that Landlord will, prior to the
Commencement Date, perform initial servicing and repair of the HVAC Units and
will replace certain other HVAC Units, and (ii) to apportion the responsibility
for, and cost of, the replacement and repair of HVAC Units after the
Commencement Date, all as set out in this Section 7.2. Therefore,
notwithstanding any other provision in this Lease (including, without
limitation, any provision of Section 7.1 or 8.2) responsibility for repair,
maintenance and replacement of the HVAC Units is apportioned as follows:

               7.2.1     INITIAL REPAIR AND SERVICING. Prior to the
Commencement Date, Landlord, at its sole cost and expense, will complete all
work recommended in the Report. However, if upon completion of the work
recommended in the Report, any HVAC Unit fails to operate properly, as
reasonably determined by Landlord and Aircom Mechanical, Inc., or Landlord's
designated HVAC vendor ("Aircom"), then Landlord, at its sole cost and expense,
shall perform additional work or replace the Unit in order to provide a
properly functioning Unit. Prior to the Commencement Date, Landlord and Tenant,
and/or their representatives, shall inspect the completed

                                       5
<PAGE>   13
work and operate the Building HVAC system to determine whether Landlord has met
its obligation under this Section 7.2.1.

               7.2.2     REPLACEMENT OF 13 EXISTING HVAC UNITS. Prior to the
Commencement Date, Landlord, at its sole cost and expense, will replace
thirteen HVAC Units. The HVAC Units to be replaced are the Units referred to in
the Report as 8, 9, 10, 13, 14, 18, 21, 22, 24, 25, 27, 28 and 29.

               7.2.3     UNIT REPLACEMENT WITHIN FIRST TWELVE MONTHS OF THE
TERM. During the first Lease Year of the Term, if any HVAC Unit fails to
function properly, Landlord will, at its sole cost and expense, replace the Unit
if it is at the "end of its useful life." For purposes of this Section 7.2.3, an
HVAC Unit shall be deemed to be at the "end of its useful life" (i) if the Unit
is more than 15 years old, if its compressor and/or heat exchanger needs repair
or replacement, as determined by Aircom, or (ii) if the Unit is fewer than 15
years old, if Aircom and Landlord reasonably determine that pursuant to custom
and practice in Santa Clara County for similar Units on similar buildings,
replacement of the Unit is preferable (considering utility and estimated cost
and frequency of repair) to repair of the Unit. If Aircom, or Aircom and
Landlord, as the case may be, determine that a Unit does not require replacement
under the terms of this Section 7.2.3, promptly after the decision is made
Landlord shall provide Tenant written notice of the decision, which notice
shall contain the basis upon which the decision was made. If Air Systems, or
any other HVAC contractor selected by Tenant, disagrees with the decision,
Tenant shall notify Landlord in writing, stating the basis of the disagreement.
If Landlord and Tenant cannot agree, within five days after Tenant notifies
Landlord of Tenant's disagreement, on whether the Unit should be repaired or
replaced, the, Aircom and Tenant's HVAC contractor promptly shall select a third
licensed reputable HVAC contractor to determine whether the Unit shall be
repaired or replaced. The decision of the third contractor shall be binding on
both Landlord and tenant. If Aircom and Tenant's HVAC contractor cannot agree on
a third contractor, then each of Aircom and Tenant's contractor shall write the
name of a licensed, reputable HVAC contractor on a piece of paper. The two
pieces of paper shall be folded and placed in a container. In the presence of a
representative of both Landlord and Tenant, the Landlord's representative,
without knowing which party has prepared each paper or which name is on each
piece of paper, shall select one of the pieces of paper. The contractor named on
the selected paper shall be the third contractor.

               7.2.4     LANDLORD'S CONTRIBUTION TO MAINTENANCE AND REPAIR.
During the initial Term only, in addition to any other obligations hereunder,
Landlord shall pay the first twenty thousand dollars ($20,000.00) of cost, if
any, incurred during each Lease Year (as defined below) with regard to the
repair (including replacement of components thereof) of HVAC Units. Landlord's
obligation shall not apply to Tenant's responsibility for the basic maintenance
HVAC contract, but will apply to any additional costs, over and above the basic
contract fee. If the cost to repair HVAC Units during any Lease Year is less
than twenty thousand dollars, the unexpended sum for such Year shall be added
to the annual twenty thousand dollars available for the next following Lease
Year, with any unexpended sums cumulated from Year to Year during the Term
until expended or until the Term expires. The Landlord's contributions made
pursuant to this Section 7.2.4 shall be excluded from the definition of
Operating Costs and shall be borne by Landlord without reimbursement by Tenant.
A "Lease Year" shall be the period commencing on the same day of the month in
which the Commencement Date occurs and terminating on the day before the next
anniversary of that date. For example, if the Commencement Date is October 22,
1999, then the first Lease Year shall be the period from October 22, 1999
through and including October 21, 2000, the second Lease Year shall be the
period from October 22, 2000 through and including October 21, 2001, and so
forth.

               7.2.5     TENANT'S CONTRIBUTION TO MAINTENANCE AND REPAIR.
Tenant shall pay all costs of maintenance and repair of HVAC Units, expect as
provided in Sections 7.2.1 and 7.2.4.

               7.2.6     REPLACEMENT OF HVAC UNITS. Except as provided in
Sections 7.2.1, 7.2.2 and 7.2.3, the costs incurred by Landlord each Lease Year
for repair or replacement of the HVAC Units that exceed the $20,000.00 amount
contributed by Landlord (as such amount may be increased by accumulations from
past Years) for such Lease Year, shall be amortized over the useful

                                       6
<PAGE>   14
economic life of such improvements, at an interest rate equal to eleven percent
(11%), and the amortized cost shall be included in the definition of Operating
Costs during the Lease Year that the cost is incurred by Landlord.

               7.2.7     TIME FOR REPLACEMENT/SUBSTITUTE HVAC SERVICES. As
material consideration to Tenant executing this Lease, Landlord agrees that it
will complete replacement of any HVAC Unit that is required (as reasonably
determined by Aircom) to be replaced hereunder within one (1) to two (2)
business days from receipt of notice that the Unit must be replaced. If
required to maintain the comfort of occupants of the Building until the
replacement is completed, Landlord, at its sole cost and expense, will provide
either "move and cool" (temporary HVAC system) service, or alternative ducting
to the affected Premises area in order to maintain comfortable temperature and
ventilation. Time shall be of the essence respecting Landlord's obligations
under this Section 7.2.7.

               7.2.8     OPERATING COSTS EXCLUSION. All sums referenced in
Sections 7.2.1, 7.2.2, 7.2.3 as being paid by Landlord "at its sole cost and
expense" shall be excluded from the definition of Operating Costs and shall be
borne by Landlord without reimbursement by Tenant.

               7.3  LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS. Upon
prior written notice to Tenant (except in the event of real or apparent
emergency, in which event no notice shall be required), Landlord may perform
Tenant's maintenance, repair, and replacement obligations and any other items
that are Tenant's obligation pursuant to Section 8. Tenant shall reimburse
Landlord for the reasonable cost incurred in so doing within ten (10) days
after being invoiced therefore.

          8.   IMPROVEMENTS; ALTERNATIONS; REPAIRS; TENANT'S MAINTENANCE;
UTILITIES.

               8.1  IMPROVEMENTS; ALTERATIONS. Except as otherwise provided in
Exhibit D attached hereto, improvements to the Premises shall be installed at
Tenant's expense only in accordance with plans and specifications which have
been previously submitted to and approved in writing by Landlord. No
alterations or physical additions in or to the Premises may be made without
Landlord's prior written consent, which shall not be unreasonably withheld or
delayed; however, Landlord may withhold its consent to any alteration or
addition that would affect the Building's Structure or its HVAC, plumbing,
electrical, or mechanical systems. Tenant shall not paint or install lighting
or decorations, signs, window or door lettering, or advertising media of any
type on or about the Premises without the prior written consent of Landlord,
which shall not be unreasonably withheld or delayed; however, Landlord may
withhold its consent to any such painting or installation which would affect
the appearance of the exterior of the Building or of any common areas of the
Building. All alterations, additions, or improvements made in or upon the
Premises shall, at Landlord's option, shall either be removed by Tenant prior
to the end of the Term (and Tenant shall repair all damage caused thereby)
(exercised by notice to Tenant given (i) at the time Tenant requests consent to
such alterations, additions or improvements, or (ii) at any time if consent to
such alterations, additions or improvements was required but not obtained), or
shall remain on the Premises at the end of the Term without compensation to
Tenant. All alterations, additions, and improvements shall be constructed,
maintained, and used by Tenant, at its risk and expense, in accordance with all
laws; Landlord's approval of the plans and specifications therefor shall not be
a representation by Landlord that such alterations, additions, or improvements
comply with any Law. Notwithstanding anything to the contrary set forth in this
Section 8.1, although fifteen (15) days advance written notice to Landlord is
required, Landlord's consent shall not be required for any alterations,
improvements or physical additions proposed by Tenant that (a) will cost less
than Ten Thousand Dollars ($10,000.00) per year over the Lease term to
construct, (b) are non-structural and do not affect the Building's Structure or
its HVAC, plumbing, telecommunications, elevator, life-safety, electrical,
mechanical or other basic systems or require a building permit, (c) will not
result in changes to the Premises or Building that are visible from the outside
of the Building, and (d) Tenant removes same from the Premises at the end of
the Term if then requested by Landlord.

          8.2  REPAIRS; MAINTENANCE. Tenant shall maintain all parts of the
Premises in a good condition and promptly make all necessary repairs and
replacements to the Premises, excepting only (i) that work which Landlord is
expressly responsible for pursuant to Section 7.1, (ii) repair

                                       7
<PAGE>   15
under condemnation of the Premises under Section 14, or (iii) fire or other
Casualty damage to the Premises under Section 15. Tenant shall maintain the
parking areas, driveways, alleys and grounds surrounding the Premises in a
clean and sanitary condition, consistent with the operation of a first-class
research and development building, including maintenance, repair, and
replacement of the exterior of the Building (including painting), sprinkler
systems and sewage lines, and any items normally associated with the foregoing.
Tenant shall maintain the HVAC, plumbing, electrical, and mechanical systems in
the Premises in good repair and condition in accordance with applicable law and
the equipment manufacturer's suggested service programs. Tenant shall maintain
during the Term of the Lease and any extension thereof, a regular full service
air conditioning maintenance contract with a qualified air conditioning
contractor reasonably acceptable to Landlord. Tenant shall at all times furnish
Landlord with a copy of the current maintenance contract and all documentation
and service records pertaining to such equipment. The service contract shall
include the changing of filters at the intervals recommended by the equipment
manufacturer or maintenance contractor.

     8.3  PERFORMANCE OF WORK. All work described in this Section 8 shall be
performed only by Landlord or by contractors and subcontractors approved in
writing by Landlord, which consent shall not be unreasonably withheld. Tenant
shall cause all contractors and subcontractors to procure and maintain
insurance coverage naming Landlord as an additional insured against such risks,
in such amounts, and with such companies as Landlord may reasonably require.
All such work shall be performed in accordance with all Laws and in a good and
workmanlike manner so as not to damage the Premises, the Building or the
components thereof.

     8.4  MECHANIC'S LIENS. Tenant shall not permit any mechanic's liens to be
filed against the Premises or the Building for any work performed, materials
furnished, or obligation incurred by or at the request of Tenant. If such a
lien is filed, then Tenant shall, within ten (10) days after Landlord has
delivered notice of filing thereof to Tenant, either pay the amount of the lien
or diligently contest such lien and deliver to Landlord a bond or other
security reasonably satisfactory to Landlord. If Tenant fails to timely take
either such action, then Landlord may pay the lien claim, and any amounts so
paid, including expenses and interest, shall be paid by Tenant to Landlord
within ten (10) days after Landlord has invoiced Tenant therefor.

     8.5  UTILITIES. Tenant shall obtain and pay for all water, gas,
electricity, heat, telephone, sewer, sprinkler charges and other utilities and
services used at the Premises, together with all taxes, penalties, surcharges,
and maintenance charges pertaining thereto. Landlord shall not be liable for
any interruption or failure of utility service to the Premises unless caused by
Landlord's affirmative acts or gross negligence. Any amounts payable by Tenant
under this Section shall be due within ten (10) days after Landlord has
invoiced Tenant therefor.

     9.  USE. Tenant shall continuously occupy and use the Premises only for
the Permitted Use and shall comply with all Laws relating to the use,
condition, access to, and occupancy of the Premises (except that Landlord shall
be responsible for compliance with any Laws to the extent the Premises or
Building are not in compliance with any such Laws as of the Commencement Date
as long as such noncompliance is not caused by the installation or existence of
the Work set forth in Exhibit D). To the best of Landlord's knowledge, and
without any duty to investigate, as of the date of execution of this Lease, the
condition of the Building complies with all applicable Laws. The Premises shall
not be used for any use which is illegal, creates extraordinary fire hazards,
or, except as set forth below, results in an increased rate of insurance on the
Building or its contents, or for the storage of any Hazardous Materials. If,
because of a Tenant Party's acts, the rate of insurance on the Building or its
contents increases, then Tenant shall pay to Landlord the amount of such
increase on demand, and acceptance of such payment shall not waive any of
Landlord's other rights. Tenant shall conduct its business and control each
other Tenant Party so as not to create any nuisance or unreasonably interfere
with other tenants or Landlord in its management of the Building.

     10.  ASSIGNMENT AND SUBLETTING.

          10.1  TRANSFERS. Except as provided in Section 10.7, Tenant shall not,
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed, (1) assign, transfer, or encumber this Lease
or any estate or interest herein, whether directly or by operation of law, (2)
permit any other entity to become Tenant hereunder by merger, consolidation,

                                       8
<PAGE>   16
or other reorganization, (3) if Tenant is an entity other than a corporation
whose stock is publicly traded, permit the transfer of an ownership interest in
Tenant so as to result in a change in the current control of Tenant, (4) sublet
any portion of the Premises, (5) grant any license, concession, or other right
of occupancy of any portion of the Premises, or (6) permit the use of the
Premises by any parties other than Tenant (any of the events listed in this
Section 10.1 being a "TRANSFER"). A transfer of a public company's stock shall
not be considered a Transfer.

          10.2 CONSENT STANDARDS. Landlord shall not unreasonably withhold or
delay its consent to any assignment or subletting of the Premises, provided that
the proposed transferee (i) submits to Landlord financial statements showing a
financial condition that, in Landlord's reasonable judgment, indicates the
transferee will be able to perform Tenant's obligations under the Lease, (ii)
has a good reputation in the business community, (iii) will use the Premises for
the Permitted Use (thus, excluding, without limitation, uses for credit
processing and telemarketing), (iv) is not a governmental entity, or subdivision
or agency thereof, and (v) is not a person or entity with whom Landlord is
negotiating to lease space in the Building.

          10.3 REQUESTS FOR CONSENT. If Tenant requests Landlord's consent to a
Transfer, then Tenant shall provide Landlord with a written description of all
terms and conditions of the proposed Transfer, copies of the proposed
documentation, and the following information about the proposed transferee: name
and address; reasonably satisfactory information about its business and business
history; its proposed use of the Premises; banking, financial, and other credit
information; and general references sufficient to enable Landlord to determine
the proposed transferee's creditworthiness and character.

          10.4 CONDITIONS TO CONSENT. Concurrently with Tenant's notice of any
request for consent to a Transfer, Tenant shall pay to Landlord a fee of $750.00
to defray Landlord's expenses in reviewing such request, and Tenant shall also
reimburse Landlord immediately upon request for its reasonable attorneys' fees
incurred in connection with considering any request for consent to a Transfer.
If Landlord consents to a proposed Transfer, then the proposed transferee shall
deliver to Landlord a written agreement whereby it expressly assumes Tenant's
obligations hereunder; however, any transferee of less than all of the space in
the Premises shall be liable only for obligations under this Lease that are
properly allocable to the space subject to the Transfer for the period of the
Transfer. Landlord's consent to a Transfer shall not release Tenant from its
obligations under this Lease, but rather Tenant and its transferee shall be
jointly and severally liable therefor. Landlord's consent to any Transfer shall
not waive Landlord's rights as to any subsequent Transfers. If an Event of
Default occurs while the Premises or any part thereof are subject to a Transfer,
then Landlord, in addition to its other remedies, may collect directly from such
transferee all rents becoming due to Tenant and apply such rents against Rent.
Tenant authorizes its transferees to make payments of rent directly to Landlord
upon receipt of notice from Landlord to do so. This Section 10.4 does not, and
shall not be construed to, create any rights in favor of any third parties.

          10.5 CANCELLATION. With regard to, and only with regard to, a
submission by Tenant of a written request for Landlord's consent to an
assignment or subletting of the entire Premises for the balance of the then
remaining Term, Landlord may, within thirty (30) days after submission of
Tenant's written request, cancel this Lease as of the date the proposed Transfer
is to be effective. If Landlord sends written notice of cancellation to Tenant
during the thirty day period, Tenant may withdraw its request for Landlord's
consent by delivering to Landlord within ten (10) days after receipt of
Landlord's cancellation notice, a written withdrawal of Tenant's request. If
Tenant does not withdraw its request, then this Lease shall cease for the entire
Premises and Tenant shall pay to Landlord all Rent accrued through the
cancellation date. Thereafter, Landlord may lease the Premises to the
prospective transferee (or any other person) without liability to Tenant.

          10.6 ADDITIONAL COMPENSATION. Tenant shall pay to Landlord,
immediately upon receipt thereof, fifty percent (50%) of the excess of (1) all
compensation received by Tenant for a Transfer less the costs reasonably
incurred by Tenant with unaffiliated third parties in connection with such
Transfer (i.e., brokerage commissions, tenant finish work, legal fees,
advertising costs and the like) over (2) the Rent allocable to the portion of
the Premises covered thereby. This Section 10.6 shall not apply to Permitted
Transfers pursuant to Section 10.7.

                                       9
<PAGE>   17
          10.7 PERMITTED TRANSFERS. Notwithstanding Section 10.1, Tenant may
Transfer all or part of its interest in this Lease or all or part of the
Premises (a "PERMITTED TRANSFER") to the following types of entities (a
"PERMITTED TRANSFEREE") without the written consent of Landlord:

               10.7.1 An Affiliate of Tenant;

               10.7.2 Any corporation, limited partnership, limited liability
partnership, limited liability company or other business entity in which or with
which Tenant, or its corporate successors or assigns, is merged or consolidated,
in accordance with applicable statutory provisions governing merger and
consolidation of business entities, so long as (A) Tenant's obligations
hereunder are assumed by the entity surviving such merger or created by such
consolidation; and (B) the Tangible Net Worth of the surviving or created entity
is not less than the Tangible Net Worth of Tenant as of the date hereof; or

               10.7.3 Any corporation, limited partnership, limited liability
partnership, limited liability company or other business entity acquiring all
or substantially all of Tenant's assets if such entity's Tangible Net Worth
after such acquisition is not less than the Tangible Net Worth of Tenant as of
the date hereof.

Tenant shall promptly notify Landlord of any such Permitted Transfer. Tenant
shall remain liable for the performance of all of the obligations of Tenant
hereunder, or if Tenant no longer exists because of a merger, consolidation, or
acquisition, the surviving or acquiring entity shall expressly assume in writing
the obligations of Tenant hereunder. Additionally, the Permitted Transferee
shall comply with all of the terms and conditions of this Lease, including the
Permitted Use, and the use of the Premises by the Permitted Transferee may not
violate any other agreements affecting the Premises, the Building, or the
Landlord. At least thirty (30) days after the effective date of any Permitted
Transfer, Tenant agrees to furnish Landlord with copies of the instrument
effecting any of the foregoing Transfers and documentation establishing Tenant's
satisfaction of the requirements set forth above applicable to any such
Transfer. The occurrence of a Permitted Transfer shall not waive Landlord's
rights as to any subsequent Transfers. "TANGIBLE NET WORTH" means the excess of
total assets over total liabilities, in each case as determined in accordance
with generally accepted accounting principles consistently applied ("GAAP"),
excluding, however, from the determination of total assets all assets which
would be classified as intangible assets under GAAP including, without
limitation, goodwill, licenses, patents, trademarks, trade names, copyrights,
and franchises. Any subsequent Transfer by a Permitted Transferee shall be
subject to Landlord's prior written consent (which Landlord may grant or deny in
its reasonable discretion).

     11.  INSURANCE; WAIVERS; SUBROGATION; INDEMNITY.

          11.1 INSURANCE. Tenant shall maintain throughout the Term the
following insurance policies: (1) commercial general liability insurance in
amounts of $3,000,000.00 per occurrence, or, following the expiration of the
initial Term, such other amounts as Landlord may from time to time reasonably
require, insuring Tenant, Landlord, Landlord's agents and their respective
Affiliates against all liability for injury to or death of a person or persons
or damage to property arising from the use and occupancy of the Premises, (2)
insurance covering the full value of Tenant's property and improvements, and
other property (including property of others) in the Premises, (3) contractual
liability insurance sufficient to cover Tenant's indemnity obligations hereunder
(but only if such contractual liability is not already included in Tenant's
commercial general liability insurance policy), (4) worker's compensation
insurance, and (5) business interruption insurance. Tenant's insurance (except
for the business interruption insurance) shall provide primary coverage to
Landlord when any policy issued to Landlord provides duplicate or similar
coverage, and in such circumstance Landlord's policy will be excess over
Tenant's policy. Tenant shall furnish to Landlord certificates of such insurance
and such other evidence satisfactory to Landlord of the maintenance of all
insurance coverages required hereunder, and Tenant shall obtain a written
obligation on the part of each insurance company to notify Landlord at least
thirty (30) days before cancellation or a material change of any such insurance
policies. All such insurance policies shall be in form, and issued by companies,
reasonably satisfactory to Landlord.

          11.2 WAIVER OF NEGLIGENCE; NO SUBROGATION. Landlord and Tenant each
waives any claim it might have against the other for any injury to or death of
any person or persons or

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<PAGE>   18

damage to or theft, destruction, loss, or loss of use of any property (a
"LOSS"), to the extent the same is insured against under any insurance policy
that covers the Building, the Premises, Landlord's or Tenant's fixtures,
personal property, leasehold improvements, or business, or, in the case of
Tenant's waiver, is required to be insured against under the terms hereof,
regardless of whether the negligence of the other party caused such Loss. Each
party shall cause its insurance carrier to endorse all applicable policies
waiving the carrier's rights of recovery under subrogation or otherwise against
the other party.

            11.3  INDEMNITY. Subject to Section 11.2, Tenant shall protect,
defend, indemnify, and hold harmless Landlord and its representatives and agents
from and against all claims, demands, liabilities, causes of action, suits,
judgments, damages, and expenses (including reasonable attorneys' fees) arising
from (1) any Loss arising from any occurrence on the Premises, or (2) Tenant's
failure to perform its obligations under this Lease, even though caused or
alleged to be caused by the negligence or fault of Landlord or its agents (other
than a Loss arising from the sole or gross negligence or willful misconduct of
Landlord or its agents), and even though any such claim, cause of action, or
suit is based upon or alleged to be based upon the strict liability of Landlord
or its agents. This indemnity is intended to indemnify Landlord and its agents
against the consequences of their own negligence or fault as provided above when
Landlord or its agents are jointly, comparatively, contributively, or
concurrently negligent with Tenant. Subject to Section 11.2, Landlord shall
protect, defend, indemnify and hold harmless Tenant and its agents from and
against all claims, demands, liabilities, causes of action, suits, judgments and
expenses (including reasonable attorney fees) for any Loss arising from any
occurrence in the Building's common areas, even though caused or alleged to be
caused by the negligence or fault of Tenant or its agents (other than a Loss
arising from the sole or gross negligence or willful misconduct of Tenant or its
agents), and even though any such claim, cause of action, or suit is based upon
or alleged to be based upon the strict liability of Tenant or its agents. This
indemnity is intended to indemnify Tenant and its agents against the
consequences of their own negligence when Tenant or its agents are jointly,
comparatively, contributively, or concurrently negligent with Landlord. The
indemnities set forth in this Section 11.3 shall survive termination or
expiration of this Lease, and shall not terminate or be waived, diminished or
affected in any manner by any abatement or apportionment of Rent under any
provision of this Lease. If any proceeding is filed for which indemnity is
required hereunder, the indemnifying party agrees, upon request therefor, to
defend the indemnified party in such proceeding at its sole cost utilizing
counsel reasonably satisfactory to the indemnified party.

            11.4  LANDLORD'S INSURANCE. Throughout the Term of this Lease,
Landlord shall maintain, as a minimum, the following insurance policies: (1)
fire and extended risk insurance covering the Building's replacement value, and
(2) commercial general liability insurance in an amount of not less than Three
Million Dollars ($3,000,000.00). The cost of all insurance carried by Landlord
with respect to the Building shall be included in Operating Costs.

      12.   SUBORDINATION ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE.

            12.1  SUBORDINATION. This Lease shall be subordinate to any deed of
trust, mortgage, or other security instrument (each, a "MORTGAGE"), or any
ground lease, master lease, or primary lease (each, a "PRIMARY LEASE"), that
now covers all or any part of the Premises (the Mortgagee under any such
Mortgage or the lessor under any such Primary Lease is referred to herein as a
"LANDLORD'S MORTGAGEE"). Landlord shall obtain a Subordination,
Non-Disturbance, Attornment Agreement from the current Landlord's Mortgagee on
a form provided by such Mortgagee and reasonably acceptable to Tenant within
sixty (60) days after the Commencement Date. As a condition of this Lease being
subordinate to any future Mortgage or Primary Lease covering all or any part of
the Premises, Landlord shall obtain a Subordination, Non-Disturbance,
Attornment Agreement from such future Landlord's Mortgagee within sixty (60)
days after full execution of the applicable Mortgage or Primary Lease. Any
Landlord's Mortgagee may elect, at any time, unilaterally, to make this Lease
superior to its Mortgage, Primary Lease, or other interest in the Premises by
so notifying Tenant in writing.

            12.2  ATTORNMENT. Tenant shall attorn to any party succeeding to
Landlord's interest in the Premises, whether by purchase, foreclosure, deed in
lieu of foreclosure, power of sale,

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<PAGE>   19
termination of lease, or otherwise, upon such party's request, and shall
execute such agreements confirming such attornment as such party may reasonably
request.

          12.3  NOTICE OF LANDLORD'S MORTGAGEE. Tenant shall not seek to
enforce any remedy it may have for any default on the part of Landlord without
first giving written notice by certified mail, return receipt requested,
specifying the default in reasonable detail, to any Landlord's Mortgagee whose
address has been given to Tenant, and affording such Landlord's Mortgagee sixty
(60) days to perform Landlord's obligations hereunder (or such longer time as
may be reasonably required to cure such default, provided Landlord's Mortgagee
commences such cure within such sixty (60) day period and thereafter diligently
prosecutes the same to completion).

          12.4  LANDLORD'S MORTGAGEE'S PROTECTION PROVISIONS. If Landlord's
Mortgagee shall succeed to the interest of Landlord under this Lease,
Landlord's Mortgagee shall not be: (1) liable for any act or omission of any
prior lessor (including Landlord); (2) bound by any rent or additional rent or
advance rent which Tenant might have paid for more than the current month to
any prior lessor (including Landlord), and all such rent shall remain due and
owing, notwithstanding such advance payment; (3) bound by any security or
advance rental deposit made by Tenant which is not delivered or paid over to
Landlord's Mortgagee and with respect to which Tenant shall look solely to
Landlord for refund or reimbursement; (4) bound by any termination, amendment
or modification of this Lease made without Landlord's Mortgagee's consent and
written approval, except for those terminations, amendments and modifications
permitted to be made by Landlord without Landlord's Mortgagee's consent
pursuant to the terms of the loan documents between Landlord and Landlord's
Mortgagee; (5) subject to the defenses which Tenant might have against any
prior lessor (including Landlord); and (6) subject to the offsets which Tenant
might have against any prior lessor (including Landlord) except for those
offset rights which (A) are expressly provided in this Lease, (B) relate to
periods of time following the acquisition of the Building by Landlord's
Mortgagee, and (C) Tenant has provided written notice to Landlord's Mortgagee
and provided Landlord's Mortgagee a reasonable opportunity to cure the event
giving rise to such offset event. Landlord's Mortgagee shall have no liability
or responsibility under or pursuant to the terms of this Lease or otherwise
after it ceases to own an interest in the Building. Nothing in this Lease shall
be construed to require Landlord's Mortgagee to see to the application of the
proceeds of any loan, and Tenant's agreements set forth herein shall not be
impaired on account of any modification of the documents evidencing and
securing any loan.

     13.  RULES AND REGULATIONS. Tenant shall comply with the rules and
regulations of the Building which are attached hereto as Exhibit C. Landlord
may, from time to time, change such rules and regulations for the safety, care,
or cleanliness of the Building and related facilities, provided that such
changes are generally applicable to all similar tenants of the Building, will
not unreasonably interfere with Tenant's use of the Premises, do not increase
Tenant's obligations under the Lease, and are enforced by Landlord in a
nondiscriminatory manner. Tenant shall be responsible for the compliance with
such rules and regulations by each Tenant Party.

     14.  CONDEMNATION.

          14.1  TOTAL TAKING. If the entire Building or Premises are taken by
right of eminent domain or conveyed in lieu thereof (a "TAKING"), this Lease
shall terminate as of the date of the Taking.

          14.2  PARTIAL TAKING-TENANT'S RIGHTS. If any part of the Building
becomes subject to a Taking and such Taking will prevent Tenant from conducting
its business in the Premises in a manner reasonably comparable to that
conducted immediately before such Taking for a period of more than one hundred
eighty (180) days, then Tenant may terminate this Lease as of the date of such
Taking by giving written notice to Landlord within thirty (30) days after the
Taking, and Rent shall be apportioned as of the date of such Taking. If Tenant
does not terminate this Lease, then Rent shall be abated on a reasonable basis
as to that portion of the Premises rendered untenantable by the Taking.

          14.3  PARTIAL TAKING-LANDLORD'S RIGHTS. If any material portion, but
less than all, of the Building becomes subject to a Taking, or if Landlord is
required to pay any of the proceeds

                                       12

<PAGE>   20
arising from a Taking to a Landlord's Mortgagee, then Landlord may terminate
this Lease by delivering written notice thereof to Tenant within thirty (30)
days after such Taking, and Rent shall be apportioned as of the date of such
Taking. If Landlord does not so terminate this Lease, then this Lease will
continue, but if any portion of the Premises has been taken, Rent shall abate
as provided in the last sentence of Section 14.2. A "material portion" for
purposes of this Section 14.3 shall mean only a significant part of the Parking
Area or any portion of the Building's Structure.

            14.4  AWARD. If any Taking occurs, then Landlord shall receive the
entire award or other compensation for the Land, the Building, and other
improvements taken; however, Tenant may separately pursue a claim (to the
extent it will not reduce Landlord's award) against the condemner for the value
of Tenant's personal property which Tenant is entitled to remove under this
Lease, moving costs, loss of business, and other claims it may have.

      15.   FIRE OR OTHER CASUALTY.

            15.1  REPAIR ESTIMATE. If the Premises or the Building are damaged
by fire or other casualty (a "CASUALTY"), Landlord shall, within seventy (70)
days after such Casualty, deliver to Tenant a good faith estimate (the "DAMAGE
NOTICE") of the time needed to repair the damage caused by such Casualty.

            15.2  TENANT'S TERMINATION OPTION. If a material portion of the
Premises is damaged by Casualty such that Tenant is prevented from conducting
its business in the Premises in a manner reasonably comparable to that
conducted immediately before such Casualty, and Landlord estimates that the
damage caused thereby cannot be repaired within one hundred eighty (180) days
after the Casualty (the "REPAIR PERIOD"), then Tenant may terminate this Lease
by delivering written notice to Landlord of its election to terminate within
thirty (30) days after the Damage Notice has been delivered to Tenant.

            15.3  LANDLORD'S TERMINATION OPTION. If a Casualty damages the
Premises or a material portion of the Building, and (1) Landlord estimates that
the damage to the Premises cannot be repaired within the Repair Period, (2) the
damage to the Premises exceeds fifty percent (50%) of the replacement cost
thereof (excluding foundations and footings), as estimated by Landlord, and
such damage occurs during the last two years of the Term, (3) regardless of the
extent of damage to the Premises, Landlord makes a good faith determination
that restoring the Building would be uneconomical, or (4) Landlord is required
to pay any insurance proceeds arising out of the Casualty to a Landlord's
Mortgagee, then Landlord may terminate this Lease by giving written notice of
its election to terminate within thirty (30) days after the Damage Notice has
been delivered to Tenant.

            15.4  REPAIR OBLIGATION. If neither party elects to terminate this
Lease following a Casualty, then Landlord shall, within a reasonable time after
such Casualty, begin to repair the Premises and shall proceed with reasonable
diligence to restore the Premises to substantially the same condition as they
existed immediately before such Casualty; however, Landlord shall only be
required to reconstruct the Premises to the extent of any improvements existing
therein on the date of the damage that were installed by Landlord as part of
Landlord's Work (if any) described in Exhibit D ("LANDLORD'S CONTRIBUTION").
Tenant shall be responsible for repairing or replacing its furniture,
equipment, fixtures and other improvements which Landlord is not obligated to
restore, and shall use the proceeds of its insurance for such purpose. Tenant
shall pay the difference between the total cost of reconstructing the Premises
and Landlord's Contribution ("TENANT'S CONTRIBUTION"). Prior to Landlord's
commencement of reconstruction, Tenant shall place Landlord's estimate of
Tenant's Contribution in escrow with Landlord (or furnish Landlord other
commercially reasonable assurances of payment thereof).

            15.5  ABATEMENT OF RENT. If the Premises are damaged by Casualty,
Rent for the portion of the Premises rendered untenantable by the damage shall
be abated on a reasonable basis from the date of damage until the completion of
the repair (or until the date of termination of this Lease by Landlord or
Tenant as provided above, as the case may be).

      16.   PERSONAL PROPERTY TAXES. Tenant shall be liable for all taxes
levied or assessed against personal property, furniture, or fixtures placed by
Tenant in the Premises. If any taxes for

                                       13
<PAGE>   21
which Tenant is liable are levied or assessed against Landlord or Landlord's
property and Landlord elects to pay the same, or if assessed value of
Landlord's property is increased by inclusion of such personal property,
furniture or fixtures and Landlord elects to pay the taxes based on such
increase, then Tenant shall pay to Landlord, within thirty (30) days following
written request, the part of such taxes for which Tenant is primarily liable
hereunder, however, Landlord shall not pay such amount if Tenant notifies
Landlord that it will contest the validity or amount of such taxes before
Landlord makes such payment, and thereafter diligently proceeds with such
contest in accordance with Law and if the non-payment thereof does not pose a
threat of lien or other cloud on Landlord's title to the Building or of loss or
seizure of the Building or interest of Landlord therein.

     17. EVENTS OF DEFAULT. Each of the following occurrences shall be an
"EVENT OF DEFAULT."

         17.1 PAYMENT DEFAULT. Tenant's failure to pay Rent within five (5)
days after Landlord has delivered written notice to Tenant that the same is
due; however, an Event of Default shall occur hereunder without any obligation
of Landlord to give any notice if Landlord has given Tenant written notice
under this Section 17.1 on one occasion during the twelve (12) month interval
preceding such failure by Tenant;

         17.2 ABANDONMENT. Tenant (1) abandons or vacates the Premises or any
substantial portion thereof, or (2) fails to continuously operate its business
in the Premises;

         17.3 ESTOPPEL. Tenant fails to provide any estoppel certificate after
Landlord's written request therefor pursuant to Section 25.5 and such failure
shall continue for five (5) days after Landlord's second written notice thereof
to Tenant;

         17.4 OTHER DEFAULTS. Tenant's failure to perform, comply with, or
observe any other agreement or obligation of Tenant under this Lease and the
continuance of such failure for a period of more than thirty (30) days after
Landlord has delivered to Tenant written notice thereof (any such notice shall
be in lieu of, and not in addition to, any notice required under California
Code of Civil Procedure Section 1161 or any similar or successor law); and

         17.5 INSOLVENCY. The filing of a petition by or against Tenant (the
term "TENANT" shall include, for the purpose of this Section 17.5, any
guarantor of Tenant's obligations hereunder) (1) in any bankruptcy or other
insolvency proceeding; (2) seeking any relief under any state or federal debtor
relief law; (3) for the appointment of a liquidator or receiver for all or
substantially all of Tenant's property or for Tenant's interest in this Lease;
or (4) for the reorganization or modification of Tenant's capital structure;
however, if such a petition is filed against Tenant, then such filing shall not
be an Event of Default unless Tenant fails to have the proceedings initiated by
such petition dismissed within ninety (90) days after the filing thereof

     18. REMEDIES. Upon any Event of Default, Landlord may, in addition to all
other rights and remedies afforded Landlord hereunder or by law or equity, take
one or more of the following actions each and all of which shall be cumulative
and non-exclusive, without notice or demand whatsoever.

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

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

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

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<PAGE>   22
               18.1.3 The worth at the time of award of the amount by which the
unpaid rent for the balance of the Lease Term after the time of award exceeds
the amount of such rental loss that Tenant proves could have been reasonably
avoided; plus

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

               18.1.5 At Landlord's election, such other amounts in addition to
or in lieu of the foregoing as may be permitted from time to time by applicable
law.

     The term "rent" as used in this Section 18.1 shall be deemed to be and to
mean all sums of every nature required to be paid by Tenant, pursuant to the
terms of this Lease, whether to Landlord or to others. As used in Sections
18.1.1 and 18.1.2 above, the "worth at the time of award" shall be computed by
allowing interest at the Interest Rate set forth in Section 5 of this Lease, but
in no case greater than the maximum amount of such interest permitted by law. As
used in Section 18.1.3 above, the "worth at the time of award" shall be computed
by discounting such amount at the discount rate of the Federal Reserve Bank
of San Francisco at the time of award plus one percent (1%).

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

          18.3 SUBLESSEES OF TENANT. Whether or not Landlord elects to terminate
this Lease on account of any default by Tenant, as set forth in this Section 18,
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed
to Tenant's interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord's election to succeed to Tenant's interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.

          18.4 EFFORTS TO RELET. For the purposes of this Section 18, Tenant's
right to possession shall not be deemed to have been terminated by efforts of
Landlord to relet the Premises, by its acts of maintenance or preservation with
respect to the Premises, or by appointment of a receiver to protect Landlord's
interests hereunder. The foregoing enumeration is not exhaustive, but merely
illustrative of acts which may be performed by Landlord without terminating
Tenant's right to possession.

     19.  PAYMENT BY TENANT; NON-WAIVER.

          19.1 PAYMENT BY TENANT. Upon any Event of Default, Tenant shall pay to
Landlord all reasonable costs incurred by Landlord (including court costs and
reasonable attorneys' fees and expenses) in (1) obtaining possession of the
Premises, (2) removing and storing Tenant's or any other occupant's property,
(3) repairing, restoring, altering, remodeling, or otherwise putting the
Premises into condition acceptable to a new tenant, (4) if Tenant is
dispossessed of the Premises and this Lease is not terminated, reletting all or
any part of the Premises (including brokerage commissions, cost of tenant finish
work, and other costs incidental to such reletting), (5) performing Tenant's
obligations which Tenant failed to perform, and (6) enforcing, or advising
Landlord of, its rights, remedies, and recourses arising out of the Event of
Default. To the full extent permitted by

                                       15
<PAGE>   23
law, Landlord and Tenant agree the federal and state courts of the state where
the Premises are located shall have exclusive jurisdiction over any matter
relating to or arising from this Lease and the parties' rights and obligations
under this Lease.

          19.2 NO WAIVER. Landlord's acceptance of Rent following an Event of
Default shall not waive Landlord's rights regarding such Event of Default. No
waiver by Landlord of any violation or breach of any of the terms contained
herein shall waive Landlords rights regarding any future violation of such
term. Landlord's acceptance of any partial payment of Rent shall not waive
Landlord's rights with regard to the remaining portion of the Rent that is due,
regardless of any endorsement or other statement on any instrument delivered in
payment of Rent or any writing delivered in connection therewith; accordingly,
Landlord's acceptance of a partial payment of Rent shall not constitute an
accord and satisfaction of the full amount of the Rent that is due.

     20.  [INTENTIONALLY DELETED]

     21.  SURRENDER OF PREMISES. No act by Landlord shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept a
surrender of the Premises shall be valid unless it is in writing and signed by
Landlord. At the expiration or termination of this Lease, Tenant shall deliver
to Landlord the Premises with all improvements located therein in good repair
and condition, free of Hazardous Materials place on the Premises during the
Term, broom-clean, reasonable wear and tear (and condemnation and Casualty
damage, as to which Sections 14 and 15 shall control) excepted, and shall
deliver to Landlord all keys to the Premises. Provided that Tenant has
performed all of its obligations hereunder, Tenant may remove all unattached
trade fixtures, furniture, and personal property placed in the Premises or
elsewhere in the Building by Tenant (but Tenant may not remove any such item
which was paid for, in whole or in part, by Landlord or any wiring or cabling
unless Landlord requires such removal). Additionally, at Landlord's option,
Tenant shall remove such alterations, additions, improvements, trade fixtures,
personal property, equipment, wiring, cabling, and furniture as Landlord may
request, provided such request was made (i) at the time Landlord gave its
consent to such alterations, additions or improvements, or (ii) at any time if
consent to such alterations, additions or improvements was required but not
obtained; however, Tenant shall not be required to remove any addition or
improvement to the Premises if Landlord has specifically agreed in writing that
the improvement or addition in question need not be removed. Tenant shall
repair all damage caused by such removal. All items not so removed shall, at
Landlord's option, be deemed to have been abandoned by Tenant and may be
appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord
without notice to Tenant and without any obligation to account for such items.
The provisions of this Section 21 shall survive the end of the Term.

     22.  HOLDING OVER. If Tenant fails to vacate the Premises at the end of
the Term, then Tenant shall be a tenant at sufferance and, in addition to all
other damages and remedies to which Landlord may be entitled for such holding
over, (a) Landlord shall pay, in addition to the other Rent, a daily Basic rent
equal to one hundred fifty percent (150%) of the daily Basic Rent payable
during the last month of the Term, and (b) Tenant shall continue to be subject
to all of the conditions and covenants of this Lease. The provisions of this
Section 22 shall not be deemed to limit or constitute a waiver of any other
rights or remedies of Landlord provided herein or at law. If Tenant fails to
surrender the Premises upon the termination or expiration of this Lease, in
addition to any other liabilities to Landlord accruing therefrom, Tenant shall
protect, defend, indemnify and hold Landlord harmless from all loss, (including
reasonable attorney fees) and liability resulting from such failure, including,
without limiting the generality of the foregoing, any claims made by any
succeeding tenant founded upon such failure to surrender, and any lost profits
to Landlord resulting therefrom.

     23.  CERTAIN RIGHTS RESERVED BY LANDLORD. Provided that the exercise of
such rights does not unreasonably interfere with Tenant's occupancy of the
Premises, Landlord shall have the following rights:

          23.1 BUILDING OPERATIONS. to decorate and to make inspections,
repairs, alterations, additions, changes, or improvements, whether structural
or otherwise, in and about the Building, or any part thereof, to enter upon the
Premises (after giving Tenant reasonable notice

                                       16
<PAGE>   24
thereof, which may be oral notice, except in cases of real or apparent
emergency, in which case no notice shall be required) and, during the
continuance of any such work, to temporarily close doors, entryways, public
space, and corridors in the Building; to interrupt or temporarily suspend
Building services and facilities; to change the name of the Building; and to
change the arrangement and location of entrances or passageways, doors, and
driveways, corridors, elevators, stairs, restrooms, or other public parts of
the Building.

          23.2 SECURITY. To take such reasonable measures as Landlord deems
advisable for the security of the Building and its occupants; evacuating the
Building for cause, suspected cause, or for drill purposes; temporarily denying
access to the Building; and closing the Building after normal business hours
and on Sundays and holidays, subject, however, to Tenant's right to enter when
the Building is closed after normal business hours under such reasonable
regulations as Landlord may prescribe from time to time; and

          23.3 PROSPECTIVE PURCHASERS AND LENDERS. To enter the Premises at all
reasonable hours under reasonable and promptly furnished escort by Tenant or
its agents or employees to show the Premises to prospective purchasers, or
lenders (after giving Tenant reasonable notice thereof, which may be oral
notice; and

          23.4 PROSPECTIVE TENANTS. At any time during the last six (6) months
of the Term, or at any time following the occurrence of an Event of Default, to
enter the Premises at all reasonable hours to show the Premises to prospective
tenants.

     24.  [INTENTIONALLY DELETED]

     25.  MISCELLANEOUS.

          25.1 LANDLORD TRANSFER. Landlord may transfer any portion of the
Building 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 arising after the date of transfer, provided that the
assignee assumes Landlord's obligations hereunder in writing.

          25.2 LANDLORD'S LIABILITY. The liability of Landlord (and its
partners, shareholders, or members) to Tenant (or any person or entity claiming
by, through or under Tenant), for any default by Landlord under the terms of
this Lease or any matter relating to or arising out of the occupancy or use of
the Premises shall be limited to Tenant's actual direct, but not consequential
damages therefor and shall be recoverable only from the interest of Landlord in
the Building, and Landlord (and its partners, shareholders, or members) shall
not be personally liable for any deficiency.

          25.3 FORCE MAJEURE. Other than for Tenant's obligations under this
Lease that can be performed by the payment of money (e.g., payment of Rent and
maintenance of insurance), whenever a period of time is herein prescribed for
action to be taken by either party hereto, such party shall not be liable or
responsible for, and there shall be excluded from the computation of any such
period of time, any delays due to strikes, riots, acts of God, shortages of
labor or materials, war, governmental laws, regulations, or restrictions, or
any other causes of any kind whatsoever which are beyond the control of such
party.

          25.4 BROKERAGE. Neither Landlord nor Tenant has dealt with any broker
or agent in connection with the negotiation or execution of this Lease, other
than Landlord's Broker (Commercial Property Services Company -- J. Houston/K.
Felder/Bart Edises), and Tenant's Broker (Colliers International -- S. Gibson/C.
Rotwein), whose commission shall be paid by Landlord pursuant to a separable
agreement. Tenant and Landlord shall each indemnify the other against all costs,
expenses, attorneys' fees, liens and other liability for commissions or other
compensation claimed by any broker or agent claiming the same by, through, or
under the indemnifying party.

          25.5 ESTOPPEL CERTIFICATES. From time to time, Tenant shall furnish
to any party designated by Landlord, within ten (10) days after Landlord has
made a request therefor, a certificate

                                       17

<PAGE>   25
signed by Tenant confirming and containing such factual certifications and
representations as to this Lease as Landlord may reasonably request. Unless
otherwise required by Landlord's Mortgagee or a prospective purchaser or
mortgagee of the Building, the initial form of estoppel certificate to be
signed by Tenant is attached hereto as Exhibit F.

          25.6  NOTICES. All notices and other communications given pursuant to
this Lease shall be in writing and shall be (1) mailed by first class, United
States Mail, postage prepaid, certified, with return receipt requested, and
addressed to the parties hereto at the address specified in the Basic Lease
Information, (2) hand delivered to the intended address, (3) sent by a
nationally recognized overnight courier service, or (4) sent by facsimile
transmission during normal business hours followed by a confirmatory letter
sent in another manner permitted hereunder. All notices shall be effective upon
delivery to the address of the addressee. The parties hereto may change their
addresses by giving notice thereof to the other in conformity with this
provision.

          25.7  SEPARABILITY. If any clause or provision of this Lease is
illegal, invalid, or unenforceable under present or future laws, then the
remainder of this Lease shall not be affected thereby and in lieu of such
clause or provision, there shall 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.

          25.8  AMENDMENTS; AND BINDING EFFECT. This Lease may not be amended
except by instrument in writing signed by Landlord and Tenant. No provision of
this Lease shall be deemed to have been waived by Landlord unless such waiver
is in writing signed by Landlord, and no custom or practice which may evolve
between the parties in the administration of the terms hereof shall waive or
diminish the right of Landlord to insist upon the performance by Tenant in
strict accordance with the terms hereof. The terms and conditions contained in
this Lease shall inure to the benefit of and be binding upon the parties
hereto, and upon their respective successors in interest and legal
representatives, except as otherwise herein expressly provided. This Lease is
for the sole benefit of Landlord and Tenant, and, other than Landlord's
Mortgagee, no third party shall be deemed a third party beneficiary hereof.

          25.9  QUIET ENJOYMENT. Provided Tenant has performed all of its
obligations hereunder, Tenant shall peaceably and quietly hold and enjoy the
Premises for the Term, without hindrance from Landlord or any party claiming
by, through, or under Landlord, but not otherwise, subject to the terms and
conditions of this Lease.

          25.10 NO MERGER. There shall be no merger of the leasehold estate
hereby created with the fee estate in the Premises or any part thereof if the
same person acquires or holds, directly or indirectly, this Lease or any
interest in this Lease and the fee estate in the leasehold Premises or any
interest in such fee estate.

          25.11 NO OFFER. The submission of this Lease to Tenant shall not be
construed as an offer, and Tenant shall not have any rights under this Lease
unless Landlord executes a copy of this Lease and delivers it to Tenant.

          25.12 Entire Agreement. This Lease constitutes the entire agreement
between Landlord and Tenant regarding the subject matter hereof and supersedes
all oral statements and prior writings relating thereto. Except for those set
forth in this Lease, no representations, warranties, or agreements have been
made by Landlord or Tenant to the other with respect to this Lease or the
obligations of Landlord or Tenant in connection therewith. The normal rule of
construction that any ambiguities be resolved against the drafting party shall
not apply to the interpretation of this Lease or any exhibits or amendments
hereto.

          25.13 WAIVER OF JURY TRIAL. To the maximum extent permitted by law,
Landlord and Tenant each waive right to trial by jury in any litigation arising
out of or with respect to this Lease.

          25.14 GOVERNING LAW. This Lease shall be governed by and construed in
accordance with the laws of the State in which the Premises are located.

                                       18
<PAGE>   26
            25.15 JOINT AND SEVERAL LIABILITY. If Tenant is comprised of more
than one party, each such party shall be jointly and severally liable for
Tenant's obligations under this Lease. All unperformed obligations of Tenant at
the end of the Term shall survive.

            25.16 FINANCIAL REPORTS. Within fifteen (15) days after Landlord's
request, Tenant will furnish Tenant's most recent audited financial statements
(including any notes to them) to Landlord, or, if no such audited statements
have been prepared, such other financial statements (and notes to them) as may
have been prepared by an independent certified public accountant or, failing
those, Tenant's internally prepared financial statements. If Tenant is a
publicly traded corporation, Tenant may satisfy its obligations hereunder by
providing to Landlord Tenant's most recent annual and quarterly reports. Tenant
will discuss its financial statements with Landlord in order to enable Landlord
to verify the financial statements. Landlord will not disclose any aspect of
Tenant's financial statements that Tenant designates to Landlord as
confidential except (1) to Landlord's Mortgagee or prospective Mortgagees or
purchasers of the Building, (2) in litigation between Landlord and Tenant, or
(3) if required by court order. Tenant shall not be required to deliver the
financial statements required under this Section 25.16 more than once in any
twelve (12) month period unless (i) requested by Landlord's Mortgagee or a
prospective buyer or lender of the Building, or (ii) an Event of Default occurs.

            25.17 LANDLORD'S FEES. Whenever Tenant requests Landlord to take
any action not required of it hereunder, or give any consent required or
permitted under this Lease, Tenant will reimburse Landlord for Landlord's
reasonable, out-of-pocket costs payable to third parties and incurred in
reviewing the proposed action or consent, including reasonable attorneys',
engineers' or architects' fees, within thirty (30) days after Landlord's
delivery to Tenant of a statement of such costs. Tenant will be obligated to
make such reimbursement without regard to whether Landlord consents to any such
proposed action.

            25.18 ATTORNEY FEES. In the event that either Landlord or Tenant
should bring suit for the possession of the Premises, for the recovery of any
sum due under this Lease, or because of the breach of any provision of this
Lease or for any other relief against the other, then all costs and expenses,
including reasonable attorney fees, incurred by the prevailing party therein
shall be paid by the other party, which obligation on the part of the other
party shall be deemed to have accrued on the date of the commencement of such
action and shall be enforceable whether or not the action is prosecuted to
judgment.

            25.19 TELECOMMUNICATIONS. Tenant and its telecommunications
companies, including local exchange telecommunications companies and
alternative access vendor services companies shall have no right of access to
and within the Building, for the installation and operation of
telecommunications systems including voice, video, data, Internet and any other
services provided over wire, fiber optic, microwave, wireless, and any other
transmission systems ("TELECOMMUNICATIONS SERVICES"), for part or all of
Tenant's telecommunications within the Building and from the Building to any
other location without Landlord's prior written consent, which consent shall
not be unreasonably withheld or delayed. Notwithstanding the foregoing to the
contrary, Landlord hereby consents to the routine installation and maintenance
of typical phone, telecommunications and computer cabling in the Premises by
Tenant, but only to the extent such installation and maintenance does not
adversely affect the Building's Structure. All providers of Telecommunications
Services shall be required to comply with the rules and regulations of the
Building, applicable Laws and Landlord's policies and practices for the
Building. Tenant acknowledges that Landlord shall not be required to provide or
arrange for any Telecommunications Services and that Landlord shall have no
liability to any Tenant Party in connection with the installation, operation or
maintenance of Telecommunications Services or any equipment or facilities
relating thereto. Tenant, at its cost and for its own account, shall be solely
responsible for obtaining all Telecommunications Services.

            25.20 CONFIDENTIALITY. Tenant acknowledges that the terms and
conditions of this Lease are to remain confidential for Landlord's benefit, and
may not be disclosed by Tenant to anyone (other than Tenant's accountants in
connection with the preparation of Tenant's financial reports, and potential
assignees, sublessees, lenders, investors in or purchasers of Tenant who shall

                                       19
<PAGE>   27

agree to keep same confidential), by any manner or means, directly or
indirectly, without Landlord's prior written consent. The consent by Landlord
to any disclosures shall not be deemed to be a waiver on the part of Landlord
of any prohibition against any future disclosure.

            25.21 HAZARDOUS MATERIALS. The term "HAZARDOUS MATERIALS" means any
substance, material, or waste which is now or hereafter classified or
considered to be hazardous, toxic, or dangerous under any Law relating to
pollution or the protection or regulation of human health, natural resources or
the environment, or poses or threatens to pose a hazard to the health or safety
of persons on the Premises or in the Building. Tenant shall not use, generate,
store, or dispose of, or permit the use, generation, storage or disposal of
Hazardous Materials on or about the Premises or the Building except in a manner
and quantity necessary for the ordinary performance of Tenant's business, and
then in compliance with all Laws. If Tenant breaches its obligations under this
Section 25.21, Landlord may immediately take any and all action reasonably
appropriate to remedy the same, including taking all appropriate action to
clean up or remediate any contamination resulting from Tenant's use,
generation, storage or disposal of Hazardous Materials. Tenant shall defend,
indemnify, and hold harmless Landlord and its representatives and agents from
and against any and all claims, demands, liabilities, causes of action, suits,
judgments, damages and expenses (including reasonable attorneys' fees and cost
of clean up and remediation) arising from Tenant's failure to comply with the
provisions of this Section 25.21. This indemnity provision shall survive
termination or expiration of the Lease.

            25.22 SIGNAGE. Tenant shall have the right, at Tenant's sole cost
and expense, to install signage identifying Tenant on the Building and on the
existing monument sign for the Building, or on a new monument sign constructed
by Tenant, subject to this Section 25.22. Tenant shall not erect or maintain
any other temporary or permanent sign on or about the Premises, or the
Building, or visible from the exterior, without obtaining prior written
approval from Landlord, which shall not be unreasonably withheld or delayed.
Any request for approval of a sign shall be made in such detail as Landlord
shall request. All signs, whether erected by Landlord or Tenant, shall conform
to Landlord's building standard signage and to all Laws, ordinances, rules,
regulations, permits, covenants, conditions, restrictions, and easements
pertaining to signs. In the event of a violation of the foregoing by Tenant,
Landlord may remove same without any liability, and may charge the expense
incurred in such removal to Tenant. Tenant shall remove all approved signs
which it has erected upon the termination of the Lease and repair all damage
caused by such removal.

            25.23 PARKING. Tenant shall have the exclusive use of all of the
parking spaces in the parking garage/area associated with the Building (the
"PARKING AREA") during the Term free of charge and subject to such reasonable
terms, conditions and regulations as are from time to time applicable to
patrons of the Parking Area.

            25.24 RECORDING. Tenant shall not record this Lease or a memorandum
thereof without the prior written consent of Landlord, which consent may be
withheld or denied in the sole and absolute discretion of Landlord.

            25.25 AUTHORITY. Tenant (if a corporation, partnership or other
business entity) hereby represents and warrants to Landlord that Tenant is a
duly formed and existing entity qualified to do business in the State in which
the Premises are located, that Tenant has full right and authority to execute
and deliver this Lease, and that each person signing on behalf of Tenant is
authorized to do so. Landlord hereby represents and warrants to Tenant that
Landlord is a duly formed and existing entity qualified to do business in the
State in which the Premises are located, that Landlord has full right and
authority to execute and deliver this Lease, and that each person signing on
behalf of Landlord is authorized to do so.

            25.26 LIST OF EXHIBITS. All exhibits and attachments attached
hereto are incorporated herein by this reference.

                  Exhibit A    Outline of Premises
                  Exhibit A-1  Building
                  Exhibit B    Description of Land

                                       20
<PAGE>   28
               Exhibit C      Building Rules and Regulations
               Exhibit D      Work Letter Agreement
               Exhibit D-1    Space Plans
               Exhibit E      Amendment No. 1
               Exhibit F      Form of Tenant Estoppel Certificate

     26.  EXTENSION OPTION.

          26.1 GRANT OF OPTION. Provided no Event of Default exists at the time
of each such election, and Tenant has failed to cure same within all applicable
cure periods, and Tenant is occupying seventy-five percent (75%) or more of the
entire Premises upon the commencement of each Extension Term, Tenant may renew
this Lease for two (2) additional periods of sixty (60) months each, (each, an
"EXTENSION TERM"), by delivering written notice of the exercise thereof to
Landlord not earlier than twelve (12) months nor later than nine (9) months
before the expiration of the then Term.

          26.2 BASIC RENT. The Basic Rent payable for each month during each
Extension Term shall be the prevailing rental rate (the "PREVAILING RENTAL
RATE"), at the commencement of such Extension Term, for renewals of space of
equivalent quality, size, utility and location; the length of the Extension Term
and the credit standing of Tenant shall be taken into account and yearly
increases in the rental rate shall be included. Notwithstanding the foregoing to
the contrary, in no event shall the Prevailing Rental Rate be less than the
Basic Rent payable hereunder for the Premises for the twelve (12) month period
immediately preceding commencement of the applicable Extension Term. Within
thirty (30) days after receipt of Tenant's notice to renew for the Extension
Term, Landlord shall deliver to Tenant written notice of the Prevailing Rental
Rate for the applicable Extension Term and shall advise Tenant of the required
adjustment to Basic Rent, if any, and the other terms and conditions offered.
Tenant shall, within ten (10) days after receipt of Landlord's notice, notify
Landlord in writing whether Tenant accepts or rejects Landlord's determination
of the Prevailing Rental Rate. If Tenant timely notifies Landlord that Tenant
accepts Landlord's determination of the Prevailing Rental Rate, then, on or
before the commencement date of the applicable Extension Term, Landlord and
Tenant shall execute an amendment to this Lease extending the Term on the same
terms provided in this Lease, except as follows:

          (a)  Basic Rent shall be adjusted to the Prevailing Rental Rate for
such Extension Term;

          (b)  After exercising both options granted herein, Tenant shall have
no further renewal option unless expressly granted by Landlord in writing; and

          (c)  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.

     For either Extension Term, if Tenant disagrees with Landlord's
determination of the Prevailing Rental Rate for such Term, Tenant may, but only
within ten (10) days after receipt of Landlord's notice, require by written
notice to Landlord that the determination of the Prevailing Rental Rate be made
by brokers. In such event, within ten (10) days thereafter, each party shall
select a qualified commercial real estate broker with at least ten (10) years
experience in appraising property and buildings in the city or submarket in
which the Premises are located. The two brokers shall give their opinion of the
Prevailing Rental Rate within twenty (20) days after their retention. In no
event, however, shall the Prevailing Rental Rate in each Extension Term be less
than the Basic Rent payable for the twelve (12) month period immediately
preceding the commencement of the applicable Extension Term, with yearly
increases in the rental rate during each such Term. In the event the opinions of
the two brokers differ and, after good faith efforts over the succeeding twenty
(20) day period, they cannot mutually agree, the brokers shall immediately and
jointly appoint a third broker with the qualifications specified above. This
third broker shall immediately (within five (5) days) choose either the
determination of Landlord's broker or of Tenant's broker and such choice of this
third broker shall be final and binding on Landlord and Tenant. Each party shall
pay its own costs for its real estate broker. The parties shall equally share
the costs of any third broker. The

                                      21
<PAGE>   29
parties shall immediately confirm the Extension Term, Basic Rent and any other
terms and conditions so determined, in writing.

          26.3 TERMINATION OF OPTION. Tenant's rights under this Section 26
shall terminate if (1) this Lease or Tenant's right to possession of the
Premises is terminated, (2) except as a Permitted Transfer, Tenant assigns any
of its interest in this Lease or, as of the Commencement Date of each Extension
Term, has sublet twenty-five percent (25%) or more of the Premises, in total,
under one or more subleases to one or more subtenants in one or more
transactions, (3) Tenant fails to timely exercise its option under this Section
26, time being of the essence with respect to Tenant's exercise thereof, or (4)
Landlord determines, in its sole but reasonable discretion, that Tenant's
financial condition has materially deteriorated since the date of this Lease.

LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLED WARRANTY THAT THE PREMISES
ARE SUITABLE FOR TENANT'S INTENDED COMMERCIAL PURPOSE, AND TENANT'S OBLIGATION
TO PAY RENT 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 THE RENT,
WITHOUT ABATEMENT, DEMAND, SETOFF OR DEDUCTION, NOTWITHSTANDING ANY BREACH BY
LANDLORD OF ITS DUTIES OR OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED.

          Dated as of the date first above written.

TENANT:                                 BEYOND.COM, a Delaware corporation

                                        By: /s/ GARRY STAUBER
                                           ------------------------------------
                                        Name: Garry Stauber
                                             ----------------------------------
                                        Title: Director of HR
                                              ---------------------------------

                                        By: /s/ MICHAEL G. PRAISNER
                                           ------------------------------------
                                        Name: Michael G. Praisner
                                             ----------------------------------
                                        Title: CFO
                                              ---------------------------------

LANDLORD:                               WMP II REAL ESTATE LIMITED
                                        PARTNERSHIP, a Delaware limited
                                        partnership

                                        By: WMP II GEN-PAR, INC.,
                                            a Delaware limited partnership

                                        By: /s/ NANCY M. HAAG
                                           ------------------------------------
                                        Name: Nancy M. Haag
                                        Title: Assistant Vice President

                                       22

<PAGE>   30

                                   EXHIBIT A

                              OUTLINE OF PREMISES

                              [LAYOUT OF PREMISES]

                            3200 PATRICK HENRY DRIVE
                                  SANTA CLARA

                                       1
<PAGE>   31

                                  EXHIBIT A-1

                                    BUILDING

                              [LAYOUT OF BUILDING]

                                       2

<PAGE>   32

                                   EXHIBIT B

                               DESCRIPTION OF LAND

                              SAN VALENTE BUILDING
                            3200 Patrick Henry Drive
                             Santa Clara, CA 95054

All that certain Real Property in the City of Santa Clara, County of Santa
Clara, described as follows:

All of Parcel 15, as shown upon that certain Map entitled, Parcel Map being a
Resubdivision of Parcels 1, 3, 4, 5 & 9 and Areas A, B & D as shown on Parcel
Map 3399 recorded in Book 368 of Maps at Pages 36 & 37 Santa Clara County
Records, which Map was filed for Record in the Office of the Recorder of the
County of Santa Clara, State of California, on December 29, 1976 In Book 385 of
Maps, at Pages 4 and 5.

                                       1
<PAGE>   33

                                   EXHIBIT C

                         BUILDING RULES AND REGULATIONS

     The following rules and regulations shall apply to the Premises, the
Building and the appurtenances thereto:

     1.   Sidewalks, doorways, vestibules, halls, stairways, and other similar
areas shall not be obstructed by tenants or used by any tenant for purposes
other than ingress and egress to and from their respective leased premises and
for going from one to another part of the Building.

     2.   Plumbing, fixtures and appliances shall be used only for the purposes
for which designed, and no sweepings, rubbish, rags or other unsuitable material
shall be thrown or deposited therein. Damage resulting to any such fixtures or
appliances from misuse by a tenant or its agents, employees or invites, shall
be paid by such tenant.

     3.   No signs, advertisements or notices shall be painted or affixed on or
to any windows or doors or other part of the Building without the prior written
consent of Landlord. No nails, hooks or screws (other than those which are
necessary to hang paintings, prints, pictures or other similar items on the
Premises' interior walls) shall be driven or inserted in any part of the
Building except by Building maintenance personnel. Except as consented to in
writing by Landlord or in accordance with Tenant's building standard
improvements, no draperies, curtains, blinds, shades, screens or other devices
shall be hung at or used in connection with any window or exterior door or
doors of the Premises. No awning shall be permitted on any part of the
Premises. Tenant shall not place anything against or near glass partitions or
doors, or windows which might appear unsightly from outside the Premises.

     4.   Landlord will furnish Tenant, free of charge, with two keys to
Tenant's suite entrance. Landlord may make a reasonable charge for any
additional keys and for having any locks changed. Tenant shall not make or have
made additional keys without Landlord's prior written consent, and Tenant shall
not alter any lock or install a new additional lock or bolt on any door of its
Premises without Landlord's prior written consent. Tenant shall deliver to
Landlord upon termination of its tenancy, the keys to all locks for doors on
the Premises, and in the event of loss of any keys furnished by Landlord, shall
pay Landlord therefor.

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

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

     7.   Landlord will not be responsible for lost or stolen personal
property, money or jewelry from tenant's leased premises or public or common
areas regardless of whether such loss occurs when the area is locked against
entry or not. Tenant assumes any and all responsibility for protecting its
Premises from theft and robbery, which responsibility includes keeping doors
locked and other means of entry to the Premises closed.

     8.   Tenant shall not conduct any activity on or about the Premises or
Building which will draw pickets, demonstrators, or the like.

     9.   All vehicles are to be currently licensed, in good operating
condition, parked for business purposes having to do with Tenant's business
operated in the Premises, parked within

                                       1
<PAGE>   34

designated parking spaces, one vehicle to each space. Tenant shall not leave
vehicles in the Building parking areas overnight, or park any vehicles in the
Building parking areas other than automobiles, motorcycles, motor driven,
non-motor driven bicycles, or four wheel drive trucks. No vehicle shall be
parked as a "billboard" vehicle in the parking lot. Any vehicle parked
improperly may be towed away. Tenant, Tenant's agents, employees, vendors and
customers who do not operate or park their vehicles as required shall subject
the vehicle to being towed at the expense of the owner or driver. Landlord may
place a "boot" on the vehicle to immobilize it and may levy a charge of $50.00
to remove the "boot". Tenant shall indemnify, hold and save harmless Landlord
of any liability arising from the towing or booting of any vehicles belonging
to a Tenant Party.

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

                                       2
<PAGE>   35

                                   EXHIBIT D

                  TENANT FINISH-WORK: LANDLORD BUILDS TO PLANS

WORK TO BE PERFORMED BY LANDLORD:

     1.   Except as otherwise provided in Section 7.1, and 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.

     2.   On or before the execution of this Lease, Landlord and Tenant have
approved a space plan depicting improvements to be installed in the Premises, a
copy of which is attached hereto as Exhibit D-1 (the "SPACE PLANS"). The Space
Plans describe the following work to be performed by Landlord at Landlord's
sole cost and expense:

                             Interior Improvements

     1.   Replacing existing carpet with new 28 ounce Building standard carpet
in a color chosen by Tenant on existing flooring.

     2.   Repair and touch-up paint on all interior walls in a color to match
the existing paint.

     3.   First Floor

          a) Lobby

               i)    Remove two doors (one door to conference room and one door
                     to the hallway) and seal the two doorways.

               ii)   Remove double doors in front of stairwell and remove wall
                     that extends back towards elevators.

               iii)  Relocate existing conference room door.

               iv)   Open above balcony area (not shown on Exhibit D-1).

          b) Back Office Area

               i)    Remove one office.

               ii)   Install two (2) store front glass panels with double doors,
                     contingent upon the structural capacity of the Building.

               iii)  Install glass double doors on backside of the Building.

               iv)   Replace existing grade level door (in room with VCT) with
                     glass store front.

               v)    Install ten (10) 4'x8' skylights. Location to be mutually
                     agreed upon between Landlord and Tenant.

               vi)   Remove one or two of the office wings in the rear office
                     area, upon Tenant's decision which will be made and given
                     to Landlord within five (5) days after execution of this
                     Lease.

               vii)  Create a lunch room, including removal of three (3) walls
                     and installation of VCT flooring.

                     a)  Install three 15' long by 30" deep by 36" high,
                         formica counters with upper and lower malamean, white
                         storage

                                       1
<PAGE>   36
                         cabinets, and one (1) three sided basin sink with
                         standard plumbing fixtures.

          4)   Second Floor

               a)  Remove doors and walls.

                             Exterior Improvements

          1)   Repair all damaged wood sidings, holes, etc., and touch-up paint
               to the exterior of Building.

          2)   Remove storage shed to provide additional parking. Awnings,
               pillars, and ramp to remain; however, the existing concrete will
               be ramped to parking lot level.

          3)   Remove masonry wall and concrete curb next to the existing
               double doors on the backside of the Building.

          4)   Patio Area (on the south side of the Building):

               a)  Fence entire area with fencing matching the existing fence.

               b)  Pour additional concrete to raise level.

               c)  Improve landscaping.

          5)   Pour concrete ramp on the north side of the Building.

          6)   Add one mercury vapor exterior standard light with triple or
               quad fixtures and replace existing exterior light fixtures with
               larger power pacs, to the mutual satisfaction of both parties.

          3.   If any of Tenant's proposed construction work will affect the
Building's HVAC, electrical, mechanical, or plumbing systems, then any working
drawings pertaining thereto must be approved by the Building's engineer of
record. As used herein, "WORK" shall mean all improvements to be constructed in
accordance with and as indicated on the Space Plans. All changes in the Work
requested by Tenant must receive the reasonable prior written approval of
Landlord, and Landlord shall, upon approval, use all reasonable efforts to
advise Tenant whether or not such change is likely to result in one or more
Tenant Delay Days. Landlord shall cause the Work to be performed in accordance
with the Space Plans. The Work shall be performed only by contractors and
subcontractors approved in writing by Landlord, which approval shall not be
unreasonably withheld.

          4.  If a delay in the performance of the Work occurs (a) because of
any change by Tenant to the Space Plans or the Working Drawings, (b) because of
any specification by Tenant of materials or installations in addition to or
other than Landlord's standard finish-out materials, or (c) if Tenant otherwise
delays completion of the Work (each day of delay caused by any such event shall
be a "TENANT DELAY DAY"), then, notwithstanding any provision to the contrary in
this Lease, Tenant's obligation to pay Rent hereunder shall commence on the date
the Work is substantially completed less the number of Tenant Delay Days, which
date shall be the Commencement Date. Landlord shall use reasonable efforts to
notify Tenant each time Landlord believes Tenant is causing a delay that is
likely to result in one or more Tenant Delay Days. If the Premises are not ready
for occupancy and the Work is not substantially completed (as reasonably
determined by Landlord) on the scheduled Commencement Date for any reason other
than the reasons specified in the immediately preceding sentence, then the
obligations of Landlord and Tenant shall continue in full force and Rent shall
be abated until the date the Work is substantially completed and the Premises
are tendered to Tenant, which date shall be the Commencement Date.

                                       2
<PAGE>   37

     5.   Landlord shall bear the entire cost of performing the Work depicted
on the Space Plans initially submitted to and approved by Landlord. Tenant
shall bear the entire additional costs incurred by Landlord in performing the
Work because of an event specified in clause 4(a), 4(b) or 4(c) of this
Exhibit. Tenant shall pay Landlord an amount equal to fifty percent (50%) of
the estimated additional costs of any change to the Space Plans or the Working
Drawings at the time of such change; Tenant shall pay to Landlord the remaining
portion of additional costs incurred in performing the Work because of an event
specified in clauses 4(a), 4(b) or 4(c) of this Exhibit upon substantial
completion of the Work. In consideration for Landlord's management and
supervision for services performed in connection with clauses 4(a), 4(b) or
4(c), Tenant shall pay to Landlord a construction management fee equal to five
percent of the additional costs specified in this Section 4.

     6.   To the extent not inconsistent with this Exhibit, Section 8.1 of this
Lease shall govern the performance of the Work and Landlord's and Tenant's
respective rights and obligations regarding the improvements installed pursuant
thereto.

TENANT WORK:

     1.   In connection with its occupancy of the Premises, Tenant intends to
install in the Premises cubicles in the manner and locations designated on a
Furniture Plan to be prepared by Tenant. Landlord hereby approves of such
Furniture Plan and consents to Tenant's installation of such cubicles so long
as Landlord reasonably approves Tenant's Furniture Plan prior to such
installation, and such installation is in accordance with all applicable Laws.

                                       3
<PAGE>   38

                                  EXHIBIT D-1

                                  SPACE PLANS

                                       4

<PAGE>   39
                                   EXHIBIT E

                                AMENDMENT NO. 1

     This Amendment No. 1 (this "AMENDMENT") is executed as of ___________,
1999 between WMP II REAL ESTATE LIMITED PARTNERSHIP a Delaware limited
partnership ("LANDLORD"), and BEYOND.COM, a Delaware corporation ("TENANT"),
for the purpose of amending the Lease Agreement between Landlord and Tenant
dated August 27, 1999 (the "LEASE"). Capitalized terms used herein but not
defined shall be given the meanings assigned to them in the Lease.

                                   AGREEMENTS

     For value consideration, whose receipt and sufficiency are acknowledged,
Landlord and Tenant agree as follows:

     1.   CONDITION OF PREMISES. Tenant has accepted possession of the Premises
pursuant to the Lease. Any improvements required by the terms of the Lease to
be made by Landlord have been completed to the full and complete satisfaction
of Tenant in all respects, and Landlord has fulfilled all of its duties under
the Lease with respect to such initial tenant improvements. Furthermore, Tenant
acknowledges that the Premises are suitable for the Permitted Use.

     2.   COMMENCEMENT DATE. The Commencement Date of the Lease is __________.
If the Commencement Date set forth in the Lease is different than the date set
forth in the preceding sentence, then the Commencement Date as contained in the
Lease is amended to be the Commencement Date set forth in the preceding
sentence.

     3.   EXPIRATION DATE. The Term is scheduled to expire on _______________.
If the scheduled expiration date of the initial Term as set forth in the Lease
is different than the date set forth in the preceding sentence, then the
scheduled expiration date as set forth in the Lease is hereby amended to the
expiration date set forth in the preceding sentence.

     4.   CONTACT NUMBERS. Tenant's telephone number in the Premises is ______.
Tenant's telecopy number in the Premises is ___________.

     5.   RATIFICATION. Tenant hereby ratifies and confirms its obligations
under the Lease, and represents and warrants to Landlord that it has no defenses
thereto. Additionally, Tenant further confirms and ratifies that, as of the date
hereof, the Lease is and remains in good standing and in full force and effect,
and Tenant has no claims, counterclaims, set-offs or defenses against Landlord
arising out of the Lease or in any way relating thereto or arising out of any
other transaction between Landlord and Tenant.

     6.   BINDING EFFECT; GOVERNING LAW. Except as modified hereby, the Lease
shall remain in full effect and this Amendment shall be binding upon Landlord
and Tenant and their respective successors and assigns. If any inconsistency
exists or arises between the terms of this Amendment and the terms of the
Lease, the terms of this Amendment shall prevail. This Amendment shall be
governed by the laws of the State in which the Premises is located.

     7.   COUNTERPARTS. This Amendment may be executed in multiple
counterparts, each of which shall constitute an original, but all of which
shall constitute one document.

                                       5
<PAGE>   40

     Executed as of the date first written above.

TENANT:                       BEYOND.COM, a Delaware corporation

                              By:
                                     -------------------------------------
                              Name:
                                     -------------------------------------
                              Title:
                                     -------------------------------------

                              By:
                                     -------------------------------------
                              Name:
                                     -------------------------------------
                              Title:
                                     -------------------------------------

LANDLORD                      WMP II REAL ESTATE LIMITED
                              PARTNERSHIP, a Delaware limited partnership

                              By:    WMP GEN-PAR, INC., a Delaware
                                     corporation, General Partner

                              By:
                                     -------------------------------------
                              Name:  Nancy M. Haag
                              Title: Assistant Vice President

                                       6
<PAGE>   41

                                   EXHIBIT F

                      FORM OF TENANT ESTOPPEL CERTIFICATE

     The undersigned is the Tenant under the Lease (defined below) between WMP
II REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership, as
Landlord, and the undersigned as Tenant, for the Premises located in the
building at 3200 Patrick Henry Drive, Santa Clara, California 95054, and hereby
certifies as follows:

     1.   The Lease consists of the original Lease Agreement dated as of August
27, 1999 between Tenant and Landlord and the following amendments or
modifications thereto (if none, please state "none"):
                                                     --------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

The documents listed above are herein collectively referred to as the "LEASE"
and represent the entire agreement between the parties with respect to the
Premises. All capitalized terms used herein but not defined shall be given the
meaning assigned to them in the Lease.

     2. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Section 1 above.

     3.   The term commenced on _____________, 199_ and the Term expires,
excluding any renewal options, on _____________, 200_, and Tenant has no option
to purchase all or any part of the Premises or the Building or, except as
expressly set forth in the Lease, any option to terminate or cancel the Lease.

     4.   Tenant currently occupies the Premises described in the Lease and
Landlord has not transferred, assigned, or sublet any portion of the Premises
nor entered into any license or concession agreements with respect thereto,
except as follows (if none, please state "none"):____________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________

     5.   All monthly installments of Basic Rent and Additional Rent have been
paid when due through __________. The current monthly installment of Basic Rent
is $___________.

     6.   To Tenant's best knowledge, all conditions of the Lease to be
performed by Landlord necessary to the enforceability of the Lease have been
satisfied and Landlord is not in default thereunder, and Tenant has not
delivered any notice to Landlord regarding a default by Landlord thereunder,
except as follows (if none, please state "none"): ____________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________

     7.   To Tenant's best knowledge, as of the date hereof, there are no
existing defenses or offsets, or, to the undersigned's knowledge, claims or any
basis for a claim, that the undersigned has against Landlord and no event has
occurred and no condition exists, which, with the giving of notice or the
passage of time, or both, will constitute a default under the Lease, except as
follows (if none, please state "none"): ______________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________

     8.   No rental has been paid more than thirty (30) days in advance and no
security deposit has been delivered to Landlord except as provided in the Lease.

                                       1
<PAGE>   42
     9.   If Tenant is a corporation, partnership or other business entity,
each individual executing this Estoppel Certificate on behalf of Tenant hereby
represents and warrants that Tenant is a duly formed and existing entity
qualified to do business in the state in which the Premises is located and that
Tenant has full right and authority to execute and deliver this Estoppel
Certificate and that each person signing on behalf of Tenant is authorized to
do so.

     10.  There are no actions pending against Tenant under any bankruptcy or
similar laws of the United States or any state.

     11.  Other than in compliance with all applicable laws and incidental to
the ordinary course of the use of the Premises, the undersigned has not used
or stored any hazardous substances in the Premises.

     12.  To Tenant's best knowledge, all tenant improvement work to be
performed by Landlord under the Lease has been completed in accordance with the
Lease and has been accepted by the undersigned and all reimbursements and
allowances due to the undersigned under the Lease in connection with any tenant
improvement work have been paid in full, except as follows (if none, please
state "none"): _________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

     13.  Tenant acknowledges that this Estoppel Certificate may be delivered
to Landlord, Landlord's Mortgagee or to a prospective mortgagee or prospective
purchaser, and their respective successors and assigns, and acknowledges that
Landlord, Landlord's Mortgagee and/or such prospective mortgagee or prospective
purchaser will be relying upon the statements contained herein in disbursing
loan advances or making a new loan or acquiring the property of which the
Premises are a part and that receipt by it of this certificate is a condition
of disbursing loan advances or making such loan or acquiring such property.

     Executed as of ________________.

TENANT:                             BEYOND.COM, a Delaware corporation

                                    By:_____________________________________

                                    Name: __________________________________

                                    Title: _________________________________

                                    By:_____________________________________

                                    Name: __________________________________

                                    Title: _________________________________

                                       1

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